Viacom (original)

This article is about the original Viacom (founded 1971). For the current state of the company since 2005, see CBS Corporation. For the new post-2005 Viacom, see Viacom.
Viacom Inc.
Public
Industry Broadcasting and Publishing
Fate Assets divided between CBS & new Viacom
Successor CBS Corporation (current entity)
Viacom (spin-off)
Founded May 3, 1971 (1971-05-03)
Defunct None, this is a still logo
Headquarters New York City, New York, U.S.
Area served
 Nationwide
Owner Columbia Broadcasting System (1971–1973)
Independent (1973–1986)
National Amusements (1986–2005)
Number of employees
 38,350 (2006)
Divisions CBS
UPN
CBS Radio

Viacom Inc. (short for Visual & Audio Communications) was an American media conglomerate. Effective December 31, 2005, this corporate entity changed its name to CBS Corporation. The present firm also known as Viacom was also established at that date and is a new spin-off company created during the CBS-Viacom split.

During the 1970s and 1980s, Viacom was a distributor of CBS television series for syndication, including such shows as I Love Lucy, The Andy Griffith Show, The Twilight Zone and All in the Family. They also syndicated shows for others, the biggest examples being The Cosby Show and Roseanne (which were produced by Carsey-Werner Productions, who eventually began distributing their own programming).

History

The original Viacom began as CBS Films, Inc., the television syndication division of CBS established in 1952. The division was spun off and renamed Viacom in 1971, amid new FCC rules forbidding television networks from owning syndication companies[1] (the rules were later repealed).

String of acquisitions

Viacom's first non-programming acquisition came in 1978 when the company purchased the Sonderling Broadcasting chain, giving it radio stations in New York City, Washington, D.C., Houston, and San Francisco, and one television station, WAST (now WNYT) in Albany, New York.

Later that year, Viacom added WHNB-TV in New Britain, Connecticut, changing its call letters to WVIT. The early 1980s saw Viacom sorting through the Sonderling stations with several being donated, swapped, or being the nucleus for new corporations—for example, WOL in Washington launched the Radio One group, which today is the largest African-American-owned broadcasting corporation.

In 1983, Viacom purchased KSLA-TV in Shreveport, Louisiana, and WHEC-TV in Rochester, New York, in separate transactions, followed in 1986 with (ironically) CBS-owned KMOX-TV in St. Louis; with the purchase, that station's call letters were changed to KMOV.

In 1985, Viacom bought Warner-Amex Satellite Entertainment, which owned MTV and Nickelodeon, renaming the company MTV Networks. Viacom also received Warner-Amex's share of Viacom/WASEC joint venture Showtime Networks, Inc, which included Showtime and The Movie Channel. This led to Viacom becoming a mass media company rather than simply a distribution company.

In 1986, movie theater owner National Amusements bought controlling interest in Viacom, which brought Sumner Redstone to the company. Redstone retained the Viacom name and made a string of large acquisitions in the early 1990s, announcing plans to merge with Paramount Communications (formerly Gulf+Western), parent of Paramount Pictures, in 1993, and buying the Blockbuster Video chain in 1994.

The Blockbuster acquisition gave Viacom access to large television holdings controlled by Aaron Spelling's company, Spelling Entertainment; along with his own productions, Spelling controlled the pre-1973 ABC and NBC back catalogs by way of Worldvision Enterprises and Republic Pictures.

In 1999, Viacom made its biggest acquisition to date by announcing plans to merge with its former parent CBS Corporation. The merger was approved in 2000, bringing cable channels TNN (now Spike TV) and Country Music Television (CMT) under Viacom's wing, as well as CBS's production units and TV syndicaters Eyemark Entertainment (formerly Group W) and King World. CBS's production unit and King World (which has since folded Eyemark) operated under their own names; however, TNN and CMT were merged into MTV Networks almost immediately.

In 2001, Viacom completed its purchase of Black Entertainment Television (BET). As with TNN/Spike TV and CMT, it was immediately integrated into MTV Networks, causing some outcry among BET workers in the Washington area (where BET was based before the merger). As a result, BET was eventually de-integrated from MTV Networks.

Although a majority economic interest in Viacom was held by independent shareholders, the Redstone family maintained 71-percent voting control of the company through National Amusements' holdings of Viacom's stock.

In 2002, Viacom bought independently run music channel TMF, which at the time was broadcasting in Belgium and the Netherlands. In June 2004, Viacom bought VIVA Media AG, the German equivalent to MTV. The same month, plans were announced to dispose of Viacom's interest in Blockbuster later that year by means of an exchange offer.

Also in 2002, Viacom acquired the remaining shares of Infinity Broadcasting radio chain. And in April 2003, Viacom acquired the remaining ownership shares of Comedy Central from Time Warner, making Comedy Central integrated into MTV Networks.

2005 split

In March 2005, Viacom announced plans of looking into splitting the company into two publicly traded companies under the continuing ownership of National Amusements. The company was not only dealing with a stagnating stock price, but also the internal rivalry between Les Moonves and Tom Freston, longtime heads of CBS and MTV Networks respectively. After the departure of Mel Karmazin in 2004, Redstone, who served as Chairman and Chief Executive Officer, decided to split the offices of President and Chief Operating Officer between Moonves and Freston. Redstone was set to retire in the near future, and a split would be a creative solution to the matter of replacing him.

The split was approved by Viacom's board June 14, 2005, took effect December 31, 2005, and effectively reversed the Viacom/CBS merger of 1999. The existing Viacom was renamed CBS Corporation and was headed by Moonves. It now includes Viacom's "slow growth businesses", namely CBS, The CW (a merger of UPN and The WB), CBS Radio, Simon & Schuster, CBS Outdoor (formerly Viacom Outdoor), Showtime, CBS Television Studios, CBS Television Distribution and CBS Studios International. These, according to some analysts, were suffocating the growth of the MTV Networks cable businesses. The split effectively made CBS an independent company again.

In addition, CBS Corporation was given Paramount Parks (which they sold to amusement park operator Cedar Fair, L.P. on June 30, 2006) and the CBS College Sports Network.

Additionally, a new spin-off company was created called Viacom, which was headed by Freston. It comprises MTV Networks, BET Networks, Paramount's movie studio, and Paramount Pictures' home entertainment operations. These businesses are categorized as the high-growth businesses (MTV Networks and BET Networks in particular), and if they were split into a separate company, it could infuse new funds/capital to allow for future acquisitions and expansion.

In September 2006, Redstone fired Freston and named Philippe Dauman as the new head of Viacom.

Notes

Footnotes

^ Viacom was initially founded in 1971, but was reincorporated in 1985. Effective December 31, 2005, this corporate entity changed its name to CBS Corporation. The present firm known as Viacom was also established at that date and is a new spin-off company created during the CBS-Viacom split.

See also

References

  1. ↑ "CBS transfers CATV to new public firm". Broadcasting: 48. 1970-07-27.
  2. ↑ Clarified by Ralph Baruch, first chairman of Viacom, in a 2007 interview on C-SPAN's "The Communicators."


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