|Hours after announcing Mel Karmazin's departure, Viacom chief Sumner Redstone detailed his plans for the succession.
INSIDE MEL KARMAZIN'S GOLDEN PARACHUTE
Ex-Viacom President Gets $1 Million Salary for the Next Two Years Plus Benefits
MEL KARMAZIN RESIGNS FROM VIACOM
Tom Freston and Leslie Moonves Named Co-COOs
MEL KARMAZIN DEFENDS 'ANAL SEX' RADIO BROADCASTS
Viacom COO Invokes First Amendment and U.S. Troops in Iraq
ANOTHER STRONG QUARTER FOR VIACOM
Big Gains From Network, Cable TV; Ad Revenue up 11%
MEDIA RIVALS BACKSLAP AT CABLE CONFERENCE
'I Can't Imagine Being a Competitor' Says Mel Karmazin
AN INTERVIEW WITH MEL KARMAZIN
Viacom President Discusses Acquisition Wish List and Media Consolidation
MEL KARMAZIN TO REMAIN WITH VIACOM
President-COO Signs New Three-Year Contract
MEL KARMAZIN DECLINES TO DISCUSS HIS FUTURE
Viacom COO Reportedly on Outs With Viacom CEO
Mr. Karmazin, the media giant's president and chief operating officer, is being replaced by Tom Freston, chairman-CEO of MTV Networks, and Leslie Moonves, chairman-CEO of CBS, who will jointly run operate Viacom under Mr. Redstone.
Speaking on a conference call with analysts this morning, Mr. Redstone said, "It is extremely likely that either one of these will be my successor. I would bet that one of these guys will succeed me."
Mr. Redstone has committed to stepping down as CEO within three years. He also dismissed rumors that his daughter, Shari Redstone, was in the running for a top job at Viacom, but he added that it was important for her to understand the business.
As for Mr. Karmazin's departure, Mr. Redstone said, "I can only speculate, but he was frustrated with the price our stock and the issue that had been raised about radio. ... There was no single event, just his frustration."
Evaluating its businesses
Viacom is currently in the process of evaluating its businesses, including its radio and outdoor media assets. When asked if Viacom is as committed to radio as it once was, Mr. Redstone responded that radio remained a high-margin business, but "there are no sacred cows here, we'll do what's in the interests of Viacom. I think you get the message. We're reviewing all our assets and if there are decisions to be made then we'll tell you about them."
Viacom's radio unit is Infinity Broadcasting, which has been involved in a scuffle with the Federal Communications Commission over shock-jock Howard Stern.
Mr. Redstone said Mr. Karmazin's contract does not include a non-compete clause, but "I don't see any place he'd go to compete with us. I don't see that there's competition, but if it comes we'll be ready for it."
Responding to Mr. Karmazin's resignation, Merrill Lynch issued a note this morning, calling the announcement a "very significant negative for Viacom as this represents the loss of an extremely talented operating executive. ... We view Mr. Karmazin's ability to hold firm as unique." The company did not alter its "buy" rating on the stock.
But Tom Wolzein, a senior media analyst at Sanford Bernstein, said the news was positive: "They [Viacom] have put in two of the strongest executives in the company. They both have been managing organizations that have been gaining share. Now we have a date when Sumner will step down."