CBS, Viacom to Reunite After 13 Years Apart

The reunification of Sumner Redstone's media empire will create "a world-class, multiplatform media organization," his daughter says.
Matthew HellerAugust 14, 2019
CBS, Viacom to Reunite After 13 Years Apart

Thirteen years after Sumner Redstone split up his media empire into its CBS and Viacom components, the companies are reuniting in a move to match up more effectively with the industry’s heavyweight players.

The merger of CBS and Viacom announced on Tuesday will create a combined company with more than $28 billion in revenue and a portfolio of assets including the CBS broadcast network, MTV, Nickelodoen, Showtime, and the Paramount Pictures studio.

CBS, the larger of the two companies, will absorb Viacom through a stock swap deal, with Viacom shareholders receiving 0.59625 shares of CBS stock for every Viacom share that they own. On Tuesday, Wall Street valued Viacom at about $12 billion.

The deal was a particular triumph for Redstone’s daughter Shari Redstone, who was thwarted in previous efforts to merge the companies by the CBS board. She will now serve as chairwoman of the new ViacomCBS Inc.

“My father once said ‘content is king,’ and never has that been more true than today,” she said in a news release. “Through CBS and Viacom’s shared passion for premium content and innovation, we will establish a world-class, multiplatform media organization that is well-positioned for growth in a rapidly transforming industry.”

As CNBC reports, Shari Redstone has “long desired putting the companies back together to gain scale in a media environment where competitors including Disney, Comcast and AT&T have bulked up through a series of megadeals.”

Both companies were also “weakened by years of internal turmoil: boardroom battles, costly lawsuits, financial miscalculations, and management woes,” the Los Angeles Times noted.

Viacom CEO Robert Bakish, who will head the new company, said it will pursue a three-pronged strategy that includes selling more streaming subscriptions, elevating its digital advertising sales, and creating many more original shows for other streaming platforms.

“Together, Viacom and CBS will become a significant player,” he told The New York Times.

But the LA Times said the challenges facing ViacomCBS are steep, noting that it “will continue to be a relative small fry — unless it combines with other independent studios.”