Reunited? CBS and Viacom Are Talking About It
- 6 years ago
Reunited? CBS and Viacom Are Talking About It
In simultaneously released statements, CBS and Viacom — which were part of the same company from 2000 to 2006 — said
that their boards had created special committees of independent directors to “evaluate a potential combination.” Yet the companies cautioned that there could be “no assurance that this process will result in a transaction or on what terms any transaction may occur.”
In rekindling the possibility, though, both companies are acknowledging
that they must get bigger to remain competitive in a media industry that now prioritizes scale.
“Investors believe that scale equals clout and clout equals pricing power with both suppliers and customers.”
The ailing 94-year-old media mogul Sumner M. Redstone took control of Viacom in 1987,
through National Amusements, the private theater chain started by his father.
Thursday’s development echoes moves made by the companies in September 2016, after Mr. Redstone and his daughter, Shari Redstone, demanded the reunification of CBS and Viacom following a tumultuous year
that led to the ouster of Viacom’s chief executive, Philippe P. Dauman.
A new chapter opened Thursday in the drama over the future of the $37 billion Redstone media empire, with CBS Corporation
and Viacom announcing plans to explore a reunion, reigniting a plan that fizzled a little more than a year ago.
“While it never was the case that you need scale to have a successful business, it becomes a more credible proposition to investors to say
that you need it,” said Brian Wieser, a senior analyst at Pivotal Research.
In simultaneously released statements, CBS and Viacom — which were part of the same company from 2000 to 2006 — said
that their boards had created special committees of independent directors to “evaluate a potential combination.” Yet the companies cautioned that there could be “no assurance that this process will result in a transaction or on what terms any transaction may occur.”
In rekindling the possibility, though, both companies are acknowledging
that they must get bigger to remain competitive in a media industry that now prioritizes scale.
“Investors believe that scale equals clout and clout equals pricing power with both suppliers and customers.”
The ailing 94-year-old media mogul Sumner M. Redstone took control of Viacom in 1987,
through National Amusements, the private theater chain started by his father.
Thursday’s development echoes moves made by the companies in September 2016, after Mr. Redstone and his daughter, Shari Redstone, demanded the reunification of CBS and Viacom following a tumultuous year
that led to the ouster of Viacom’s chief executive, Philippe P. Dauman.
A new chapter opened Thursday in the drama over the future of the $37 billion Redstone media empire, with CBS Corporation
and Viacom announcing plans to explore a reunion, reigniting a plan that fizzled a little more than a year ago.
“While it never was the case that you need scale to have a successful business, it becomes a more credible proposition to investors to say
that you need it,” said Brian Wieser, a senior analyst at Pivotal Research.