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For CBS-Viacom Merger, Negotiations Prove Content is King

Aug 15, 2019




By Zarifa Huq


“Will they be big enough?”


Jessica Reif Ehrlich, senior media and entertainment analyst at Bank of America Merrill Lynch pondered the impact of the merger between Viacom and CBS, to be called ViacomCBS. 

The combined $30 billion dollar company will make Shari Redstone, the new controlling shareholder, one of the most powerful women in media. 


The unified company will control nearly $11 billion in advertising revenue and have a more commanding presence at the negotiation table with cable distributors and satellite partners. 


In a realm where “content is king” and streaming has become the go-to, multiple corporations are merging to gain market share. The latest in this string of mergers is Disney’s purchase of FOX making their market capitalization close to $245 million. Redstone is not stopping here. She has received pitches from Vice and held talks with Sony Pictures and Discovery. The final completion of this deal will generate a market cap of 30.6 billion. 


At the moment, the media conglomerates are all fighting for the same customer as the customer demands the content but more importantly where the services are being purchased. With each streaming platform companies put out, making sure they own the platform on top of the content has become the utmost important factor. Companies are clamoring to stand out in an ever-increasing streaming stage in order to compete. Merging will give them a better edge amongst customers so their level of offered products can maintain a competitive edge against media behemoths like Disney. 


With a new board of directors in place, CBS is more keen to complete the negotiations with Viacom. Eager to prove success after the sexual allegations of previous CEO Les Moonves and the subsequent departure of 6 board members, CBS makes a willing negotiator. The two companies are negotiating a share exchange ratio between 0.5960 and 0.5965 according to sources close to the matter. The price haggling between these two parties is the final demand in the negotiation to close.

Read the full story NBC News here.