CBS had better watch the market

With the entire blogosphere still dutifully picking appart what is left of Dan Rather's credibility and the obvious problems with those Bush "documents", I thought I would follow another tack.

At this point I feel it is a waste of time to argue the authenticity of the documents any further. They are fake, and anyone who takes the time to look at them will realize they are fake. John Podhoretz states in his New York Post op-ed:

The documents aren't just forgeries, they're bad, blatant, ludicrous forgeries. They're forgeries so easily detected that in the space of a few hours after CBS released computer photographs of them on the Internet, they had already been pegged and deconstructed.

I'm not citing Podhoretz as though what he says is scripture, but he does make an obvious point. So let's not even entertain the idea that these documents are anything but horrible forgeries, and that Dan Rather is a complete hack. What should be concerning us is what will happen to CBS and Rather because of this blatent smear of the president based on a fraud.

One of the greatest lessons I have taken away from several business professors I have had over the years is this: "watch the market". While journalists will cover for their peers as long as they can get away with it, and politicians will spin a story in any direction, the market is incapable of lying. The bottom line here is that CBS News is not owned by Dan Rather, they are owned by the company's stockholder - namely Viacom stockholders.

If Rather owned CBS News he would probably get away with this. Hell, who's gonna stop some madman from running his own company into the ground if he is hellbent on doing so? Here in lies the problem for Dan, the stockholders and executives that are meant to protect their interests are not going to sit by and watch Dan bankrupt CBS News.

So, has the market begun to speak? I think it has. Take a look at the following chart that tracks the last 5 days of Viacom activity. There is a small spike on Friday, perhaps a reaction to the news that broke stating that Rather/CBS News were going to quash their detractors that evening. But look at the decline that began Monday morning - AFTER the weekend news cycle began to digest the problems with Dan's explanation.

Dan may think CBS is his own personal political pulpit (try saying that 3 times fast), but we can be sure the investors who own Viacom stock disagree. In fact, I would suspect the execs at Viacom and CBS are already hearing about it. No matter what CBS News' bias, like all publicly owned organizations their primary loyalty lies with the bottom line. Dan Rather's adventures in politics come in a VERY distant second.