from All Access
March 31, 2003
--snips--
That series of AOL BROADBAND promos INFINITY stations have started to run heavily across the country continues, and the companies still haven't indicated what they're really promoting, but so far the promos appear to concentrate on the wiring of the stations' studios for broadband using AOL; since many of the chain's stations already have broadband Internet connectivity, this would not be a major change, and some other radio trade publications have indicated that they doubt that there will be streaming of INFINITY stations.
But in a press release TODAY (3/31), the indications ALL ACCESS reported last week are acknowledged by AOL -- buried in the release is this description of the company's proposed broadband marketing campaign: "An innovative marketing alliance with INFINITY BROADCASTING that will promote AOL for Broadband on 183 INFINITY radio stations ... in addition to streams of select INFINITY stations on the AOL RADIO@NETWORK."
--snips--
from DCRTV
March 28, 2003
Streaming For Infinity? - 3/28 - Infinity has long prohibited the internet streaming of its radio stations. But we're hearing that a new "Radio@AOL" service offered by AOL Broadband may soon feature live audio for stations like WJFK-FM (Howard Stern, Don and Mike, the Redskins), WPGC-FM (Donnie Simpson), WQSR (Big Don, the Ravens), WHFS (the Junks), WLIF, WWMX, WXYV, WARW (Cerphe), and more. Infinity's WJFK-FM and WXYV have been running promos teasing the arrival of the AOL service. Stay tuned.....
from All Access
NET NEWS as of FRIDAY, MARCH 28, 2003
Updated at 11:04a (PT)
Is INFINITY finally dropping its resistance to Internet streaming of its stations?
Look for the stations to be part of the RADIO@AOL offerings on AOL BROADBAND.
The companies haven't formally announced a deal, but ALL ACCESS has now learned that all INFINITY stations nationwide are already running promos/commercials indicating that the stations are coming to the service.
from the NY Post
March 21, 2003
March 21, 2003 -- Wall Street applauded Viacom for signing a new pact to keep Mel Karmazin on board as its president for three more years.
The deal - which sent Viacom shares jumping 5 percent and earned Karmazin a tidy $8.4 million gain on his personal Viacom stake - calls a truce to a nasty feud between Karmazin, 59, and his crusty boss, Sumner Redstone, 79.
The new pay pacts announced yesterday for both executives pleased many investors, because they leave open a door for Karmazin to take over when Redstone steps down after he turns 80 this year.
Karmazin may not be as enthusiastic as Wall Street, however. The new employment contracts strip away some of Karmazin's power and, for the first time, allow Redstone to fire his superstar executive with simple board approval.
Redstone, the controlling shareholder of Viacom, has chafed over not having the final word over Karmazin's work; Karmazin's previous contract had severely limited any effort to fire him.
The two executives have made headlines for more than a year with their spats over both management style and decisions affecting the media empire, which includes CBS, Paramount Studios, MTV and Simon & Schuster.
Karmazin was on the verge of quitting, but softened his stance and agreed to cede more power to Redstone.
The new contracts also modify the secession plan.
Karmazin was previously assured the CEO's job if Redstone stepped down; under the new deal, the board will make the hiring decision and could bring in an outsider - though analysts, who openly prefer Karmazin's style, think that would be unlikely.
"The agreement by Mr. Karmazin to stay removes a material overhang on Viacom shares and in our view is a material positive for Viacom given the management expertise of Mr. Karmazin," said Merrill Lynch analyst Jessica Reif Cohen.
Investors hope some of the checks and balances built into the employment pacts will prevent the feud from erupting again.
Under the executives' new three-year contracts, Redstone can fire Karmazin or overrule him on operational matters with backing of a simple majority of the board of directors. Previously, a "supermajority," or 14 of 18 board members, was required.
Karmazin has an exit clause that allows him to leave the company with all his perks if any of his decisions are overruled.
Redstone and Karmazin began working together in 2000 when Viacom bought CBS, which was run by the iron-fisted Karmazin.
Karmazin held onto his day-to-control of the new company, putting Redstone into the back seat for a while.
The new pay pacts give the men almost identical pay packages.
Both will annually receive a base salary of $1 million plus an added $2.99 million in deferred compensation, with annual raises of up to 10 percent. Their bonuses are $6.55 million annually.
Last month, Karmazin redeemed about $17 million of his options. He still owns more than 3.9 million shares, valued at $162 million based on yesterday's close of $41.03, up $2.13.
from USA Today
January 26, 2003
He'd better be, considering that the company paid him $15 million in salary and bonus in 2001 - about as much each day of the week, including weekends, as the average family makes in an entire year.
But Karmazin looks like a bargain when you consider the implied value Wall Street put on him in the past few weeks. Viacom's stock has fallen 10% since Jan. 2, twice the decline of the Standard and Poor's 500, as investors started to conclude that the brusque ex-radio ad salesman might lose a power play with Viacom CEO Sumner Redstone and split after December, when his three-year deal expires.
That has shaved $7.6 billion in market value from Viacom, about as much as the entire annual gross domestic product of Namibia.
Karmazin wants to keep CEO-like powers over budgets, hiring and firing, which he negotiated into the contract he signed in 1999, just before he sold CBS to Viacom.
Yet, Redstone is telling people that he's unwilling to make the same concessions now, and the home of CBS, Paramount, MTV Networks and Blockbuster will be fine if Karmazin goes.
Conventional wisdom says the matter will be wrapped up by the end of March, before the company sends out its annual proxy statement. Three directors - Verizon's Ivan Seidenberg, Orion Safety Products Chairman David McLaughlin and lawyer William Schwartz - are in charge of the negotiations. Yet, there's no question that Redstone, who controls most of the voting shares, will make the final decisions. Many say Redstone ignores Wall Street at his peril.
Through his zealous promotion of ad sales and budget cuts, "Mel is one of the best operators in the entire business," says Merrill Lynch's Jessica Reif Cohen, a longtime Karmazin fan. "He has a huge following because every company he has run" - including Infinity Radio, CBS and Viacom - "has outperformed the market. It's highly unusual to take responsibility from someone who'd doing a great job."
But others privately say that some major investors might be overreacting to help Karmazin in the battle of the Viacom super-egos. The only way Redstone might concede power, this theory goes, is if it will boost Viacom's share price - something he treasures almost as much as life itself.
Strangely enough, considering Redstone's age of 79, time might be on the CEO's side. That's the view of someone who ought to know.
"When Sumner fired me, the stock went down, and a month later it was back," says investor Frank Biondi, who was CEO of Viacom from 1987 to 1996, and ran Universal Studios until 1998. "And it was back because the business itself was fine."
Others agree. "In the end, it'll trade on how MTV's doing in Europe and how CBS is doing in the ratings," says Vogel Capital Management's Hal Vogel.
Investors often overlook the fundamentals because many media executives hype their supposedly unique and irreplaceable talents.
"The legacy of the one-man or -woman gang is still there," Biondi says. "That's what mattered 20 years ago. You became successful by picking the movies and TV shows. Now, at a $30 billion worldwide company with five lines of business, it's management that counts. And it's a mistake to have a single executive who's that important to your company. It means you haven't delegated enough."
Lots of anecdotal evidence supports that attack on the "Great Person" theory of history. Media stocks didn't change direction as companies tossed aside once highly touted visionaries including AOL Time Warner's Gerald Levin and Bob Pittman, or Vivendi Universal's Jean-Marie Messier. Disney's stock stayed the course when it hired, then booted, former Hollywood super agent Michael Ovitz.
But Cohen rightly notes that sometimes "you don't see the effect right away when someone leaves. It can take years."
One could argue that Disney hasn't been the same since 1994, when President Frank Wells died in a helicopter crash. And the company's once-invincible animation unit has fallen on hard times since studio chief Jeffrey Katzenberg left a few months later to co-found DreamWorks SKG.
That's why Viacom's fortunes don't depend solely on whether Karmazin stays or goes.
"You'd have to tell me who's taking his place," says McAlpine Associates' Dennis McAlpine. "If it's Shari Redstone (president of theater chain National Amusements, and Sumner's daughter) then the stock goes down. If it's (respected MTV Networks chief) Tom Freston, maybe there's no change."
Biondi, for his part, thinks Karmazin's days at Viacom are numbered. "Neither of them is going to blink, which probably means Mel's not going to be back."
The former CEO says he wouldn't be surprised if Redstone created an office of the president, including Freston, CBS chief Les Moonves and Paramount's Jonathan Dolgen and possibly overseen by CFO Rich Bressler. "The company pretty much runs itself, with the exception of the planning and budgeting process."
And while some shareholders may be angry at first, cooler heads will prevail. "I wouldn't be surprised if some people use it as a buying opportunity," Biondi says.
from the NY Post
January 30, 2003
Mel Karmazin is set to stay on at Viacom, sources tell The Post.
Although a deal has not yet been signed, Karmazin has agreed to a short-term contract extension, sources say. While the deal could still fall through, it appears Karmazin will stay as chief operating officer for at least another year or two.
Karmazin and Sumner Redstone, the chairman and CEO of the media giant, have feuded recently over Mel's future at the company.
The discord has worried investors, who have lopped off about 10 percent of the value of Viacom's stock over the last two weeks on concern that Karmazin - one of the most highly respected media execs - might take his talents elsewhere.
Viacom's board of directors held a regularly scheduled meeting yesterday. The Karmazin matter was not officially on the agenda, though the directors are believed to have discussed the issue.
Karmazin's contract expires at the end of the year, and the tussle between him and Redstone has centered on control.
As part of the existing contract, Redstone does not have the ability to personally fire Karmazin. Redstone is said to have balked at keeping this stipulation, which is a remnant of Viacom's merger deal with Karmazin's CBS network in 2000.
Karmazin's name has come up frequently as a possible CEO at some of Viacom's rivals. Most recently, some influential AOL Time Warner shareholders tried to woo him to that company.
Last year, his name was mentioned as a possible replacement for Disney CEO Michael Eisner.
Viacom, with such valuable assets as MTV and Infinity Broadcasting, has been a rare bright spot in the media landscape. While other companies have seen profits and share prices tumble, Viacom has remained stable.
from Radio Ink
January 16, 2003
Two factors that will likely keep Karmazin where he is: the report that Viacom Chairman Sumner Redstone has made Karmazin an offer he can’t refuse, and the fact that Karmazin currently has most of his $600 million in net worth tied up in Viacom options.
Industry analysts expect Karmazin to announce in March whether he will remain at Viacom, or jump ship.
from the NY Post
January 16, 2003
January 16, 2003 --
With only two weeks left to wrap up heated contract negotiations to secure his job as Viacom Inc. President, Mel Karmazin is refusing to sign the contract being offered unless it is changed significantly, a source told The Post.
At the same time, Karmazin is being wooed by several influential investors at AOL Time Warner to possibly jump ship and run that company, sources said.
Although sources familiar with Karmazin's contract negotiations say Viacom Chairman Sumner Redstone "has offered Mel more than he ever expected" in terms of control at the company, there are a few major sticking points to the new deal.
Among the biggest: Redstone wants to remove a stipulation in the current contract that would make it impossible for him to fire Karmazin.
Sources say Redstone has given signals that he doesn't care if Karmazin leaves Viacom.
Karmazin's contract is set to expire at the end of 2003, and it was previously reported that the company wanted the matter settled by March. Now, sources say, the parties aim to wrap up the matter in two weeks.
There has been speculation for months that Karmazin's strained relations with his boss may give him second thoughts on signing a new deal. Viacom has since formed a committee to negotiate a deal to keep Karmazin in the fold.
The sideways contract negotiations are taking place as influential AOL Time Warner shareholders have been aggressively trying to help broker a deal for Karmazin to join the executive suite at that company, sources said.
Gordon Crawford, a veteran money manager at Capital Group's Capital Research & Management, one of AOL Time Warner's biggest institutional investors, is said to be among them, acting independently of the company.
Crawford and the others want a dynamic media executive at the helm of troubled AOL Time Warner, sources said.
Crawford has lately been dumping Viacom stock and adding AOL shares to his portfolio, CNBC reported yesterday. In addition, CNBC reported that Crawford and Karmazin recently took a trip to China together.
Crawford, along with AOL Vice Chairman and major investor Ted Turner, was instrumental in getting AOL Time Warner Chairman Steve Case to resign on Sunday. Sources familiar with the situation said Crawford and other shareholders have been reaching out to Karmazin to gauge his interest in running the company.
It is unclear if Turner is a part of this approach.
Karmazin would presumably come in to replace Dick Parsons as AOL Time Warner's CEO. Parsons is among candidates being considered to replace Case as chairman.
AOL has not yet decided whether to combine or separate the chairman and CEO positions. Industry observers said that giving Parsons both titles could make investors uneasy, especially amid heightened concerns about corporate governance and calls for independent boards.
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