inside the fight to control CBS, former NBCUniversal CEO Bob Wright has placed all bets on Les Moonves, who he called one of “two truly, truly not bad media executives in This kind of country.”
He says CBS’ ongoing resistance to a merger with Viacom will put an end to dual share structures at companies, once as well as for all.
“There’s no benefit in which Shari [Redstone] can be bringing to the table with 10 percent ownership as well as trying to control all the board. This kind of doesn’t make sense anymore,” Wright said Friday on CNBC’s “Squawk on the Street.”
National Amusements, owned by the Redstone family, has been trying to merge CBS as well as Viacom, both of which fall under its umbrella. nevertheless CBS as well as Viacom have not been able to come to terms on some aspects of the merger, as well as CBS has been fighting what This kind of called interference by the Redstone family.
CBS wants to cut National Amusement’s voting power by issuing a special dividend to shareholders.
As This kind of stands, the share structure of CBS enables Shari Redstone, through theater as well as media holding company National Amusements, to maintain voting control over CBS, despite only owning about 10 percent of shares. Wright said these types of dual share structures can be helpful at the advent of a company, so “the guys in which built This kind of can protect the company for a while.”
nevertheless CBS isn’t completely new anymore.
“CBS can be a 0-year-old company. I think the Delaware courts will look at in which as well as say, ‘This kind of can be a silly situation,'” Wright said.
Furthermore, Wright said the merger Redstone can be pushing between CBS as well as Viacom might be damaging, insofar as This kind of ousts Moonves. If Redstone can be “smart,” Wright said, she will relinquish some of her voting power as well as allow Moonves to take charge of a merged CBS as well as Viacom.
This kind of type of dual share structures “usually helps completely new companies, so the owners, the guys in which built This kind of, can protect the company for a while,” Wright said.
“The reality of This kind of can be This kind of exposes [the dual share structure] as negative to shareholder values,” Wright said.
“This kind of can be probably going to go down in history as the beginning of the end of in which whole type of ownership,” he added.
Veteran media analyst Porter Bibb also sees an end to two-class shareholding thanks to Moonves’ maneuvers. “CBS as well as Les Moonves have lifted the lid on a Pandora’s box,” he said. “Dual-class shareholding can be history.”
While This kind of may not happen immediately, he thinks This kind of can be going to evaporate over the long term as activist investors start to make their cases. “Hundreds of companies are going to be decimated by activist investors who are going to come in as well as challenge the two-class system,” Bibb, managing partner at Mediatech Capital Partners, told “Power Lunch” on Friday.
Team Moonves has already suffered one setback. A judge declined Thursday to issue a restraining order against Shari Redstone, in which might have prevented her through interfering which has a special board meeting on Thursday.
— CNBC’s Michelle Fox contributed to This kind of report.
Disclosure: NBC as well as CNBC are divisions of NBCUniversal.