Viacom Announces Merger of CBS and UPN

11 December 2001

Eager to reduce costs, American media titan Viacom is to merge the operations of its two broadcast TV networks CBS and UPN.

Heading the merged entity will be Leslie Moonves, currently chief executive of CBS. Viacom said it would unveil further details – expected to include job losses and the integration of behind-the-scenes operations – over the coming weeks. The group recently axed 450 staff at MTV.

UPN is presently part of the Paramount studio division. Kerry McCluggage, chairman of Paramount Television Group and the driving force behind the expansion of UPN into a full broadcast network, resigned following the decision, and will leave his post at the end of January.

The integration of the two networks – which are expected to keep distinct identities on-air – is a triumph for Viacom president/chief operating officer Mel Karmazin, who has been arguing in favour of a merger of CBS and UPN for the last year, convinced that the latter would benefit from a move from Paramount. This has not, however, been a view shared by Viacom’s chairman Sumner Redstone and entertainment group chairman Jonathan Dolgen.

Karmazin announced on Monday that combining the networks would be part of the ongoing integration of Viacom and CBS following the duo’s merger last year, adding that the move could “simultaneously realise significant efficiencies and increase advertising sales.”

News sources: Financial Times; Wall Street Journal