Allen & Co’s. famous yet secretive gathering in Sun Valley, Idaho, begins early next month and perhaps the most notable media executives who won’t be attending are Joe Ianniello and Bob Bakish, the CEOs of CBS and Viacom, respectively. Merger negotiations are allegedly already underway as Shari Redstone and her ailing father, Sumner, control them both and are eager to combine them to compete more seriously with Walt Disney Co.
The Wall Street Journal reports CBS is preparing to make an offer for sister media company Viacom in the coming weeks, following a meeting of CBS directors last week in which a potential deal was discussed. If the companies move ahead with talks, it would be a third attempt to reunite the $30 billion media empire that was divided by mogul Sumner Redstone more than 13 years ago. Journal subscribers can read the full story here.
A slew of major Hollywood studios with business in the state finally spoke up about how the “highly restrictive legislation” may require them to reevaluate taking productions there. Following similar announcements by Netflix, Disney and WarnerMedia were Viacom, CBS, Sony, AMC and NBCUniversal.
The long-anticipated talks between the two companies controlled by the Redstone family’s National Amusements are expected to begin in mid-June, though discussions could begin even sooner, sources say. Viacom CEO Robert Bakish would likely run the combined entity.
Viacom Rev Down, But Beats Profit Estimates
Viacom delivered a mixed second-quarter financial report, with earnings of 93 cents a share handily beating Wall Street forecasts, but revenue missing targets due to a downturn in domestic advertising.
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Washington, D.C., is locked in a court battle with entertainment cable channel BET over land the city practically gave away to help launch an African-American entertainment center in 1992.
The move has been expected for months, although there may still be obstacles on the road to a reunion for the two sides of the Redstone media empire.
Why Viacom Must Merge With CBS
Hank Price: The relationship between Viacom and CBS is a long and complicated one.
CBS and Viacom are gearing up to resume merger talks — and settle once and for all who will be CEO of the combined company. On Monday, the two media giants cleared a major hurdle to getting back to the negotiating table when Viacom settled a contract dispute with AT&T that had $1 billion in carriage fees hanging in the balance, sources say.
After negotiating throughout the weekend, AT&T and Viacom announced Monday morning that they had reached an agreement to renew their carriage agreement. Details of the deal were not immediately available.
Potential Viacom channels being dropped from DirecTV could have a major multibillion-dollar effect on the network group in terms of advertising and afffiliate revenue, says one analyst. Todd Juenger, media analyst at Bernstein Research, writes in a note: “Viacom would potentially lose $1 billion [per year] of affiliate revenue and $1 billion of advertising revenue. There would be very little offsetting costs.”
Viacom is blasting telco giant AT&T on several fronts as the companies wrestle over a carriage renewal deal that is vital to Viacom’s long-term financial health. As of Tuesday, Viacom had begun running crawls and promo spots on its channels warning viewers that Nickelodeon, Comedy Central, BET, MTV and other channels could go dark on AT&T’s DirecTV as of midnight ET on Friday, when the current contract expires.
Viacom has closed its $340 million acquisition of free, ad-supported streaming service Pluto TV. The acquisition, which raised eyebrows for its pricetag when it was announced in January, advances Viacom’s plan to focus on advertising as it invests in streaming. That’s the opposite approach from media peers like Disney, CBS and WarnerMedia.
Viacom Earnings Beat Estimates
Revenue for the company, led by CEO Bob Bakish, fell short of Wall Street expectations as advertising revenue dropped, but affiliate revenue increased.
Viacom Bets Big On Free Streaming
Viacom’s $340 million bet on Pluto TV signals that the programming giant sees a bright future in free, ad-supported streaming. The move also speaks to a grander strategy as Viacom looks to stake its claim in a growing direct-to-consumer marketplace that has lured in just about every media company across the sector.
Two weeks after word first surfaced that Viacom had been holding acquisition talks with ad-supported streaming services, it has acquired Pluto TV for $340 million in cash. Founded in 2013, Pluto TV offers more than 100 channels and thousands of hours of on-demand content.
Viacom has laid off a number of staffers in its entertainment group, with the majority of the affected employees hailing from Paramount Network. A Viacom spokesperson declined to comment. But a source with knowledge of the situation that the number of affected employees was fewer than 20, or less than 2% of the entertainment group’s workforce.
Entertainment mogul Ice Cube, through his Big3 basketball league, is trying to put together a competitive bid for the Fox regional sports networks as the auction shifts into high gear. In recent weeks, the rapper approached media company Viacom Inc. for help with Big3’s bid for the 22 regional networks, according to a person close to the situation who was not authorized to comment.
“We are active in the OTT space,” Viacom CEO Bob Bakish said Wednesday. “We are also active in the SVOD space through our third-party production business.” A growing part of this strategy will be to lean into mobile, said Bakish. “Mobile distribution really is the catalyst that will turn this whole decline of television argument on its head.”
A merger of CBS and sister company Viacom that has been hovering in corporate and legal limbo for roughly three years may now happen during the first six months of this year, industry experts say. “I would be surprised if this merger doesn’t happen during the first half of the year, maybe even the first quarter,” CFRA Research analyst Tuna Amobi says. And BTIG analyst Rich Greenfield says Viacom CEO Bob Bakish would make the most sense to lead the combined company.
A permanent replacement for Les Moonves may have to wait until CBS and Viacom become one company again. The quest to find a full-time CEO has lost some of its intensity over the holidays as a consensus is emerging among CBS board members and power players to take a renewed look into melding the media outlet with its former parent company.
A probate judge on Monday appointed an independent legal guardian to represent Sumner Redstone, finding he is incapable of representing his interests in a trust battle with his former companion. Redstone, the chairman of National Amusements, Inc., is 95 and suffers from severe speech impairment and diminished mental faculties. Judge David Cowan appointed probate attorney Samuel Ingham to serve as Redstone’s guardian ad litem.
Strauss Zelnick would be the $120 million man if he ends up running a combined CBS and Viacom. He is a leading contender in the mix to run the media colossus — partially due to his close relationship with mogul Shari Redstone. Zelnick, the current head of Take-Two Interactive and CBS chairman, would cost the merged entity plenty in employment guarantee payouts.
After CBS boss Les Moonves’ sensational September downfall on sexual-assault allegations, insiders say the TV giant’s board could announce a merger with Viacom in the next three to six months — a deal that Moonves had fiercely resisted.
Viacom is joining the battle against Netflix’s hiring practices, filing a suit that accuses the streaming service of poaching a TV production executive. In the suit filed on Oct. 5 in L.A. Superior Court, Viacom alleges that Netflix induced Momita SenGupta to breach her contract, which was not set to expire until April 21, 2020.
Changes are coming fast and furious at the companies controlled by Sumner and Shari Redstone, leading Wall Street to presume a merger is inevitable.
With six new members — including a new leader — the CBS board is no longer a Les Moonves production.
There are risks for Shari Redstone as she moves swiftly to consolidate her power over CBS. A grand jury has demanded that lawyers for Sumner Redstone’s ex-flame, Manuela Herzer, turn over by Wednesday “any and all (non-privileged) materials” pertaining to the Redstone family.
Viacom — “and pretty much only Viacom” — is engaged in a systematic program of “ad stuffing” even as ratings of its networks continue to decline, according to a report by Wall Street analyst Todd Juenger.
Viacom boss Bob Bakish has set a target for Paramount Television to become a billion dollar business over the next few years. Bakish claimed that the television production division is set to grow from a $400M in 2018 to a $600M in 2019 and has set plans to almost double this in a “few years.”
Hollywood and Wall Street has long wondered how much Sumner Redstone really knows about what is being done and said in his name. Now, thanks to an irate filing Tuesday by lawyers for the rarely seen 95-year old media mogul and the legal tenacity of his former companion Manula Herzer, by the end of the week we might know if we are finally going to get a glimpse at the real capacity of the elder Redstone
Viacom touted its new Advanced Marketing Solutions (AMS) platform during the company’s quarterly earnings call. The new solution, designed to help Viacom earn more revenue from emerging advertising platforms, saw revenue growth of 33% year-over-year, the company said.
Viacom is awaiting a response from CBS to the acquisition counteroffer that Viacom submitted last week. CBS executives and bankers were said to be huddling Wednesday and Thursday to hammer out a new offer. Details are still sketchy but it’s believed that CBS will raise the valuation of Viacom up from its opening March 30 offer, which came in around $12 billion. CBS is not expected to budge on the issue of keeping CBS chairman-CEO Leslie Moonves’ current top executive team intact.
Leslie Moonves is open to merging CBS and Viacom — on his terms — but Shari Redstone, eager for power, may be ready to sacrifice Hollywood’s most celebrated exec to chart her own path.
As she seeks to combine CBS and Viacom into a single company again, media mogul Shari Redstone risks losing her most talented executive, whose leadership could be critical to ensuring the proposed merger succeeds. Her long-time friend and business ally, powerful CBS chief executive Les Moonves, has emerged as one of the biggest obstacles to a potential CBS-Viacom tie-up, according to people familiar with the matter.
Merger talks between CBS and Viacom will likely result in a deal — despite thorny negotiations over price and whether CBS boss Les Moonves will get to name his own No. 2 exec at the merged company, sources say. But while the $2.8 billion gulf between the two looks wide, one source close to the talks expects a deal to happen somewhere close to the middle, although no announcement is expected this week.
Viacom Inc. has asked CBS Corp. to sweeten its merger bid by about $2.8 billion or almost a quarter more than CBS’s offer, people familiar with the matter say, indicating the wide gap in the U.S. media firms’ price expectations.
