Shari Redstone is continuing to work to bend the corporate trajectories of CBS Corp. and Viacom Inc,. the two media conglomerates controlled by her family’s movie-exhibition company, National Amusements Inc.
In her latest move, Redstone has been pressing CBS to consider appropriate corporate governance, according to a report in The Wall Street Journal, and has been working to gather names for potential replacements for the company’s board of directors and place more emphasis on long-range strategic planning. A CBS spokesman declined to comment, as did a representative for Redstone.
The Journal reported that the company has not formally named a successor to Leslie Moonves, its current chairman and CEO. Moonves, 68 years old, has over the years, leveraged his skills in picking talent and programming into a seat at the head of a company that produces some of the best-known and most-watched programs in the nation, including “The Big Bang Theory” and “NCIS.” Moonves’ current contract lapses in 2021. Meantime, Joe Ianniello, the company’s chief operating officer, is expected to be named president of the company in 2018, according to the executive’s latest contract, which was included in a November regulatory filing from the company.
The new pressure comes after the recent disclosure that Redstone has begun to revive her efforts to combine CBS and Viacom anew. Her father, Sumner Redstone, had combined CBS and Viacom in 2000, only to pull them apart six years later. National Amusements in September of 2016 formally requested that the boards of both companies consider the possibility of a new merger on an all-stock basis, then stopped the process at the end of that year.
A merger between the two companies is not something that is seen as imminent, according to people familiar with the matter, and Redstone’s efforts are said to be nascent.
More media companies are considering tie-ups that would give them a larger footprint in a sector that has been flummoxed by new technology and consumer patterns. Monetizing viewership of content has become more difficult as consumers migrate to new video screens and behaviors that aren’t measured as easily, crimping the flow of advertising support and undermining media companies’ ability to lock in fees from distributors. To fight back against these trends, a number of prominent media companies have set big acquisitions or outright mergers.
CBS has not seemed inclined to merger or make outsize acquisitions in the recent past, but recent agreements struck by AT&T to buy Time Warner and Walt Disney to acquire a large portion of 21st Century Fox may have changed the landscape. “As the world around CBS and Viacom will soon be inhabited by giant companies with giant companies with endless balance sheets, the reality of the current arms race has weighed on these two stocks,” said Michael Nathanson, a media-industry analyst with Moffett Nathanson, in a recent research note.
The combination of the two companies could give each more marketplace leverage, he suggested. “This combination should create more aggregate affiliate fee negotiating leverage and substantial cost synergies. In addition, a merger with Viacom would give CBS more cash flow for its upcoming NFL negotiations,” Nathanson said.
