Wall Street may be banking on an eventual CBS-Viacom merger, but don’t count on it in 2016.
There were no signs of an imminent deal based on the comments by the top executives at their presentations to the UBS Global Media and Communication Conference held Monday. Neither CBS Corp. Chairman Leslie Moonves nor Viacom interim Chief Executive Bob Bakish hinted of an immediate future together.
Although he acknowledged that “anything can happen,” Moonves expressed confidence that CBS would continue to prosper on its own.
“We are very happy the way we are as a stand-alone company,” Moonves said. “We’ve said this and we truly believe this. There is nothing that we want. There is nothing that we lack. Our stock hit a 52-week high this week. We are executing tremendously.”
For his part, Bakish, who took his post Nov. 15 after running Viacom’s international businesses for the last nine years, said his focus will be a turnaround of the struggling media conglomerate while a special committee evaluates a possible CBS deal.
“My mandate from the board is to drive Viacom as a strong independent company and to revitalize areas of our performance,” he said. “Whether or not [a CBS transaction happens] we will ensure Viacom can be as strong as it can be.”
At the urging of Sumner Redstone and his daughter Shari, the controlling shareholders of the two companies, each firm has formed a special committee to explore a merger. Viacom and CBS were part of the same company until Sumner Redstone cleaved his empire in two in 2006.
Analysts widely expect that should the two companies merge, Moonves would be entrusted to run a combined CBS/Viacom. Moonves is respected on Wall Street and enjoys a strong working relationship with Shari Redstone. But a CBS executive familiar with the talks said no action is expected before the end of this year.
CBS also has improved its businesses — becoming a major producer and seller of programming to overseas broadcasters and streaming services — at a time when Viacom has suffered ratings declines.
That was reflected in Monday’s remarks by Moonves, who touted a strong fall prime-time launch for the most-watched TV network because all five of its new series have been picked up for a full season. He also said all of the network’s sports contracts are profitable, including the $1-billion-a-year deal with the NFL.
Moonves said despite the ratings declines in NFL viewing this season — largely blamed on competition from the compelling presidential election campaign — it continues to be the best product on television. (His network carries a Sunday package and the first half of the “Thursday Night Football” schedule). The telecast draws the largest TV audiences and provides a promotional platform for other CBS programming, luring young male viewers who don’t watch a lot of network television.
“I remember the three years we didn’t have it from 1995 to 1998,” he said. “The network fell apart.”
The NFL is also a reason that Moonves believes AT&T will eventually make a deal to carry the network on its new streaming service. CBS is the only major broadcast network not offered in the package that gives subscribers 80 channels for $35 a month. Quoting his favorite film “The Godfather” when talking about the negotiations, Moonves said, “We’re not unreasonable people.”
Moonves also said he is “guardedly optimistic” that CBS will make a deal with Warner Bros. to bring back another season of TV’s top-rated sitcom,“The Big Bang Theory.” The network is currently in negotiation with the studio that produces “Big Bang.” Though expensive, the show is still valuable in helping build other new series on the schedule.
On the Viacom side, Bakish touted the value of the company’s cable network brand names, which are still growing overseas. He said reviving MTV and Comedy Central will be a priority.
“We’ve lost share and we need to take that back,” he said.
Bakish indicated that he would like to see MTV return to its roots in music programming. He also offered a vote of confidence in “The Daily Show” host Trevor Noah, saying the topical comedy program’s ratings have held up since the end of the presidential election.
Bakish shut down speculation that Viacom is eyeing a stake in the youth-oriented media company Vice. “We are not going to do it,” he said.