CBS, Viacom set early August deadline for remerger agreement – report

CBS and Viacom formally split up in 2006. (FierceVideo)

CBS and Viacom reportedly set August 8 as an informal deadline for reaching an agreement to recombine the two media companies.

According to CNBC, a potential deal announcement could come sooner or later than that date, but August 8 is the date both companies have set for their upcoming quarterly earnings reports.

If the report proves true, it would mean there’s some light at the end of an extremely long tunnel. CBS and Viacom have gone back and forth on potential remerger terms for years. According to the report, both companies agree that recombining makes sense in terms of gaining more competitive scale. But, financial terms aren’t being discussed until the companies can agree on a strategic and management framework for the combined company.

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RELATED: CBS-Viacom remerger ‘probably inevitable’ - analyst

CBS and Viacom’s previous remerger talks in 2018 dissolved into a bitter feud as CBS sought to dilute majority shareholder National Amusements' voting power within the company. CBS accused NAI’s Shari Redstone of interfering with the CBS board nomination process, of acting to undermine CBS’ “highly lauded and successful management team in a series of escalating attacks,” and of blocking another unnamed acquisition partner from pursuing a deal with CBS.

The legal dispute was settled in September 2018, and Chairman and CEO Les Moonves left the company after several accusations of sexual misconduct were leveled against the longtime CBS executive.

Prior to that, CBS and Viacom had explored a remerger in 2016, which was eventually called off. The two companies formally split up in 2006.

MoffettNathanson analyst Michael Nathanson today revisited his math supporting the remerger, and found that the positives still outweigh any potential negatives.

“Given the industry comps, the risk/reward continues to be skewed to the upside as even pure play cable network comps trade at higher levels,” wrote Nathanson in a research note. “While both companies face obvious pressures in the coming years (CBS has an NFL and SEC Football renewal, while Viacom faces a threat of accelerated subscriber losses), we have long believed that the initial separation of these companies made zero sense.”


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