CBS, Viacom to reunite as media giants bulk up for streaming
By MAE ANDERSON AP Business Writer
NEW YORK (AP) — CBS and Viacom announced a long-anticipated reunion Tuesday, bringing together their networks and the Paramount movie studio as traditional media giants bulk up to challenge streaming companies like Netflix.
Viacom CEO Bob Bakish, who will become CEO of the combined company, said the new ViacomCBS will be “one of only a few companies with the breadth and depth of content and reach to shape the future of our industry.”
Analysts say the reunion will help both companies navigate an ever-competitive streaming landscape.
Viacom owns Paramount Pictures and pay TV channels such as Comedy Central, MTV and BET, while CBS has a broadcast network, television stations, Showtime and a stake in The CW over-the-air network. MoffettNathanson analyst Michael Nathanson said Paramount’s movie library could be added to Showtime’s premium networks and streaming service, for instance, while CBS’ streaming service could get a boost from Viacom’s Nickelodeon video.
The deal is an all-stock transaction. CBS shareholders will own about 61 percent of the combined company and Viacom shareholders will own 39 percent. The companies say the combined company will have $28 billion in revenue. The reunion, expected to be completed by the end of the year, will be beneficial to earnings and lead to $500 million in cost savings, the companies say.
Acting CBS CEO Joe Ianniello will become chairman and CEO of the CBS division in the combined company.
CBS was one of the first media companies to launch its own streaming service, CBS All Access. The $6-a-month service now has a new “Star Trek” series, a revival of “The Twilight Zone” and archives of old and current broadcast shows. CBS says All Access and its Showtime streaming services have 8 million subscribers combined. That’s far less than the 60 million U.S. subscribers that Netflix has, though it’s comparable with the estimated number of subscribers to HBO Now, that network’s stand-alone streaming service.
Now, Disney, Comcast’s NBCUniversal and AT&T’s WarnerMedia are jumping in with their own services as well to challenge Netflix, Amazon, Google and other tech companies encroaching into entertainment. To expand its library, Disney bought Fox’s entertainment businesses for $71 billion in March, while DirecTV owner AT&T bought Time Warner last year for $81 billion.
The companies say the combined company will create content not just for its own services, but for third-parties as well. It wants to speed up the growth of its streaming services, including CBS All Access, Showtime, and PlutoTV, the free ad-supported service that Viacom owns, and drive more advertising spending to its platforms.
Moody’s media analyst Neil Begley said the CBS-Viacom reunion would help cut costs and provide greater scale for creating and distributing content.
“There’s growing pressure on companies to bulk up content libraries and merging is the easiest and safest way to do that,” Begley said.
The combined company would still be small compared with behemoths like Disney, with a vast library of movies and shows, and Netflix, the pioneer in streaming technology. CBS has a market value of $18 billion and Viacom has a market value of about $11.7 billion. Disney’s is nearly $245 billion and Netflix is at $136 billion.
Begley said the combined entity might have to consider other acquisitions to keep up with competitors. However, the number of possible targets is dwindling, he said, with what’s left mostly smaller companies such as the Discovery and the AMC television networks and the MGM and Lionsgate movie studios.
CBS and Viacom have had an on-again, off-again relationship.
CBS split from Viacom in 2006, but both remained controlled by National Amusements. Shari Redstone, daughter of media mogul Sumner Redstone, runs the holding company.
The split was a way to separate Viacom’s networks like MTV, Nickelodeon and BET, which were very successful at the time, from the slower growth of the CBS network.
But over time, the two companies’ fates were reversed. CBS under longtime chief Les Moonves became more profitable and Viacom struggled, hurt by weakness in its Paramount studio and people dropping cable in favor of streaming.
A recombination makes sense now because media companies are bulking up their content offerings to better compete for ad dollars. But Moonves was against the idea, as CBS was stronger and more profitable than Viacom.
Moonves’ ouster last year in the face of multiple sexual misconduct allegations changed the dynamic. Under an agreement, Shari Redstone agreed not to push for a reunion for at least two years, but that left open the possibility of CBS itself pushing for it.
Redstone will be chairwoman of the combined company’s board.
“We will establish a world-class, multiplatform media organization that is well-positioned for growth in a rapidly transforming industry,” she said.

Western Pennsylvania Pump Prices Drop as Regional Inventory Jumps
The average price of gasoline across Western Pennsylvania is six cents cheaper this week at $2.861 per gallon, according to AAA East Central’s Gas Price Report.

Statewide, Pennsylvania motorists are paying a nickel less at the pump this week at an average of $2.82.

All Mid-Atlantic and Northeast states saw gas prices decline on the week. However, decreases have been moderate (an average of four-cents) in comparison to other regions with double-digit weekly changes.

Regional gas prices are likely to continue decreasing, considering gasoline inventory rose by nearly 2 million barrels on the week. According to the Energy Information Administration (EIA), this was the largest build of any region. Much of the increase can be attributed to imports, as regional refinery utilization saw a 2 percent drop this week.

This week’s average prices: Western Pennsylvania Average $2.861
Average price during the week of August 5, 2019 $2.924
Average price during the week of August 13, 2018 $3.113

The average price of unleaded self-serve gasoline in various areas:

$2.556 Altoona
$2.771 Beaver
$2.905 Bradford
$2.941 Brookville
$2.884 Butler
$2.926 Clarion
$2.678 Du Bois
$2.933 Erie
$2.859 Greensburg
$2.915 Indiana
$2.937 Jeannette
$2.905 Kittanning
$2.799 Latrobe
$2.763 Meadville
$2.925 Mercer
$2.798 New Castle
$2.843 New Kensington
$2.932 Pittsburgh
$2.976 Sharon
$2.803 Uniontown
$2.959 Warren
$2.942 Washington

On the National Front
Today’s national gas price average ($2.64) is seven cents cheaper on the week, 13-cents less than a month ago, and 21-cents cheaper than a year ago.

This week’s decline is largely due to an increase in domestic gasoline inventory, which outpaced a weekly increase in demand. According to the EIA’s latest data, stocks built by 4.4 million barrels. Contributing to the build was at least 1.2 million b/d of imports at U.S. ports. With the large bump, stocks now sit 235 million barrels – a U.S. stock level not seen since the end of March.

At the close of Friday’s formal trading session on the NYMEX, West Texas Intermediate increased by a $1.96 to settle at $54.50. Crude prices increased last week after reports emerged that OPEC is considering additional crude production cuts. In July, the cartel announced that it and its partners would extend the 1.2 million b/d crude production reduction agreement for an additional nine months. More details about the potential production cuts will likely be discussed at OPEC’s next meeting in December.

Motorists can find current gas prices nationwide, statewide, and countywide at GasPrices.AAA.com.

AAA East Central is a not-for-profit association with 79 local offices in Kentucky, New York, Ohio, Pennsylvania and West Virginia serving 2.7 million members. News releases are available at news.eastcentral.aaa.com. Follow us on Twitter and Facebook.

Hopewell Schools announcing some new hires…

Our Sandy Giordano has the story…

Industry trade groups representing producers in several countries have signed on to a letter complaining the PA Wine & Liquor Board is charging what they call “stealth taxes.”

Originally, the board had levied a flat, 30 percent markup on all the products it sold. But the new system adopted in 2016 gave the state Liquor Control Board power to negotiate directly with wholesalers, and then set prices based on those agreements.

The change was pitched as a way to save consumers money, but also pump more money into the state.

But a group of spirits producers from Canada, Australia, New Zealand, Scotland, the United Kingdom, and the European Union say they’re concerned it has made the markups unfair.

The PLCB maintains it has been transparent and open about its pricing, and says it’s having “collaborative” discussions about markups with suppliers.

Add the Sewickley Bridge to PennDOT’s list for work. The Sewickley Bridge will get resurfacing work done and will force PennDOT to shut down the span for a 10-day stretch next year.

Though a 10 day closure for a busy bridge is not a happy proposition, PennDOT district executive Cheryl Moon-Sirianni says it’s better than closing the bridge 15 consecutive weekends, which was the alternative.

PennDOT says 18,000 vehicles use the Sewickley Bridge daily.

The Ambridge/Aliquippa Bridge to the west and Interstate 79 to the ease will become the detour routes during the closure.

A public information meeting about the bridge project is scheduled for 5 p.m. Thursday at the Sewickley Library.

President Trump arriving in Beaver County this afternoon as he plans to spotlight the Shell cracker plant as a welcome example of economic progress and job creation.

According to senior administration officials the president plans to tour the site of the Shell complex, then deliver a short speech focused on the economy and how to grow and sustain the nation’s competitive edge.

Trump will be joined by U.S. Energy Secretary Rick Perry and EPA chief Andrew Wheeler.

Air Force One is scheduled to touch down shortly after 1 p.m. at Pittsburgh International Airport. Trump’s motorcade will then head to the Shell complex to go on a tour, meet with Shell project officials and state and local dignitaries, and deliver brief remarks, officials said.

Travelers on Interstate 376 and nearby routes may see heavier-than-usual traffic for most of the afternoon while officials accommodate the presidential motorcade, according to local department heads. For security reasons, it’s unclear which route the motorcade will travel.

Trump was initially slated to visit the Shell plant Aug. 8. He postponed the trip following the back-to-back mass shootings in El Paso, Texas, and Dayton, Ohio.

TODAY:
SCATTERED THUNDERSTORMS THIS MORNING BECOMING MORE WIDESPREAD THIS AFTERNOON – HIGH 78

TONIGHT:
SCATTERED THUNDERSTORMS CONTINUE THIS EVENING, PARTLY CLOUDY OVERNIGHT – LOW 66

TOMORROW:
PARTLY CLOUDY, SLIGHT CHANCE OF A SHOWER LATE IN THE DAY – HIGH 84

Aliquippa police officers recently received a Silver Star award for bravery. Our Sandy Giordano has the story…