Comcast, ViacomCBS Bosses Reportedly Met to Discuss International Streaming Pact

Comcast chief executive Brian Roberts, and ViacomCBS chairman Shari Redstone and CEO Bob Bakish reportedly met recently to discuss partnering in an international streaming video venture.

The Wall Street Journal, citing sources familiar with the situation, said the executives met at the end of June in New York to discuss possible scenarios in which the two media giants could partner in advancing their respective streaming platforms.

Shari Redstone

Comcast’s NBCUniversal launched the Peacock SVOD/AVOD platform last summer, while ViacomCBS transitioned CBS All Access into Paramount+ in March. Both platforms have international aspirations in an attempt to remain competitive with Netflix, Amazon Prime Video and Disney+.

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Bob Bakish

Working together could benefit the companies as Comcast’s Roberts has publicly expressed a desire to find business partners for international expansion. Paramount+ plans to operate in 45 countries by 2022.

Netflix has seen the bulk of its subscriber growth originate outside the United States, while one-third of Disney+ subs come from India. Comcast also owns streaming service Now TV in the United Kingdom, operated by its Sky satellite TV subsidiary.

Regardless, strange bedfellows is indeed a possibility considering that since its launch, Peacock has generated 45 million sign-ups, but reportedly only about 10 million paying subscribers. ViacomCBS in May disclosed that its Paramount+, Showtime OTT and BET+ platforms had a combined paying sub base of 35.9 million.

By comparison, Netflix had 208 million subs at the end of March, a tally that could be closer to 210 million through the streamer’s fiscal second quarter, ended June 30. Prime Video touted 175 million subs two months ago, while Disney+ tops 103 million.

Viacom, CBS Agree on Merger Price

The expected re-merger between Viacom and CBS has reportedly found common ground on the all-stock transaction’s price at around Viacom’s $12 billion market valuation.

Bloomberg, citing sources familiar with the deal, says the merger, which would re-unite parent Viacom and CBS after 13 years, could be announced as early as today.

Specifically, Viacom would get 0.59625 a share of CBS for each of its own shares. A year ago, Viacom had sought 0.6135 a share of CBS.

The two companies, whose assets include Paramount Pictures, BET, MTV, Comedy Central, Showtime and CBS All Access, among others, are looking to save $500 million in combined synergies — about half of what they originally announced.

The deal was originally delayed after former CBS boss Les Moonves sought the CEO position among the combined companies. Shari Redstone, who runs Viacom/CBS parent company, National Amusements Inc. for her ailing 94-year-old father, Sumner Redstone, wanted Bob Bakish, CEO of Viacom, to hold the position.

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Moonves dropped out of discussions when he was forced out at CBS following a series of #MeToo allegations.

Now Bakish is seen inheriting the CEO position, which leaves acting CBS CEO Joe Ianniello’s position unknown.

 

CBS, Viacom Re-Merger Nearly Complete; CBS Eyeing Higher Price Point for International ‘All Access’ Rollout

As expected, the Viacom and CBS re-merger could reportedly be announced as early as next week, pending last-minute stock exchange issues.

Fox Business’ Charlie Gasparino Aug. 9 on Twitter said the deal reuniting CBS with parent Viacom after a 13-year split is in the hands of the companies’ respective boards.

Viacom and CBS are majority owned by family-owned National Amusements, which is operated by Shari Redstone on behalf of her ailing 96-year-old father, Sumner Redstone.

Shari Redstone has pushed for the merger, claiming media consolidation is a perquisite for navigating the rapidly changing media landscape and over-the-top video distribution. She also wants Viacom CEO Bob Bakish to lead the combined companies.

Redstone’s strategy was initially rebuffed by former CBS CEO Les Moonves, who wanted the top job. With Moonves out following #MeToo issues, consummation of the merger seemed a formality.

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Separately, CBS says it will have 25 million combined CBS All Access/Showtime OTT subscribers by 2022.

To get there the media giant is rolling out All Access internationally in attempt to borrow a page from Netflix’s subscriber growth playbook.

All Access, like Hulu, is available with limited ads for $5.99 monthly, or ad-free for $9.99 ($11.99 for Hulu).

Speaking on the Aug. 8 fiscal call, acting CEO Joe Ianniello said the company would target Latin America and Europe with the more expensive $9.99 price point.

“Two-thirds of the All Access subs are taking the limited commercial option,” he said. “So obviously, the vast majority of that is the $9.99 price point.”

Ianniello contends there is strong demand for premium content delivered via broadband in the international marketplace.

“I just look at the number of people in the consumption of Netflix,” he said. “I’m very encouraged that this is single-handedly the largest opportunity that we have in front of us.”

Ianniello said CBS targets international distribution of proprietary content on franchise-per-franchise basis. Characterizing the U.S. market as “limited” to 325 million people, the executive contends a global audience in the billions satisfies long-term fiscal goals.

“Our thought is if [international is] willing to pay us [$9.99], we’re going to look at that hard,” Ianniello said. “But if they’re not, we’re going to put it through our own [domestic] infrastructure.”

With Disney announcing it would bundle pending SVOD service Disney+ with ESPN+ and Hulu, Ianniello said CBS is content limiting its OTT bundling to All Access and Showtime.

“I can understand why others want to kind of do that together because people will subscribe for different reasons,” he said.

With All Access nearly five years old, Ianniello says the company understands its appeal and marketing with Showtime.

“It’s an opportunity we don’t force consumers to do it,” he said. “They can buy part; if they want to buy them together, we obviously discount that. We think again those are different offerings and complementary as well.”

CBS Says It Will Investigate Sexual Misconduct Claims Against CEO Les Moonves

The board of directors at CBS Corp. July 27 said it will investigate claims of sexual misconduct by longtime CEO Les Moonves disclosed in an expose by Ronan Farrow in The New Yorker.

Farrow’s article  alleges Moonves engaged in unwanted touching and kissing of female subordinates over the past 20 years.

Read Ronan Farrow’s article in The New Yorker here.

“All allegations of personal misconduct are to be taken seriously,” the board said in a statement. “The independent directors of CBS have committed to investigating claims that violate the company’s clear policies in that regard.”

The board noted the timing of the expose coinciding with CBS’ ongoing legal battle with corporate parent National Amusements, headed by Shari Redstone and her ailing father Sumner Redstone.

“While that litigation process continues, the CBS management [which includes Moonves] has the full support of the independent board members,” said the statement.

Farrow won a Pulitzer Prize for another expose that outed Harvey Weinstein’s long history of sexual harassment. The story led to Hollywood’s #MeToo movement, and subsequent criminal indictments against Weinstein.

Analyst: Amazon Should Buy CBS to Compete Against Netflix

Despite spending billions on original content, Amazon Prime Video (100+ million) still lags behind Netflix (125 million) in subscribers and content cachet, according to analyst firm MoffettNathanson.

Solution: Acquire CBS Corporation, the media giant headed by Les Moonves with $21 billion market capitalization, major TV network, original online content production (“Star Trek : Discover” and “The Good Fight”) and burgeoning OTT video platform, CBS All Access.

“Rather than build it out over time, we wonder if Amazon would embrace a ‘buy it’ model and seek to acquire a traditional media company with content creation skills, deep proprietary content libraries, sports production capabilities, and burgeoning OTT ambitions,” Michael Nathanson said in a note. “Of all the companies available, CBS is the most logical fit.”

With a market cap above $820 billion, Amazon would appear to  be able to afford CBS — even in the hyper media M&A market that saw AT&T acquire Time Warner for $85 billion, and Disney offer more than $70 billion for 20thCentury Fox Film.

CBS, of course, is in the corporate crosshairs of parent National Amusements, which also is majority owner of Viacom (Paramount Pictures, BET, Nickelodeon, MTV, etc.). Spearheaded by Shari Redstone, National Amusements wants to re-combine CBS and Viacom — despite the former’s lukewarm interest.

CBS has an October 3 court date to determine whether it has the legal authority to undermine National Amusements’ voting power on the board of directors.

“If CBS is given their freedom from NAI’s control (which we doubt), we believe that an M&A premium would quickly emerge,” Nathanson said.

CBS, Shari Redstone Clash Gets Oct. 3 Court Date

The legal skirmish between CBS and corporate parent National Amusements, which is led by co-owners Sumner Redstone and his daughter Shari Redstone (who runs the company in place of her ailing father), will gets its day in court on Oct. 3.

On that day, the Delaware Chancery Court will begin proceedings to determine whether CBS has the legal authority to flood shareholders with a dividend issuance that would reduce National Amusement’s voting power from 79% to 17%. The issuance would not undermine NAI’s stock ownership or market cap.

Shari Redstone responded to the CBS move by changing the company’s bylaws and requiring 90% approval vote by the board of directors on such matters.

At issue is Ms. Redstone’s desire to meld CBS with Viacom, whose assets include Paramount Pictures, BET, MTV, Nickelodeon and Comedy Central, among others.

Les Moonves, who heads CBS, has been lukewarm to the idea. Moonves, who would head the combined company, wants to install his own management team, including COO Joseph Inniello as his second-in-command.

Redstone wants to put Bob Bakish, current CEO of Viacom, in that position.

CBS, which delayed its annual shareholder meeting due to the conflict, has rescheduled it for August 10.

 

CBS Postpones Annual Shareholder Meeting

CBS canceled its planned May 18 annual shareholder meeting following a week of litigation and drama between the media giant and its majority shareholder National Amusements, which is headed by Shari Redstone and her ailing 94-year-old father Sumner Redstone.

On May 17, the board of directors of CBS voted 11-3 to dilute the voting power of National Amusements from 80% to 20%. That vote was largely for naught since Shari Redstone – before the board vote – changed the company’s bylaws, requiring a supermajority vote to enact changes by the board.

“CBS management and the special committee cannot wish away the reality that CBS has a controlling shareholder [i.e. National Amusements],” Shari Redstone said in a statement. “NAI yesterday exercised its legal right to amend the company’s bylaws to require a supermajority vote on certain board actions with respect to dividends, effective immediately. In light of the Board’s action today, that action was plainly necessary, and it is valid.”

Indeed, a judge from the Delaware Chancery Court May 17 ruled against CBS’ request for a temporary restraining order prohibiting the Redstones from blocking the expected CBS board vote diluting their voting power.

In the rapidly changing media landscape, Shari Redstone is seeking to re-merge CBS and Viacom, with Viacom CEO Bob Bakish assuming the No. 2 position to CBS CEO Les Moonves. The latter reportedly has no real interest in CBS rejoining Viacom, including assets Paramount Pictures, BET, MTV, Nickelodeon and Comedy Central, among others.

Judge Denies CBS Restraining Order in Merger Battle with Redstones

A judge in the Delaware Court of Chancery May 17 denied a restraining order request by CBS Corp. to stop majority shareholders Shari Redstone and her ailing 94-year-old father Sumner Redstone from blocking an expected CBS board vote later today that would dilute the Redstones’ voting power.

The judge’s ruling means Shari Redstone can override a planned move by CBS to thwart the Redstones’ stranglehold on board votes by reducing their 70% voting stake to 18%.

CBS issued a statement saying the judge’s decision would not keep it from pursuing what was in the best interest of its shareholders.

“The ruling clearly recognizes that we may bring further legal action to challenge any actions by [the Redstones] that we consider to be un lawful,” the company said in a statement.

In the rapidly changing media landscape, Shari Redstone is seeking to re-merge CBS and Viacom, with Viacom CEO Bob Bakish assuming the No. 2 position to CBS CEO Les Moonves. The latter, who has no real interest in rejoining Viacom, including assets Paramount Pictures, BET, MTV, Nickelodeon and Comedy Central, among others, wants to install his own senior management.

 

 

CBS Sues Controlling Shareholder for Independence

CBS Corp. May 14 filed a lawsuit in Delaware Court of Chancery alleging breaches of fiduciary duty by majority shareholder National Amusements, which is run by Sumner Redstone and his daughter Shari Redstone.

CBS is seeking to prevent the Redstones from allegedly interfering with a special meeting of its board of directors to consider declaring a dividend of shares that would dilute the value of National Amusements’ voting rights to 17% from 80% — as is permitted under CBS’s charter.

The dividend would not dilute National Amusements’ economic interests, or any other CBS stockholder.

CBS said it took this step because it believes it is in the best interests of all its shareholders, and necessary to unlock significant stockholder value.

If consummated, the dividend would enable CBS to operate as an independent, non-controlled company and more fully evaluate strategic alternatives — including merging with Redstone-controlled Viacom.

CBS contends that without the litigation National Amusements would seek to oust its board members and/or change its bylaws — allegations National Amusements denies.

“National Amusements had absolutely no intention of replacing the CBS board or forcing a deal that was not supported by both companies,” the company said in a statement. “National Amusements’ conduct throughout supports this and reflects its commitment to a well-governed process.”

 

Viacom Asks CBS to Up Merger Bid

Media giant Viacom reportedly has asked CBS Corp. to increase its undisclosed merger bid by $2.8 billion. CBS previously offered an amount (reportedly $11.9 billion) below Viacom’s market capitalization value, according to CNBC, which cited sources familiar with the proceedings.

Viacom, which includes Paramount Pictures and Paramount Home Media Distribution, is majority owned by National Amusements – the corporate shell run by Sumner Redstone and his daughter Shari Redstone that controls Viacom and CBS.

Viacom spun off CBS in 2006 with Les Moonves assuming control of the publicly traded company.

With ongoing media consolidation industrywide, Shari Redstone seeks to consolidate the two companies, putting Moonves in charge. Redstone, however, wants Bob Bakish, current CEO of Viacom, to be president/COO of a combined Viacom/CBS, while Moonves prefers that position go to Joseph Ianiello, current COO at CBS.

Separately, CBS nominated Richard Parsons, the 70-year-old former CEO of Time Warner, to its board of directors. Parsons, who was replaced by Jeff Bewkes in 2008, was an earlier supporter of releasing movies digitally day-and-date with their packaged media debut – a move criticized at the time by video stores seeking exclusivity.

Parsons then enflamed the situation when, in a fiscal call, he said it would be a “cold day in hell” before leaving his Manhattan apartment to go to a video store. His comments came as Warner Home Video ranked #1 in domestic home video disc sales, with an industry-leading 20.2% market share.