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Viacom Post-Split Plans Take Shape

Sep 19, 2005  •  Post A Comment

Viacom’s co-presidents and co-chief operating officers last week began outlining what areas they intend to pursue once the media giant is split into two separate companies.

Leslie Moonves, who will become CEO of CBS Corp. following the split, repeated that he intends to charge cable, satellite and telephone companies a fee to carry CBS programming, while Tom Freston, who becomes CEO of the new Viacom, said his group is holding talks with “several outside partners” about jointly launching channels.

Mr. Moonves indicated at a Merrill Lynch investor conference last week that he wants to charge distributors a rate similar to that charged by USA Network, which commands a per-sub fee of between 50 cents and 70 cents, according to sources. He said he considered it “one of the great injustices for many years that we never got paid for our signals,” and that if distributors “want the NFL, ‘Survivor,’ ‘CSI’ and ‘David Letterman,’ you are going to have to pay [for the CBS signal] what you pay USA.”

Mr. Moonves, who for months has indicated he will start seeking compensation for the CBS signal once the current carriage agreements expire in four to five years, said he has already begun conversations with the telephone companies about paying for the CBS signal. He said that such conversations were more difficult to have with CBS’s being part of the larger Viacom family, which also includes MTV Networks. However, with Viacom gearing up to split its cable and broadcast assets into two separate companies by early next year, Mr. Moonves said his group would be free to begin seeking compensation from content distributors.

Meanwhile, Mr. Freston said at the same conference that his group is holding “a host of discussions” and is talking with “several outside partners” about the possibility of forming joint ventures to launch new channels, but he made clear no decisions have yet been made. The comments came on the heels of a press report Tuesday that indicated the cable programming giant is holding talks with Comcast about possibly forming joint ventures to launch a series of lifestyle channels that would be run by John Sykes, former president of Viacom’s radio unit, Infiniti Broadcasting.

“We are in a host of discussions with several outside partners,” he said, adding that no formal agreements have been reached.

Mr. Freston played down the significance of launching a channel with a partner as not being a new concept and noted the company has had a history of launching channels through joint ventures, has launched a British version of Nickelodeon with Sky Television and used partners in Russia and Japan to launch versions of MTV in those markets.

“It’s not unprecedented,” he said.