Advertisers Returning to Viacom, says Karmazin

03 October 2001

Many advertisers who canceled spots following the September 11 attacks are resuming campaigns, according to Mel Karmazin, president/chief operating officer of Viacom, which owns networks CBS and UPN.

Speaking at the Goldman Sachs Communacopia X conference in New York, Karmazin forecast that the group could sell more ad time next year than it did in 2001, as many companies will be eager to win back lost business.

However, he warned that the outlook for next year remained uncertain, since the political situation may trigger further interruptions to advertising. “We are cautious that we may have to pre-empt programming again,” he said, adding that further TV and radio addresses to the US by President Bush would erode potential ad time.

Karmazin revealed that ad revenue had begun to lead last year’s figures before the attacks prompted “an awful lot of cancellations.” Viacom has consequently reduced its second-half EBITDA (earnings before interest, taxes, depreciation and amortization) forecasts by $200 million from previous expectations of $3.1 billion.

Non-stop coverage of the events cost CBS $85m in lost ad revenue and $7m in extra news-gathering expenses. Viacom’s 35 TV stations lost over $40m ad dollars and paid out $5m extra for news coverage. UPN lost $3m of ad revenue, MTV $5m and the group’s 180 radio stations $125m.

News source: (US)