Viacom Q1 Earnings Up, Confirms Purchase of Comedy Central

23 April 2003

The ongoing recovery of Viacom continued through the first quarter of 2003 with net income rising to $443.1 million (€404.21m; £281.45m), or 25 cents a share, compared year-on-year with a net loss of $1.11 billion (63 cents a share).

However, there were harsh words from president/coo Mel Karmazin for the media giant’s radio unit, Infinity Broadcasting – a key contributor to group profits. Its performance was not “not an acceptable level for Viacom in this extraordinarily good advertising environment,” Karmazin told analysts during a conference call Tuesday. There was “no excuse” for Infinity failing to post higher growth.

In normal circumstances, such blunt and public criticism would bode ill for the radio company’s chief executive John Sykes. But Karmazin was in benign mood, perhaps because of the lucrative accommodation reached recently following his power battle with Viacom chairman/ceo Sumner M Redstone [WAMN: 21-Mar-03].

Not yet for Sykes the mafiosi kiss, it seems. “John is a great executive,” said Karmazin, adding, “I'm unhappy with the performance of the radio stations … I now need John as the ceo and the leader of that company to show the results that our shareholders and I [seek].” Sykes hastily agreed: “Infinity can and will do better,” he assured

However, the future of Infinity president John Fullam, appears to lack visibility. He was “on vacation and couldn't be reached,” according to an Infinity spokesman.

• Separately on Tuesday, the predicted $1.2 billion (€0.98bn; £0.76bn) purchase by Viacom of the Comedy Central stake held by AOL Time Warner [WAMN: 22-Apr-03] was confirmed. Viacom will purchase from AOL TW the 50% stake in the comedy network it does not already own.

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