CBS and Viacom, hoping the third time will be the charm, have agreed to merge, creating ViacomCBS, a cable network, film production and broadcasting powerhouse that will include a library of 140,000 premium TV episodes and 3,600 movie titles.
CBS and Viacom have tried this before -- the companies combined in 1999, split in 2006 and have attempted a recombination another two times in 2016 and in 2018 only to pull the plug before closing a deal. And though those other attempts stumbled after the two sides couldn’t agree on valuations, the most recent merger reflects the need for scale in the cutthroat content business.
Direct-to-consumer assets are a big part of the combination. According to the press release announcing the deal, the combination will help Viacom and CBS accelerate and expand its DTC businesses -- CBS All Access, Showtime, Pluto TV and niche products like CBSN, ET Live and Noggin -- both domestically and globally.
Viacom CEO Bob Bakish will become president and CEO of the new ViacomCBS, with CBS acting CEO Joseph Ianniello becoming chairman and CEO of CBS. The all-stock merger will create an entity with combined revenue of about $28 billion.
CBS shareholders will own about 61% of the combined company, with Viacom shareholders owning the rest. Under the terms of the merger agreement, each Viacom Class A voting share and Viacom Class B non-voting share will convert into 0.59625 of a Class A voting share and Class B non-voting share of CBS, respectively. The deal is expected to close by the end of the year.
The combined company will include content brands like CBS, Showtime, Nickelodeon, MTV, BET, Comedy Central and Paramount Network, as well as a library of more than 140,000+ TV episodes and over 3,600 film titles, including Star Trek and Mission: Impossible. The combined company will also have more than 750 series currently ordered to or in production. ViacomCBS also will be one of the biggest content spenders in the industry, with more than $13 billion spent in the last 12 months.
“Our unique ability to produce premium and popular content for global audiences at scale – for our own platforms and for our partners around the world – will enable us to maximize our business for today, while positioning us to lead for years to come,” Bakish said in a press release. “As we look to the future, I couldn’t be more excited about the opportunities ahead for the combined company and all of our stakeholders – including consumers, the creative community, commercial partners, employees and, of course, our shareholders.”
In addition to Bakish and Ianniello, the leadership team of the combined company will include Christina Spade as EVP and chief financial officer; and Christa D’Alimonte as EVP, general counsel and secretary.
“This merger brings an exciting new set of opportunities to both companies,” Ianniello said in a press release. “At CBS, we have outstanding momentum right now – creatively and operationally – and Viacom’s portfolio will help accelerate that progress. I look forward to all we will do together as we build on our ongoing success. And personally, I am pleased to remain focused on CBS’s top priority – continuing our transformation into a global, multiplatform, premium content company.”
The ViacomCBS board of directors will be made up of 13 members, six independent members from CBS, four independents from Viacom and two members appointed by National Amusements, Inc. Current Viacom and CBS vice chair Shari Redstone will be appointed chair.
“I am really excited to see these two great companies come together so that they can realize the incredible power of their combined assets,” Shari Redstone said in a press release. “My father once said ‘content is king,’ and never has that been more true than today. Through CBS and Viacom’s shared passion for premium content and innovation, we will establish a world-class, multiplatform media organization that is well-positioned for growth in a rapidly transforming industry. Led by a talented leadership team that is excited by the future, ViacomCBS’s success will be underpinned by a commitment to strong values and a culture that empowers our exceptional people at all levels of the organization.”