In the world of mergers and acquisitions, Wall Street bankers have an old saying: “Everyone talks to everyone.”
The cliché describes those preliminary M&A powwows between CEOs that are so commonplace, you probably shouldn’t label them “deal discussions.”
Except on those occasions when they deserve that designation, which is why Shari Redstone, the matron of the ViacomCBS media empire, caused such a stir two weeks ago at the Allen & Co. media conference in Sun Valley, Idaho.
People who attended the event say Redstone was “talking to everyone,” which again may or may not lead to a deal. However, given her body language (plus some after-the-fact reporting on my behalf), ViacomCBS — one of the largest content providers in the business — appears open for a sale.
The reason: Redstone knows as well as anyone that in our current media world, big is no longer big enough.
Redstone controls ViacomCBS through the holding company created by her late father, the legendary dealmaker Sumner Redstone. It has been just two years since she managed to combine both companies by winning a nasty fight against ex-CBS chief Les Moonves.
Moonves, you might recall, opposed the merger, sued Redstone to stop it, and then lost his job over sexual-harassment allegations. With him out of the way, Redstone appointed her very capable and very loyal aide Bob Bakish as CEO of the new combined company.
ViacomCBS’s marquee properties include CBS News, “60 Minutes,” Showtime, Paramount Pictures, Comedy Central and MTV. Redstone — a former corporate lawyer who labored for years in her father’s shadow — had suddenly become the queen of all media.
What looked big in 2019 isn’t so big today, however. ViacomCBS has a market value of $26 billion. But the newly combined Discovery-WarnerMedia could have a market value of $150 billion. Comcast — which combines distribution and content (NBC and Universal Studios) — is valued at $264 billion. Netflix is at $235 billion, and Disney at $326 billion. Amazon, which is catching flak from the Federal Trade Commission over its deal to buy MGM, is valued at $1.8 trillion.
You get the point: In a business that demands “scale” or size to demand higher distribution fees, ad revenues and streaming customers, etc., ViacomCBS has become a minnow in a sea of sharks.
Redstone’s handlers made clear to me that the last thing she was doing at Sun Valley was “shopping” the company — the term used to describe serious attempts to sell something. She doesn’t have to, they say, as her content has decent scale and management is making strides with new streaming services.
Plus, the Allen & Co., conference is the ultimate schmooze-fest for CEOs and bankers, they reminded me. People there do nothing but talk to each other and it’s often not about business.
OK, but isn’t that also how deals are done? A random conversation about the weather can lead to a chat over breakfast with bankers in the room, right?
“If someone offers [Redstone] a good deal of course she will listen,” a source close to her told me.
So who might that someone be? Again, Shari had no shortage of Sun Valley dance partners. The Post’s Lydia Moynihan reported that Redstone was seen chatting with Comcast CEO Brian Roberts at the conference.
Reps for both Redstone and Roberts vehemently denied that this was a meeting of dealmaking substance. But in my experience, such comments are also non-denial denials for obvious reasons.
Comcast would love to buy ViacomCBS, because Roberts needs to do deals like most people need to breathe. After failing to snare WarnerMedia (which includes HBO, CNN and Warner Bros.), Roberts does not want the next big one to get away. He needs to feed his new streaming service, Peacock, with high-quality content, media bankers say.
That said, the combo would be messy. Any Roberts-Redstone marriage would spur a divorce from one of their marquee properties, either CBS or NBC, on antitrust grounds. It’s also not clear that the new antitrust bureaucrats in the Biden administration would ever look kindly on a Universal-Paramount studio combo — or, for that matter, on any media company Comcast’s size getting larger.
Might the new WarnerMedia-Discovery combo run by veteran media exec David Zaslav look at Shari’s baby? Like Roberts, Zas likes to do deals, and he, too, was chatting with Shari at Sun Valley.
People who know Zas tell me he knows he can’t be static and needs to grow, though the concept of another large acquisition in the near term looks a bit far-fetched since his last one has not even closed.
So whom else might Shari dance with? Asked by The Post about her conference convos, Redstone quipped: “I meet with everyone.”
In other words, let the bidding begin.