Simon & Schuster Is Up for Sale, ViacomCBS CEO Says

Robert Bakish-Getty-H 2019
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"Simon & Schuster is not a core asset. It's not video based," Bob Bakish told an investor conference about seeking strategic alternatives for the book publisher.

ViacomCBS CEO Bob Bakish on Wednesday signaled book publisher Simon & Schuster is up for sale.

"We've made the determination that Simon & Schuster is not a core asset of the company. It is not video based; it doesn't have significant connectivity to our broader business. At the same time, there's no question it's a marquee asset that's highly valuable. I've had multiple, unsolicited inbound calls about that asset," Bakish told the Morgan Stanley Technology, Media & Telecom Conference in San Francisco, in a session that was live-streamed.

"So as this market stabilizes, we'll engage in a process and look at strategic alternatives for Simon & Schuster," he added.

Carolyn Reidy, president and CEO of the book publisher, in an internal memo Wednesday to staff, confirmed that its parent had begun "the process by which ViacomCBS will potentially sell Simon & Schuster."

"Whatever the outcome, this process does not change what we know to be true of Simon & Schuster: we are a great publishing house and one of the world’s best known publishing brands, with an incredible legacy and bright future. We have a tremendous track record of producing best sellers in every category and format, and for readers of every age. We have a history of strong and long lasting relationships with our authors, and we will continue to bring important voices to readers around the world, both with our current publishing and our rich backlist of perennially favorite titles," Reidy added in the memo obtained by The Hollywood Reporter.

Bakish on the call also pointed to Black Rock, the longtime headquarters of CBS in Manhattan, as another asset from the combined Viacom and CBS entity that is in the process of fielding interested buyers. 

"The value-creation opportunities, including the accretive dispositions of some things we don't necessarily need to execute our strategy — Black Rock, Simon & Schuster — it's a tremendous value-creation opportunity," Bakish told investors.

His presentation to the investors conference followed ViacomCBS last month, in its first earnings report since the recombination of Viacom and CBS Corp. in December, swinging to a quarterly loss that disappointed Wall Street, dragging its stock down 18 percent that day. Analysts have said the merged firm must prove it can grow despite continued cord-cutting and ratings challenges in the digital age due to the young target audiences of many of its cable networks.

Bakish during his Morgan Stanley conference presentation focused on touting synergies, cost savings and free cash flow generation to come from the recombination as he spoke against the background of market skepticism. ViacomCBS called the final quarter of 2019 a "transitional" one, saying that it was affected by "operating items expected to be mitigated through the benefits of the combined company."

Investors have also raised questions about ViacomCBS’ streaming strategy, which doesn’t focus on a single approach. Bakish recently argued that the future online video landscape would be much like linear TV in that it will have free, "broad pay" and premium pay offerings, with the company ready to play in all three areas. Pluto TV is ViacomCBS' free streaming platform, Showtime OTT is its premium pay offering, and the company is also working on a new "broad pay" streaming offering.

"We have real momentum and growing scale in streaming, as we said on the call," Bakish reiterated on Wednesday.

ViacomCBS last month said it would expand its CBS All Access service to be the backbone for a “House of Brands” service, which has yet to be named. It will add content from Nickelodeon, Comedy Central, MTV, BET and other channels.

ViacomCBS, under a deal unveiled late in 2019, is set to acquire a 49 percent stake in Miramax, which has a library of 700-plus titles, including Oscar winners like Pulp Fiction, Chicago, Scream, Good Will Hunting and No Country for Old Men, for $375 million in a deal with BeIN Media Group. Paramount Pictures has also entered an exclusive, long-term distribution agreement for Miramax's film library and an exclusive, long-term first-look agreement allowing Paramount "to develop, produce, finance and distribute new film and television projects based on Miramax's IP."