CBS-Viacom Combination Would be TV Ad Leader

SMI estimates merged company would have 20% share of national revenue
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Whatever the merits at this point of putting together CBS and its sibling Viacom, combining the media companies would create a leader in the national TV advertising business.

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According to an analysis by Standard Media Index, CBS and Viacom combine for a 20.2% share of all national TV ad revenue this TV season.

CBS brings its big broadcast network, plus cable networks Pop and CBS Sports Network, while Viacom would kick in its once-youthful cable networks including MTV and Comedy Central plus its struggling kids network Nickelodeon and its kid brother Nick Jr.

CBS Viacom Ad Revenue

Both CBS and Viacom are controlled by the family of Sumner Redstone and if a merger could be arranged, the new company would have a larger share of the national ad market than Comcast’s NBCUniversal at 18.4%, The Walt Disney Co., at 16.4, Discovery at 9.9, WarnerMedia--which last week jettisoned several of its top ad sales execs--at 9.8% and the new, slimmed down Fox Corp., with 9.4%.

Looking at shares of cross-platform ad revenue, a merged CBS and Viacom would again be the leader with an 11.4 share, according to SMI.

Following would be Disney with a 10.5% share, Google at 10.4, NBCU with a 9.4% slice, WarnerMedia getting 5.1% and Facebook with 4.9%.

The most recent reports indicate that CBS and Viacom have set a target date of Aug. 8 to conclude merger talks.

The companies’ boards are not discussing how the stocks of CBS and Viacom would be valued, according to CNBC. That will be decided only after issues including who would lead the combined firm is settled. Both companies are scheduled to release and discuss quarterly earnings that day.

Many analysts expect the deal to be completed. Some think it might be a good idea to create a bigger entity at a time when the industry is consolidating to pursue scale in order to compete with tech companies and streamers like Netflix.

"While both companies face obvious pressures in the coming years (CBS has an NFL and SEC Football renewal while Viacom faces a threat of accelerated subscriber losses), we have long believed that the initial separation of these companies made zero sense,” said Michael Nathanson of MoffetNathanson Research in a report this week.

“We would hope new management (whoever that may be) would examine current plans to prove that current streaming and production strategies generate sufficient ROI to continue. We also would urge better financial disclosure going forward,” Nathanson said.

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