What’s Old Is New Again At ViacomCBS
Yesterday executives from Viacom and CBS announced plans to complete a merger of the two companies. If the idea of ViacomCBS sounds familiar it is. 13 years ago the two units separated from one another, even though Sumner Redstone’s National Amusements company retained controlling interest in both. Now, after three years of pushing by Sumner’s daughter Shari Redstone, the two media companies are back together.
So why is now the right time for the tie up? It all has to do with the continued consolidation of the video content space. A decade or two ago a national network like CBS could stand on its own. But today networks need the content incubator of larger TV/movie producers to stay competitive. Hence the tie ups between ABC/Disney, NBC/Universal, etc.. In Viacom, CBS not only gets a terrific content engine but also a corporate cousin they know well.
There are still some exec-level details to be worked out in the merger, and expect a round of “deduplicated efficiencies” (aka layoffs) to happen over the next several months. Despite this short term pain, this is probably a good move for both parties.