Talks of CBS and Viacom recombining have revived once again, and this time the idea has gained some urgency due to the rapid pace of media industry consolidation.
According to The Wall Street Journal, National Amusements’ Shari Redstone—whose company owned controlling stakes in both CBS and Viacom—reluctantly set aside an attempt at a remerger in 2016 but never gave up believing it was a good idea. Now, as Disney is buying most of Fox’s entertainment assets and a number of other media consolidation deals are in the works, Redstone is reportedly thinking the time is now for the recombination, for the sake of “bulking up.”
Besides Disney and Fox, other notable media deals include AT&T’s $85 billion acquisition of Time Warner, Discovery Communications’ $14.6 billion purchase of Scripps Networks, and Sinclair’s $3.9 billion acquisition of Tribune Media.
As the report points out, Redstone is also concerned about long-term planning at CBS and the lack of a clear successor for current CEO Les Moonves. Redstone is reportedly prepping a list of names for new directors on CBS’s board.
According to Variety, the reports of Redstone’s dissatisfaction have caught some off guard at CBS and have raised red flags for executives at Viacom, which is still in the midst of a turnaround under CEO Bob Bakish.
“Here we go again,” one source told the publication.
It’s been about 12 years since CBS and Viacom formally split. 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 pursue his plan to right the ship at Viacom.
“Over the past few months, after careful assessment and meetings with the leadership of both companies, we have concluded that this is not the right time to merge the companies,” wrote Redstone. “Following the management changes that the Viacom Board put in place, we have been very impressed with the forward‐looking thinking and strategic plan being pursued under Bob Bakish’s leadership. We know Viacom has tremendous assets that are currently undervalued, and we are confident that with this new strong management team, the value of these assets can be unleashed. At the same time, CBS continues to perform exceptionally well under Les Moonves, and we have every reason to believe that momentum will continue on a stand‐alone basis.”