ViacomCBS: A Merger ‘Born out of Necessity’
The closing of the $12 billion merger of Viacom and CBS is the most recent in a series of consolidations over the past 18 months that has swept across the entertainment, toy and music industries, carrying with them broad implications for the licensing industry.
The creation of ViacomCBS reflects the need for medium-size players, as those companies were separately, to bulk up to compete with other media giants.
“The merger was born out of necessity,” Peter Csathy, chairman of the advisory firm CREATV, told the Los Angeles Times. “It is no mystery that is scale is where everyone has been looking for in this fundamentally changing media space.”
The Licensing Factor
It’s a pattern seen in countless other business in which licensing is a factor – the need to create scale in order to compete. Here are some of the notable deal in the past 18 months:
- AT&T acquired Time Warner Inc. in an $85 billion deal that closed in July 2018 and created WarnerMedia as a new home for Warner Bros. studio, HBO, CNN and other properties.
- Disney completed its $71.3 billion purchase of Rupert Murdoch’s Hollywood holdings in March, including 20th Century Fox Film and television studio. It has moved quickly to incorporate the company into its fold including making content available for its new Disney+ streaming service.
- Hasbro is expected to close on its $4 billion acquisition of Entertainment One (eOne) by year-end (It also bought Saban’s entertainment brands – most notably Power Rangers — last year).
- Jazwares’ parent Alleghany Capital Corp. purchased Wicked Cool Toys in October in what is being viewed as a potential hedge against Jazwares losing the Peppa Pig business. Jazwares also acquired Russ Berrie and Zag Toys in 2018.
- Elsewhere in the toy business, Basic Fun bought K’nex and Spin Master acquired Gund.
- Universal Music Group’s Bravado bought Epic Rights in January, creating a merchandising division that represents more than 50 musicians and bands.
- Warner Music Group earlier this fall acquired online entertainment merchandise retailer EMP Merchandising Handelsgesellschaft, which has networks in 18 countries.
