Unless you've turned off your TV or sworn off the Internet for the past couple of weeks, you probably know about the recent Don Imus controversy.  If you haven't heard about it, the long-time radio shock jock made an off-hand comment on the air about the Rutgers women's basketball team, referring to the predominantly African-American players as "nappy-headed hos."  CBS (CBS) initially suspended Imus for two weeks, then fired him in the wake of serious public backlash led by Al Sharpton and Jesse Jackson.  The uproar over the incident reminded all of us about the thin line between free speech and unwarranted verbal venom.

But if Imus's words hurt so many people, why didn't CBS fire him right away?

Simply put, CBS didn't want to permanently pull the plug on one of its most popular programs until it absolutely had to make a move.  The network hedged its risk by starting with a suspension.  By taking temporary action, CBS appeased anyone who felt offended without precluding the possibility of bringing back an important revenue source once the controversy died down.  If the incident turned into a full-blown national story, the network needed to cut its losses and move on.  The unanimous animosity toward Imus's comments sealed his fate.

So what does all of this mean for CBS's stock?  While some analysts would encourage investors to take advantage of any short-term decrease in CBS stock resulting from the incident, others suggest that Imus's dismissal will temporarily make the stock more volatile.  Regardless, most experts agree that the controversy won't hurt CBS much in the long-run.  CBS Radio remains a steady revenue source that should fuel growth in other developing divisions.

In any event, this polarizing incident should teach at least one important lesson to media executives who feel the need to hire a shock jock for higher ratings:

Live by the sword, die by the sword.

Disclosure: I have no relationship with CBS, financial or otherwise. 

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