WASHINGTON — CBS stockholders will gather in New York today to give an expected vote of approval for the pending $37 billion merger with Viacom.
Viacom CEO Sumner Redstone and CBS topper Mel Karmazin may not be too worried about selling their deal to shareholders, but federal regulators must still be won over. The Justice Dept. has made a second request for information about the deal, and CBS has complied with the request.
Must clear UPN hurdle
If the Justice Dept. is satisfied with all the documents now in its possession, the CBS-Viacom merger could be cleared by antitrust officials as early as next month. But that still leaves the FCC, which must decide, among other things, whether the merged company should be allowed to keep UPN after the deal closes. Current rules bar a major network such as CBS from owning an emerging network such as UPN.
Redstone has stated publicly that he is optimistic the FCC will allow common ownership of UPN and CBS. The deal is only possible since the FCC changed its rules barring ownership of two stations in the same market. If the deal is consummated, Viacom-CBS will own two stations in several markets, including Dallas, Boston, Miami, Philadelphia and Pittsburgh.
Spinoff to meet cap
Redstone and Karmazin will, however, have to spin off a few stations to meet the FCC’s current 35% national audience coverage cap. The combined stations of CBS and Viacom would reach about 41% of the country. All four major networks are lobbying vigorously in Washington to have that cap lifted to at least 50%, in not eliminated completely.
Karmazin and Redstone have said several times that they will do everything in their power to assuage the concerns of regulators and complete the deal.