Media Landscape Shrinks as CBS and Viacom Merge

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Viacom | CBS

It creates a company with roughly a $30 billion market value, which is still small compared with rivals including Netflix Inc, at $136 billion, ABC network owner Walt Disney Co, at $245 billion, and NBC owner Comcast Corp at $193 billion.

Shari Redstone, whose family controls both companies, will become chair of the combined entity.

"Our unique ability to produce premium and popular content for global audiences at scale - for our own platforms and for our partners around the world - will enable us to maximize our business for today, while positioning us to lead for years to come", Bakish said in the statement.

Acting CBS CEO Joe Ianniello will become chairman and CEO of the CBS division in the combined company. These include CBS All Access and Showtime, which deliver premium, branded content live and on demand to millions of subscribers; Pluto TV, the leading free streaming TV service in the US; and niche products such as CBSN, ET Live and Noggin.

CBS and Viacom have ties that go back to the 1970s.

The executives also emphasized the power of the content that CBS and Viacom are now creating: It's the result of some $13 billion in combined annual spending, one of the largest amounts in the industry. Expect $500 million in annual savings within two years, and a boost to earnings soon after the deal closes.

According to the two companies, the new media conglomerate will have 22 percent of the US television viewing audience, larger than Disney, Comcast and other major rivals. MoffettNathanson analyst Michael Nathanson said Paramount's movie library could be added to Showtime's premium networks and streaming service, for instance, while CBS' streaming service could get a boost from Viacom's Nickelodeon video.

Analysts on the CBS-Viacom call seemed to wonder aloud whether the two companies, once united, will still be big enough to compete over the long haul.


Fourteen years after their split, CBS is reuniting with Viacom in a merger that will likely increase content offered to streaming subscribers. Under an agreement, Shari Redstone agreed not to push for a reunion for at least two years, but that left open the possibility of CBS itself pushing for it.

The troubled merger has been in talks for more than three years, with former CBS CEO Leslie Moonves taking the lead on opposing the reunification. The combined company will also have more than 750 series now ordered or in production.

The stock exchange ratio - the final stumbling block in the days leading up to the deal - has been set at 0.59625 CBS shares for each share of Viacom.

"We will establish a world-class, multiplatform media organization that is well-positioned for growth in a rapidly transforming industry", she said.

CBS Corp (CBS.N) and Viacom Inc (VIAB.O) have reached a deal to reunite media mogul Sumner Redstone's USA entertainment empire after 13 years apart.

The combined company will include a major Hollywood film studio, Paramount Pictures, which has been a subsidiary of Viacom since 1994.

CBS had been weighing its next moves since firing Moonves last September, after a dozen women accused him of sexual misconduct, setting off a shake-up that included a board overhaul.

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