.CBS and Viacom are bringing together their television networks and the Paramount movie studio.
CBS logo seen at the CBS Television City Studio in Los Angeles.
Once the all-stock deal is completed, expected by the end of the year, CBS shareholders will own about 61 percent of the combined company and Viacom shareholders will own the rest. The companies say the combined company will have $28 billion in revenue. By combining, the companies say they will save $500 million a year.
The companies say the combined company will create content not just for its own services, but for third-parties as well. The new company wants to speed up the growth of its streaming services, including CBS All Access, Showtime, and Pluto TV, the free ad-supported service that Viacom owns, and drive more advertising to its services.
“If you’re going in both directions, you’re hedging your bets, but are you pulling your punches on whatever the best strategy might have been?” Begley said. Begley said the combined entity might have to consider other acquisitions to keep up with competitors. However, the number of possible targets is dwindling, he said, with what’s left mostly smaller companies such as the Discovery and the AMC television networks and the MGM and Lionsgate movie studios.After splitting in 2006, CBS and Viacom both remained controlled by National Amusements. Shari Redstone, daughter of media mogul Sumner Redstone, runs the holding company.
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