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ViacomCBS (VIAC) Acquires 49% Miramax Stake in $375M Deal

ViacomCBS VIAC recently closed its acquisition of a 49% stake in Miramax from BeIN Media Group in a $375 million deal. Miramax’s current leadership team will continue in their existing roles.

Per the agreement, the company made a payment of around $150 million at closing and will invest $45 million annually over the next five years for a total of $225 million to provide funding for new film and television productions and working capital.

Moreover, ViacomCBS-owned Paramount Pictures has also entered into an exclusive, long-term distribution agreement for Miramax's film library and an exclusive, long-term agreement allowing the U.S. studio to develop, produce, finance and distribute new film and television projects based on Miramax's IP.

Miramax’s Content Strength to Boost ViacomCBS’s Streaming Portfolio

Notably, ViacomCBS is planning to launch a streaming service, per a CNBC report in February.

Viacom and CBS have existing streaming services, including CBS All Access and Showtime, which, on a combined-basis, have more than 10 million paying subscribers.

ViacomCBS Inc. Price and Consensus

ViacomCBS Inc. Price and Consensus
ViacomCBS Inc. Price and Consensus

ViacomCBS Inc. price-consensus-chart | ViacomCBS Inc. Quote

The new service will build on CBS All Access and include Viacom assets like Nickelodeon, BET, MTV, Comedy Central, and Paramount Pictures.

Moreover, the newly-acquired stake at Miramax will give ViacomCBS access to Miramax’s impressive film library of more than 700 titles, which include 278 Academy Award nominations and 68 Oscars. Some of the award-winning titles include Chicago, Shakespeare In Love, The English Patient, No Country For Old Men, Pulp Fiction, Scream and Good Will Hunting.

Also, its library of 140,000 television episodes and 3,600 films including popular franchises such as Star Trek and Mission: Impossible is expected to cater to users of all age groups and demography.

The Paramount television business also has a strong portfolio of new series (17 ordered or in production) and an additional 19 series set up at networks.

New series ordered include Shantaram for Apple’s AAPL streaming service Apple TV+, Made for Love and Station Eleven for HBO Max, When the Street Lights Go On for Quibi and Sexy Beast for Paramount Network.

Ad-free and ad-supported options will be reportedly available, along with a premium version that will include Showtime with the monthly cost expected to be less than $10.

Program Strength, Ad Dollars to Aid the Top Line

ViacomCBS is expected to benefit from its recent deals with affiliates like Nexstar NXST and Meredith Corporation MDP.

On Mar 24, this Zacks Rank #4 (Sell) company announced a multi-year agreement to renew nine CBS network affiliations for Nexstar stations, reaching approximately 3.5% of the U.S. audience and nearly 4 million television households.

Notably, Nexstar is the largest independent operator of CBS affiliates, covering 14% of the U.S. market and serving more than 15 million households. Nexstar owns or operates CBS affiliates in 41 markets.

Moreover, the company announced a multi-year deal with Meredith to renew affiliation agreements for all seven of its CBS Affiliates, including three top-25 market affiliates. The seven markets combined reach 7% of the U.S. audience, serving more than 7.6 million television households.

These deals expand ViacomCBS’s content offerings and boost user engagement levels, thereby attracting advertising dollars.

Additionally, higher investments in original content and focus on providing quality entertainment are expected to expand the audience base for brands like MTV, BET and Comedy Central.

Moreover, a solid portfolio of streaming services (both advertising and subscription-based offerings), including CBS All Access, Showtime OTT, Pluto TV, Noggin and BET+ is expected to remain a key growth driver in the near term.

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