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In A $30 Billion Deal, Viacom And CBS Are Joining Forces

By David Folkenflik | NPR
Wednesday, August 14, 2019

Copyright 2019 NPR. To see more, visit https://www.npr.org.

Viacom and CBS are merging to make an entertainment giant, but it will still be smaller than its competitors.

Transcript

RACHEL MARTIN, HOST:

Now to a new Hollywood production that spotlights corporate intrigue and a desperate need to compete. But this drama is offscreen, involving a real-life mega merger. Viacom and CBS are joining forces to bring together properties including BET, MTV, CBS, Showtime and Paramount Pictures into one massive, blended company, valued at roughly $30 billion. Here's NPR's David Folkenflik.

DAVID FOLKENFLIK, BYLINE: Viacom chief executive Bob Bakish made his case for the deal in a conference call with investors yesterday afternoon.

(SOUNDBITE OF ARCHIVED RECORDING)

BOB BAKISH: Simply put, the combined company will be one of only a few with the breadth and depth of content and platforms and the global reach to shape the future of the industry.

FOLKENFLIK: Bakish is set to lead the new company, said to be called Viacom-CBS. It would combine Nickelodeon's "Dora The Explorer," CBS News' "60 Minutes" and Comedy Central's "Drunk History" in the same corporate pantheon. The two are separate wings of the Redstone family's media empire, split by Sumner Redstone in 2006 in an effort to unleash the profit potential of the entertainment side in Viacom. Instead, it lagged, and CBS flourished.

Sumner Redstone is now in his mid-90s. His daughter, Shari Redstone, had to fight Sumner's former girlfriends and executives in boardrooms and courtrooms to ensure she and the family would retain control of the two companies. Shari Redstone was interviewed by the digital news site Recode's Peter Kafka back in 2017.

(SOUNDBITE OF ARCHIVED RECORDING)

PETER KAFKA: At one point, Viacom was going to be the star. Now CBS is the star. Last fall...

SHARI REDSTONE: They're both stars.

KAFKA: They're both your children.

REDSTONE: And I love them.

FOLKENFLIK: That got laughs. But Redstone made clear she wanted one happy family.

(SOUNDBITE OF ARCHIVED RECORDING)

REDSTONE: I think, looking at the changes that were taking place in the industry, the changes in distribution, to me, it made sense to figure out, if you put these companies together, if you have content for all of these demographics, is that going to be the right thing?

FOLKENFLIK: The new Viacom-CBS will have to compete with bulked-up competitors. Disney acquired much of the entertainment properties of Rupert Murdoch's 21st Century Fox, including "The Simpsons" and the "X-Men." AT&T owns cable systems Warner Brothers Studios, CNN, The Cartoon Network and more. Internet and cable provider Comcast has NBC, MSNBC and Universal Pictures. All three are much bigger than Viacom and CBS. And then there's the digital services of Amazon, Netflix and Apple. The post-merger Viacom wants to offer more streaming services directly to viewers, too, but it will have a much smaller portfolio and far fewer resources.

The merger is believed likely to receive approval from federal regulators. It is also unlikely to be the last deal for Viacom, as the new company will probably have to buy more content or get absorbed by a bigger player. David Folkenflik, NPR News, New York. Transcript provided by NPR, Copyright NPR.

View this story on npr.org

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