Viacom said earlier this year it would explore the idea of splitting the company into two parts to maximize the long-term business potential of divisions with similar growth patterns. Now, the board had decided to do it and determined in broad brush strokes how the split would be accomplished.
Viacom will create two publicly-traded companies through a tax-free stock spin-off to Viacom shareholders. The new companies would be called Viacom and CBS Corporation.
Viacom Chairman/CEO Sumner Redstone said the board believes the transaction will result in "two strong, focused and nimble companies."
Infinity Broadcasting would be part of CBS Corp, which would also include CBS and UPN networks, Viacom Television Group, Viacom Outdoor, Paramount and King World television production operations, as well as Showtime, Simon & Schuster and Paramount Parks. Leslie Moonves would lead this company.
The new Viacom will be comprised of MTV Networks, which includes MTV, VH1, Nickelodeon, Nick at Nite, Comedy Central, CMT: Country Music Television, Spike TV, TV Land and other networks, BET, Paramount Pictures, Paramount Home, Entertainment and Famous Music. Tom Freston will lead this group.
The spin-off is expected to be complete in Q1 of 2006. Redstone will serve as chairman and will be the controlling shareholder of the companies.
Viacom's board has named Sumner's daughter Shari Redstone to the newly created position of non-executive vice chairman of the board. Shari Redstone, president of National Amusements Inc., has been a member of the Viacom Board since 1994.
(Radio World)
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