Shari Redstone is emphatic: ViacomCBS has plenty of resources and the scale to compete in the new world order for media giants.
“We absolutely have enough scale,” Redstone said Friday morning during her Q&A held as part of the Paley Center for Media’s International Council Summit in New York. “We have an incredible library. We have incredible IP. We spend over $13 billion on content. We can compete with the best of them.”
Redstone, the controlling shareholder of Viacom and CBS, was pressed by moderator Aryeh Bourkoff, chief of LionTree investment bank, which was a key adviser on the Viacom-CBS merger, about the more than 20% drop in the stocks for CBS and Viacom since the long-awaited merger was completed in mid-August. The conventional wisdom on the Street is that investors believe the company isn’t big enough to remain a major player in global media.
“We not only have the scale, we have a track record of producing hits,” she said. “I think we’re in a very good position to compete going forward.”
Redstone stressed her view that the reunion of Viacom and CBS will create a content production powerhouse that will produce for a multitude of platforms — some in-house and some for third-party buyers like Netflix and Amazon. Redstone rejected the suggestion that ViacomCBS would be disadvantaged by not having an omnibus global platform of the scope of Disney’s Disney Plus or AT&T’s HBO Max, set to launch in May.
“It’s not just about being a big company. It’s about creating content that people want to watch,” Redstone said. “That’s the track record we have.”
The focus as Viacom and CBS integrate operations is to be “everywhere that consumers are” with content and brand-building opportunities.
“A lot of the companies are taking a one-size-fits-all approach,” Redstone said. “There is no cookie-cutter approach to the consumer.”
Redstone said integration of Viacom and CBS assets is well under way. She noted that the blending process of the companies this time around would be far more significant than 20 years ago when her father, legendary media mogul Sumner Redstone, first brought them together in 2000. (Viacom and CBS were split up by Sumner Redstone again in 2006.) The first time around, the company was run largely as fiefdoms controlled by executives who had no incentive to work together.
“These companies were together before but never were they integrated the way this company is going to be integrated now,” she said. She pointed to cross-company efforts such as Showtime developing a series format that hails from Viacom’s Argentine broadcaster Telefe, and Nickelodeon content being added to CBS All Access. “We are one culture, one set of values, one strategy and one team.”
Redstone said she has put a lot of time and energy into ensuring that the boards of CBS and Viacom reflected gender and racial diversity as a means of improving overall corporate governance at both companies.
Redstone acknowledged that big concerns about the internal working environment at CBS and Viacom in recent years forced a tough look at how the companies handled issues such as sexual harassment. Redstone was in the midst of a very public battle with former CBS Corp. chairman-CEO Leslie Moonves last year for control of CBS when sexual misconduct allegations were leveled against the executive, who was forced out last September.
“I have been focused on the board and leadership,” Redstone said. “We have looked at the systems in place that perpetuated a lot of the behavior.”
Redstone got a round of applause at the start of the session after Bourkoff complimented the incoming ViacomCBS chair for her tenacity in her work to overhaul the management of Viacom and CBS during the past three years, and for advocating in a tough environment for the reunion of the two halves of the Redstone empire. He called her a person of “extraordinary principle and great determination.”
Among other topics that Redstone touched on during the 45-minute Q&A.
NFL: Redstone, an ardent fan of the New England Patriots, exuded confidence about CBS’ ability to renew its NFL rights contract, which comes up in 2021. “The package is going to be comprehensive and going to be great,” she said. She noted that CBS brings decades of production expertise to its relationship, and she noted that the NFL prizes the ubiquitous reach of broadcast TV, even in a world of expanding platforms. “NFL needs to reach a massive audience,” she said. “Nobody lives and breathes the NFL like CBS. And it starts from the top,” she said with a grin.
Stock slump: Redstone flatly said that CBS and Viacom are both “tremendously undervalued,” she said. “The intrinsic value of the combined (company) is greater than our stock value today.” She asserted that her interest as the controlling shareholder was “in alignment” with other shareholders. “I want to create value and unlock value from day one” after the merger is completed, she said. “Nobody is working harder to achieve those goals.”
Advancit Capital: Redstone said her digital media investment venture, which is separate from Viacom and CBS, has been a good way for her to gain perspective on cutting-edge trends in media. Investment opportunities through Advancit helped her see the potential of podcasts and for digital businesses that are influencing the way people work in the digital economy. “Never has it been more important to pay attention to what’s about to happen next,” she said.