April 3, 2018
Ongoing talks regarding the possible merger of CBS Inc. and former corporate parent Viacom isn’t revolving around price or who would head both companies. That would be CBS CEO Les Moonves. Instead, the multibillion dollar deal is reportedly hung up by who would be Moonves’ second-in-command, among other management decisions.
CNBC reported that Moonves is eyeing CBS COO Joe Ianniello, while Shari Redstone, who controls majority shares of Viacom, wants Viacom CEO Bob Bakish assuming the role.
Moonves contends that if the Viacom board of directors wants him to lead the combined companies, he has the right to name his management team. Shari Redstone believes otherwise.
“[The acquisition price] is not actually going to be the key issue whether or not these talks succeed in reaching a deal,” said David Faber, host of CNBC’s “The Faber Report”.
Ianniello, who was recently promoted to the COO position from CFO, has been with CBS since the media company separated from Viacom in 2005. He typically backs up Moonves on fiscal calls.
Bakish, who replaced Philippe Dauman in 2016 as CEO of Viacom, formerly headed Viacom International Media Networks. He has been with the company since 1997.
“So, we are setting up, it would seem, for a potential debate and/or clash between Shari Redstone and Les Moonves about what the reporting structure in the new company will be,” Faber said.
Indeed, as controlling shareholder at Viacom (including Paramount Pictures), Redstone has the right to replace the board or even Moonves, according to Faber.
In addition, both Bakish and Ianniello have clauses in their employment contracts that call for significant financial compensation in the event of a change in ownership of either company. For Ianniello, that reportedly would be $70 million should he not get the No. 2 position in a combined CBS/Viacom.
Analysts contend cost synergies in the merger would range from $500 million to $750 million.