It has long been thought that CBS Corporation (NASDAQ:VIAC) and Viacom (NASDAQ: VIA) (NASDAQ:VIAB) would "re-merge" at some point.

Viacom and CBS were previously part of the same company controlled by National Amusements, which is owned by the Redstone family. In 2006, the company decided to split up, with CBS taking the namesake broadcast networks, premium cable network Showtime, and Simon & Schuster publishing assets, while Viacom took the niche cable stations MTV, Comedy Central, Nickelodeon, and others, as well as Paramount film studios.

That split may not have been such a great move, as media companies today are scrambling to merge in a big way and develop over-the-top bundles. Thus, it's a bit ironic that CBS and Viacom, two companies with common ownership and a deep history, seem to be the last big media pair to tie the knot.

Recently, the Hollywood rumor mill has pointed to a tie-up as early as this week. It also suggests that the companies forged a working agreement last week as to who would be the CEO of the combined companies if (or when) they merge.

Head shot of Bob Bakish.

Viacom CEO Bob Bakish. Image Source: Viacom.

Bakish at the head; Ianniello still oversees CBS

The working agreement stipulates that Bob Bakish, currently the CEO of Viacom, would lead the combined company. Interim CBS CEO Joe Ianniello, who took over after former CEO Les Moonves was ousted on sexual harassment allegations, would become the head of the branded CBS assets. CBS chief financial officer Christina Spade would become CFO for the combined company.

The agreement makes a lot of sense as it ensures continuity for the CBS operations, which have continued to be strong under Ianniello even after Moonves' departure, while also installing Bakish at the head. Bakish had inherited something of a mess at Viacom and was the architect of the company's current turnaround plan to refocus on its core brands.

The plan hasn't exactly worked, as Viacom's revenue and share price have continued to decline in the two-plus years Bakish has been in charge. Nevertheless, it's hard to overcome the massive industry headwinds posed by cord-cutting, which especially hurts Viacom's niche cable brands. Therefore, it's possible that National Amusements President Shari Redstone believes Bakish is doing the best he can with a bad situation and could do even more with a bigger and healthier entity in the combined company.

How Bakish is doing

Joining Viacom in 1997, Bakish rose up through the company ranks and had most recently held the position as head of the company's international operations. After a tumultuous ousting of former CEO Philippe Dauman, Bakish was named CEO by Viacom's board. At the time, Vice Chair Shari Redstone called Bakish "an exemplary forward thinker" who "embraces disruption and brings teams along with him."

At first glance, one might conclude that the Bakish era isn't going so well at Viacom. Last quarter, revenue fell 4% in constant currency; however, Viacom's cost controls resulted in just a 1% decline in adjusted operating income. Bakish has also boosted beleaguered Paramount Studios' performance, with nine straight quarters of improvement.

And even though Viacom's media networks revenue is declining, so is the overall cable industry. Last quarter, Viacom actually improved its market share by 2% overall, with 12% improvement at Comedy Central, 5% at MTV, and 3% at The Paramount Network.

Bakish has also helped the company close deals to bring Viacom networks onto many of the new over-the-top streaming services such as Pluto TV and DirecTV Now Plus.

A better horse

Going forward, Bakish will be able to utilize his talents at the much-better-positioned CBS. Recent reports say there is a 50-50 chance of the merger going through this week, though sticking points remain, including exchange rates and valuations of the respective companies, since it will likely be an all-stock deal.

Both companies' stocks have been laggards in the rapidly changing environment, and the situation looks to be Bakish's to improve. It does appear that most at the combined companies think he's the most able candidate for the job -- though the task is certainly a daunting one.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.