Viacom Thinks Smaller

18 March 2005

US media giant Viacom is mulling a split into two separate companies, thereby bucking the industry trend for increasingly constipated consolidation.

The owner of TV broadcast network CBS and radio operator Infinity, plus prized cable stars MTV and Nickelodeon, would put its 'younger' networks into one company and its broadcast and outdoor advertising business into the other.

Creating two publicly traded companies would give the cable group its own currency — its stock — to use for further acquisitions.

The dichotomous proposal is the response of Viacom's razor-sharp octogenarian ceo, Sumner M Redstone, to stagnant stock values. Shares in the company have fallen by around 3% in the past year, dragged down by Infinity's struggles.

Redstone says the separation is almost certain to occur and could be completed by the end of the year.

The move would also put an end to the succession race between Redstone's two lieutenants Tom Freston and Leslie Moonves, who would each get a company to run. Freston would head the cable and movie studio operation, while Moonves would oversee CBS and Infinity.

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