Viacom To Split?
In what might be a trend in business to think “retro,” Viacom CEO Sumner Redstone is considering splitting his company into two operational units.
Basically, some of Viacom’s acquisitions are doing swell – MTV’s cable networks, for instance – but new technologies are threatening the success of its radio and broadcast entities, according to The Wall Street Journal.
By dividing Viacom into two moderately sized companies, Redstone hopes to rebuild stock prices. With no more lands to conquer or media outlets to buy, the CEO is apparently thinking it’s better to pump up the shares of the existing businesses.
On the drawing board, Viacom would be split into a CBS-Infinity unit that would be fronted by Les Moonves. The other operation, handled by Viacom co-president and former MTV chairman Thomas Freston, would comprise the company’s cable channels (MTV, Comedy Central, BET, CMT, VH1, Showtime et al) and Paramount Pictures, along with Paramount Home Entertainment and other like-minded businesses.
The split would follow similar maneuvers in big business, none more notable than Vivendi Universal’s selling of its U.S. assets, and Time Warner’s jettisoning of Warner Music Group.
In another example of what the WSJ speculated as a sign of the times, Liberty Media Corp. announced it would spin off its interest in Discovery Communications.
If Viacom goes splitsville, it would set the stage for Freston to become a new major player in the world of media, the paper said.
Freston and Moonves are now first in line to succeed the 81-year-old Redstone if he retires in 2007 as promised. The CEO had a tumultuous relationship with his former prexy, Mel Karmazin, before the latter found more amenable climes at Sirius Satellite Radio.
In the meantime, Redstone’s daughter Shari Redstone, who has been running the family’s movie theatre company, National Amusements, is apparently getting groomed for something, appearing more often with her dad at investor and internal meetings, the paper said.