CBS (CBS) and Viacom (VIA) have agreed to merge into a combined company with more than $28 billion in revenue, culminating a deal that has been in the works since 2016. The combined company, ViacomCBS, will have an edge in the competitive streaming landscape, says one analyst.
In this deal, Viacom’s networks like MTV, Comedy Central, Nickelodeon, and Paramount, will all be combined with CBS, which has popular shows like “Big Bang Theory,” “Survivor,” and “NCIS.” Viacom’s angle on streaming as been more advertising-oriented, while CBS is more subscription-based.
“Bringing those two together will kind of help them to diversify, not just the business model, but also the reach and demographics. So I think there's a lot of upside in combining those two,” Tuna Amobi, CFRA Senior Analyst, told YFi AM Tuesday.
The CBS-Viacom merger will help the company compete against media empires like Disney (DIS) and AT&T Time Warner (T). “This merger is a positive long-term play, and that's why we're still recommending the shares, although there is going to be some devil in the details once the official announcement is out, depending on which side you are,” Amobi said on Tuesday, shortly before the deal was announced. “But ultimately, it's a game of scale, and we think a combined CBS and Viacom is going to be better positioned in direct-to-consumer and whole lot of other areas.”
Jennifer is a Production Assistant for Yahoo Finance. Follow her on Twitter @shankerjennifer