The drama surrounding the efforts by Viacom and CBS to merge back together after its split in 2006 has been well documented in the media, but the ongoing twists and turns are worthy of examination.
Viacom head Sheri Redstone, daughter of Sumner Redstone, has been trying to wrest control of CBS, in which she has a majority share, from network C.E.O. Les Moonves, with whom she is not happy. Moonves’ handling of CBS properties, including Star Trek, has been less-than-stellar, and court filings reveal that she intends to sell the combined company for a higher price than she would get if the separate organizations were sold individually.
In fact, CBS lawyers sued Viacom in court over the planned merger, only to be denied. Moonves, for his part, wants to keep his job, which wouldn’t necessarily happen if things go in Redstone’s favor, hence the lawsuit to stop the merger from taking place.
CBS has pushed back its annual shareholders’ meeting to August. Complicating matters is that telecommunications giant Verizon is also trying to acquire CBS, which if successful would throw a serious wrench into Redstone’s plans. If Verizon is able to acquire the network, Redstone loses out on the massive profits from selling a recombined Viacom.
In the interests of full disclosure, I worked for Blockbuster Video, which at the time was owned by Viacom, from mid-1996 to early 2001. So I have something of a passing interest in seeing how this all plays out. I wasn’t all that thrilled with how Blockbuster was managed or the poor business decisions that alienated it from some of its video vendors, including Universal Studios. For a time, Blockbuster had to pull all Universal videos and merchandise from store shelves, it was that bad. (A couple of years after I left, a judge tossed out a lawsuit brought by independent video rental retailers citing unfair revenue-sharing practices, and prior to that, survived an anti-trust suit, though it was forced to settle another one over its outrageous and misleading late fee practices.) So it’ll be interesting to see where all this goes.
Keep an eye out for the video discussion about this merger effort.
The Wilk Report 