Word: viacom
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...Viacom comprises a panoply of media, ranging from talk radio to roadside billboards and including just about anything and everything that can carry or broadcast an advertisement. That's what has Wall Street applauding the deal. "It will be a one-stop shop," says PaineWebber analyst Chris Dixon. "Ad buyers can come to them for TV time, billboards, radio ads." CBS has also developed a significant Internet presence. That kind of concentration will give Viacom pricing power too. Dixon, like most analysts, forecasts 18% to 20% increases in cash flow to $5 billion in 1999, and combined revenues above...
Time Warner, parent company of TIME, is currently the biggest media company in the world, with assets including cable, broadcast, a movie studio, book publishing, a magazine division and the fledgling WB network. And the Viacom-CBS deal has again piqued the longstanding yearning of Time Warner vice chairman Ted Turner (who once made a run at CBS) to buy NBC, the only major network not affiliated with a Hollywood studio. That's not likely to happen, since Time Warner chairman Gerald Levin seems satisfied with the WB and the company's collection of cable networks...
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...
...agreed that if any deal were to happen, it would be a merger of equals, although Viacom is clearly the acquiring party. "I had 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...
...kindred spirits, says Frank Biondi, who was Redstone's No. 2 before a controversial ouster in 1996 and who knows Karmazin. "They're both devoted to the business--it's about 99% of their lives. They're just going to have to work out the yins and yangs." Says Viacom Entertainment Group chairman Jonathan Dolgen: "They share the same basic work ethic, which is: There are only seven workdays in the week...