Update: Redstone reacts, considering countersuit
Variety has a statement from Shari Redstone’s National Amusements (NAI), which refutes the CBS claims in their lawsuit. It reads in part:
“National Amusements (NAI) is outraged by the action taken by CBS and strongly refutes its characterization of recent events. NAI had absolutely no intention of replacing the CBS board or forcing a deal that was not supported by both companies. NAI’s conduct throughout supports this, and reflects its commitment to a well-governed process.”
And CBNC is reporting that a deal over the valuation price for Viacom had been agreed, which was a major issue during negotiations. This leaves the disagreement over the management of the company the sole sticking point. They also report that Redstone “could counter sue CBS directors for a breach of loyalty.”
The potential reunification of CBS and Viacom – which would bring all of Star Trek back under one corporation – may be in jeopardy. The driving force behind the deal has been Shari Redstone, who controls a majority of voting shares in both corporations. However, CBS and its CEO Leslie Moonves have been reluctant, especially with regards to the proposed management structure of the combined company. Today, CBS took a dramatic step, suing Redstone’s National Amusements holding company in an effort to take away her control of CBS.
According to a number of reports, CBS is seeking a temporary restraining order to stop Redstone from making changes to the CBS board in order to push forward her plan for the merger. Even though Redstone had made concessions earlier this month, that does not appear to be enough to satisfy CBS, who are concerned she can use her power to replace board members and force a deal on her terms.
As reported by Variety, the independent directors on the CBS special committee to evaluate the merger “decided this past weekend that a reunion with Viacom is not in the best interests of CBS shareholders.” The suit alleges that Redstone is not acting in the best interest of shareholders and seeks to have her voting shares diluted from 79% to about 17%.
According to CNN, the suit also claims that “Redstone unilaterally, and without Board approval, informed a potential acquirer of CBS to not make an offer for the Company, depriving the board of the opportunity to consider a potentially value-enhancing transaction.” The suit does not identify the “potential acquirer.”
The nature of this dramatic move by CBS indicates there was concern Shari Redstone was prepared to use her power to make the deal happen regardless of the board’s concerns. As noted by the Hollywood Reporter last week, “Shari Redstone ultimately controls both media companies and, like Rupert Murdoch before her, she (and not Leslie Moonves) ultimately will determine the future of a merged film and TV empire.” The lawsuit is a last-ditch effort on the part of CBS to see if there is a way for them to determine their own future without Redstone.
Star Trek could be a casualty of this corporate war
This is certainly a major step backwards for the reunification of CBS and Viacom, owner of Paramount Pictures. Since Viacom split up in 2005, Star Trek has been divided between CBS and Paramount Pictures, with CBS owning the brand and television rights and Paramount owning the film library and holding the rights to make new feature films.
A CBS/Viacom merger could create more opportunities for building the brand, cross-promotions and other synergies. Potentially it could eventually lead to building a coherent ‘Star Trek Cinematic Universe’ across TV and film. For now, any such dreams will have to be put on hold with CBS and Paramount continuing to forge their own independent paths with Star Trek.
TrekMovie will provide updates on this story as the become available.