Everything You Need to Know About the ViacomCBS Merger
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Some sighs of relief are emerging internally, now that the long-anticipated Viacom-CBS merger has been formalized, but a number of questions loom large as some things remain in flux and the two entertainment giants prepare to become one by year’s end.
Here’s a comprehensive look at what comes next for ViacomCBS.
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What kind of executive shuffling is ahead?
Viacom head Bob Bakish has stepped into the role of CEO of the combined ViacomCBS, and Joe Ianniello — once an odd man out — will lead CBS as chairman-CEO; that much is obvious. (Read their internal memos to their respective companies.)
But now that CBS’ cable operations — Showtime, Pop TV and Smithsonian Channel — are now under Bakish’s command, where does that leave other high-level execs such as Showtime chairman-turned-CBS chief creative officer David Nevins, Smithsonian Channel head Tom Hayden and Pop pres Brad Schwartz?
For now, it’s business as usual, according to people close to the situation, though Nevins will report to new chief Bakish and continue to work with Ianniello on day-to-day operations. Hayden and Schwartz report to Nevins. No further organizational announcements are expected in the near future. A cross-company integration team, with staff from both companies in addition to third-party consultants, will soon be formed to shepherd the new entity across the finish line, when the deal closes at the end of 2019.
How much of the half a billion dollars in synergies will involve personnel? Will there be layoffs?
According to sources familiar with the matter, synergies may result from real estate consolidation and increased use of automation. In May of last year, Viacom let go of about 100 staffers in a bid to streamline operations and drive down costs across the company, though Bakish said then that he was looking to shrink costs in a way that would not result in layoffs.
Personnel-wise, it has been surmised that back-office support departments and administrative areas may see layoffs, as is not uncommon when two large corporations come together.
Bakish said to expect $500 million in run-rate annual synergies within the first year to two years of the transaction’s close, in areas outside of content and marketing. (That’s net synergies, clarified CBS CFO Christina Spade on the investor call Tuesday, meaning that even after reinvestment in the business, that $500 million will still make it to the bottom line.)
What happens to CBS and Viacom’s SVOD and AVOD streaming platforms?
All of the streaming properties across both entertainment conglomerates will be more-or-less synced up in one bucket, and all of their ad-supported video-on-demand properties are getting swept into another, per execs on the call Tuesday, with Bakish touting a “powerful DTC ecosystem” to come.
“Just think about getting content from Nickelodeon, BET, MTV and Comedy Central to CBS All Access and Paramount movies to Showtime.,” he said. “And also imagine our AVOD properties like CBS sports HQ and ET Live being added to Pluto.”
Now the question becomes how quickly that can happen, what pricing and branding changes the various services will undergo, and whether there are licensing deals with other streaming platforms that have yet to expire.
Where will reunited “Star Trek” and “Mission: Impossible” franchises go from here?
Two major pieces of IP will see their film and TV under the same umbrella for the first time in years: “Star Trek” and “Mission: Impossible.” The “Star Trek” TV rights are currently held by CBS, while its film rights reside with Paramount. Paramount also controls the “Mission: Impossible” film rights, while the last “MI” TV series was produced by what is now CBS Television Studios.
Bob Bakish said that the company’s plans for the franchises is to “leverage across all the companies’ platforms.” That likely means that the recently-stalled development on new “Star Trek” films will resume, while there will more than likely be a new “Mission: Impossible” TV series in the not too distant future. While it is doubtful Tom Cruise will be popping up on the small screen, the bigger question is: Would the films feature the most recent film cast or characters from the CBS All Access “Trek” universe?
Those franchises aren’t the only pieces of IP for the combined companies to consider. “South Park,” “Transformers” and “Paranormal Activity” are also now under the merged banner.
What happens to Paramount TV and CBS TV Studios?
CBS TV Studios — formerly CBS Paramount TV in a former lifetime, after Viacom and CBS split in 2005 — is much larger than its younger Viacom-born counterpart, Paramount TV. The question going forward is whether the two studios will merge into a single operation or remain separate brands. Separately, there exist a number of other in-house production units in the form of MTV Studios and Comedy Central Productions.
There’s plenty of recent precedence for internal mixes-and-matches down the road, given Bakish and Ianniello’s remarks on the integration of CBS and Viacom’s streaming and AVOD properties, and the sweeping of CBS’ cable channels under Bakish’ purview.
How will Viacom and CBS learn to woo advertising dollars together?
CBS is one of the dominant forces in big broad-based advertising, owing to its flagship broadcast network. Viacom has had to develop new specialties in emerging marketing methods, such as social-media amplification, influencer marketing and data-driven marketing, due to the challenges of reaching younger audiences with its youth-skewing networks. The question the merged company will face is melding its ad-sales forces into a cohesive unit to provide all these things to Madison Avenue.
Should regulatory hurdles be expected? Will the new company list on the NYSE or NASDAQ?
Regulatory approval is expected (though 2020 Democratic presidential candidate Elizabeth Warren has “serious concerns” about the union). Next, CBS and Viacom have myriad decisions to make at the corporate level about how the integration will proceed. For starters, what’s the company’s moniker on Wall Street? A natural ticker symbol would be VIAC, which doesn’t seem to be in use at the moment in the U.S.
Then there’s the question of where the company will plant its equity flag. Viacom has been listed on the tech-heavy NASDAQ since 2011 while CBS is a stalwart of the NYSE. The Street’s reaction to the deal has so far been decidedly mixed, so look for ViacomCBS to pull together a glitzy investor presentation once the ink is dry on the re-marriage documents.
Cynthia Littleton, Joe Otterson, and Brian Steinberg contributed to this report.
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