Analysis: Is ViacomCBS Really Being Shopped For A Sale?

A new rumor is being floated by Fox Business reporter Charles Gasparino that ViacomCBS VIAC is being shopped around for a potential buyer. However, common sense might suggest the story has no legs.

Who Says What: ViacomCBS stock popped Monday afternoon after Gasparino tweeted, “BREAKING: Biggest takeaway from the #SunValley Allen & Co conference: Shari Redstone made it clear she's shopping @ViacomCBS and not just to @comcast.”

He followed up with an appearance on his network that Redstone's actions "could lay the groundwork" to ViacomCBS to be merged with Comcast Corporation CMCSA, however, he also hedged himself by noting there were no "merger meetings" at the conference.

Gasparino's claim stands out from other major media focused on the event, who did not report that Redstone, the company’s chairwoman, “made it clear” that the company was up for sale. 

A July 8 article in the New York Post carrying the headline “Tongues wagging over Shari Redstone meeting with Comcast” reported Comcast CEO Brian Roberts briefly met with Redstone during the Allen & Co. conference in Idaho. The Post sourced its story to a single anonymous “attendee with knowledge of the sitdown.”

Shari Redstone was asked in the Post’s article about meeting with Roberts. Her reply: “I meet with everyone” — an answer she provided while on her way to a meeting with Jordan’s King Abdullah II.

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Reality Checks: Any potential merging of ViacomCBS and Comcast immediately runs into an impossible regulatory roadblock: federal law prevents a single company from owning two national broadcast television networks, which means either ViacomCBS jettisons CBS or Comcast ditches NBC. And while broadcast television audience sizes have been losing ground to cable television and streaming services, the two networks are still considered jewels in the companies’ respective crowns and are unlikely to be auctioned off.

Last month, the Wall Street Journal tapped into its own anonymous sources to claim Comcast had unsuccessfully approached ViacomCBS ahead of the launch of its Paramount+ streaming service in March to team up and put ViacomCBS content on its Peacock service.

ViacomCBS did not comment on that story, which also used an anonymous source to report Comcast plans to pull NBC content next year from the Hulu service it now shares with Walt Disney Co. DIS and end its movie licensing deal to populate Peacock with more popular content. Thus, why would Comcast need to spend billions acquiring ViacomCBS' content via a merger when it has more than a healthy supply of its own titles to keep Peacock in flight?

Lest we forget, ViacomCBS is not in poor health. According to its latest earnings report, its first-quarter revenue of $7.4 billion is up 14% year-over-year while its operating income of $1.5 billion is up 14%. And while Paramount+ is not in a neck-and-neck race with rivals Disney+ and Netflix NFLX, it nonetheless saw a 65% year-over-year spike in its first-quarter global streaming revenue.

The company’s diluted earnings per share of $1.42 was up 7% from the 81 cents in the same period in 2020. Yes, the company's stock could be more boisterous, but so could an endless number of stocks trading on the exchanges.

In reality, no one in the financial media knows for sure what Redstone's plans are.

Photo: Shari Redstone (center) flanked by CBS and Nickelodeon stars and executives, is seen ringing the NASDAQ bell for ViacomCBS in December 2019. Photo courtesy of the Nasdaq Exchange.