Report: CBS, Viacom Set August Target Date For Merger Talks

CBS and Viacom continue to bob along with merger talks and are now circling Aug. 8 as an internal deadline to agree to a deal, according to CNBC citing people familiar with the matter.

CBS and Viacom happen to share Aug. 8 as the day both companies report second-quarter earnings. That makes it a natural goal post for a merger that’s been speculated about for more than a year, said the people, who asked not to be named because discussions are private.

Shari Redstone

Both companies have conceptually agreed that a deal to gain scale makes sense, said the people.

Bulking up to compete with Netflix, Disney, Comcast and others is a narrative that’s been pushed by controlling shareholder Shari Redstone, who is prohibited from proposing a merger of the companies herself -- a provision from a lawsuit she settled with CBS Corp. last year. Redstone would like a combined CBS-Viacom to get even larger as it prepares to renew expensive NFL broadcast rights in the coming years. She attended Allen & Co.’s Sun Valley conference last week, an annual setting for companies to begin thinking about future acquisitions.

The price of the transaction, which will come in the form of a merger exchange ratio, hasn’t been discussed and won’t be addressed until all strategic and management issues are sorted out, according to people familiar with the matter.

Bob Bakish

CEO Bob Bakish is expected to be the leader of a combined company, as CNBC has previously reported. While CBS’s board has concerns about Viacom’s leadership under Bakish, the combined boards of the companies will likely work with Bakish to name other executives instead of mandating that certain CBS executives come pre-installed as part of a deal, said the people. CBS CEO Joe Ianniello’s role is still unclear, said the people. His contract as CBS CEO’s runs out at the end of December.

After closing, the company may want to move quickly to acquire another company, such as Starz, which has already held talks about selling to CBS.

New leadership will also need to plan a streaming strategy to combat offerings from Disney, AT&T’s WarnerMedia and others. CBS’s streaming service CBS All Access has more than 8 million subscribers and estimates it will have 25 million by 2022.