Viacom's Redstone Sets Spin-Off Decision Date

30 May 2005

The final decision on Viacom's long-mooted bifurcation into disparate units will be made by the end of June, chairman/ceo Sumner M Redstone told the group's annual meeting last week.

Committees are already in place to agree the detail of the split which, if approved by the Viacom board, will be completed by Q1 2006.

Given Redstone's vice-like grip on the company (he controls 71% of the votes) board and shareholder approval is a mere formality. As media analyst Michael Nathanson puts it: "It feels to us as if this is almost a fait accompli."

The split would see MTV Networks and the Paramount movie studio - the group's fastest growing units - meld into a single corporate entity with Viacom's current co-president Tom Freston at the helm.

The rump of the present Viacom business (CBS, Infinity Broadcasting, Paramount Television and book publisher Simon & Schuster) would be entrusted to Freston's partner-in-presidency, Leslie Moonves.

Redstone, now 82, will continue to rule over his divided empire until he (or Mother Nature) sees fit to hand over the reins to his daughter and presumed heir Shari.

The moneymen are applauding the divorce which they believe will maximise the worth of shares in the spun-off companies. Enthuses Chris Marangi, an analyst at Gabelli & Company which owns 8.9 million Viacom shares: "This would surface some of the value in the cable networks."

Data sourced from New York Times; additional content by WARC staff