Redstone: Age of Media Conglomerate Over

[Roland99]

http://news.yahoo.com/news?tmpl=story&u=/ap/20050708/ap_on_hi_te/media_conference_redstone_2

SUN VALLEY, Idaho - Sumner Redstone, one of the great empire-builders of the media world, on Friday said he had no regrets about his decision to break up Viacom Inc., the massive media company that owns MTV, CBS and the Paramount movie studio.

"The age of the conglomerate is over," Redstone said, addressing a small group of reporters at an annual retreat for media moguls in Sun Valley, a scenic resort tucked into the mountains of Idaho.

"Sometimes divorce is better than marriage," Redstone said. "The world has changed" since Viacom announced in 1999 that it was buying CBS Corp. "It's time to take a new look and adapt."

Redstone, a regular guest at the annual Sun Valley conference, had been keeping a low profile at this year's event. On Friday he agreed to speak to reporters in the lobby of the resort as other key players in the media world including News Corp. Chairman Rupert Murdoch and Time Warner Inc. CEO Dick Parsons strolled past.

Last month Viacom's board approved a plan that would split the company into two entities, one with a focus on fast-growing cable networks including MTV, VH1 and Nickelodeon, and the other on cash-rich but slower growing businesses like broadcast television and radio.

The two companies will be run by Redstone's two deputies at Viacom, former CBS chief Les Moonves and former MTV head Tom Freston. Both executives were also attending the Sun Valley meetings.

The annual retreat for media executives, investors and technology gurus draws an A-list crowd from the business world, including investor Warren Buffett, Microsoft Corp. Chairman Bill Gates and both Michael Eisner, the outgoing CEO of Walt Disney Co., as well as incoming Disney CEO Bob Iger.

Addressing the Viacom split, Redstone said that "the time has come to be more nimble" for media businesses. Viacom is hoping that the split will allow each company to move more quickly in its own realm and also attract investors interested only in those sets of businesses.

The stocks of large, diversified media companies including Viacom and Time Warner have been out of favor on Wall Street as investors have become skeptical of claims that the various kinds of media businesses would create more value under one roof than they would operating as separate businesses.

"It hasn't been working," Redstone said of large media conglomerates.

For Redstone, the breakup reverses more than a decade of building up Viacom into a major diversified media conglomerate through a series of acquisitions, including the Paramount movie studio, the radio and outdoor businesses that came with CBS, and the Blockbuster video rental chain, which has since been separated from Viacom.

The split also solves the question of who will succeed Redstone, who turns 82 in May. Moonves has been tapped to run the business centered on CBS, while Freston will run the other company, which will keep the Viacom name. Redstone will remain controlling shareholder of both companies.

Redstone's daughter Shari is also taking a greater role in the company, and was recently named to the new position of non-executive vice chairman of the board. She had been a member of the company's board since 1994.