Morris Esformes Flushes Out the Details of The CBS Viacom Merger

Morris Esformes Flushes Out the Details of The CBS Viacom Merger

Thirteen years ago leading media companies Viacom and CBS went separate ways and split assets, along with Star Trek’s film and television franchise. Now, it seems a reunification of the two media companies is on the horizon. 

However, according to The Wall Street Journal, several contingencies remain in a potential deal. The most prominent being settling a deal and identifying leadership. Currently, Bob Bakish, CEO of Viacom, seems most likely to takeover as Chief Executive Officer if a merger does happen, while Joseph Ianniello, who took over as CEO of CBS in the past year since Les Moonves departed the company due to sexual assault claims, would likely assume a different leadership role.

As talks of the merger intensify, further scenarios for the future of a merged Viacom and CBS are coming to the forefront. 

Morris Esformes Explores the CBS Viacom Merger

According to sources close to the situation, a combined entity most likely will not explore the option of a Chief Operating Officer (COO), as both CBS and Viacom in the past have traditionally opposed having the position. While it seems likely that a merged entity will forego the position of COO, there are some inter-workings that have made it difficult to solidify a C-Suite team due to similar held positions at both companies. Once the two have come together and determined the potential merged entity’s executive leadership team, it will be easier to manage other merger aspects.

Another key aspect of the deal is its Board of Directors. Currently, Viacom’s Board of Directors has nine members while CBS has 11. Due to controlling shareholder Shari Redstone, who is a member of both boards due to her positioning as president of CBS and Viacom holding group National Amusements, Inc., CBS will most likely gain an additional seat or two in the merger as the primary company.

As for Chief Content Officer at CBS, David Nevins is likely to continue as the CEO of Showtime and play a large part in expanding the company’s direct-to-consumer services. Nevins also oversees programming, marketing and research for the CBS broadcast network and television studios, in addition to oversight of CW’s joint venture with Warner Bros.

CBS, which has led the market in direct-to-consumer services with CBS All Access and Showtime subscription services, hopes that the merger will solidify CBS Interactive CEO Jim Lanzone will take lead on providing subscription services to Viacom’s vault of content. 

Leadership Decisions Have Yet to Be Made

Aside from the potential merger’s many leadership decisions that have yet to be made, most consumers are more concerned about the content and/or IP assets that both companies currently hold.

Sources have made it clear that questions surrounding potential overlapping of Viacom and CBS content, product and distribution will be the most difficult to sort out. Bakish already has in place a strong executive team that is brand-focused and would be key players in any restructuring scenario. The list of executives includes Paramount Pictures chief Jim Gianopulos, MTV and VH1 president Chris McCarthy, Comedy Central and TV Land president Kent Alterman, Viacom Digital Studio president Kelly Day and Nickelodeon president Brian Robbins. 

The level of thought and evaluation brought to the table in terms of a solidified management team prior to the transaction has to do with CBS’s concern on CBS-specific asset performances. Before merging, each company is expected to showcase a deep dive into finances and asset performances to determine the future of the company. CBS is hoping its assets bode well in the eyes of the board to raise the overarching stock of both.

Michael Nathanson of MoffettNathanson, who has extensively watched the growth of both companies in the stock market, predicted that a final deal would land the stock ratio between 0.59 to 0.68 CBS to every Viacom share. The ratio would value Viacom shares between $32 and $37 shares. 

While a timeframe for the merger is still up in the air. Sources close to the situation suggested August 8 would be the day that the two come together for talks.

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Morris Esformes
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