Les Moonves, CEO, CBS at Fortune Brainstorm TECH on July 15, 2014 in Aspen, Colo.
Photograph by Kevin Moloney — Fortune Brainstorm TECH
By Geoff Colvin
April 11, 2018

Two famous entertainment companies are providing excellent entertainment to fans of corporate dealmaking as they wage the weirdest takeover battle ever. As in so many popular storylines, you kind of know how it will end—but you have no idea how it will get there.

Here’s the synopsis: CBS, the highly successful owner of the CBS TV network and Showtime, is trying to buy Viacom, the declining owner of MTV, Nickelodeon, and other cable networks that are showing their age, plus the struggling Paramount studio. Yet CBS chief Les Moonves doesn’t especially want Viacom. That may be why he’s pursuing the novel strategy of bidding less than Viacom’s market value. In any case, both CBS and Viacom are controlled by National Amusements, which owns 80% of each. National Amusements is controlled by Sumner Redstone, 94, whose faculties have reportedly declined to the point where he communicates only through grunts. As a practical matter, the boss is now his daughter, Shari Redstone, who is the one person who unequivocally wants this deal to happen.

Got all that? Then why, you ask, is this a takeover “battle” at all? As the controlling shareholder of both companies, Shari Redstone can do whatever she wants. Except that she can’t. That’s because the crown jewel in this scenario is not a product or patent or film library, but a person: Moonves. And the one thing Redstone cannot do is make Moonves, 68, stay if he doesn’t want to.

That is why her previous attempt to merge these companies, in 2016, failed. The rationale was to put Viacom’s weak business under the highly successful Moonves. But he wanted no part of it, and he’s at a point in his career where he needn’t accept anything he doesn’t want. At a 2016 industry conference, says the Hollywood Reporter, someone asked Moonves onstage why he might oppose the merger. “Because I’m too old and too rich. How’s that?” he replied. He tried to soften the remark by adding that he was kidding, but all evidence suggests he was not.

Since Moonves began running CBS when it went public in 2006, the stock has doubled, matching the S&P 500, which is better than many other incumbent media firms have done; by contrast, Viacom has lost about 15% of its value over that period. Exactly how rich Moonves is cannot be determined from public documents, but his pay over the past three years is as follows: in 2017, $69.3 million; in 2016, $69.6 million; in 2015, $57 million. Last year he also realized an additional $46 million by exercising stock options. He owns shares worth $172.3 million. With regard to his future in the labor market, this is not an easy man to bargain with.

The media world is rapidly consolidating, with Disney buying most of Fox, and AT&T fighting in court to buy Time Warner. In that environment, Moonves’s willingness to make an offer for Viacom, however reluctantly, suggests that he and Redstone finally agree that CBS and Viacom can’t stand alone. Redstone still wants Moonves to run a combined enterprise. He is insisting that it be done at his price, and there’s one more element of weirdness: The fight isn’t over who’s the boss, nor just over the price, but over who is No. 2. Redstone wants it to be Viacom chief Bob Bakish; Moonves wants his CBS COO, Joseph Ianniello.

Will a major merger founder on that dispute? Seems unlikely. You’ve got to figure that one way or another, with Shari Redstone controlling both companies and industry consolidation threatening both, this deal gets done. The price, the leadership, the potential contract buy-outs—who knows? But it probably gets done.

Yet when the dust settles, this may all be just a short-lived survival tactic in a transforming industry. Even a combined CBS-Viacom would not be major player. Looking out five years, it’s hard to see how those two companies, or at least their most valuable assets, don’t end up part of Disney or Comcast or AT&T—or Amazon, Netflix, Alphabet, or Apple. Combining CBS and Viacom, ideally under Moonves, looks like a play to make sure that when they’re inevitably sold, they go for the highest possible price. Enduring a bit of weirdness along the way is likely worth it.

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