Here Is Everything You Need To Know About The Viacom-CBS Merger

The plaintiff CBS shareholders filed a lawsuit in the Delaware Chancery Court against certain NAI parties, as well as certain directors and officers of CBS. The complaint alleges that the defendants breached their fiduciary duties in connection with the negotiation and approval of the merger. In a February 21, 2021 order (here), Vice Chancellor Slights largely denied the defendants’ motion to dismiss. According to the plaintiffs’ consolidated amended complaint (here), the 2019 merger of CBS and Viacom followed years of efforts by Shari Redstone, who was a director of both CBS and Viacom, and who through National Amusements, Inc. (NAI) controled both companies. The 2019 merger, the complaint alleges, was the culmination of years of “relentless” effort on Redstone’s part to merge the companies.

Early examples of cross-company synergy that year included TV Land airing a week-long marathon of classic episodes of “The Fugitive” to promote CBS’ revival of the franchise. VH1 was tapped to promote the Eye’s new Bette Midler sitcom with a week of Midler-themed programming. CBS also announced an MTV-produced Super Bowl halftime show, a Nick Jr.-branded Saturday kids’ block, and TV movie co-productions with Showtime. The original Viacom was first created in the 1970s after the Justice Department forced CBS to sell off its syndication unit.

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Originally just a distribution company, Viacom began purchasing TV stations and then cable outlets (including MTV and Nickelodeon in 1984). Then Redstone’s National Amusements took control of the company in 1986, and he began an acquisitions spree that included Paramount Communications in 1994 and Blockbuster Video, which included Spelling Entertainment, in 1995. While the merger is now complete, the new company has work to do yet on Wall Street. CBS and Viacom shares have dropped about 19% and 24%, respectively, since the long-expected deal was confirmed on Aug. 13.

• One such case led to a $14.75 million settlement resolving #MeToo related allegations of CBS failing to disclose former CEO Les Moonves’ behavior of sexual harassment.
• CBS shareholders filed three separate suits, which were later consolidated, alleging the company had overpaid for Viacom, clearing the way for media mogul Shari Redstone to reunite the family’s media holdings.
• So he proposed breaking Viacom into two companies, housing movie and cable-TV operations in a company led by Freston and broadcast TV, radio and outdoor advertising operations under Moonves.
• Working together may ensure both companies are better off than they started, but holding out against each other may be the best-case scenario for one company and the worst-case scenario for the other.
• The previous board of directors of Viacom were George S. Abrams, David Andelman, Joseph Califano, Jr., William Cohen, Philippe Dauman, Alan C. Greenberg, Charles Phillips, Shari Redstone, Sumner Redstone, Frederic Salerno, William Schwartz, and Robert D. Walter.

You should consult your own attorney in connection with matters affecting your own legal interests. As readers know, I have been maintaining a runny tally of the largest shareholder derivative settlements. My table of the largest settlements, updated to reflect this new CBS/Viacom (Paramount Global)settlement can be found here. This new settlement is one of the ten largest derivative suit settlements ever. Depending on how you count some of the arguably larger settlements, this latest settlement could be the ninth largest, or better.

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The picture changed in September 2018 after longtime CBS chairman-CEO Leslie Moonves was ousted as allegations of sexual misconduct in his past surfaced. That came four months after Moonves went to war with Shari Redstone over control of CBS, filing a lawsuit that argued she was breaching her fiduciary duty to other CBS shareholders by pushing for the CBS-Viacom deal. CBS Corp. and Viacom revealed the timeline of the merger talks in a Securities and Exchange Commission filing on Thursday that runs nearly 300 pages. Also Thursday, CBS and Viacom said the shares of the newly minted ViacomCBS will trade on the Nasdaq market, where Viacom shares have been listed since December 2011.

(This isn’t a perfect prisoner’s dilemma example because the companies can’t really betray each other, ending up in a situation where both are worse off). Comcast’s NBCUniversal and ViacomCBS are struggling to keep up with the biggest players in streaming video. Also at this time, the CBS board began to have specific discussions about the fate of Bakish and Ianniello. The views expressed on this site are exclusively those of the author, and all of the content on this site has been created solely in the author’s individual capacity. This site is not affiliated with his company, his colleagues, his clients, his relatives or any other institution or person living, dead, or yet to exist. However, this site may not be quoted in any legal brief or any other document to be filed with any Court unless the author has given his written consent in advance.

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Viacom began life as a child company of CBS which handled syndication rights for the network before becoming its own separate company. This confusion is understandable—these are companies who have a long history of buying other companies, and of being split up into new businesses. Here’s a brief history of Paramount, Viacom and CBS, as well as an explanation of exactly who owns who in 2022, as well as Paramount’s own rationale for changing its name. ViacomCBS is now Paramount, as announced at the company’s recent earning’s call.

The new company will be one of the largest players in TV advertising, capturing an estimated 22% of viewership to traditional television. That will be in the same league as Comcast Corp., which owns NBCUniversal, and ahead of Walt Disney Co. Combined, the company spends more than $13 billion a year to produce content. It will have a growing presence in the streaming space and access to a library stocked with more than 140,000 television episodes and more than 3,600 movie titles. Viacom Chief Executive Bob Bakish will become president and chief executive of the new entity, and gain a seat on the board. Shari Redstone, the mogul’s daughter, will become the first chairwoman in Viacom’s history.

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The prisoner’s dilemma is a standard game theory situation often taught in business school. Comcast Chief Executive Brian Roberts and ViacomCBS chairman Shari Redstone are living it in real-time as they consider working together. Nine days later, the CBS board met with advisers at Lazard and Centerview to hear their view of the changing media landscape and CBS’ long-term prospects. CBS and Viacom had two previous fitful attempts at merger discussions in 2016 and early 2018, but in both cases, corporate drama derailed Redstone’s desire to see the two halves of her family’s media empire reunited. CBS and Viacom were brought together by her father, Sumner Redstone, in 2000, and split up into separate entities again as of January 2006.

Kevin M. LaCroix is an attorney and Executive Vice President, RT ProExec, a division of RT Specialty. RT ProExec is an insurance intermediary focused exclusively on management liability issues. As reflected in a February 2023 filing by Paramount Global on Form 8-K (here), the separate Viacom shareholder action recently settled for $122.5 million, subject to court approval.

The complaint alleges that after prior unsuccessful efforts to effect the merger, Redstone packed the CBS board with hand-picked loyalist directors and also convinced certain hold-over directors to support her efforts, using compensation inducements. It gives CBS a television and film studio to provide shows for its network. Viacom gains major advertising https://forexhero.info/tradeallcrypto-crypto-broker/ outlets to promote the films and shows produced by Paramount and its Spelling Entertainment TV studio. The merger was announced last September, and approved by the two companies’ stockholders in late December. Beginning on November 25, 2019, four class action lawsuits against Viacom were filed and ultimately consolidated in January 2020.