KARMAZIN RESIGNS VIACOM QUICKLY ELEVATES 2 OTHERS.Byline: Greg Hernandez Staff Writer Viacom Inc. President Mel Karmazin Melvin Alan "Mel" Karmazin, a native New Yorker, (born August 24, 1943)[1] is an executive who has held several top jobs in the broadcasting industry and is currently CEO of Sirius Satellite Radio. resigned Tuesday from the New York-based media conglomerate and was quickly replaced by Leslie Moonves Leslie Moonves (born December 23, 1948 in New York City) is President and Chief Executive Officer of CBS Corporation. He grew up in Valley Stream, NY, and is a graduate of Valley Stream Central High School. and Tom Freston Thomas E. Freston (born 22 November 1945) is an American television executive who most recently served as President and Chief Executive Officer of the post-split Viacom, until his resignation on September 5, 2006. , the respective heads of Viacom-owned CBS (Cell Broadcast Service) See cell broadcast. and MTV MTV in full Music Television U.S. cable television network, established in 1980 to present videos of musicians and singers performing new rock music. MTV won a wide following among rock-music fans worldwide and greatly affected the popular-music business. . The swift elevation of Moonves and Freston to the positions of co-president and co-chief executive officer and the announcement of a corporate succession plan seemed to quell Wall Street jitters jitters 'Butterflies' Psychology An episode of nervousness or anxiety that often precedes a public event; jitters is a type of performance anxiety which may affect actors in a stage production–stage fright or soloist musicians; it may respond to anxiolytics as shares of Viacom held steady. ``I have worked closely with both Tom and Les for many years, and there are no two finer executives in the media industry,'' Viacom Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Sumner Redstone Sumner Murray Redstone (born Sumner Murray Rothstein on May 27 1923 in Boston, Massachusetts) is majority owner and Chairman of the Board of the National Amusements theater chain. Through National Amusements, he is majority owner of Midway Games, Viacom and CBS Corporation. said. ``Each has presided over phenomenal growth stories - Les in broadcast and Tom at the cable networks - and each has served as an integral member of Viacom's senior management team.'' The Viacom empire includes the CBS broadcast network, Paramount Pictures film studio and cable's MTV. Redstone, who is also the corporation's controlling shareholder, said he will step down as head of Viacom within the next three years. ``Obviously, Tom and Les are the two leading candidates to be the next CEO of Viacom,'' he said. Media analyst Angela Kohler said Viacom's stock might have taken a hit Tuesday had Redstone not immediately named Freston and Moonves as his probable successors. ``They were pretty clear that the likelihood scenario would be that it would be an internal candidate,'' said Kohler, an analyst with Federated Investors Federated Investors is a large financial services company headquartered in Pittsburgh, Pennsylvania. Founded in 1955, the company manages $260 billion dollars of customer assets. The corporation offers 151 different types of mutual funds. in Pittsburgh. ``They were saying they have a strong bench.'' In their new roles, Freston and Moonves will jointly supervise all of the operations of Viacom under the direction of Redstone. In addition to MTV, Freston will oversee the operations of Showtime, BET, Paramount Parks Paramount Parks was an operator of theme parks and attractions, which annually attracted about 13 million patrons. Viacom had assumed control of the company as part of its acquisition of Paramount Pictures in 1994. , Simon and Schuster publishing and Paramount Pictures. ``I am excited about the opportunity to play a greater role at Viacom,'' Freston stated. ``After so many years at MTV and MTV Networks, Viacom is a company that I love and one that I know intimately.'' Moonves will oversee Viacom's broadcast television holdings and will be responsible for the operations of Paramount TV, Infinity Broadcasting and Viacom Outdoor. He said in a printed statement: ``I am excited to take on these new responsibilities at such an important moment in the evolution of Viacom.'' Karmazin was quoted in a printed statement as saying he was departing Viacom after four years as president for ``personal and professional reasons.'' There had been well-known tension between Karmazin and Redstone that had grown stronger over the years, although Redstone downplayed this and said Karmazin's resignation was met with ``very much regret.'' Redstone insisted during a conference call with analysts that ``nobody asked for Mel's resignation'' and that Karmazin was among those being considered to replace Redstone as CEO. Redstone said he learned two weeks ago about Karmazin's plans to depart and was told that the executive was frustrated with Viacom's stock price. The value of Viacom's shares had recently dropped to $35.91, a 15-month low. Shares rose 9 cents Tuesday on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. to close at $36.98, far below Viacom's 52-week high of $48.12. Karmazin's frustration was also said to also be related to Viacom's struggling radio division. Redstone told analysts Tuesday that the company is committed to radio ``for the time being'' but that the management team would be scrutinizing those operations, and he did not rule out selling them. Karmazin, who was head of CBS Corp. when it was bought by Viacom four years ago, did not mention any specific plans except to say that he would ``pursue other interests.'' He will stay on at Viacom for 60 more days to help Moonves and Freston move into their new roles. Since Karmazin does not have a noncompete clause noncompete clause Medical practice A clause in a contract in which the provider of a specific service, commonly understood to be physicians in private practice, agrees not to practice medicine–ie, compete–in the same geographic region–the size of in his contract, he is free to work for another media conglomerate in the near future. This led to speculation Tuesday that he might be headed to The Walt Disney Co. which has been criticized for its lack of potential successors to CEO Michael D. Eisner. Dissident former Disney board members Roy Disney and Stanley Gold, who led an unsuccessful campaign earlier this year to oust Eisner, said Karmazin is among ``the obvious candidates'' for the board to talk to as part of Disney's succession planning. ``If (the board) was not planning to contact Mr. Karmazin, we would strongly encourage (them) to do so,'' Disney and Gold wrote in a joint statement. ``Mel is a world-class executive who has both the right credentials and experience. He should definitely be on the Disney board's short list.'' Disney Chairman George Mitchell stood by Eisner on Tuesday. ``The board has complete confidence in the current management,'' Mitchell said. ``On the strength of our recent results, we believe that confidence has been justified and will be further validated as our performance continues to improve.'' Greg Hernandez, (818) 713-3758 greg.hernandez(at)dailynews.com CAPTION(S): 5 photos, box Photo: (1 -- color) Viacom's Sumner Redstone, left, and Mel Karmazin were in lockstep lock·step n. 1. A way of marching in which the marchers follow each other as closely as possible. 2. A standardized procedure that is closely, often mindlessly followed. Noun 1. in a 1999 meeting, but tension arose. James Estrin/The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times (2 -- color) Redstone, 81 (3 -- color) Karmazin, 60 (4 -- color) Freston, 58 (5 -- color) Moonves, 54 Box: VIACOM'S CHANGING OF THE GUARDS SOURCE: Viacom Inc. Associated Press |
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