Split of CBS Corporation and Viacom
On December 31, 2005, American mass media company Viacom split into two companies: the second CBS Corporation, its successor (the first being a short lived rename of Westinghouse Electric) which holds the namesake flagship channel Columbia Broadcasting System, CBS News, CBS Sports, Showtime Networks, UPN (Replaced by the CW, co-owned by TimeWarner), Smithsonian Channel, Channel 10, PopTV, Simon and Schuster, Infinity Broadcasting Corporation, Viacom Outdoor, and Paramount Television, and an entirely new Viacom which holds Paramount Pictures, Nickelodeon, Nick Jr., Noggin, Nicktoons, TEENick, Music Television, Black Entertainment Television, Video Hits One, Country Music Television, and later DreamWorks, respectively. It was first announced in March 2005. The companies are controlled under National Amusements' control because of a stagnating stock price.[1]
They would later re-merge into ViacomCBS, later Paramount Global.
1886
Westinghouse Electric Corporation is founded
Famous Players Film Company is founded
Lasky Feature Play Company is founded
Paramount Pictures is founded
Famous Players and Lasky merge as Famous Players–Lasky and acquire Paramount
Famous Players–Lasky renamed to Paramount Famous Lasky Corporation; CBS is founded
Paramount acquires 49% of CBS
Paramount Famous Lasky Corporation renamed to Paramount Publix Corporation
Paramount sells back its shares of CBS
Gulf+Western is founded as the Michigan Bumper Corporation
Paramount Publix Corporation renamed to Paramount Pictures
Desilu is founded and CBS distributes its television programs
CBS creates the CBS Television Film Sales division
CBS Television Film Sales renamed to CBS Films
Gulf+Western acquires Paramount
Gulf+Western acquires Desilu and renames it Paramount Television (now CBS Studios)
CBS Films renamed to CBS Enterprises
CBS Enterprises renamed to Viacom
Viacom is spun off from CBS
National Amusements acquires Viacom
Gulf+Western renamed to Paramount Communications
Viacom acquires Paramount Communications
Westinghouse acquires CBS
Westinghouse renamed to CBS Corporation
Viacom acquires UPN and CBS Corporation
Viacom splits into second CBS Corporation and Viacom
CBS Corporation shuts down UPN and replaces it with The CW
CBS Corporation and Viacom re-merge as ViacomCBS
ViacomCBS renamed to Paramount Global
Split[edit]
After the departure of Mel Karmazin in 2004,[5] Sumner Redstone, who served as chairman and chief executive officer, decided to split the offices of president and chief operating officer between Moonves and Freston.[5] Redstone was set to retire in the near future, and a split was seen as a creative solution to the matter of replacing him.[5] It was also intended to provide alternative investments that would be more appealing to investors: one a high cash flow, lower growth company that could afford to pay a substantial dividend and the other a growing company that would have greater investment opportunities and therefore would not be expected to pay a dividend.
In March 2005, Viacom contemplated splitting the company into two publicly traded companies, amid issues of the stock price stagnating and clashing corporate cultures between the cable and broadcast divisions, which came to a head with the Super Bowl XXXVIII halftime show controversy a year previous with the MTV-produced show causing controversy for game broadcaster CBS.
On June 14, 2005, the Viacom board of directors approved the split of the company into two firms.[6] The CBS Corporation name would be revived for one of the companies, to be headed by longtime television executive (and Viacom co-president) Les Moonves, and would include the namesake television network CBS, UPN, Infinity Broadcasting Corporation, Viacom Outdoor, Showtime Networks, and Paramount Television.
The split was structured such that the second Viacom was spun off from the first Viacom, which was renamed CBS Corporation. In a sense, this was a repeat of the 1971 spin-off. However, in this case, CBS retained virtually all of the prior firm's broadcast television assets, including its various syndication companies.
CBS said: "In many ways, today's decision is a natural extension of the path we laid out in creating Viacom," Redstone said in a company-wide memo. "We are retaining the significant advantages we captured in the Paramount and CBS mergers and, at the same time, recognizing the need to adapt to a changing competitive environment."[7]
With the split, the two companies began trading on the New York Stock Exchange (NYSE) on January 3, 2006. Investors anticipated Viacom benefiting from the split, but instead, it dropped approximately 20 percent, while CBS Corporation rose 9 percent, that same year, Paramount Parks became a wholly-owned theme park unit of CBS Corporation.[8]
The second Viacom was created by Redstone and headed by Freston. It consisted of BET Networks, MTV Networks, and Paramount Pictures.[9] It started trading on January 3, 2006.[10]
Despite the split, both companies are controlled by National Amusements.