-- DJ Viacom's Karmazin Says Cash Flow Will Buy TV,Radio Assets --
NEW YORK (Dow Jones)--Viacom Inc. (VIA, VIAB) President and Chief Operating
Officer Mel Karmazin said the company is particularly interested in buying radio
and television stations and outdoor advertising companies with its free cash
flow.
Karmazin - noting that the company must bring its share of the U.S. viewing
population down to the federally mandated 35% from its current 41% - said Viacom
would swap for television stations in markets where it already operates so as
not to expand its geographic reach.
Viacom, which completed its merger with CBS Corp. earlier this month, will
also use its cash to repurchase stock, said Karmazin, who had been president and
chief executive of CBS.
Karmazin said he and Viacom Chairman Sumner Redstone are "very excited" about
the future and the company's ability to cater to advertisers across several
platforms. The company is experiencing strong trends in radio, outdoor,
broadcast and cable advertising. Traditional bricks-and-mortar companies are
competing fiercely with Internet retailers, Karmazin said. And in the up-front
advertising market, where advertisers are positioning to buy time for the
upcoming television season, the company's broadcast and cable stations are
seeing strong demand.
"Advertisers seem anxious to spend a lot of money," Karmazin said, adding that
"everyone seems bullish" about growth in the advertising market in 2001.
Political advertising will be a big boon for Viacom in the third quarter, said
Karmazin, adding that the Senate race in New York is a potential bonanza given
the war chests of New York Mayor Rudolph Giuliani and First Lady Hillary Rodham
Clinton.
In addition to CBS, Viacom also owns the UPN network and such cable television
assets as MTV, Nickelodeon and TNN.
To illustrate the cross-branding opportunities of the Viacom-CBS merger,
Karmazin pointed out that Viacom will now have rights to the Super Bowl and the
halftime show will be an MTV production.
Turning his attention to the recent skirmish that led to Walt Disney Co.'s
(DIS) ABC-TV broadcast network being dropped from Time Warner Inc.'s (TWX) cable
systems in several major cities, Karmazin said it was a "shame" that it had to
happen.
Time Warner - which returned ABC to the air little more than a day later after
the two called a truce to continue retransmission negotiations - suffered bad
publicity and faces punitive measures from the Federal Communications
Commission. Karmazin said Disney is perceived as the victor and the debacle
illustrates the importance of content and the power of broadcasters.
Karmazin made his comments at the Banc of America Securities Growth
Telecommunications, Media and Entertainment conference here.
(END) DOW JONES NEWS 05-15-00
05:01 PM- - 05 01 PM EDT 05-15-00 |
