A possible decision by CBS Corp. and Viacom to corporately reattach themselves would result in a powerful program licensing negotiating opponent for pay TV operators, controlling nearly a quarter of the linear TV audience.
According to MoffettNathanson, the recombination of CBS and Viacom would result in a company with combined networks controlling a 23% share of all Nielsen live program-plus-seven days of time-shifted viewing.
That would far outstrip second-place Disney (18%) and third-place Comcast/NBCUniversal (17%)
Before its leverage could be exacted in new program licensing negotiations, the newly combined company would control about 14% of the market for cable carriage and broadcast retransmission fees—tying it at fourth place with Time Warner Inc., and trailing market leader Disney, which controls a dominant 31% share.
Recombined CBS-Viacom would control 21% of U.S. national TV ad dollars, trailing NBCU (26%) and Disney (19%).
Last week, Reuters reported that Shari Redstone, vice chairman of both CBS and Viacom, and president of National Amusements, is having exploratory conversations with CBS directors about recombining the companies.
CBS and Viacom formally split back in 2006. In 2016, National Amusements began the process of recombining the companies before eventually deciding to back off the plan and allow Viacom CEO Bob Bakish to try and right the ship at Viacom.
Since that time, Viacom has seen an uptick in ratings for some of its networks and managed to hammer out a new carriage deal with Charter.
“Management has been executing on its turnaround strategy, including improving ratings, upcoming cost realignment and delivering on affiliate renewals,” said UBS analyst Doug Mitchelson in a research note.