FINALLY, ‘EYE DO!’
ViacomCBS is born, its streaming flow is next
CBS finally put a ring on it. After months of discussions, CBS Corp., the network behind “The Big Bang Theory,” has agreed to tie the knot with Viacom to better position the two TV companies to compete against streaming-video giants like Netflix and Disney.
The all-stock deal, announced Tuesday, unites CBS network shows, as well as its premium cable network, Showtime, with Viacom’s Nickelodeon and MTV — the networks behind “SpongeBob SquarePants” and “Jersey Shore.” It also reunites Sumner Redstone’s media empire for the first time since it split in 2006.
The new company will be called ViacomCBS and Redstone’s daughter, Shari Redstone, will be named chair. Shari Redstone — who heads National Amusements Inc., the majority shareholder of both CBS and Viacom — has been pushing for the companies to reunite for years.
“All in all, the deal is about creating scale,” said Gideon Gilboa, a senior VP at Kaltura, a firm that focuses on streaming video. “They do have unique content and a better portfolio now than they had separately.”
The new ViacomCBS will have a market capitalization of $30 billion. While that’s nearly double the current CBS $18 million market cap, it pales in comparison to competitors like Netflix, valued at $136 billion, and Walt Disney, valued at $246 billion.
It’s one reason Wall Street analysts and other media sources expect Shari Redstone to continue to hunt for acquisitions, including film studio Lionsgate or its premium cable network, Starz. The boards of both CBS and Viacom have considered buying these entities before, sources said.
And as The Post previously reported, CBS has also considered acquiring Take-Two, the gaming company run by CBS interim Chairman Strauss Zelnick, as well as Sony Pictures and MGM. It has also mulled a potential merger with Discovery Inc., which owns the hit reality show “90 Day Fiancé” through its TLC network.
The deal announced Tuesday exchanges 0.59625 of each CBS share for every Viacom Class B share, which means current CBS shareholders will own 61 percent of the combined company versus 39 percent for Viacom holders.
Shares of both companies rose on the news Tuesday, but Bernstein analyst Todd Juenger J pooh-poohed it as a bad bet for CBS. Whatever synergies are produced will “pale in comparison to CBS shareholders inheriting Viacom’s structural problems,” including a lack of fresh new shows, said Juenger.
Viacom boss Bob Bakish has been named the combined company’s president and CEO. Joseph Ianniello, the current acting CEO of CBS, will continue to run the CBS assets in his new role as chairman and CEO of CBS.
The companies came close to merging a year ago, but a rift over leadership derailed talks. At the time, Les Moonves was CBS boss. He has since left amid sexual harassment complaints.
Viacom also nixed plans to merge with CBS in 2016.