For Immediate Release
Chicago, IL – September 11, 2018 – Today, Zacks Investment Ideas feature highlights Features: CBS and Viacom .
Is Moonves' Ouster at CBS a Victory for Viacom?
On Sunday it was reported that CBS CEO Les Moonves would relinquish his role at the company amid reports of decades of inappropriate behavior both before and after he joined the company. An internal investigation is underway, mostly to determine the value of Moonves’ severance package which could be anywhere from zero to over $100 million, but it is clear that he will no longer lead the entertainment and broadcast giant.
COO Joe Ianniello will take the helm on a temporary basis while the board conducts a search for a permanent replacement CEO.
Lost amid the salacious details of the accusations against Moonves – CEO of the largest company to date to be felled by the #MeToo movement – is the fact that his departure has major implications for the efforts of Viacom and the privately held parent of both companies, National Amusements (NAI) and its president Shari Redstone, and their efforts to merge Viacom and CBS, a move which Moonves had long opposed.
Redstone and National Amusements, which owns roughly 80% of the voting shares of both CBS and Viacom, had been involved in protracted litigation against CBS as Redstone sought to merge the media empires (which were previously a single company before CBS was spun off from Viacom in 2006) and the board at CBS favored diluting Redstone’s voting rights to preclude a deal.
The legal wrangling has been ongoing for the past two years but now appears to be at an end. At the same time CBS announced Moonves’ departure, it was also announced that a settlement was reached in which both sides would agree to dismiss litigation and that Redstone and NAI would not pursue a merger of Viacom and CBS for a period of two years. CBS also announced that six existing board members would be replaced with six new independent members.
The agreement does not preclude either side from engaging in potential deals with any other companies.
Shares of both companies have lagged the mass-media market in 2018 as uncertainty about a potential deal and the costs and distraction of protracted litigation cast doubt on the ability of either company to pursue growth opportunities.
Both CBS and Viacom currently carry a Zacks Rank #3 (Hold).
Though market reaction to these new developments has been muted in Monday’s trading, with CBS shares shedding just less than 2% and Viacom essentially unchanged on the day, these announcements should be a net positive for both firms as CBS gets out from under the cloud of the accusations against Moonves and both sides can move forward as independent companies with substantially similar ownership an a common goal of growing their respective media footprints.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: CBS and Viacom
For Immediate Release
Chicago, IL – September 11, 2018 – Today, Zacks Investment Ideas feature highlights Features: CBS and Viacom .
Is Moonves' Ouster at CBS a Victory for Viacom?
On Sunday it was reported that CBS CEO Les Moonves would relinquish his role at the company amid reports of decades of inappropriate behavior both before and after he joined the company. An internal investigation is underway, mostly to determine the value of Moonves’ severance package which could be anywhere from zero to over $100 million, but it is clear that he will no longer lead the entertainment and broadcast giant.
COO Joe Ianniello will take the helm on a temporary basis while the board conducts a search for a permanent replacement CEO.
Lost amid the salacious details of the accusations against Moonves – CEO of the largest company to date to be felled by the #MeToo movement – is the fact that his departure has major implications for the efforts of Viacom and the privately held parent of both companies, National Amusements (NAI) and its president Shari Redstone, and their efforts to merge Viacom and CBS, a move which Moonves had long opposed.
Redstone and National Amusements, which owns roughly 80% of the voting shares of both CBS and Viacom, had been involved in protracted litigation against CBS as Redstone sought to merge the media empires (which were previously a single company before CBS was spun off from Viacom in 2006) and the board at CBS favored diluting Redstone’s voting rights to preclude a deal.
The legal wrangling has been ongoing for the past two years but now appears to be at an end. At the same time CBS announced Moonves’ departure, it was also announced that a settlement was reached in which both sides would agree to dismiss litigation and that Redstone and NAI would not pursue a merger of Viacom and CBS for a period of two years. CBS also announced that six existing board members would be replaced with six new independent members.
The agreement does not preclude either side from engaging in potential deals with any other companies.
Shares of both companies have lagged the mass-media market in 2018 as uncertainty about a potential deal and the costs and distraction of protracted litigation cast doubt on the ability of either company to pursue growth opportunities.
Both CBS and Viacom currently carry a Zacks Rank #3 (Hold).
Though market reaction to these new developments has been muted in Monday’s trading, with CBS shares shedding just less than 2% and Viacom essentially unchanged on the day, these announcements should be a net positive for both firms as CBS gets out from under the cloud of the accusations against Moonves and both sides can move forward as independent companies with substantially similar ownership an a common goal of growing their respective media footprints.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook: http://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.