Cementing the long-awaited merger of CBS and Viacom, the heads of each company, Bob Bakish at Viacom and Joe Ianniello at CBS, conveyed the news to their troops without sugarcoating the “challenges” of uniting two large organizations.
Ending years of on-again, off-again discussions, the companies said Tuesday they are officially coming together in a new entity to be known as ViacomCBS. Regulators will still need to bless the combination, which will result in a company with a market value of about $30 billion. Still further M&A could be undertaken to be sure the company can keep pace with media giants several times larger, to say nothing of deep-pocketed tech firms.
Both Bakish and Ianniello joined the company in the 1990s and worked there when it was under a single roof (from 2000 to 2006), but the media landscape has changed substantially in the years since.
For CBS, the changing of the guard after 13 years as a solo enterprise, is a significant milestone in a 92-year corporate saga. Viacom’s roots are more tangled, though the company was incorporated under its current name in 1970. The 1980s was a key decade for Viacom, which bought MTV and Nickelodeon in 1984 and then saw Sumner Redstone enter the scene via his exhibition chain National Amusements in 1986.
Here’s Bakish’s memo today:
I’m writing today to share some big news. We just announced an agreement to merge with CBS, bringing together our two great companies to create a leading global, multiplatform, premium content powerhouse.
This merger comes with a lot of expectation, but it also comes with what I believe is a rare and exciting opportunity. Together, we have the opportunity to be one of the few companies positioned to shape the future of the entertainment industry.
With this agreement, we bring together the most storied studio in Hollywood, a portfolio of brands that have shaped culture for nearly four decades, a broadcast powerhouse rightfully called “The Tiffany Network,” a major force in consumer publishing with Simon & Schuster, and Showtime, a premium brand that consistently pushes the boundaries of storytelling. Between us, we also boast one of the most innovative, diversified collections of digital assets in the industry. Make no mistake, together we aren’t just bigger – we are much, much better.
Our combined company – which will be called ViacomCBS – will have a library of content with incredible breadth and depth, and a reinforced capability to produce premium and popular content at scale. We’ll have greater reach, strengthening our position with advertising and distribution partners. We will have an extended portfolio of direct-to-consumer products — both ad-supported and subscription-based — that will accelerate our growth. And we’ll be able to build on our leadership positions in the US, UK, Australia, Argentina and India for continued global expansion.
Very importantly to me, CBS and Viacom are also a great fit. The CBS team is incredibly talented, with distinct expertise that has propelled the company’s continued leadership in broadcast, D2C and beyond. And, both of our companies share a passion for creating premium content and a commitment to innovating through a rapidly shifting media landscape.
I’m honored to say that I will be leading the combined company as President and CEO. Christa D’Alimonte will serve as EVP, General Counsel and Secretary. Christina Spade, who is currently EVP and CFO of CBS, will serve as EVP and CFO of the combined company. Joe Ianniello – currently President and Acting CEO of CBS – will serve as Chairman and CEO of CBS, overseeing the CBS-branded assets.
Combining our companies will be a joint effort. Over time, we expect there will be opportunities to bring our teams together with our peers at CBS, so we can begin identifying ways to work together and learn from each other.
In short, I’m very excited to begin working with CBS. Together, we can better maximize our business today, while ensuring we lead the industry tomorrow.
This is a big step forward for all of us, and I’m so grateful for all you’ve done to get us here. Despite changes in our company and the industry — as well as the continued speculation of a potential merger — you’ve focused. You’ve executed. And, you’ve delivered, which makes us a much stronger company than we were just a few years ago. I’m hoping you can maintain similar focus and determination in the months ahead as we work to close the transaction.
One change we already know will happen is that Wade Davis will depart in connection with the closing of the transaction, as we’ve determined there isn’t a senior operating role at the corporate level of the merged company that would be consistent with the full breadth of his experience, expertise and the scope of his current role at Viacom.
Wade has been one of Viacom’s most vocal and passionate champions, playing a critical role for the company in helping to develop and successfully execute our strategy to evolve Viacom for the future. In addition to managing our global financial functions, corporate development, investor relations, data science and technology services, over the past two years he has spearheaded important strategic growth initiatives, including most recently the creation of Advanced Marketing Solutions, which was the engine that retuned us to Domestic Ad Sales growth, as well as the acquisition, integration and management of Pluto TV, which helped us establish a leadership position in the DTC marketplace. We’re so grateful for his many contributions, and that he’ll be with us through the closing of the deal.
Throughout the process ahead, I promise to be as accessible and transparent as I can, starting with a Bob Live tomorrow, where I’ll give you an overview of the merger and answer any questions you may have.
I can’t wait to speak with you then. In the meantime, please check out the press release below for further details, and thank you again for all your hard work in getting us to this very important milestone.
Here’s Ianniello’s memo:
Dear Colleagues –
CBS is entering a new era today, announcing a merger with Viacom that bolsters our premium content portfolio and positions us for an even better future. As we all know, there is a race to create more of the best content. We are already leaders in this regard, and today’s news will accelerate our global ambitions.
We are merging at a time when the possibilities for premium content companies are greater than ever. Viacom owns terrific brands – Paramount, Nickelodeon, BET, MTV, Comedy Central and many others – that will complement ours and offer innovative ways to reach a whole new set of viewers. You can read more about the benefits of the deal in this press release.
When we finalize the merger, Viacom CEO Bob Bakish will become the President and CEO of the combined company, and I will become the Chairman and CEO of CBS. Bob and I will ensure a smooth and steady integration of our two great companies.
I am proud that I will continue to lead CBS, responsible for overseeing all of our CBS-branded businesses. I love CBS like you do, and I’m pleased to remain a steward of it along with our great team.
The new ViacomCBS will include corporate representation from both management teams, including our Chief Financial Officer, Chris Spade, who will become ViacomCBS’ CFO.
Together, we will build upon our success in Entertainment, News and Sports with the #1 television network, a prolific studio that produces more and more hit programming for outlets across the industry, an interactive division that operates CBS All Access and is a top-10 digital property in the U.S., a syndication arm that has eight of the top 10 first-run shows on television, and a local media business that has 28 television stations in the country’s major markets. As for our esteemed colleagues at Simon & Schuster and Showtime, your divisions will report to Bob when the deal closes, working under the inspired leadership of Carolyn Reidy and David Nevins – who will also continue to work with me overseeing entertainment programming for CBS, CBS TV Studios and CBS All Access.
CBS was founded on the principle of great content. This is something that will not change. In fact, our announcement today is structured in part to make certain that our tradition of excellence will remain an integral part of our future. And so in my role I’ll be “keeping my Eye on the Eye”…working with you to ensure that the rich heritage of CBS remains central to everything we do…and that CBS continues to thrive as it has magnificently for more than 90 years.
Of course, our best and strongest asset is our people, and we will continue to prioritize investing in you. We’ve accomplished so much on that front recently, and I assure you that our ongoing commitment to a positive, diverse and inclusive workplace will remain a key priority.
It’s important to note that the vast majority of you will continue to excel in your current roles. And while all of us will experience some change, including new challenges and opportunities, I want you to know that each and every one of you is a crucial component of our success, and we value your contributions every day.
It’s also important to remember that the process of combining our two companies won’t happen overnight, and the closing of this merger is likely several months away. I know that many of you will have questions, and they will be addressed in the upcoming weeks and months.
In the meantime, you should all have confidence that today’s announcement will put us in a decidedly better competitive position to succeed in the years ahead. As always, you have my appreciation and respect for the creativity, dedication and loyalty that you bring to your job every day. You are CBS.
August 13, 2019
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