After some false starts, CBS and Viacom announced Tuesday they will combine to form the latest media empire in a wave of mergers driven by the need for companies to reformulate themselves for the streaming era.
The new company will have more than $28 billion in revenue and comprise brands such as MTV, Comedy Central and Showtime, as well as Paramount Pictures and publisher Simon & Schuster.
The transaction will bolster their ability to develop original programming that can win subscribers to premium channel, score well with advertisers and resonate with audiences in international markets, the companies said.
The deal recombines two entities that were under the same corporate umbrella until they were broken apart in 2006 by Sumner Redstone, chairman emeritus of National Amusements, which holds almost 80 percent of both companies.
The deal comes on the heels of other large transactions in media, including Disney’s $71.3 billion acquisition of key assets from Rupert Murdoch’s 21st Century Fox, and AT&T’s $85 billion purchase of Time Warner.
“I am really excited to see these two great companies come together so that they can realize the incredible power of their combined assets,” said Shari Redstone, who will chair the new company, ViacomCBS.
“My father once said ‘content is king,’ and never has that been more true than today,” she said in a statement. “We will establish a world-class, multi-platform media organization that is well-positioned for growth in a rapidly transforming industry.”
The two companies failed in their earlier attempts to pull off a merger, due in part to opposition from former CBS chief executive Les Moonves, who was ousted in September 2018 amid sexual harassment allegations.
Joining forces will allow them to bolster investment in premium entertainment and boost their global reach, with broadcast networks in Britain, Argentina and Australia and content in 45 languages, the companies said in a press release. The deal also should result in $500 million in annual savings.
“The more scale you have, the more clout you have when go to in to negotiate with distributors or even with direct-to-consumers,” said Tuna Amobi, analyst at CFRA Research. “It gives them a better chance to compete.”
– Streaming era –
The traditional media industry is battling to deal with the rise of Netflix, Hulu and other streaming ventures that erode the position of conventional cable packages and broadcasters unveil “over-the-top” options.
CBS itself has launched its “All Access” service which provides on-demand programming for $5.99 per month with limited commercial interruptions or $9.99 per month for ad-free service.
And Disney in November plans to launch a new “Disney+” service at a starting price of $6.99 monthly that offer its films and television shows as well as the library it acquired through the Fox deal.
Under the all-stock transaction in the latest tie-up, existing CBS shareholders will own 61 percent of the company, while Viacom shareholders will own 39 percent.
Bob Bakish, chief executive of Viacom, will assume that post in the newly-combined company, while Joe Ianniello, acting chief executive at CBS, will become chairman and CEO of CBS, overseeing CBS-branded assets.
Shares of Viacom fell 5.6 percent to $30.75, while CBS rose 1.4 percent to $48.70.
Trump has committed 6 impeachable offenses: Harvard Law’s Laurence Tribe says ‘the evidence is all there’
Constitutional law expert Laurence Tribe broke down the six impeachable offenses President Donald Trump has committed during a Thursday appearance on MSNBC's "The Last Word" with Lawrence O'Donnell.
Tribe has argued 36 cases before the United States Supreme Court and taught at Harvard Law for 50 years. He co-authored the 2018 book To End a Presidency: The Power of Impeachment with Joshua Matz.
"Everyone was in the loop, it was no secret. That was the testimony from Ambassador Gordon Sondland yesterday as he implicated the president, Secretary of State, White House chief of staff, and former National Security Advisor John Bolton and other administration officials in the plot to bribe the president of Ukraine to publicly launch an investigation into Joe Biden in exchange for U.S. military aid to Ukraine that was authorized by Congress and that the president was withholding," O'Donnell reported.
Rachel Maddow breaks down how public opinion is catching up with the facts of Trump’s impeachment
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The host read the headlines from multiple newspapers following the damning testimony by Ambassador Gordon Sondland.
The Los Angels Times headlined, "Sonland implicates president." "Envoy says Trump directed effort," was The Wall Street Journal headline.
The St. Louis Post-Dispatch headlined, "'Everyone was in the loop. It was no secret': Defiant Sondland says he followed Trump's orders."
"Trump directed pressure on Ukraine, ambassador says," headlined The Kansas City Star.
Shep Smith blasts autocrats in first public remarks since leaving Fox News — and donates $500,000 to protect journalists
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"Intimidation and vilification of the press is now a global phenomenon. We don’t have to look far for evidence of that,” said Smith. "Our belief a decade ago that the online revolution would liberate us now seems a bit premature, doesn’t it? Autocrats have learned how to use those same online tools to shore up their power. They flood the world of information with garbage and lies, masquerading as news. There’s a phrase for that."