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Redstone weighs CBS-Viacom merger with or without Moonves

© Reuters. Shari Redstone arrives for Variety's Power of Women luncheon in New York
© Reuters. Shari Redstone arrives for Selection’s Energy of Ladies luncheon in New York

By way of Jessica Toonkel

NEW YORK (Reuters) – As she seeks to mix CBS Corp (N:) and Viacom Inc (O:) right into a unmarried corporate, media tycoon Shari Redstone dangers dropping her maximum gifted govt, whose management may well be vital to making sure the proposed merger succeeds.

Such is the trouble going through Redstone. Her long-time good friend and industry best friend, robust CBS leader govt Les Moonves, has emerged as probably the most largest stumbling blocks to a possible CBS-Viacom tie-up, in step with other people accustomed to the subject. Issues are that his objections may just both doom the transaction or that he would possibly no longer lead the brand new entity, the folk mentioned.

Moonves is chafing at Redstone’s insistence on putting in Viacom’s CEO as his second-in-command and most probably successor of a merged corporate, the folk say. CBS and Viacom introduced in February that they have been exploring a possible deal and in contemporary weeks have begun negotiations.

At stake is the way forward for Redstone’s media empire, which is going through power to scale up at a time when competition are gobbling opponents to stick related. Her circle of relatives’s corporate, Nationwide Amusements Inc, controls each CBS and Viacom. Redstone favors merging the 2 to achieve dimension and leverage in negotiating higher programming costs from conventional cable and satellite tv for pc consumers, and to raised compete with rising gamers reminiscent of Netflix (NASDAQ:), the folk mentioned.

However she will have to come to a decision if she is prepared to do it with out her best captain to persuade the send.

Redstone desires Moonves to run the mixed corporate, in step with the folk accustomed to the placement, all of whom needed to stay nameless as a result of discussions are confidential. However she is considering shifting ahead with out him on the helm if no settlement can also be reached to stay him aboard, mentioned probably the most other people just about the placement.

With over 25 years at CBS and greater than a decade as CEO, Moonves has confirmed adept at navigating a hard media panorama. Underneath his management, CBS has been a best performer in its sector with probably the most hottest displays on tv. CBS inventory is up over 116 p.c on his watch. At 68, Moonves is an trade legend and nonetheless on the best of his sport.

Nonetheless, Redstone is serious about succession making plans, the folk mentioned. She desires 54-year-old Bob Bakish, whom she selected two years in the past to steer a turnaround at Viacom, to be president and leader running officer of the mixed corporate; Bakish would report back to Moonves, with the expectancy of succeeding him, the folk mentioned.

“Shari values Les, however we are actually in an international of: ‘what occurs after Les?'” mentioned probably the most other people just about the placement.

Redstone, Moonves and Bakish declined to remark thru spokespeople. Viacom and CBS declined to remark.

Moonves, in the meantime, desires his long-time lieutenant, CBS leader running officer Joseph Ianniello, to take the No. 2 spot on the mixed corporate, in step with other people accustomed to his considering.

The lads have cast a a success operating dating that would turn out key to melding two very other entities. Moonves and Viacom’s Bakish, against this, have met only a handful of instances, in step with other people accustomed to the placement.

“Les is announcing ‘I wish to make this a success. ..however let me have my staff,'” probably the most other people mentioned.


Regardless of contemporary tensions, Redstone has lengthy been just about Moonves, who was once decided on through her father, Sumner Redstone, to be CEO of CBS when it was once spun off from Viacom in 2006.

She and Moonves have long past to soccer video games and picture premiers in combination. And he or she has mentioned that Moonves was once considered one of her staunchest supporters amid extremely public felony battles, together with a feud with Viacom’s former CEO, Philippe Dauman, and clashes with former girlfriends of her aged father looking for a percentage of his riches.

“I’ve a perfect dating with Les,” 63-year outdated, Redstone informed a Recode convention closing 12 months.

Redstone has additionally taken a shine to Bakish since plucking him from Viacom’s world department in 2016 and putting in him because the company’s leader govt. As CEO, Bakish engineered a turnaround plan for the corporate’s suffering film studio and TV networks and boosted badly sagging workforce morale, holding Redstone within the loop thru all of it, other people accustomed to the placement mentioned.

That may be a giant alternate taking into consideration Redstone for years was once unwelcome at Viacom below former CEO Dauman, the folk mentioned. A bid through the Redstones to reassert keep an eye on culminated in Dauman’s departure in 2016.

The media heiress is now a well-known face within the hallways of Viacom’s New York workplaces. She has attended worker the town halls and corporate occasions, together with the relaunch of the MTV display “Overall Request Reside.”

Bakish and Redstone communicate a minimum of weekly, and he comprises her in all main choices, in step with other people accustomed to the placement.

“He introduced her in and solicits her ideas, and in some ways in which was once the best way to her middle,” mentioned one individual just about Redstone and Viacom.


There are different problems that would scuttle the merger.

The particular board committees that CBS and Viacom have shaped to barter a deal lately disagree about what number of CBS stocks Viacom shareholders will have to obtain.

CBS has introduced zero.55 of its stocks for each and every Viacom Magnificence B percentage, in step with the assets. Viacom countered closing week that it sought after zero.68 CBS stocks for each and every Viacom Magnificence B percentage, the assets mentioned.

What is obvious is that Moonves is observed as a big asset to the mixed corporate. Many analysts be expecting CBS’ inventory to take successful if he isn’t a part of any new management staff.

If the present standoff continues, Redstone will have to come to a decision if dropping Moonves is price going to the mat for Bakish, the up-and-comer.

“They’re each stars,” Redstone mentioned of CBS and Viacom on the Recode convention closing 12 months. “And I like them each.”

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