Mario Gabelli, the biggest independent holder of voting stock in CBS Corp. and Viacom Inc., said that while the two companies could still merge, they may need partners to compete against larger, more-global bigger rivals.
Both companies need to develop a worldwide direct-to-consumer strategy, Gabelli, the chairman and chief executive officer of Gamco Investors Inc., said in an interview. CBS may need a new leader with the programming prowess of CEO Les Moonves, who was ousted over allegations of sexual harassment. The broadcaster on Sunday named Joseph Ianniello, CBS’s No. 2 executive, as interim CEO.
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“Ianniello has knowledge of CBS’s strategic plans and the skill set to follow it through,” Gabelli said by phone. “He needs to prove his skill set in greenlighting scripts.”
A partnership with Amazon Prime could be an “intriguing” way for either company to obtain global reach like Netflix, Gabelli said. Amazon.com Inc. has already teamed with Sony Corp.’s studio division to give Prime members early access to movies and has also talked with the studio about options including co-financing films. It’s held similar talks with Viacom’s Paramount Pictures, Bloomberg reported .
Gabelli also sees potential in a possible tie-up between Paramount and Sony’s Columbia Pictures. Walt Disney Co.’s purchase of 21st Century Fox Inc.’s movie studio shows there are potential benefits from industry consolidation.
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Lots of Benefits
“I’ve been under the impression over the last three or four years that there are a lot of synergistic benefits of combining Sony Columbia Pictures production with Paramount’s distribution,” he said. “You save a lot of money when you are distributing movies around the world.”
Gabelli’s company holds about 3.4 million voting shares of CBS, according to company filings, a 9 percent stake that’s second only to the 80 percent voting stake held by National Amusements Inc., the Redstone family holding company. He also oversees 5.03 million shares of Viacom, a 10 percent stake.
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