Word: karmazin
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...this case don't believe what Karmazin is saying. Believe what he's doing. CBS needed to make this deal. It makes sense. Relaxed regulations make it possible for a company to own both a TV network and a studio that creates its content. And until August, companies could own only one TV station in a market; now they can own two. This change sparked a new round of merger negotiations...
...Karmazin hasn't been completely satisfied with CBS since he's been there, which is one reason he went to see Redstone in his Broadway offices in early August. "The fact that he had me come over to his office means he didn't think any deal was going to happen," says Karmazin, noting that real negotiations take place on neutral turf. But after getting reacquainted with Redstone and discussing a swap of some stations, Karmazin says he began to realize that a bigger deal might be possible...
Redstone believes Karmazin knew from the first week of August that he wanted to somehow put the two companies together. Redstone wasn't interested. "I canceled three appointments because I was so busy," he says. "I didn't think it could be anything this big. But he seduced...
When Redstone shifted the talks to a hotel suite, a more appropriate setting for a seduction, Karmazin knew things were getting serious. He pointed out to Redstone that the two companies already had great working relationships among CBS's extensive radio network and Viacom's MTV and VH-1. "Sumner said to me, 'You've been stalking my company for a long time; come over and talk to me about CBS.'" Karmazin approached his talk with Redstone as if he were a prospective investor, highlighting CBS's strong network of affiliates and its prime radio stations and outdoor-advertising assets...
...always thought of CBS as a network," says Redstone. "But it's much more than that." Redstone saw a good fit. CBS was strong domestically; Viacom was growing fast internationally. And shareholders had long expressed concerns that Redstone, who remains in fine fettle, had no clear successor. Karmazin, a darling on Wall Street for driving up the stock price of CBS, and of Infinity Broadcasting before that, would neatly resolve that issue...