Shari Redstone can’t wait to ring that bell.
After three years and three tries, Viacom and CBS Corp. have been reunited as one company, ViacomCBS, as of Wednesday. The closing of the deal reached on Aug. 13 is a testament to Redstone’s tenacity and determination to change the direction of her family’s empire as she saw the business landscape around CBS and Viacom changing dramatically in the past few years.
Although nobody wanted to see the CBS-Viacom merger come to fruition more than Redstone, she still can’t quite believe it’s done.
“It’s not going to be real until we’re trading tomorrow,” Redstone told Variety in an interview hours before the closing became official. Redstone, ViacomCBS CEO Bob Bakish and a host of other senior leaders will be on the NASDAQ trading floor in Manhattan on Thursday to ring the bell and launch the official trading of the new VIACA and VIAC shares.
ViacomCBS still faces plenty of skepticism in the marketplace about whether it has the size and scale to compete with behemoths such as Disney, Comcast, AT&T, Amazon, Apple and Netflix. Redstone points to ViacomCBS’ $13 billion (and counting) in annual content spending as something that cannot be dismissed as a small player.
“I think ViacomCBS is absolutely going to have the scale they need to succeed in the world,” Redstone said. “We’re taking a group of differentiated assets to really create a global content powerhouse. We not only have the ability to create a quantity of content, we have the brands to create content that people really want to watch.”
Redstone pointed to the success that Paramount Television has had in recent years with producing original series for the streaming giants that have disrupted traditional TV. Amazon’s “Jack Ryan” and Netflix’s “13 Reasons Why” are top hits that demonstrate the importance of having a wealth of IP and the know-how to produce.
Redstone believes that ViacomCBS has a bright future ahead, especially as its larger rivals focus on launching direct-to-consumer platforms that will require them to hold back a good portion of their movie and TV productions for in-house platforms. ViacomCBS is taking a different approach, balancing its investment in DTC operations such as CBS All Access and the ad-supported Pluto TV with a drive to produce high-end content for takers around the world. The archives of Viacom, Paramount Pictures and CBS together contain some 140,000 episodes of television and more than 3,600 film titles. That depth of IP can generate a lot of business when content with built-in brand recognition has launched a sea of reboots, remakes, sequels and prequels.
“Our ability to take our library around the world to all third-party platforms as the craving for content increases and other (companies) pull back their content — I’m really excited about this,” she said. “I really believe we have a differentiated strategy and we are going to be a leader in content.”
Reuniting CBS and Viacom will strengthen the assets of both companies in ways that weren’t as vital during the 2000-2005 period when they were previously brought together by Redstone’s media-mogul father, Sumner Redstone. During those years, however, CBS and Viacom operations largely stayed distinct, which had the effect of turning the company into a series of fiefdoms. That will not be the case this time around, Redstone promised.
“We missed this opportunity before,” Redstone said. “There is nothing more important that I am focused on than creating one company, with one vision and one strategy and one team.”
Bakish, who has been a senior executive at Viacom since 1997, reinforced that ViacomCBS has learned from the missteps of the past. The company moved quickly after the merger announcement to create central groups for content licensing, distribution and advertising sales that cut across all Viacom and CBS brands.
“That’s facilitating our plan to make us easier to do business with,” Bakish said. “That gives us a strong hand to play. When those companies were together in the past, we did not operate that way. We went into this saying ‘Let’s set ourselves up to do incredible things.”
Redstone said planning for the integration process began from the day the merger was announced in August. Leaders of divisions as disparate as CBS News and Nickelodeon have been meeting to brainstorm potential collaborations and cross-promotional efforts.
“I met with all the leaders over the first few weeks and asked them to think about who you might want to work with and what things you might be able to do when we’re one company,” she said. “The last few months we’ve made tremendous progress.”
Wall Street still needs some convincing. CBS and Viacom shares are down about 19% and 24%, respectively, since the Aug. 13 merger announcement. Redstone sees the decline as in part due to all the noise in the industry about the “streaming wars” as Disney, WarnerMedia and Comcast dive into substantial investments in DTC platforms. As ViacomCBS executes on its priorities, investors will respond, Redstone predicts.
“They need to see that we can fully integrate this company so that we are acting as one team,” Redstone said. “The market likes to put everyone in one bucket and make it all about the streaming wars and ‘how will you compete with Netflix and Amazon?’ and all that. We’re a new company with a differentiated strategy of maximizing the assets we have across all platforms — digital, linear, consumer products, real-world experiences. We have a different strategy than other companies and people need to see we can execute on this. We’ve done it before.”
Redstone’s enthusiasm is infectious (“Can you tell my passion for this deal?” she asks), and her achievements to date are undoubtedly impressive.
Starting in 2016, she remade the boards and senior management teams at Viacom and CBS as she became increasingly concerned about internal problems at the companies and external competitive threats. Redstone endured public battles with former Viacom CEO Philippe Dauman and former CBS chief Leslie Moonves that at times went deep into her family history, particularly her relationship with her legendary father.
Shari Redstone was thwarted twice before — in 2016 and 2018 — in her efforts to bring CBS and Viacom back together. As 2019 draws to a close, Redstone has solidified her position as one of the world’s most powerful media moguls, and the only woman at the top of an entertainment conglomerate of significant size.
At 96, Sumner Redstone is in failing health and struggles at times to communicate. But he is well aware of the goings on in the kingdom of content that he began building more than five decades ago.
“I spoke with him last week. Someone asked him ‘Are you proud of Shari?’ and I got the loudest ‘yes’ I’ve ever heard,” Redstone said.