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Yesterday, following what felt like an eternity of seriously-when-will-they speculation, CBS and Viacom announced plans to merge. Well, re-merge: since CBS first spun off Viacom in the ’70s, the companies already got back together once, then split again. (They were on a break!) The latest merger comes in the context of a push for scale across the media and entertainment industries, especially in the streaming space. Shari Redstone—who already controlled both companies through her family’s company, National Amusements—will chair the combined entity. Bob Bakish, currently in charge at Viacom, will be the CEO. The new company will be called ViacomCBS, at least to start with. (The creatives probably weren’t involved in that one.)
There have been plenty of hurdles on the road to the merger: as The Wall Street Journal put it in a headline, the “deal drama was worthy of the fall lineup.” After CBS and Viacom last separated, in 2006, National Amusements was roiled by a messy family-succession saga. In the time since, leaders at CBS—Les Moonves, most notably—vigorously opposed Redstone’s push to merge the companies; last year, CBS sued Redstone, alleging that she was trying to force a deal on unfavorable terms. Soon afterward, Moonves resigned as CBS chairman and CEO after 12 women told The New Yorker’s Ronan Farrow that Moonves sexually abused them, one of several #MeToo scandals to shake the network and its news division; following a review, CBS fired Moonves for cause, and yanked his severance. Even with Moonves gone, the path to a deal was not clear-cut: a legal settlement imposed conditions on future merger moves, including the acquiescence of two-thirds of CBS’s independent directors, and Joe Ianniello, Moonves’s interim replacement, brought with him a history of opposition to the deal. In recent months, however, the merger became a question of “when,” not “if.” Ianniello came onside; he’ll stay at the company as chairman and CEO of the CBS wing.
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Roll the credits, then? Not so fast: the CBS–Viacom deal will stay in the headlines for some time to come. The merger will need to clear regulators. Experts suspect that it will, but shareholders could throw obstacles in the way; per The Hollywood Reporter, the biggest independent holder of voting stock in both companies already warned that his “lawyers [are] at work.” As and when the deal goes through, executing it will be a messy business, as Recode’s Peter Kafka notes. It’s not clear that the companies are a good match, culturally; turf battles could ensue as they work out how to team up. Staff from the executive level on down could quit. Others will surely be laid off: the new company plans to save at least $500 million in dreaded synergies.
The merging will continue, but to what degree? The combined entity will be big—but not big enough, analysts agree, to meaningfully compete with entertainment giants such as Netflix, or the recently merged Disney (which now includes parts of Fox) and WarnerMedia (which is made up of AT&T and Time Warner). It’s long been thought that a bigger player could acquire a merged CBS–Viacom entity, but Kafka now thinks that’s unlikely: for now, there’s no apparent buyer. It’s more likely that ViacomCBS will become a buyer: rumors about moves for Discovery, Starz, AMC Networks, Sony, and even Univision abound. Companies with sizable news divisions could also be targets. Vanity Fair reported last week that Vice (no stranger to corporate turmoil) wants in; Bakish reportedly isn’t interested, but Redstone might be. Redstone supposedly has one eye on BuzzFeed, too. For now, NBC’s Dylan Byers writes, she’ll effectively pursue a dual course: pursuing acquisitions with a view to a future sale.
Time will tell if we’re looking at ViacomCBS, or ViacomCBSDiscoverySonyStarzViceBuzzFeed, or something else entirely. Likewise, it’s too soon to assess the deal’s full impact on the news business—including at CBS News, which the combined company will already own. For now, one thing’s for sure: the CBS–Viacom story will grind on.
Below, more from the world of mergers, acquisitions, and antitrust:
- Power player: The merger deal, NBC’s Claire Atkinson writes, makes Redstone “possibly the most influential woman in media.” Last month, Irin Carmon profiled Redstone for New York magazine: “Moonves’s stunning downfall has given Redstone, for all her wealth, something she’s never had before: a narrative that justifies her own rise.”
- Buyers beware: In her newsletter yesterday, Sara Fischer, of Axios, warned that “scale for scale’s sake can be a risky business.” Late last year, Verizon, which went on a media buying spree that saw it acquire companies such as HuffPost and Yahoo, took a $4.6-billion writedown on its media assets—about half what Verizon spent on them.
- In more Verizon news: Earlier this week, Verizon agreed to sell Tumblr (ask your parents) to Automattic, the owner of WordPress, for less than $3 million—a stunning drop from 2013, when Yahoo (now part of Verizon) paid $1.1 billion to acquire Tumblr.
- Meanwhile, on the news side: Last week, Gannett and GateHouse agreed on a deal to merge. Shareholders have not yet signed off, however, and Digital First Media, the private-equity-backed publisher that recently tried (and failed) to take over Gannett could try and derail the deal, as could hedge-fund boss Leon Cooperman. This week, GateHouse cut jobs at at least four of its titles, including 14 layoffs at The Oklahoman, Poynter’s Tom Jones reports. It’s not clear if the cuts are linked to the pending merger.
- Trust fun: Companies such as Facebook and Google have showered trade associations with money—but, amid divisions among industry players, some such groups are staying silent about heightened antitrust scrutiny of big tech, Politico’s Steven Overly reports. Elsewhere, Google could be in antitrust trouble in Europe again: rival job-finding sites have complained that Google’s job-listing tool has an unfair advantage, Reuters reports.
Other notable stories:
- Four days on from Jeffrey Epstein’s murky apparent suicide at a Manhattan jail, reporting has filled in parts of the picture, but also raised fresh questions about Epstein’s death. Per ABC News, Epstein was taken off suicide watch, despite an apparent prior attempt, at the urging of his attorneys; per the Times, two guards responsible for Epstein fell asleep, failed to check on him for three hours, then falsified records to hide their mistake. (Yesterday, the guards were placed on leave.) BuzzFeed’s Jane Lytvynenko reports that details of Epstein’s death appeared on 4chan about 40 minutes before the press got the story; it’s not clear who posted them, but it may have been a medical worker or first responder. Also yesterday, a reporter asked Trump why he shared a conspiracy theory linking the Clintons to Epstein’s death. “That was a retweet; that wasn’t from me,” he said.
- On Monday, Bernie Sanders suggested that The Washington Post covers him harshly because he complains frequently about Amazon’s low taxes. (The Post is owned by Jeff Bezos, who also owns Amazon.) Marty Baron, editor of the Post, called Sanders’s logic a “conspiracy theory”; reporters who covered Amazon for the paper insisted that Bezos never influenced coverage. On Tuesday, Sanders walked back the comment—in part. “My criticism of the corporate media is not that they… wake up in the morning and say, ‘What could we do to hurt Bernie Sanders?’” he told CNN. Rather: “There is a framework of what we can discuss and what we cannot discuss, and that’s a serious problem.”
- Last week, the Times publicly slapped down Jonathan Weisman, a deputy Washington editor at the paper, for showing “poor judgment” on social media; Weisman had drawn criticism for a series of tweets about Democratic politicians of color. Yesterday, the Times announced that Weisman has been demoted; as a result, he will no longer oversee coverage of Congress. (He will no longer be “active on social media,” either.) Weisman told the Times’s Marc Tracy that he accepts the judgment of Dean Baquet, the paper’s executive editor: “I embarrassed the newspaper, and he had to act.”
- In May, Myanmar freed Reuters reporters Wa Lone and Kyaw Soe Oo, to global relief. As E. Tammy Kim writes for CJR, however, their release did not end the problems for Myanmar’s press. “The Reuters case was, in many ways, exceptional, and drew wide attention: it became a model campaign for journalists’ rights,” Kim writes. But behind it “are dozens of other prosecutions that… relate to the assault on the Rohingya and go largely unseen. One highly visible victory may have served to mask dozens of defeats.”
- On Monday, after staff at sports and culture site The Ringer announced a union, Dave Portnoy, founder of Barstool Sports, re-upped an anti-union rant he posted in 2015. In response, a writer at Live Science offered to provide Barstool staffers with unionization resources; Portnoy said he would fire anyone who responded to the offer “on the spot.” Alexandria Ocasio-Cortez and New York’s Department of Labor were among those to point out that such a reprisal would likely be illegal. Variety’s Todd Spangler has more.
- Yesterday, clashes between riot police and anti-government protesters paralyzed Hong Kong’s airport. At one point, a group of demonstrators tied a reporter for a mainland Chinese newspaper to a luggage cart, believing him to be an undercover police officer; he was later freed. In recent days, Chinese state media has painted a distorted picture of the deepening unrest, which Chinese officials have said shows “signs of terrorism.”
- And some projects for your attention: the Times unveiled the 1619 Project, an initiative, pitched by Nikole Hannah-Jones, that proposes the arrival of the first African slaves in America as “a new point of origin for our national story.” The Post analyzed more than a century of government temperature data and found that “extreme climate change” has already arrived in the US. And journalism students from 19 universities just published a collaborative multimedia investigation into disaster recovery in America.
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