CBS CBS Corp

By Benjamin Mullin and Cara Lombardo 

Representatives of CBS Corp. and Viacom Inc. have reached a working agreement on the management team that would lead the combined company in the event of a merger, people familiar with the matter said, resolving a critical question that threatened to stand in the way of a deal.

Joe Ianniello, the acting chief executive of CBS Corp., would be offered a job overseeing all of CBS's branded assets at the combined company under the working agreement, the people said.

Bob Bakish, the chief executive of Viacom, would be chief executive of the combined company, the people said. The working agreement also calls for Christina Spade, the chief financial officer of CBS, to become chief financial officer of the combined company, they said.

CBS hasn't yet submitted a formal offer for Viacom and negotiations are still fluid, some of the people said. The timing of the deal is still uncertain, but both companies are making progress, they said.

The working agreement for the management structure casts aside one of the biggest roadblocks to a deal between the two sister companies. This marks the third time in the past four years that CBS and Viacom have sought a merger, with the attempts stymied by differences between the companies.

A deal could be announced before the end of the month, according to people familiar with the matter. The issues still outstanding include the exchange ratio for the two companies and the composition of the board.

Last year, CBS and Viacom were at loggerheads over Mr. Bakish's role at the combined company, holding up a potential deal.

It is unclear whether Viacom Chief Financial Officer Wade Davis would remain at the combined company, given that the working agreement calls for there to be no chief operating officer.

Mr. Davis is involved in setting Viacom's ad-sales strategy, and his portfolio includes Viacom's finances, corporate strategy, technology operations and the recently acquired direct-to-consumer video-streaming service Pluto TV.

The management structure under consideration would be a departure from the way both Viacom and CBS have been organized in the past, when the second-in-command has held the chief operating officer role. Viacom's former chief operating officer, Thomas Dooley, served in that position from 2010 until 2016, when he was named interim CEO; he left later that year. Viacom doesn't currently have a chief operating officer.

Former CBS Chief Executive Leslie Moonves ran the company with a second-in-command, Mr. Ianniello, who was then chief operating officer. Mr. Moonves in September was forced to step down after several women accused him of sexual harassment and assault, and Mr. Ianniello became acting CEO. Mr. Moonves has denied accusations of non-consensual sexual relations.

The proposed structure doesn't preclude the possibility that Mr. Bakish will appoint an executive overseeing strategy after the merger is announced. Mr. Ianniello is eligible for a $70 million payout if he isn't named permanent CEO of CBS, according to his contract.

--Emily Glazer contributed to this article.

Write to Benjamin Mullin at Benjamin.Mullin@wsj.com and Cara Lombardo at cara.lombardo@wsj.com

(END) Dow Jones Newswires

August 02, 2019 16:34 ET (20:34 GMT)

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