Tweet from CNN entertainment and media reporter
CBS and Viacom may finally be getting back together again after a lengthy on-again, off-again relationship.
Although they are currently two separate corporations with separate stocks, the ownership and management of the two companies heavily overlap. CBS owns the CBS broadcast network, half of the CW broadcast network, a number of television production companies, approximately thirty broadcast television stations, and the Simon & Schuster publishing group. Viacom owns the movie studio Paramount and numerous cable channels, including Comedy Central, BET, and the various MTV and Nickelodeon channels.
Viacom had begun in the 1960s as a small film production unit within CBS. Later, in 1971, the federal government became concerned that the broadcast networks were becoming too powerful, so it forced them to sell their content production units. (Can you imagine that today?) As an independent company, Viacom grew into a major producer of cable television programming; its products included MTV and Nickelodeon.
In 1987, theater owner Sumner Redstone bought Viacom. Under Redstone’s leadership, the company became a dominant media corporation in the 1990s. Finally, Viacom bought CBS in 1999, the television network that had given birth to it decades before.
But then, in 2005, Viacom and CBS split back into two separate corporations with separate stocks being traded. So they are no longer a single Big Media company, right? Well, sort of. In recent years, Sumner Redstone and his daughter Shari have been battling over control of the company. Sumner is now in his 90s and in failing health, so Shari has been more firmly in control. But the story over the possible remerger of the two companies has been as much a family soap opera as a business narrative.
Since 2018, however, the companies have been dancing back and forth, considering becoming one company once again. The issues surrounding this deal seem to be largely one of how much one company would be willing to pay for the other, and who would be the management after the merger. In 2018, CBS had revenue of $15 billion from cable networks, local media, publishing, and the various CBS broadcast properties. Viacom had revenue of $13.8 billion including Paramount Pictures and a wide range of cable networks, most prominently the MTV family of youth-oriented channels.
Complicating matters were the problems of CBS’s former chairman Les Moonves, who was forced out of the company by multiple charges of sexual harassment. Moonves was fired in September of 2018, following a pair of articles by Ronan Farrow in the New Yorker alleging that that Moonves had sexually harassed at least a dozen separate women.
So, with all that background, what’s going to happen with this likely merger?
- One of the major objectives of the merger is to get the two companies into a better position to compete in the cord-cutting, streaming world of the Fox-enhanced Disney behemoth, Comcast, AT&T/WarnerMedia and Netflix.
- Sheri Redstone, daughter of Viacom mogul Sumner Redstone, will become chair of the combined company and become one of the most powerful women in the media industry. Reuniting the two companies has been a goal for Ms. Redstone for at least three years.
- The ViacomCBS merger, with an estimated value $11 billion, is pretty small compared to AT&T’s $80 billion acquisition of WarnerMedia and Disney’s $71.3 billion purchase of most of the entertainment business of Rupert Murdoch’s 21st Century Fox.
- But despite all the talk about what this will mean to the two companies, Brian Steinberg, writing for Variety, points out:
“The new ViacomCBS looks much like the old one, where Sumner Redstone served as chairman of a company that essentially had two parts: Tom Freston ran cable operations while Leslie Moonves supervised CBS assets. The new version of the company will install Redstone’s daughter Shari as chairman, but leaves some questions about whether the combination will be able to maximize its efforts with the assignments given to Bakish and Ianniello.”
If I really wanted to go nuts on this blog post, I could make a pretty compelling analogy with the relationship between director/choreographer Bob Fosse and dancer/actress Gwen Verdon as portrayed in the recent FX mini series that I finally got around to watching this week. But I will leave that as an exercise for the reader…