“Now that the Viacom-AT&T negotiation is in the rearview mirror, we would expect that the boards of Viacom and CBS will renew conversations about merging these two companies. CBS shares were up 4% at the close of trading Tuesday to $47.32. And the apparent lack of M&A matchmaking surrounding CBS in the wake of Leslie Moonves’ ouster as chairman-CEO last September is another telling sign. Michael Nathanson, a longtime Viacom watcher and partner in MoffettNathanson, said the movement of CBS and Viacom shares have been closely linked for the past few months, a sign the market sees a deal on the horizon. Yet there is no denying the sense of inevitability surrounding a consolidation of the two companies that were joined from 2000 through 2005, when controlling shareholder split them in to separate entities out of frustration with a lagging stock price. The CBS board is in the midst of a CEO search - which will not be concluded by the end of this quarter as had been indicated earlier - and is considering a host of M&A options for the Eye, not just Viacom. Sources close to the situation at CBS downplayed the suggestion that formal reunion discussions for the company are just around the corner. The key MVPD pacts allow the company to project out its most vital revenue source - predictable affiliate fees - for the near term, which will be important in valuing the company. Meanwhile, there’s renewed focus on Wall Street and in Hollywood on the fate of Viacom and CBS, the two halves of the Redstone media empire. Tuesday’s leap was welcome for Viacom after the threat of a DirecTV blackout spurred a 5% drop in the stock price on March 20. The stock was up 7.6% at the close of trading to $28.33. Viacom shares were up as much as 10% in early trading. But the thumbs up on growth guidance offered in February indicates that the DirecTV deal is in line with the terms of Viacom’s recent renewals with large MVPDs including Comcast, Charter Communications and Altice USA.ĭirecTV, U-verse and the DirecTV Now and Watch TV streaming platforms make AT&T the nation’s largest traditional MVPD, which also has the benefit of national reach unlike the regionally focused cable operators. Viacom acknowledged the new deal was a step down from the previous contract.
The reaffirmation of financial guidance was a signal to Wall Street that the DirecTV deal reached in the early hours of Monday did not amount to a rate-cutting bloodbath, as some feared because of AT&T’s own financial need to hammer down on programming costs for its MVPD platforms. Live+7 Ratings for Week of March 4: 'Big Bang Theory' Narrowly Tops 'This Is Us'ĭirecTV, Viacom Avert Blackout After Marathon Negotiation TV News Roundup: 'Million Dollar Mile' Debuts Exclusive First Look
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