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May 31, 2002  •  Post A Comment

Karmazin promises improved network-affiliates relationship

CBS affiliates expected Viacom President and chief operating officer Mel Karmazin to again tell them, “We suck less” than the other networks at this year’s CBS affiliates meeting. Instead, a more mellow Mel surprised the crowd by saying their network-affiliate relationship is now “pretty darn good.”

“Pretty darn good is not really good enough, so we really are going to work real hard in making that relationship go from sucking less to pretty damn good to excellent,” Mr. Karmazin said last Thursday. “You keep watching and I think you’ll see an even greater improvement in our relationship.” He said he has confidence in the new fall lineup and he reiterated what CBS President and CEO Leslie Moonves said the day before during the fall lineup presentation, that CBS realizes the importance of good 10 p.m. shows to lead into local stations’ late newscasts. He also acknowledged the “Early Show” time period is a top priority.

“It’s a very, very important time period for our network, affiliates and owned-and-operated stations,” Mr. Karmazin said. “We’re going to commit whatever resources it takes for us to improve that time period.”

This year 400 affiliate representatives descended on the Bellagio Hotel in Las Vegas to attend the only large-scale affiliate meeting. That number is up from the 340 who attended last year.

Mr. Karmazin also pointed out to affiliates that CBS is producing more shows in high definition than any other network-every prime-time show except “Baby Bob”-and urged affiliates to embrace the transition from analog to digital. Mr. Karmazin emphasized his commitment to providing HD programming and said it should give stations more leverage in their markets.

Mr. Karmazin spoke briefly about Viacom’s stock. He pointed to other media mergers that occurred after Viacom’s merger with CBS two years ago and said AOL Time Warner’s stock is “80 percent down from where it was before the merger” and at Vivendi Universal, they’re “down approximately the same.” “Our stock is still trading at a higher price than before the merger,” Mr. Karmazin said.

Although Viacom is a $25 billion company with a cash flow of $6 billion, the CBS network-which is not a big part of the conglomerate-is important in the eyes of Wall Street, Mr. Karmazin said. “Anything that happens at CBS moves the stock one way or the other,” Mr. Karmazin said. “I can assure you that Sumner [Redstone, Viacom CEO and chairman] and I will do whatever we need to do to make CBS No. 1.”

He also talked about advertising. Mr. Karmazin said that for the first time in a long time, they are looking at second quarter as an up quarter. “We’re seeing demand quite strong in our broadcast network.” He said scatter pricing for the third quarter is around 25 percent higher than what the pricing was in the upfront. He added, “No advertiser benefited by holding the money buying scatter. There was no advantage [in] waiting for scatter. We’re feeling guardedly optimistic we’ll come out of upfront as the No. 2 revenue network.”

Troubled Adelphia wraps up NASDAQ trading: Today is the last day Adelphia Communications will publicly trade under the symbol ADLAE. But being delisted by the NASDAQ is just one of many problems for the company. The sixth-largest cable company today was hustling to complete negotiations with Paul Allen’s Charter communications for the sale of its Los Angeles systems for what sources say would be well under the asking price. Several board members have rigorously opposed the fire sale. Proceeds would be used to make late payments on bank loans, the deadlines for which have been extended a second time. Analysts say they don’t see how Adelphia can avoid filing for bankruptcy.

(c) Copyright 2002 by Crain Communications