December 5, 2019

USA: CBS and Viacom Complete Merger: ‘It’s Been a Long and Winding Road to Get Here’.

CBS News published Dec 5, 2019: ViacomCBS rings Nasdaq opening bell. CBS and Viacom have completed their merger. ViacomCBS Chairman Shari Redstone and ViacomCBS President and CEO Bob Bakish celebrated the new corporate combination with a ceremonial ringing of the opening bell at the Nasdaq MarketSite in New York's Times Square.
written by Cynthia Littleton
December 4, 2019 at 1:36pm PST

CBS Corp. and Viacom are united once again.

The merger of the two halves of the Redstone family media empire into ViacomCBS was completed Wednesday, just four months after the boards of CBS and Viacom reached an agreement on an all stock-swap transaction. The combined company’s shares will begin trading Thursday on the NASDAQ index under the ticker symbols VIACA (for preferred shares largely held by the Redstones) and VIAC (for common shares).

The deal brings Viacom’s Paramount Pictures and cable channels such as MTV, Nickelodeon, Comedy Central and BET together with the CBS broadcast network, Showtime, 28 O&O TV stations, CBS All Access and Simon & Schuster. The combined company, lead by Viacom CEO Bob Bakish, will have annual revenue of about $28 billion.

“I can’t wait to get on with this,” Bakish told Variety on Tuesday. “It’s been a long and winding road to get here. It’s an incredible collection of assets.”

Getting the merger over the finish line is a victory for Shari Redstone, who is the controlling shareholder in CBS and Viacom through her National Amusements Inc. holding company. Redstone has long sought to reunite CBS and Viacom, which were brought together in 2000 by her father, Sumner Redstone. But Sumner Redstone decided to split them up again, as of January 2006, out of frustration with Viacom’s sagging stock price.

Shari Redstone will serve as chairman of ViacomCBS. That’s a capstone on her three-year quest to reshape her family’s media holdings after years of executive rivalries, fiefdoms and executive largess at the companies that are less vulnerable to shareholder pressure on performance because of NAI’s iron grip on about 80% of voting shares in both firms. Indeed, the merger process was able to close quickly because the Securities and Exchange Commission and other federal regulators already considered Viacom and CBS to be under the same roof.

The challenge for Bakish and Redstone this time around is to make ViacomCBS function as an integrated company — something that did not happen during the first merger. The CBS Corp. assets will have a dedicated leader in Joe Ianniello, who shifts from acting CEO to chairman-CEO of CBS, a structure that was mandated by the CBS Corp. board as part of the merger. That has raised questions about whether the companies will remain balkanized.

But the enlarged ViacomCBS will emerge to do battle in a much more treacherous competitive landscape than they faced two decades ago. Even in bolting the companies together, there are questions about whether ViacomCBS is big enough to do battle with the tech giants that are up-ending traditional media and entertainment.

CBS Corp. has also been battered by allegations that its corporate culture allowed harassment and discrimination to persist. The ouster of former CBS chairman-CEO Leslie Moonves in September 2018 amid allegations of past sexual misconduct set the stage for the CBS-Viacom reunion. Shari Redstone has frequently cited the importance of a healthy and vibrant creative culture within CBS and Viacom as one of her top governance priorities.

While the merger is now complete, the new company has work to do yet on Wall Street. CBS and Viacom shares have dropped about 19% and 24%, respectively, since the long-expected deal was confirmed on Aug. 13.

The company has promised to deliver at least $500 million in synergy savings within two years of the closing — a number that suggests that there will be inevitable layoffs as overlapping operations are eliminated. ViacomCBS expects to offer more financial guidance for the company after the release of the enlarged company’s first earnings report in February.

On the day before the deal closed, Bakish was nothing but bullish about the company’s ability to thrive amid the growing global demand for content and the increasing value to be mined from large film and TV libraries, which ViacomCBS has to the tune of 140,000 episodes of TV and more than 3,600 movie titles.

“We have an extraordinary opportunity to create value for a whole range of constituencies,” Bakish said. “We have a tremendous library and ongoing production that we can deliver for our owned platforms and third-party buyers. We are setting up the organization of the company to enable us to leverage every asset we have.”

Bakish also said he sees a silver lining in the stock swoon of the past few months. He has no doubt that the company will be able to execute on its growth strategies quickly enough to quiet the doubters.

“There’s a light at the end of the tunnel,” Bakish said. “The people who got in at this (low share) price are going to be happy campers.”

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written by Cynthia Littleton
Wednesday December 4, 2019

Shari Redstone can’t wait to ring that bell.

After three years and three tries, Viacom and CBS Corp. have been reunited as one company, ViacomCBS, as of Wednesday. The closing of the deal reached on Aug. 13 is a testament to Redstone’s tenacity and determination to change the direction of her family’s empire as she saw the business landscape around CBS and Viacom changing dramatically in the past few years.

Although nobody wanted to see the CBS-Viacom merger come to fruition more than Redstone, she still can’t quite believe it’s done.

“It’s not going to be real until we’re trading tomorrow,” Redstone told Variety in an interview hours before the closing became official. Redstone, ViacomCBS CEO Bob Bakish and a host of other senior leaders will be on the NASDAQ trading floor in Manhattan on Thursday to ring the bell and launch the official trading of the new VIACA and VIAC shares.

ViacomCBS still faces plenty of skepticism in the marketplace about whether it has the size and scale to compete with behemoths such as Disney, Comcast, AT&T, Amazon, Apple and Netflix. Redstone points to ViacomCBS’ $13 billion (and counting) in annual content spending as something that cannot be dismissed as a small player.

“I think ViacomCBS is absolutely going to have the scale they need to succeed in the world,” Redstone said. “We’re taking a group of differentiated assets to really create a global content powerhouse. We not only have the ability to create a quantity of content, we have the brands to create content that people really want to watch.”

Redstone pointed to the success that Paramount Television has had in recent years with producing original series for the streaming giants that have disrupted traditional TV. Amazon’s “Jack Ryan” and Netflix’s “13 Reasons Why” are top hits that demonstrate the importance of having a wealth of IP and the know-how to produce.

Redstone believes that ViacomCBS has a bright future ahead, especially as its larger rivals focus on launching direct-to-consumer platforms that will require them to hold back a good portion of their movie and TV productions for in-house platforms. ViacomCBS is taking a different approach, balancing its investment in DTC operations such as CBS All Access and the ad-supported Pluto TV with a drive to produce high-end content for takers around the world. The archives of Viacom, Paramount Pictures and CBS together contain some 140,000 episodes of television and more than 3,600 film titles. That depth of IP can generate a lot of business when content with built-in brand recognition has launched a sea of reboots, remakes, sequels and prequels.

“Our ability to take our library around the world to all third-party platforms as the craving for content increases and other (companies) pull back their content — I’m really excited about this,” she said. “I really believe we have a differentiated strategy and we are going to be a leader in content.”

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