Pay TV distributors should brace for a “significant” rise in fees over the next several years as the newly combined ViacomCBS seeks to eke out additional growth in retrans and affiliate fees, CBS chairman and CEO Joe Ianniello told analysts Tuesday.
Viacom and CBS earlier announced their agreement to merge in an all stock deal Tuesday, with current Viacom CEO Bob Bakish becoming CEO of the combined company once the deal is closed later this year. In a conference call with analysts to discuss the merger, Ianniello, who will head up the CBS broadcast division after the deal closes, said there is tremendous revenue upside opportunities inherent in the deal.
On the call, Ianniello said that CBS and Viacom channels represent about 22% of all TV viewing, yet attract just 11% of retrans and affiliate fee dollars.
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“There is significant revenue upside that we should be going after,” Ianniello said on the call.
Viacom earlier this year reached a carriage deal with AT&T that the company said included a reduction in fees. With CBS as part of its negotiations, chances are lower that will happen in the future.
It may take about three years before CBS’ carriage agreements and Viacom’s affiliate deals sync up -- Ianniello said most of CBS’s deals are for three years -- but the intention is to eventually go into the market together.
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That, coupled with targeted advertising capabilities that are expanded with the inclusion of the Viacom properties could represent “billions of dollars of upside that we can achieve over time,” Ianniello said.
