Any hope of bringing Star Trek back together has officially ended.
The Redstone family, which owns 80 percent of both CBS Corp. and Viacom Inc. – the two companies that split ownership of Capt. Kirk and everything surrounding Gene Roddenberry’s creation – has completely shut down merger talks, according to the Los Angeles Times. That means the two companies will continue their divorce that started in 2006, and Viacom will have to find a way to recover its value on its own.
Shari Redstone, the daughter of 93-year-old Viacom founder Sumner Redstone, shared the news with investors in a letter.
“Over the past few months, after careful assessment and meetings with the leadership of both companies, we have concluded that this is not the right time to merge the companies.”
Redstone credited a new board of directors put in place at Viacom with helping to push the company forward, while financial observers say there was just no way the Redstones would come up with a price for the merger that would make both CBS and Viacom investors happy.
Viacom split in 2006, spinning off CBS and nearly all of its television library, including Star Trek. Viacom remained with MTV, Nickelodeon and Paramount Pictures, among others, which included the film rights to Star Trek.
The splitting of those rights have wreaked some havoc on the franchise as a whole, especially as both the film and television side compete with each other, creating no multi-platform universe that has served Disney well through both its Marvel and Star Wars properties.
The biggest obstacle in the way of a merger was the value of the companies. CBS, at market close on Monday, was worth $26.8 billion, while Viacom was valued at just under $14.1 billion. Any merger would’ve likely forced the new company to go with the Viacom name, although investors on the CBS side might rightfully object, saying CBS was by far the larger company.
However, the Redstones are very partial to the Viacom brand, and the hope was that creating a mega-media company once again with CBS would help rebuild Viacom as a brand.
Another issue negatively affecting merger talks was CBS chief executive Les Moonves, who had reportedly asked for complete autonomy in running the combined company – meaning the Redstones would step back and not interfere. While the older Redstone is in failing health and nowhere near as active as he once was, Shari Redstone has taken on more active role, representing the family’s ownership in the two companies.
In the end, though, trying to put a value on Viacom’s shares proved too complicated. CBS board members did not want to punish their shareholders by paying too high a price for Viacom given the ratings decline at key networks and missteps at Paramount Pictures.
The Melrose Avenue movie studio lost nearly $450 million in the last fiscal year, and its film pipeline has been meager.
In fact, with just a couple weeks left in 2016, Paramount currently is ranked sixth among the major studios when it comes to domestic box office, according to The Numbers. Its $764.2 million has earned it a 7.5 percent market share, just ahead of Lionsgate, but behind Sony Pictures. Walt Disney, on the other hand, has pulled in $2.4 billion with the same number of movies as Paramount, commanding nearly 24 percent of the total market.
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