CBS chief: Viacom merger ‘must be attractive’

CBS Corp. will only recombine with Viacom “if it looks rights and is structured properly”, according to chairman and CEO Les Moonves.

Speaking on an investor call yesterday, Moonves said the currently healthy financial and creative position of CBS meant merging with Viacom, which has the same parent company, “if it is in the best interests of CBS and all of its shareholders”.

“The state of the CBS Corporation is extremely strong, which is more important now than ever given changes in our industry and as we consider a potential recombination with Viacom,” he said.

“As you know, our board has formed a special committee to work with us and explore this possibility, and we are still in the very early stages, so while the timetable and outcome are unclear, our strategy is not.

“If it looks right and is structured properly, it could be an attractive opportunity.”

Moonves pointed to strong third-quarter financial results as a demonstration that CBS could move forwards alone if the merger was ultimately deemed unappealing.

CBS, which has the number one new season US drama and comedy in Bull and Kevin Can Wait respectively, reported increased Q3 revenue of US$3.4 billion, up 4% on last year. Operating income was up 6% at US$798 million.

Moonves is expected to be handed control of a merged CBS-Viacom, which Sumner Redstone’s National Amusements would control. Viacom got a new interim CEO this week in the shape of international chief Bob Bakish, but he is unlikely to gain control of a merged group.

Under Moonves, CBS has steadily grown revenues and profits through long-running franchises such as NCIS and CSI: Crime Scene Investigation. He has a key ally in Shari Redstone, vice chairman of both Viacom and CBS, who recently backed him to lead the broadcast business “into the digital future”.

Viacom and its cable channels, meanwhile, have suffered from poor ratings and a falling share price.