Viacom Boss Prepares for a Final Fling

14 January 2005

Sumner M Redstone (81), chairman and chief executive of Viacom, is girding his loins for a final fling at the helm of the USA's second largest media conglomerate.

Last year he cleared the deck in no uncertain manner, waving a dry-eyed farewell to then president Mel Karmazin [WAMN: 02-Jun-04] with whom he had battled for forty months in a bout the World Wrestling Federation would have been proud to stage.

Also at that time, Redstone stated his intention to stand down as chief executive within three years. He effectively nominated two heirs-apparent, promoting Tom Freston and Leslie Moonves as co-presidents of the company. Two falls, two submissions, or a knockout to decide the winner!

Karmazin's pain at walking the platinum plank was eased in no small measure by a truckload of dollar bills - $35 million (€26.35m; £18.49m) to be precise. He has since signed up as chief executive of Sirius Satellite Radio [WAMN: 22-Nov--04]

Redstone's energy belies his eighty-one years. Speaking at a Smith Barney conference in Phoenix, Arizona, he told the assembled soothsayers he intends to reorient Viacom toward aggressive growth.

He recalled that before Viacom merged with CBS in 2000: "We were the fastest-growing media company in the world. We will be again."

Redstone will invest more in internet opportunities and hive off slower-growth operations such as theme parks and book publisher Simon & Schuster.

If the group could "live with a slightly lower credit rating", Viacom could borrow "billions" of dollars more, which could be used in future stock buybacks and possibly in "small acquisitions."

'Small' being a relative term, one such buy might be Britain's largest commercial broadcaster ITV, seen by many as a prime target for US takeover since the enactment late in 2003 of the UK Communications Bill.

Among other Big Media-friendly gestures, the bill swept away a ban on ownership by non-EU nationals of UK television companies. And some observers see it as significant that Redstone enjoyed a cosy tête à tête at Downing Street with prime minister Blair while the controversial bill was at its drafting stage [WAMN: 08-Nov-02].

It was also noteworthy that the octogenarian's daughter Shari accompanied him to the Phoenix meetings, Redstone telling investors he wanted her to know more about the business because she will likely "control Viacom [in the] long-distant future."

Redstone's kin emulate the clan Murdoch in that they hold a controlling stake in the family business.

Data sourced from Wall Street Journal Online; additional content by WARC staff