Culture

CBS, Viacom reach agreement in principle

CBS, Viacom reach agreement in principle”

These include CBS All Access and Showtime, which deliver premium, branded content live and on demand to millions of subscribers; Pluto TV, the leading free streaming TV service in the US; and niche products such as CBSN, ET Live and Noggin.

CBS, which separated from Viacom in 2006, was one of the first media companies to launch its own streaming service, CBS All Access.

The combined company, ViacomCBS Inc., will have more than $28 billion in revenue and the largest market share - 22% - of the US television viewing audience, according to the companies. The combined company is expected to accelerate and expand its direct-to-consumer strategy through subscription and ad-supported offerings, including CBS All Access and Showtime; Pluto TV, the leading free streaming TV service in the USA; and niche products such as CBSN, ET Live and Noggin.

Since that time, CBS stock has more than doubled in value, trading at almost $50 a share this week, while Viacom stock has stayed more or less flat, trading at almost $30 a share Tuesday.

Bob Bakish, Viacom's current president and chief executive, will assume the role at the combined firm. To expand its library, Disney bought Fox's entertainment businesses for $71 billion in March, while DirecTV owner AT&T bought Time Warner a year ago for $81 billion. CBS, led by Moonves, fought in the boardroom and courtroom to dilute the voting stake of National Amusements to prevent her gaining control of the company.

Create a leading producer and licensor of premium content to third-party platforms globally. Viacom shares will be converted into shares of CBS, with CBS shareholders owning about 61% of the combined company, and Viacom the rest.

Once the deal is completed, expected by the end of the year, ViacomCBS will have a combined library with more than 140,000 TV episodes and 3,600 film titles, including franchises such as "Star Trek" and "Mission: Impossible".

The companies said they expected about $500 million in annual synergies, or cost savings.

The deal represents a coming together of two disparate arms of the vast media holdings owned and controlled by Sumner Redstone and his daughter, Shari - who will be the vice chair of the CBS and Viacom board of directors - under the umbrella of the privately held National Amusements. Shari Redstone is the president of National Amusements and vice-chairwoman of both CBS and Viacom.

The companies have sought a merger several times in recent years, but their management teams' differences were never bridged.

A recombination makes sense now because media companies are bulking up their content offerings to better compete for ad dollars. But Moonves was derailed by a sexual assault and harassment scandal, which led to his firing. But Moonves was against the idea, as CBS was stronger and more profitable than Viacom. Under an agreement, Shari Redstone agreed not to push for a reunion for at least two years, but that left open the possibility of CBS itself pushing for it.

I'm extremely curious to see if CBS, which commands 22% of the TV viewership share (that's larger than Disney, Fox, Comcast, Warner, and Discovery), will be able to survive in the long run with the rise of streaming. Disney's stock was up 1%, while Netflix gained less than 1%.



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