Redstone firm calls off CBS, Viacom merger proposal

December 12, 2016 by Mae Anderson
In this Feb. 13, 2012, file photo, a CBS logo is displayed on the exterior of CBS Scene Restaurant and Bar, at Gillette Stadium, in Foxborough, Mass. Media mogul Sumner Redstone's National Amusements is abandoning a proposal that CBS and Viacom reunite after a 10 year split. National Amusements, which owns most of the voting shares of the two companies, had urged the companies to combine in September 2016. (AP Photo/Steven Senne, File)

Media mogul Sumner Redstone's National Amusements is abandoning a proposal that CBS and Viacom reunite after a 10 year split.

The news comes as Viacom named acting CEO Bob Bakish as its permanent head.

National Amusements, which owns most of the voting shares of the two companies, had urged the companies to combine in September, saying that a tie-up would help them compete better as technology and the entertainment industry rapidly evolve.

Now, the company, run by Redstone and his daughter Shari, says that following management changes at Viacom and strength at CBS, which operates CBS, Showtime and other entities, it makes more sense for the companies to continue as separate entities.

Viacom, which owns the Paramount Pictures movie studio and pay TV channels such as Comedy Central, MTV, BET and others, has been struggling to improve its profit as Paramount has struggled to produce hits and cable viewership declines.

The company named Robert Bakish as acting president in late October and appointed him permanent president and CEO on Monday.

The appointment caps off a management saga that culminated earlier this year, when longtime Viacom CEO Phillipe Dauman was pushed out following a legal battle with media mogul Sumner Redstone's daughter, Shari Redstone, over control of the company. The fight ended with Shari Redstone as a Viacom director and president of National Amusements, which has a controlling stake in CBS and Viacom. At the time Tom Dooley was named interim CEO, but he announced unexpectedly he was leaving in October and Bakish was then named acting CEO.

This Aug. 3, 2011, file photo, shows the Viacom logo at Viacom headquarters in New York. Media mogul Sumner Redstone's National Amusements is abandoning a proposal that CBS and Viacom reunite after a 10 year split. National Amusements, which owns most of the voting shares of the two companies, had urged the companies to combine in September 2016. (AP Photo/Mark Lennihan, File)

Meanwhile, as more people cut the cable cord, choosing instead to stream TV shows or movies online at places like Netflix, Hulu, iTunes and Amazon.com, CBS has found success under Les Moonves streaming its popular shows like "NCIS" and "The Big Bang Theory," as well as its stand-alone, streaming Showtime channel.

There would have been cost savings if the companies combined, but strategically, the positives weren't as clear, said Instinet analyst Anthony DiClemente.

"This allows CBS to continue to operate in a very nimble and autonomous fashion," DiClemente said. "For Viacom, I think in terms of long term strategy, the verdict is still out."

Viacom said in a statement that it received the letter sent by National Amusements and will provide more updates later. CBS referred comment to National Amusements.

Viacom Inc. Class B shares fell $3.01, or 7.8 percent, to $35.61 in afternoon trading Monday. CBS Corp. Class B shares slipped 4 cents to $62.52.

In this Oct. 1, 2012, file photo, Sumner Redstone attends the premiere of "Seven Psychopaths" in Los Angeles. Redstone's National Amusements is abandoning a proposal that CBS and Viacom reunite after a 10 year split. National Amusements, which owns most of the voting shares of the two companies, had urged the companies to combine in September 2016. (Photo by Matt Sayles/Invision/AP, File)

Explore further: Viacom names Robert Bakish acting president, CEO

Related Stories

Viacom owner throws up hurdle to Paramount sale

June 7, 2016

In a move that further undermines Viacom CEO Philippe Dauman, the company's controlling shareholder said Monday it amended Viacom's bylaws to require unanimous board approval for any full or partial sale of movie studio Paramount ...

Viacom slashes exec pay amid lawsuit over Redstone's health

January 21, 2016

Viacom Inc. on Wednesday pre-released details about executive pay that show an 85 percent drop in compensation for its ailing 92-year-old executive chairman, Sumner Redstone, amid legal battles questioning his health and ...

Recommended for you

Printing microelectrode array sensors on gummi candy

June 22, 2018

Microelectrodes can be used for direct measurement of electrical signals in the brain or heart. These applications require soft materials, however. With existing methods, attaching electrodes to such materials poses significant ...

EU copyright law passes key hurdle

June 20, 2018

A highly disputed European copyright law that could force online platforms such as Google and Facebook to pay for links to news content passed a key hurdle in the European Parliament on Wednesday.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.