Does Tom Dooley’s Departure Open the Door for a Viacom-CBS Merger?

Dooley was tapped as interim president and chief executive officer on Aug. 20, replacing the embattled Philippe Dauman at the top.

“The best and only investment case is that National Amusements decides to either combine CBS and Viacom or looks to merge it into another company (most likely a Liberty-backed one),” MoffettNathanson wrote today, following the news.

“A merged Viacom/CBS actually looks more similar to their peers — meaning a broadcast juggernaut, combined with at least one strong cable network and a host of other less powerful cable networks,” BTIG wrote in a blog post a day before Dooley’s departure broke.

“We have heard investors say if Viacom and CBS merge, it will just lead to CBS getting paid less, with economic value just shifting to Viacom channels from CBS — implying that a merger is a horrible idea for CBS shareholders,” the Tuesday analysis continued.

“Viacom needs the ‘shield’ of CBS to protect its distribution, maximize the growth of its license fees, while CBS should want Viacom to enable it to utilize the power of its sports and entertainment franchises to create value above and beyond its existing broadcast assets,” Greenfield’s group concluded.

“We do NOT THINK Dooley’s departure means a CBS combo is imminent (as suggested in many press articles; neither company has commented),” Ryvicker wrote in her own email newsletter, caps and all.

Both companies are still controlled by Sumner Redstone’s National Amusements, Inc., so only time — and the market — will tell.

[...] VIAB investors will not only wait with bated breath, but they’ll do so with lighter pockets.

Viacom cut its dividend in half on Wednesday, adjusted earnings forecasts down and squashed any notion of a Paramount Pictures sale.