Shari Redstone is considering removing Les Moonves from atop CBS if he doesn’t agree to take on Viacom boss Bob Bakish as his No. 2 should the two companies become one again, according to Reuters. But would she really?
Not according to a spokeswoman for National Amusements, Inc., the umbrella company through which the Redstone family controls CBS and Viacom. “National Amusements has tremendous respect for Les Moonves and it has always been our intention that he run a combined company,” the rep told TheWrap.
A person with knowledge of the plans told TheWrap that the Reuters report of a threat to Moonves (which was echoed by CNBC) is “not reflective” of where the process stands. NAI is still waiting on a special committee to hash out such hiccups, and the person told us that they all still support that small group.
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So is this all just posturing, using the media as a negotiator? Technically, Redstone has the power to do virtually whatever she wants, as her family holds about 80 percent of the voting shares of both companies. That means she holds the cards.
And the hand Redstone wants played, according to the reports, is for Bakish to be president and chief operating officer of the new CBS. That would drop Moonves’ current righthand man, Joe Ianniello, into some other role — or perhaps, unemployment.
Moonves is reportedly staying loyal to Ianniello. Those on the CBS side believe he has good reason to.
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Though Bakish would bring some international experience to the table, many people do not believe he can match Ianniello on financial matters. And Ianniello has the advantage of knowing both companies, because he also worked at Viacom for six years.
Since the two entities split in 2006, Moonves’ CBS has been far more successful than Viacom. To be fair to Bakish, Viacom was led by Philippe Dauman for the lion’s share of the last dozen years, which haven’t always been glory days.
Why mess with a good thing? For Redstone, it is all about access, her critics say. That doesn’t mean she’s on an island with her thinking, however.
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BTIG analyst Rich Greenfield wrote in a note to investors last week that having Moonves lead the combined company would be a mistake. Greenfield said Moonves has a negative view of Viacom’s asset portfolio — and of basic cable in general. He also accused Moonves of being “the key driver behind the failed 2016 merger” of these two companies.
“Moonves has poisoned the Viacom waters for far too long and we simply do not believe Viacom and its employees could flourish under the known dislike of Moonves,” Greenfield wrote. “The future of a combined Viacom and CBS is going to be driven by an increasing focus on international and scaling up, which implies Bakish with Viacom CFO Wade Davis are the proper team, not Moonves and CBS’ COO Joe Ianniello.”
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Others aren’t questioning Moonves, but are questioning his consigliere.
“The contrast between Bob and Joe is pretty clear,” said Tuna Amobi, a media and entertainment analyst for research firm CFRA. “That’s not to say there aren’t people who prefer Joe, but Bob has a significantly diversified skill set, especially on the international side. [Joe’s] never run a public company.”
Viacom did not immediately respond to TheWrap’s request for comment on this story. CBS declined comment.
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Last week, Viacom countered CBS’ initial acquisition offer, adding about 24 percent in valuation to the opening proposal. The counter-offer valued Viacom at $14.7 billion, though since this is an all-stock deal, any ultimate dollar amount tied to a completed transaction would come down to fluctuating share prices.
Initially, CBS had proposed a share exchange ratio of 0.55, which would value Viacom at $11.9 billion. Viacom believed that to be a low-ball offer, CBS does not. At the time the value became public, that first offer placed a dollar amount on Viacom that was below its market cap.
An insider at one of those companies tells TheWrap that the negotiations have been contentious.