The History of CBS and Viacom

This article was written by Phineas Upham

The CBS Corporation is an American media powerhouse, operating news, sports and original programming in addition to several means of advertising and marketing. CBS didn’t initially produce its own television content, however. That job ultimately fell to Viacom. The subsidiary was formed in 1970 to handle all television syndication for CBS.

Viacom was a highly profitable arm of CBS at one point, spinning off shows like I Love Lucy and The Twilight Zone. But all of that changed in 1999, when Viacom acquired CBS. This gave Viacom/CBS access to The Nashville Network, Spike, and led to CBS reacquiring rights to air the Super Bowl.

It was those rights that would lead to a split in the company.

In 2005, during a half time show for Super Bowl XXXVIII, Justin Timberlake tore the front off of Janet Jackson’s costume. This exposed her breast, complete with a paste-on nipple shield, and an FCC firestorm. The company quickly banned MTV from ever producing a half time show, which caused stagnation in stock prices for CBS because they owned the network.

They split Viacom from CBS, keeping Viacom as its own separate entity but transferring ownership of some networks to CBS. CBS has since expanded its sports lineup to form the CBS sports network, buying smaller college stations along the way. They also created the CW network in 2006 with a joint partnership that included Warner Bros. In the future, CBS also plans to open an amusement park that is based on its brands and television shows.

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About the Author: Phineas Upham is an investor at a family office/hedgefund, where he focuses on special situation illiquid investing. Before this position, Phineas Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phineas on his Twitter page.