CBS-Viacom Merger Intrigue as Les Moonves Pushes for Clear Control

Shari Redstone Les Moonves - Split - H - 2016
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Sources say Viacom and Shari Redstone are looking to wrap up a quick deal by year's end, but governance (and compensation) issues could complicate a combination.

The merger dance between Viacom and CBS Corp. is underway, but the priorities of the two Sumner Redstone companies don't quite seem to match. Sources tell THR the Viacom special committee tasked with working on the merger hopes to wrap things up by year's end, quickly tackling financial terms and moving to issues of governance and compensation for CBS Corp. president and CEO Leslie Moonves, who would oversee the combined entity.

But for the CBS side, the issue of governance comes first. In other words, Moonves, who holds a strong hand in this negotiation thanks to his stellar reputation, wants clear control of the combined company. He was closely allied with Viacom and CBS vice chair Shari Redstone during the protracted battle to oust Viacom chairman Philippe Dauman, but now it seems Moonves might be wondering whether Redstone might have developed an appetite for influence at a CBS-Viacom and would attempt to pull strings. (Of course, the Redstones control voting shares of both companies.)

CBS has hired Moelis & Co. and Goldman Sachs to advise on a deal, while its special committee is advised by Lazard. The special committee of Viacom is advised by LionTree, Allen & Co. and Morgan Stanley. Viacom and CBS declined comment, but in a Nov. 3 earnings call in which Moonves touted the highest quarterly earnings per share in CBS history, he said talks "aren't even in the second inning yet."

This story first appeared in the Nov. 18 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.