Viacom CEO Rallies Staff Amid Contentious CBS Merger Talks
Bob Bakish's memo was titled "What a week!" and touted the "creative momentum across this company."
As CBS Corp. negotiates a purchase price for Viacom and, perhaps more importantly, figures out what the management team of a merged company might look like, Viacom CEO Bob Bakish was rallying the troops earlier this week around the notion that the conglomerate's turnaround was progressing well and was firing on all creative cylinders.
In film, Paramount "blew away industry expectations" with the opening of A Quiet Place, while at MTV, Jersey Shore Family Vacation enjoyed "the network's highest rated series premiere in six years," the exec highlighted in a memo to employees early this week.
Bakish titled his memo: "What a week!" And he concluded in it: "I couldn’t be more proud of the creative momentum across this company." Wall Street will watch closely for more signs of how the company's turnaround is going when it reports earnings on April 25.
The Hollywood Reporter published a story earlier on Wednesday that mentioned an analyst who raised some doubt about Viacom's turnaround after years of stagnating box office at Paramount and ratings declines at its cable networks — not to mention a stock price that is lower today than it was a dozen years ago.
The key to a potential merger lies with Shari Redstone’s relationship with Leslie Moonves, the chairman and CEO of CBS Corp. who is poised to run the combined company, but wants to do so only on his terms. Redstone has large sway over both companies as president of controlling stakeholder National Amusements and vice-chair of each board, and she has pushed for Bakish to serve as the No. 2 executive of the merged company.
CBS originally offered .55 shares of its stock for each Viacom class B share, which comes to roughly $11.9 billion, and Viacom countered with .68 shares of CBS stock, an increase of about $2.8 billion. The latter offer seems more fair given Viacom’s $12.7 billion market cap, but that value has been inflated by rumors of a CBS offer. If Viacom’s board rejects the offer, the stock could drop 20 percent in a day.
The price, though, is almost secondary to the power struggle, as Moonves wants Joseph Ianniello, the current COO of CBS, to be COO of the combined company, while the Viacom camp wants Bakish in that role — with Redstone siding with Bakish. She is understood to want to bring expertise from both companies together if a merger can be reached.
National Amusements issued a statement Wednesday, though it falls very short of addressing anything beyond the role it expects for Moonves should CBS and Viacom merge. "National Amusements has tremendous respect for Les Moonves and it has always been our intention that he run a combined company,” the statement read.
As for Bakish, his memo to Viacom employees is below.
We know how hard everyone is working, and it’s incredible to see that work pay off.
I’m happy to say Paramount blew away industry expectations — and our own! — with the opening of A Quiet Place this weekend. An innovative concept, with great talent both behind the camera and in front, and a savvy distribution and marketing plan led to Paramount’s biggest opening since 2016. The film — which was the talk of SXSW and beloved by critics and audiences alike (a 97% “Fresh” rating on Rotten Tomatoes!) — brought in $50.2M domestically for its opening weekend, and added $21M internationally, with most major markets still to come. Given the movie was made for just $17M, it’s a monster hit by every measure. I want to congratulate Jim and the entire Paramount team for their tireless work on this film, and on the studio’s turnaround more broadly. We all feel the renewed energy and creative and strategic focus, and couldn’t be more excited for what’s ahead.
I also want to congratulate Chris and the MTV team for their huge Jersey Shore Family Vacation premiere last week. With a 3.0 rating in its key demo, it was the network’s highest rated series premiere in six years, broke cable records as the most watched unscripted launch since 2012, and was the most social show of the day. This caps off MTV’s third consecutive quarter of prime growth, and jumpstarted the new quarter with high triple digit increases. I also love that Jersey Shore was the network’s first global premiere, with the show debuting in nearly 180 countries and territories.
I couldn’t be more proud of the creative momentum across this company, and I hope you are, too. Thanks again for everything you’re doing to contribute to it — let’s keep it up!