Reunited: It’s been a rocky road, but the long-awaited reunion of CBS and Viacom is officially in underway, with Viacom CEO Bob Bakish set to lead the new combined company, ViacomCBS, as president/CEO and Joe Ianniello, who for the past year has served as president and acting CEO of CBS, becoming chairman/CEO of CBS. Shari Redstone will become chairman of the new company – a position her father held until early 2016. The merger is expected to close by year’s end and form a combined enterprise that will have about $28 billion in revenue. Here’s what you need to know, at our deadline:
* The companies together have 140,000-plus TV series episodes and 3,600 films. ViacomCBS says its combined platforms account for 22 percent of all television viewing in the US, which places it ahead of Comcast (18 percent) and Disney (14 percent).
* Combined, the companies have 750 series ordered to production. They’ve spent a total of $13 billion on content during the past 12 months for programming across CBS’ local and national platforms, Showtime, Viacom’s cable and international networks and Paramount Pictures.
* ViacomCBS will have a global reach of more than 4.3 billion cumulative TV subscribers in more than 180 countries.
* The combined company projects $500 million in synergy savings within two years via the elimination of overlapping corporate operations and other initiatives.
* The new 13-member Board of Directors will comprise six CBS appointees, four from Viacom plus Bakish, Redstone and another board member designated by National Amusements.
* Once the deal closes, current CBS shareholders will own 61 percent of the combined company.
* Wall Street’s reaction to the merger was pretty much a non-reaction. CBS gained just shy of 2 percent; Viacom climbed nearly 2 percent as well.
Nevertheless, Bob Bakish, the Viacom CEO who will become CEO of ViacomCBS once the merger closes, stressed during a 40-minute investor call Tuesday that the reality of the deal transforms the operating environment. “It takes a big uncertainty off the company, which has been an overhang,” Bakish said. Both companies, he added, enter the marriage on an upswing. “One of the benefits is going to be the financial shape that we’re going to be in,” Bakish said. In one of the call’s many bursts of polysyllabic exuberance, he anointed the merged entity a “very strong, global, multiplatform premium content company.”
What’s it all mean? “This merger is about creating scale in a market that’ moving from traditional TV distribution to streaming. It’s about creating a stronger foothold in both camps. For traditional TV distribution that is a declining market, this deal means better leverage in negotiation with pay TV providers and overall bigger share of cable fees,” Gideon Gilboa, SVP, Product & Marketing, Media & Telecom at Kaltura, tells Cynopsis. As for streaming video, where the growth is highly competitive, “This deal means differentiation,” adds Gilboa. “First in terms of content selection with enough diversification to attract young audiences who tend to use streaming more regularly, in terms of marketing and brand power and in terms of a combination of business models including ad and subscription based products. Who will win the streaming wars is still very hard to say but this merger puts the two companies in a better starting position.”