Viacom, CBS plan to wed into 'No. 1 outlet' for advertisers

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Viacom, CBS plan to wed into 'No. 1 outlet' for advertisersViacom and CBS Corp., both New York, today announced they intend to merge into an $80 billion communications giant that would have a presence across a broad range of content and ad media, including network and cable TV, local TV, radio, outdoor, and the Internet. Combined ad revenue was pegged at $10.7 billion.The boards of both companies have unanimously approved the deal, creating a new company to be called Viacom. Sumner Redstone, 75, will remain as chairman-CEO of Viacom, and CBS President-CEO Mel Karmazin, 59, will become president-chief operating officer. The agreement calls for Mr. Karmazin to assume the top spot if there's a vacancy.

A merged Viacom would include the CBS and UPN broadcast networks; MTV, Nickelodeon and TNN on cable; TV stations in 18 of the top 20 markets; Paramount Pictures; 163 radio stations; the TDI outdoor ad company; and a slew of Internet sites.

Messrs. Redstone and Karmazin in a news conference called the deal "a merger of equals'' and said it presents a variety of cross-promotional opportunities.

"The new Viacom will be the No. 1 outlet on the planet for connecting advertisers with the audience they need to reach,'' Mr. Redstone said. CBS Television President-CEO Leslie Moonves said it's too early to determine how the deal will affect ad rates, though he said bundled ad sales will be used.

The new company would have 41% of the U.S. network viewing audience, and the Federal Communications Commission prohibits any one company from commanding more than 35%. Mr. Karmazin said the rule is outdated in a "multichannel world,'' and he and Mr. Redstone hope to convince regulators to allow the new company to go forth without divesting assets.

Copyright September 1999, Crain Communications Inc.

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