Report: Redstone May Merge Viacom, CBS

Sumner Redstone had his reasons when he split his media empire into two separate corporations a decade ago: He had two strong top executives whom he wanted to keep happy, and more than enough successful businesses to go around, reports the LA Times.

Since then, network chief Leslie Moonves has been running the stalwart CBS Corp., which boasts the nation’s most watched TV network.  Viacom, meanwhile, has seen its stock plummet more than 45% in the last two years, and its chairman and chief executive, Philippe Dauman, is on increasingly shaky ground.

The contrasting trajectories of the two companies, and Dauman's precarious position, has prompted speculation about whether the Redstone family might eventually put CBS and Viacom back together again. That would allow them to hand the combined entity to Moonves, 66, who has long wanted to run a major movie studio.

“It’s clear that Les Moonves knows what he is doing while the people running Viacom are stumbling around in the dark,” said Jonathan Taplin, a USC Annenberg School communications professor.

Moonves declined to comment.

Les Moonves

Redstone turned 93 on Friday, and his family celebrated with him at his Beverly Park compound. In contrast to last year, top Viacom executives did not attend the celebration.

Rejoining the two companies would result in a more powerful conglomerate that would allow Viacom to better compete with the likes of the Walt Disney Co., Comcast Corp.'s NBCUniversal and 21st Century Fox.

Brian Wieser, a media analyst at Pivotal Reseach, said there was some merit in merging Viacom and CBS – if CBS’ management, directors and shareholders were interested in such an arrangement. “There would be tons of synergies,"  he said.

CBS boasts the nation's most-watched network, with TV sports and news, one of the nation's largest chains of TV stations, premium cable channel Showtime and the Simon & Schuster book publishing house.

Viacom has a different set of assets, with its profits coming from its stable of cable TV channels, including MTV, VH1, Comedy Central, Nickelodeon and BET.  It also owns the struggling studio Paramount Pictures, responsible for such big franchises as "Star Trek,"  "Mission: Impossible" and "Teenage Mutant Ninja Turtles."

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