Here Is Everything You Need To Know About The Viacom-CBS Merger

Now that CBS's merger with its long-lost corporate sibling Viacom is slated to close December 4, it seemed as good a time as any to review the screwy history of this deal and look at the challenges that lie ahead for the new company.  

•  CBS and Viacom have been "married" and "divorced" before. The Federal Communications Commission forced CBS in 1970 to spin off the company that became Viacom after ruling that television networks couldn't have financial stakes in shows they aired. CBS and Viacom got together again in 1999 thanks to Media Mogul Sumner Redstone. Viacom bought CBS in 1999 for $36.5 billion, in a deal that CNN at the time predicted would "bring the network of Dan Rather in touch with the MTV generation."Alas, those lofty prediction proved overly optimistic. Seven years later, Redstone soured on the idea of diversified media conglomerates and split the corporate siblings up.
• What changed? The growth of free-spending rivals such as Netflix and Amazon took legacy media companies like CBS and Viacom by surprise. Redstone's daughter Shari Redstone was concerned that both companies, which her family controls through their National Amusements Inc. movie theater chain, lacked the scale to be competitive. She urged CBS and Viacom to merge in 2016 but withdrew her proposal in the wake of opposition from CBS CEO Les Moonves. Two years later, CBS rejected Redstone's merger plan a second time. After Moonves was ousted amidst allegations of sexual misconduct, the merger was back on track.
• What are the terms of the deal? The all-stock deal is structured as an acquisition of Viacom by CBS. After closing, CBS shareholders will own approximately 61 percent of the new company, and owners of Viacom will hold about 39 percent. The deal valued Viacom at $11.8 billion, higher than the company's current market capitalization of $10.5 billion.
• What are the assets of ViacomCBS? Thanks to the CBS broadcast network and cable channels such as MTV, BET, Nickelodeon, and Comedy Central, the companies will have the largest share of the TV audience of anyone. The companies' holdings include a library with 3,600 film titles and 140,000 TV episodes along with Paramount Pictures studio, the CBS broadcast network, cable network brands such as MTV, BET, Nickelodeon, and Comedy Central as well as such streaming services including CBS All Access.
• What impact will the merger have on shareholders, employees? LightShed Partners Analyst Richard Greenfield estimates that 2,000 people will lose their jobs after as the companies try to meet their savings targets of $540 million in 2020 and $653 million in 2021. Viacom CEO Bob Bakish will run the new company. Acting CBS CEO Joe Ianniello will retain his current position and will also get a $100 million payout once the deal closes.
• Are there skeptics? Some Wall Street analysts have expressed reservations about the merger. A Delaware court Monday ordered CBS to turn over internal documents to a disgruntled shareholder who claims that the merger unfairly benefits Redstone. Wall Street investors are not fans either. Shares of both companies are both trading down for the year.
• Is ViacomCBS big enough? No. The combined companies will have a combined market capitalization of about $26 billion, orders of magnitude smaller than rivals, including Walt Disney ($274 billion) and Comcast ($197 billion). It isn't a question of "if" ViacomCBS makes a deal but "when" and "how much." Discovery Communications, Lions Gate, Sony Pictures Entertainment, and Starz are among the speculated potential acquisition targets for ViacomCBS.  
• Could ViacomCBS Be Acquired? Some pundits have argued that ViacomCBS could become an acquisition target for a larger company like Amazon and Apple. Time, however, isn’t on ViacomCBS’s side. The NFL’s broadcast rights deal likely will be announced next year. It’s imperative that that ViacomCBS continues to broadcast pro football, by far the country’s most popular sport.