Joint Statement of Sumner M. Redstone Chairman and Chief Executive Officer Viacom Inc. and Mel Karmazin President and Chief Executive Officer of CBS Corp.(*)

Article excerpt

Viacom

CBS

I. INTRODUCTION

On September 6, 1999, Viacom Inc. and CBS Corporation agreed to combine the two companies in a merger of equals. Sumner Redstone will lead the new company, to be called Viacom, in his continued role as Chairman and Chief Executive Officer, as well as majority shareholder. Mel Karmazin, now President and Chief Executive Officer of CBS, will become President and Chief Operating Officer of the new Viacom, with all operations of the combined company reporting to him.

The assets and markets of the two companies are highly complementary, have very little overlap, and, once merged, will achieve significant economies of scale, resulting in new programming, new jobs, lower costs and an increase in exports of Viacom's brands, for the benefit of Americans and all consumers around the world. Subject to governmental approvals, Viacom will meld its brands and assets in basic and premium cable networks (for example, MTV, Nickelodeon, VH1 and Showtime), movie production (Paramount Pictures), television program production and syndication (Paramount Television), broadcast television stations, theme parks, publishing (Simon & Schuster), home video and rental and retailing (Blockbuster) and Web sites, with CBS's television network, broadcast television stations, basic cable networks (Country Music Television (CMT) and The Nashville Network (TNN)), regional sports operations, radio stations (Infinity Broadcasting), outdoor business, and online holdings, to create a U.S.-based global media company that is positioned to seize the myriad opportunities and confront the formidable challenges of the twenty-first century. Such opportunities include serving the explosive media and entertainment demands of the domestic and international arenas through the Internet and other distribution channels we know today, while the challenges include maintaining a voice in an increasingly fragmented and technologically evolving marketplace.

The proposed merger of Viacom and CBS is no accidental pairing. Rather, it represents another strategic and significant landmark in a farsighted vision of constructing a competitive media and entertainment company flexible enough to adapt to changing times. The vision took seed some forty years ago with a handful of drive-in movie theatres. With the waning audience for such theatres, those holdings were expanded to include the much-in-demand indoor, multiplex variety of theatres. And, in turn, it was with this base set of assets in 1987 that Viacom and its cable networks, including MTV and Nickelodeon, were acquired. Seven years later, Viacom's cable network brands--by then having expanded beyond MTV, Showtime, and Nickelodeon to VH1, MTV Europe, and MTV Asia--combined with the Paramount movie studio. This marriage reaffirmed Viacom's commitment to content and resulted in a strengthened and enhanced programming portfolio that now extends Viacom franchises into theatres and homes around the country and the world. For example, Paramount Pictures worked with Nickelodeon to produce The Rugrats Movie, and Paramount Parks feature Nickelodeon play centers. Globally, MTV can be viewed in over three hundred million households, Nickelodeon in over 135 million households and VH1 in over ninety million households, in some fourteen different languages and in more than one hundred countries around the world, from the People's Republic of China to Norway to Mexico. And as the world goes digital, Viacom is ready to supply content through its suite of digital channels that are accessed via television, and through its music and child-oriented sites that are accessed via that ubiquitous digital medium, the Internet.

As Viacom has grown, it has never lost sight of the importance of funneling its profits back into the company to finance quality programming for diverse audiences and to meet the public service obligations owed to its viewers. Early this year, for example, Viacom, together with its nonprofit partner Children's Television Workshop, launched Noggin, the nation's first round-the-clock, commercial-free educational children's channel. …