Magazine article Newsweek

The Making of a Media Giant: Viacom's Plan to Buy a Network Thrusts CBS's Mel Karmazin into a Starring Role. Will Sumner Redstone Share the Applause?

Magazine article Newsweek

The Making of a Media Giant: Viacom's Plan to Buy a Network Thrusts CBS's Mel Karmazin into a Starring Role. Will Sumner Redstone Share the Applause?

Article excerpt

Mel Karmazin is a pretty funny guy. At last week's news conference announcing Viacom's $37 billion acquisition of CBS, Karmazin, the CBS chief, could have been auditioning his stand-up act for a spot on "Letterman." With mock seriousness, he explained how the two companies would exchange assets to complete the deal: "As of about an hour ago, one ticket to the MTV Music Awards was equal to one-and-a-half tickets for the U.S. Open, but not the finals.'' He teased his new billionaire boss, Sumner Redstone, the head of Viacom, about their trip the following day to Washington: "He's flying on his plane; I'm getting on a shuttle.'' When Redstone said the real reason for the deal was his interest in using all the empty billboards owned by CBS, Karmazin, without missing a beat, turned the awkward moment into a setup line: "And if you saw blank billboards, they weren't ours.''

For Karmazin, the Viacom-CBS deal is more than a great opportunity to showcase his wisecracking skills. Once the merger is completed, it will catapult the son of a New York cabdriver to the uppermost reaches of the media business and clearly signals that in the entertainment industry these days, business skills trump creative instincts. Unlike Disney's chief, Michael Eisner, who got his start picking shows for ABC, Karmazin spends little time on the creative side. Instead, Karmazin's clout stems from his obsessive focus on boosting ad sales and cutting expenses. He's generated enormous profits for investors through the years, and for himself--last year he cashed in $196 million worth of stock options. Even though CBS was acquired by Viacom, and Karmazin is taking the No. 2 spot, it's clear that Wall Street and media-industry insiders expect the former radio-ad salesman to make the merger pay off. "Mel's a superb executive,'' said David Geffen, a partner in DreamWorks SKG. "He's all about operations and marketing, making things run efficiently.''

By pushing for this huge deal, which will create the third largest media company, behind Time Warner and Disney, Karmazin may trigger a new wave of hastily arranged corporate media marriages. There was intense speculation last week that General Electric's NBC, which is the sole remaining network not linked to a movie studio, will rush into the arms of a partner like Sony or Seagram, both of which own studios but lack a broadcaster's pipeline into homes. The model is the kind of success that Rupert Murdoch's News Corp. has had with "The X-Files''--Fox produces the show, it runs on the Fox network, reruns are syndicated by Fox and cable rights go to a Fox cable network. Fox also made the movie.

Karmazin is already considered a master at making a modern media empire more than the sum of its parts. Last year CBS regained the status of most-watched network partly because Karmazin aggressively promoted CBS's TV shows on its huge chain of radio stations. He wants to keep your eyes focused, ears tuned and mouse clicking on the myriad divisions under his direct control, including the CBS TV network, radio stations, cable channels like MTV and Nickelodeon, Paramount Studios and a slew of Web sites. Karmazin sees all sorts of possibilities in a world where Paramount Studios can develop shows for the CBS network, and CBS's rock radio stations can plug MTV. In turn, Karmazin wants to publicize CBS television shows on MTV to help attract younger viewers to CBS. And with Nickelodeon thrown in the mix, he can boast of high-chair-to-grave demographics across the company's audiences. The new selling proposition: Viacom will offer advertisers one-stop shopping and oodles of cross-promotion among its units.

All that may be the easy part. Karmazin has to manage not only down and out, but also up. He maintained last week that Redstone doesn't even make the top-10 list of toughest bosses he's ever worked for, but that judgment may be a little premature. Redstone is not the easiest guy to work for, as Frank Biondi, his longtime chief executive, found out. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.