from The Deal.com
March 20, 2002
Viacom Inc. has shaken up its cable and radio divisions, moving John Sykes to the chairman and CEO spot at Infinity Radio from his post as president of VH1 and Country Music TV. New York-based Viacom denied that the move was a consolation prize for Sykes after a year of depressed ratings at VH1. Judy McGrath, international creative director for MTV, was named president of MTV Networks Music Group, giving her reign over VH1, CMT and all of the company's digital music services, in addition to MTV and MTV2.
The Infinity job opened up last month when Farid Suleman resigned to become CEO of rival Citadel Communications Corp. Sykes said one of his main goals will be to get Infinity radio stars like Howard Stern and Don Imus to do more television and convincing TV personalities like Bill O'Reilly to do radio. This week on his morning radio show, Stern, winner of Billboard's 2002 Nationally Syndicated Radio Personality of the Year award, said that he knows what he's doing and that Sykes should leave him alone.
--snips--
Learn some background on the life and thoughts of Howard new boss, John Sykes, from this speech he made.
from berklee.edu
When I was a kid growing up in Schenectady, New York, there was one thing that drove my life - music. The first major purchase I made with my own money was not a baseball glove. It was a Bradford transistor radio. And at night, when you could get a good AM signal for miles, I would sit under my covers and listen to everything from Martha Reeves to Roy Orbison on stations like WLS in Chicago, CKLW in Detroit and WRKO right here in Boston. Somehow god punished my addiction to music by making me… a drummer. I guess you could say he also punished everyone who lived in my house. So I became addicted to the drums… Ludwig drums to be specific. Most of my friends knew the names of the lead vocalists in every band. Forget Mick Jagger, my heroes were Charlie Watts, Cozy Powell, Ginger Baker, and Aynsley Dunbar. I knew the exact kit every one of them played. I still remember "the smell" of a new Ludwig drum catalog.I can also remember the day when word hit the street that Bruce Gowdy, the best drummer in Schenectady, would be heading off to Berklee. Not to San Francisco, but to Boston, the Berklee with the double "e." This was a very big deal. The only other person ever to make it out of Schenectady was Pat Riley. I, too, wanted to go to Berklee, but I knew I wasn’t good enough. Well, a life goal finally achieved today, thanks to you!
So what can I possibly say that will be of interest to this graduating class of 2000, the best of the best, the alma mater of Bruce Gowdy... not to mention Quincy Jones, Bruce Hornsby, or Donald Fagen, to name a few.
Well, I know what I’m not going to say. I’m not going to tell you that you are going to be the next Quincy Jones, Bruce Hornsby or Don Fagen. I wouldn’t want you to aspire to that. You shouldn’t want to. They’ve already achieved greatness. Now it’s your turn… on your terms.
Whether you leave here today to become a professional musician, or whether you are pursuing the business side of the industry, or whether you are going to be a music educator, your biggest challenge is to move beyond the current gold standard. Simply put… to challenge conventional wisdom.
Most people, when they leave college, are confused about what they want to do and where they want to go. I was too. All I wanted to do when I graduated was to figure out a way to combine music and television in a meaningful way. There was only one problem, there weren’t any jobs like that in 1977.
You see, when I was growing up, the two biggest voices in youth culture were rock ‘n’ roll and television. So I saw every reason in the world why the two should be somehow combined. But when I graduated every job offer I got was to join the mailroom of a big television network and learn "the ropes." The way "it’s done" -- their way. I said, "no way." I ended up taking a job in the music industry so I could learn more about the business, all the while looking for a way to follow my dream.
Then, about two years out of school, I saw my opportunity. Everyone said I was nuts when I quit a perfectly good job in the record business to start a cable music channel. But it meant everything to me. I was so excited, I even forgot to ask how much I was going to get paid. (Don’t make that mistake.) And I wasn’t the only one. Other people believed in the same dream - five to be exact. So in late 1980, the six of us joined forces to see how far we could take this idea of putting music on television.
The big network broadcasters said nobody would watch music on television. They wanted no part of us. The advertisers said there wasn’t enough money to go around. The established record companies - not A&M, of course - wouldn’t even return our phone calls. Who needs TV, we were told, when we’ve got radio? The rock critics said nobody’s going to watch an artist play music. And they all said - who could possibly need more than three TV channels?
Well, one year later we went against conventional wisdom and launched our cable music service. We called it MTV. Today it is carried in 300 million households around the world and is the most watched network on the planet.
Most of you grew up with cable TV, but in 1980 it was virtually non-existent. My generation grew up with only three television channels that dictated how we lived our lives, and we wanted more. Back then there were hundreds of magazines and radio stations catering to every possible specific taste. But with television we had to sit there on Sunday nights watching circus acts and opera singers while waiting for the Beatles to play one song on the Ed Sullivan Show.
So, with the introduction of cable TV, we set out to create a network that would be the exact opposite of broadcast TV. Our notion of television was that it should not be linear, it should not be about story lines with a beginning, middle and end. It should be about mood and emotion. MTV, ESPN, CNN…they were introduced as 24-hour environments, programmed to specific tastes of viewers. MTV was about young people and creating a 24 hour-a-day place on television that was important to them. Today, when people say, "I feel like watching MTV," you know exactly what they mean.
Creating that network environment was our intention. And then it became our mission, driving the birth and development of other MTV Networks brands like VH1, Nickelodeon, Nick at Nite and TV Land. It’s funny, I again confronted conventional wisdom just six years ago when we set out to reposition VH1 as a music brand for the post-college audience. Conventional wisdom said that people over 25 didn’t care about music. "Music is a teenage thing. Once they leave college, kids grow up get jobs, and stop buying music."
We saw that as strange, since adults account for over 60% of all music sales. Conventional wisdom forgot that the generation that invented rock ‘n’ roll music grew up, and took its love and passion for music with it, and never let go. VH1 now reaches more than 70 million homes and just last year was named AdWeek’s "Breakout Brand" of 1999. We proved that there is life after Britney Spears.
Now, I know I make it sound easy. I guess that’s the benefit of speaking in hindsight. But in reality, our group took a lot of risks and we made a lot of mistakes. And in the end, we had luck and timing on our side. But we had a passion and an original idea, and we never lost sight of our goals. We kept challenging ourselves, we kept challenging tradition, we kept creating TV that followed the tastes of our audience, not the status quo. And while this all sounds so rebellious, aggressively following your vision can end up being quite profitable. Today, the MTV Networks group is more profitable than ABC, CBS, NBC, the WB, Fox and UPN - combined. Not like I’m counting. I’m just making a point. But it’s not just true of MTV networks. In the 60s, Herb Alpert and Jerry Moss founded an upstart label called A&M records that went up against the big corporate giants like Columbia and MGM. They sold the little boutique label just a few years ago for $300 million dollars.
So here’s what I learned from conventional wisdom: Conventional wisdom said we didn’t need more than three television channels. Conventional wisdom said nobody would watch music on television. Conventional wisdom is the enemy to any creative business.
And while I thought I was such a rebel 20 years ago, I’m now part of the establishment. Cable TV is now part of conventional wisdom. Let’s look at the media environment today. You guys grew up with 36 channels, so it’s no wonder that you’re the ones that drove the creation of the Internet. My generation was happy with 50 channels - that was our revolution. My initial response to the Internet was, "Who has the time or desire to wade through all that information?" Well, just ask any six-year-old and you’ll get your answer. My five-year-old son Jack runs circles around me on our computer. My greatest fear has come true. My God, I’ve become my parents!
But, that’s the beauty of our culture, especially the arts… it is always changing. It thrives on fresh ideas, on innovation. And that’s what you’ve spent not just the last four years, but the last 21 years preparing for. Every great idea ever created flew in the face of conventional wisdom (except of course, the 8-track and that TV show about singing cops). Originality is about new ideas. The one thing that will never change is that just when you think you know it all - it will change. Just when the world thought there was nothing better than the Sony Discman, they invented this: the Rio player. No moving parts, no skipping, and it weighs less than a pair of headphones. Soon you won’t even need the box. It will all be coming from satellites right into your headphones. Or your phone…or your watch.
Nothing drives this theory more than music. Entire genres of music have been created against "what history dictates." In the late 70s, record companies weren’t exactly lining up to sign The Police. Why would they? Sting’s voice was raspy - he couldn’t sing. What about hip-hop in the late 80’s? It was a passing fad -- not. And let’s never forget the best lesson of them all…that five labels passed on The Beatles before EMI gave them a record deal.
Like all invention, music is about risk. Sure there were thousands of great artists that have preceded you. So, how do you top them? Study the greats. Then take it to the next level. Keith Richards was obsessed with Chuck Berry. And the great hip-hop artists have all sampled George Clinton’s music. But they didn’t just copy it… They reinvented it and made it their own. Take the shot. If it doesn’t work, you can always make a decent living in a cover band.
I can find only one example in which conventional wisdom has been challenged for the worse. In fact, it’s downright devastating.
Conventional wisdom has always said that, as parents, we want to give our kids more than we had. Historically, as a nation, we have defined this to the point of being a cliché.
We all had music education. I did, our parents did. Look where it took you! Turns out we were all very, very lucky, because it’s not that way anymore. Over the last 20 years we’ve been systematically eliminating our country’s public school education programs. What’s even more confusing to me is that we’ve done this at a time when research has shown a direct connection between music education and a child’s ability to learn academic subjects like math and science. At a time when we’ve grown the Dow over 1000 percent, America’s test scores have dropped to the bottom of all industrialized nations.
Listen to these facts:
Kids who are involved in music programs score more than 100 points higher on the SATs than students who are not involved.
Children involved with active music participation demonstrate significant improvements in their spatial abilities, which is important for success in math and science.
Children involved in music programs have improved reading abilities, higher self-esteem and are less likely to be involved with gangs and drugs.
Only 25% of our nation’s eighth graders are able to participate in instrumental music programs.
A few years ago, I had the privilege of being Principal for a Day at PS-58 in Brooklyn. I happened to walk in to a 4th grade music class and see the most beautiful sight. Every kid had an instrument! And I couldn’t believe my ears. Then I looked a little closer. The instruments were held together with gaffer’s tape. The teacher informed me that she had no money in the budget for music and that the program was closing down at the end of the year.
In the car on the way home I remember feeling this tremendous sense of guilt. Here I was, returning to my fancy job that I love, in the industry that I love, and here were these kids that I thought were getting the same education that I had - but who were being set up to lose.
That day I made an executive decision. VH1 was going to adopt PS-58. And we did. Only we couldn’t stand helping only one school, so we soon adopted the whole New York City Public School System. And it wasn’t long before we said, to hell with it, let’s adopt the entire country. And VH1 Save the Music was born.
VH1 Save the Music is my network’s way of helping to improve the quality of education in our public schools. We’ve partnered with all sorts of organizations, like The National Association for Music Education, the National School Boards Association, The Recording Industry Association of America, and NAMM, to set up local programs to collect used instruments and donate them to the kids that need them most. Then, whatever we don’t collect, we purchase with money raised nationally by our foundation.
By the end of this year we will put $10 million worth of music instruments in school music programs in 40 cities, directly affecting over 200,000 kids. That’s a nice beginning. But hopefully we can use our power as a television network to raise awareness about the need to put music education back in our schools.
And though it makes me feel good, I want to be very clear on something. It’s not about some rich corporation "giving back." It’s about accountability. It’s about responsibility.
And after all, these children are our future customers, our future employees and our future neighbors.
If these real life experiences I’ve shared with you this morning provide you with even a grain of inspiration to follow your own dreams, then I’ll feel like I’ve done my job. I’m living proof that a little creativity and a decent amount of self-confidence can go a long way in achieving your dreams. Add a lot more creativity and a lot more talent, and your could be Patti Austin or Herb Alpert.
One last bit of advice. You are entering a high risk business. Fortunately, you are doing so at a fascinating time in history. This is a time of transition similar to the one that I experienced with the birth of cable, only so much bigger, and so much more exciting. Today’s technology will change the way you make music, the way your music gets distributed, the way your music is consumed and it will even change the way you get paid.
So when you leave here today, armed with arguably the best music degree in the world, the first word you will probably hear is "no." Don’t worry, because that is where your journey begins, and that’s when the fun begins. Because through all of the ups and downs, the victories and the mistakes, there is nothing more gratifying than defying conventional wisdom and achieving success on your terms.
Ask Quincy, ask Branford, ask Elton, ask Madonna, ask Herb or ask Patti… they listened politely to the establishment, then they did it their own way.
It’s your turn now. Take the step.
Think. Observe. Ask. Experiment. Dare. Pursue. Aggravate. Surprise. Shock. Amaze. Astonish. Succeed. And, above all, do it on your own terms.
I highly recommend it.
Thank you.
John Sykes is the CEO of VH1 Networks.
from The New York Times
February 1, 2002
Sumner M. Redstone, chairman and chief executive of Viacom (news/quote), told the company's board at a special meeting on Wednesday that he would not renew the contract of its president, Mel Karmazin, after Mr. Karmazin's term ends in May 2003, several people close to the board said yesterday.
In announcing that he would let Mr. Karmazin go, Mr. Redstone did not criticize Mr. Karmazin's corporate strategy or decisions but said that Mr. Karmazin's hard-charging management style did not mesh with Viacom's corporate culture. He also said that several fund managers had told him that Mr. Karmazin's departure would not hurt the stock and that Mr. Karmazin was not the man Mr. Redstone wanted to lead the company in the future, the people said.
For his part, Mr. Karmazin told the board that he would serve out his contract and would not walk away from it, the people close to the board said.
The details of the meeting, as well as information about a number of critical memos Mr. Redstone wrote about Mr. Karmazin, who is also the chief operating officer, appeared to undercut months of denials by the executives of a significant rift in their relationship.
Still, the two executives issued a joint statement last night, saying that newspaper accounts of what took place in the meeting and reports of their personal conflict were "outrageous and a total fabrication." They would not comment further.
Carl Folta, a Viacom spokesman, declined to specify what was inaccurate in the accounts.
Mr. Karmazin took over as the chief operating officer of Viacom after the company acquired Mr. Karmazin's previous company, CBS, in 1999 for $37.3 billion. While the company, which also owns media properties like MTV Networks, the Paramount studios and Simon & Schuster publishing, has mostly thrived under the two executives, reports of strains began to appear not long after the merger.
Those strains became increasingly evident the last several weeks, numerous Viacom executives said, leading to the confrontation at Wednesday's board meeting. More details of a special board meeting that took place after the board's regular meeting came out yesterday as several directors sought to subdue the publicity surrounding the personal dispute.
On Wednesday, the board officially urged Mr. Redstone and Mr. Karmazin to put aside their differences for the good of the company. They made a relatively unusual joint appearance last night at a dinner for investors. It was a first step in the effort to present a unified front, a Viacom executive said. Some executives suggested that it was unlikely that the tension would ease simply because of the board's request. "It's probably only a matter of time before this thing between them explodes," said one executive close to several board members.
In one example cited by people associated with the board, Mr. Redstone sent a number of memos criticizing Mr. Karmazin to Viacom executives and board members to whom he has been close.
The memos were intended to be read only by Viacom executives and directors close to Mr. Redstone. But a person with knowledge of the memos said that at least two of the critiques were mistakenly sent to a director close to CBS. That director brought the memo up at the meeting on Wednesday, this person said.
Whether that director gave Mr. Karmazin a copy of the memo or whether Mr. Karmazin received a copy independently is not clear. Mr. Karmazin, however, also alluded to the memo when he spoke at the meeting on Wednesday but said he would not get into personal issues, this person said.
The special board meeting was led by two directors, Ivan Seidenberg, president and co-chief executive of Verizon Communications (news/quote), and David T. McLaughlin, the former president of Dartmouth. They sought to find a way to put an end to the conflict by asking Mr. Redstone and Mr. Karmazin to state their views. According to the people close to the board, the two men were told to refrain from any personal attacks and address only business issues.
In declaring that he would not renew Mr. Karmazin's contract in May 2003, the people close to the board said, Mr. Redstone might have been seeking to have the board choose to terminate Mr. Karmazin's contract now. But that did not happen.
They said Mr. Karmazin pointed out that he, too, had a lot riding on the future of Viacom, especially an employment condition that prohibits him from selling more than 10 percent of his stock each year.
Mr. Karmazin told the board that he believed he had done a good job and that his performance would lead to an offer to renew his contract. But he also promised that he would help in any transition should his contract not be renewed.
The contract issues have drawn enough attention at the board level that directors are weighing hiring their own legal counsel, several people close to the board said.
Inside the company, rumors are rampant about who might succeed Mr. Karmazin if he left the company. At a top-level corporate Christmas party in December, Philippe D. Dauman and Thomas E. Dooley, who had formerly served as deputy chairmen of Viacom under Mr. Redstone, both attended. That set off rumors inside the company that Mr. Redstone hoped to bring them back to replace Mr. Karmazin. Neither man would comment yesterday, but people close to both said they were content with their new independent status and had no intention of returning to executive roles at Viacom.
Reports in the media this week suggested that the president of CBS Television, Leslie Moonves, might be in line for the job, a suggestion that executives close to Mr. Moonves strenuously denied. He has said he has no interest in leaving his active role in the CBS and UPN networks.
Other executives said that selecting Mr. Moonves was not likely because it would alienate other important executives who were now Mr. Moonves's equals: Tom Freston, chairman of MTV Networks, and Jonathan Dolgen, chairman of the Viacom Entertainment Group.
To circumvent any conflict that would arise from choosing one man as Mr. Karmazin's successor, a Viacom executive said Mr. Redstone had considered creating an executive troika, with the three executives sharing power.
from YAHOO! News
February 21, 2001
The $12.5 billion stock deal was originally slated to close last month, but the company decided to hold a shareholder vote after a decision by a Delaware court created some uncertainty about minority buyouts following WorldCom Inc.'s (NasdaqNM:WCOM - news) acquisition of Intermedia Communications Inc. (NasdaqNM:ICIX - news).
Infinity shareholders will get 0.592 Viacom Class B common share for each Infinity Class A common share. Viacom already owned all of Infinity's Class B common stock, which represents about 64.3 percent of all outstanding Infinity shares and about 90 percent of the combined voting power of Infinity's Class A and Class B common stock.
In October, Viacom bumped up the exchange ratio to buy the radio station owner by 5 percent from the original ratio of 0.564 of a share announced in August.
from YAHOO! News
February 21, 2001
Press Release
SOURCE: Viacom Inc.
Under the terms of the merger, which is tax free for the shareholders of Infinity and Viacom, each share of Infinity Class A Common Stock has been converted into the right to receive 0.592 of a share of Viacom Class B Common Stock. Infinity shareholders will receive a cash payment in lieu of any fractional shares.
Viacom is the No. 1 platform in the world for advertisers, with preeminent positions in broadcast and cable television, radio, outdoor advertising, and online. With programming that appeals to audiences in every demographic category across virtually all media, the company is a leader in the creation, promotion, and distribution of entertainment, news, sports, and music. Viacom's well-known brands include CBS, MTV, Nickelodeon, VH1, BET, Paramount Pictures, Infinity Broadcasting, UPN, TNN: The National Network, CMT: Country Music Television, Showtime, Blockbuster, and Simon & Schuster. More information about Viacom and its businesses is available at http://www.viacom.com.
from the NY Post
December 16, 2000
Shock jock Howard Stern ended four months of modern-day radio drama yesterday by announcing that he's signed a new contract believed to be worth nearly $100 million over the next five years.
During an on-air news conference that included Viacom/CBS/Infinity president Mel Karmazin, Stern said his numerous threats to make yesterday's broadcast his "final show" were legitimate - and not part of his twice-a-decade contract-negotiation ritual.
"Up until 4:42 yesterday afternoon, I had no contract with Infinity. I was really on the fence," Stern told listeners and reporters.
"At 4:41, I was ready to kick Mel in [an intimate, sensitive area]. At 4:42, I was on my knees."
No one at Infinity would say how much money Stern will collect, but industry insiders have estimated that he'll be making $18 million for each of the next five years.
"I have no reason to doubt it," said Tom Taylor, editor of the M Street trade fax. "Mel's getting his money's worth."
"If it's $18 million, it's a discount," said Q104 general manager Matt Ross. "If you look at what he's meant to Mel and Infinity, it looks like he's worth considerably more than that. I'm not sure where Mel would be without Howard Stern."
Earlier this year, The Post calculated that Stern was entitled to at least $21 million per year from just four CBS/Infinity radio stations, based on widely accepted industry pay scales in a booming radio economy.
Stern's top-rated wake-up show is carried by 42 stations, about a dozen of them owned by CBS/Infinity.
Karmazin said he had about 25 meetings with Stern to negotiate the new deal and said he never doubted that radio's baddest boy would sign.
"The opportunity for him to have all these beautiful women take off their clothes every morning is something I knew he would not want to give up," said Karmazin, adding that Stern drove a hard bargain, "believing the S in CBS should stand for Stern.
"I think that [the late CBS founder William S.] Paley, wherever he is, will be happy to know that CBS will stay CBS and won't be named after Stern."
from the NY Daily News
December 16, 2000
The end wasn't much of a shock at all. Ribald radio morning man Howard Stern told listeners yesterday he would remain with Infinity Broadcasting for another five years.
"I have a lot of radio left in me," said Stern, whose WXRK-FM (92.3) show is the largest draw in the New York market, though his audience has shrunk somewhat. The latest official ratings figures give Stern 7.8% of the metro radio audience, down from 8.7% last winter.
The announcement ended months of speculation about whether he would stay with Viacom-owned Infinity, or in radio at all.
"Up until 4:42 [Thursday] afternoon, I had no contract," Stern said of the renewal talks, which never turned nasty. He admitted the sticking point was money. And until the day before the announcement, Stern said, "I was really on the fence.
"There was nothing about creative differences," he added during an on-air press conference attended by Viacom President Mel Karmazin and Stern's agent Don Buchwald.
Terms of the new deal were not revealed. But the contract will keep the radio jock's daily dose of lesbians, strippers and malcontents on the air through 2005.
"In my mind, there was never a doubt Howard was going to stay," said Karmazin, who handled the negotiations.
In recent weeks, Stern has played up the fact that his contract was to expire at month's end and he had not made a new deal with Infinity -- though few people other than Stern and Buchwald believed he would seriously consider leaving.
But he had billed yesterday's broadcast as his last.
"At 4:41 yesterday, I wanted to kick Mel in the ---," Stern said. "By 4:42, I was on my knees."
Some yesterday questioned whether Stern's drawn-out renegotiation -- including his on-air chatter about getting no respect from Infinity -- was nothing more than a perfectly planned radio stunt.
"I will swear on the life of my children that this was no publicity stunt," he said. "I would never do that to my audience."
In the end, Stern said, he felt he was born to do radio and couldn't see himself walking away from the medium.
December 15, 2000
from the Associated Press/1010 WINS News
December 15, 2000 at 08:42:44
Stern says he reached the contract with Mel Karmazin, Infinity's Chief Executive at 4:42 yesterday afternoon.
He wouldn't comment on the salary. But Stern says, "I got less than I deserve and Mel thinks I got more than I deserve."
Infinity Broadcasting is the parent company of 1010 WINS.
from the Associated Press (Regional Wire)
12-15-00 0948EST
NEW YORK (AP) - After straddling the fence for months and keeping his millions of fans wringing their hands, radio shock-jock Howard Stern finally announced Friday that he has signed a new five-year deal to keep his nationally-syndicated program on the air.
Stern, whose contract with Infinity Broadcasting was set to expire at the end of the year, brought his negotiations down to the wire. He signed the agreement one day before he was set to go on vacation through the end of the year.
"Up until 4:42 yesterday I had no contract. I was really on the fence," Stern told reporters in an on-air press conference. "But in the end, I couldn't see walking away from this."
Stern, who was joined on air by Viacom president Mel Karmazin, admitted that he had to think long and hard about his future during the past months. He had said repeatedly during his show that Friday could be his last show ever.
"In the end, I couldn't see walking away from this," he said.
Despite such soul-searching, Stern quickly reverted to his usual, brash style, saying that prior to signing he had thought about kicking Karmazin - whose company owns Infinity - in a sensitive spot.
He later asked a female Fox News reporter to don a skimpy, orange bikini. She demurred.
Stern refused to disclose the details of the deal despite incessant queries, but admitted that financial issues were at the heart of the disagreement.
When asked what he would do with the extra money, Stern quipped, "Do what I always do - give it to my wife."
Stern and his wife of 21 years separated last year.
Stern's nationally syndicated show remains the No. 1-rated morning show in New York City by a wide margin despite a sharp dip in spring 2000.
Outside New York, his numbers are not as strong. In several markets, Arbitron figures have shown his audience eroding - particularly in Los Angeles, where Stern lost 20 percent of his listeners over the last two years.
Stern brushed aside suggestions that the drawn-out contract negotiations were a ploy at bolstering his market share.
"I will swear on the life of my children that this was no publicity stunt," he said. "I would never do that to my audience."
AP-ES-12-15-00 0948EST
from Forbes.com
December 15, 2000, 1:22 PM ET
Davide Dukcevich, Forbes.com
NEW YORK - Was there ever any chance shock jock Howard Stern would abandon his radio show?
Puh-leeze!
It was impossible to believe that the 46-year-old could walk away from the program that propelled his success in movies, television and publishing. Stern, who refers to himself as the "King of All Media," stands to make a ton of cash with his five-year contract renewal. Radio industry experts say he could rake in between $17 million and $20 million a year.
But with his ratings down in several major markets, is he worth the money?
Stern's current five-year deal was set to expire at the end of this year. In the last few weeks, the raunchy radio star bellyached that a new agreement was becoming more and more elusive. The fatalism allowed Stern to do what he loves, and does, best: draw attention to himself. And it worked. Reporters wrote stories about the show's demise. Alarmed fans tuned in, fearing they would no longer be able to vicariously experience Stern administering breast cancer exams to young women on his show.
No one has ever underestimated Stern's marketing prowess. That's why it was unfathomable that he would end his radio program: The daily five-hour dose of scatological and sexual humor "is the house around which everything revolves," says Steve Young, the director for rock programming at Jones Broadcasting in Seattle. "It's a tremendous publicity machine." The latest promotional push is for his sophomoric FX television program Son of a Beach.
Indeed, the morning radio show has been a lucrative springboard. Stern's 1997 movie Private Parts made more that $40 million in about a month; his E! Television show reportedly pays him about $4 million a year, and his two books have spent months on bestseller lists. Stern earned about $18 million last year, putting him in the same league as radio personalities Rush Limbaugh ($22 million), Dr. Laura Schlessinger ($13 million) and Don Imus ($10 million). An annual, $20-million contract with his radio syndication firm, Infinity, a unit of Viacom (nyse: VIA), would match what champion golfer Tiger Woods receives to endorse Nike (nyse: NKE) sports apparel each year.
But Stern's radio ratings, aired on about 50 stations, have fallen dramatically in several cities across the U.S. This spring, Stern's morning show audience fell by more than 20% in Los Angeles, compared with the same period in 1998, according to Arbitron radio ratings. In Miami, the show's listenership fell by more than 14%. Even in New York, where Stern has the number-one rated radio show, he lost more than 11% of his audience in the past two years. Time spent listening to the show has also dropped.
One of the reasons for the decline is Stern's divorce with his wife, Alison, earlier this year. Some of Stern's best comedic material came from playing the sexually repressed husband who was tortured on a daily basis by flirting, half-naked (and sometimes completely naked) women.
But radio station consultant Walter Sabo contends that Stern is as hot as ever. He notes that summer ratings have shown a resurgence in listeners between 25 and 54 years old. He also points out that Stern is still among the top three rated programs in major cities such as Philadelphia and Washington.
One of the only sure ways to boost radio ratings, Sabo tells the stations he advises, is to broadcast the Stern show. "If I can convince a client to put Howard on, I don't have to do too much work after that."
from the Los Angeles Times
Friday, December 15, 2000
MORNING REPORT
By SHAUNA SNOW
--snips--
Stern und Drang: Is today Howard Stern's last day on the air? For weeks, regular listeners of the radio personality's morning show, aired locally on KLSX-FM (97.1), have heard Stern make discussions of his ongoing negotiations with Viacom Inc.'s Infinity Broadcasting Corp. part of his morning carnival of strippers, celebrities and various other human oddities.
Stern and his crew are set to go on vacation after today, but many see a new deal as inevitable, given that Stern's hard-core fan base is anchored in radio.
The shock jock has indicated in recent days that talks for a new contract are progressing (he has also made plans to broadcast a week of shows in Los Angeles in January). Stern's agent, Don Buchwald, did not return phone calls Thursday.
--snips--
from the NY Post
Friday, December 15, 2000
It's D-Day for Howard Stern - the shaggy-haired shock jock says he still hasn't signed a new contract with his radio company and today may be his final day on the air.
"I thought we were close, but it still hasn't happened," Stern told his millions of fans across the country yesterday.
"Friday could be my last show."
Stern has said that in recent months his efforts to hammer out a "fair" new contract with the company have been fruitless.
Yesterday, he insisted he had come extremely close to making a deal. But as he left the air yesterday, the outspoken gabmeister said he had no idea if his fans would be hearing him again come the second week in January, when he's supposed to return after a three-week vacation.
Stern's producer, Gary Dell'Abate, said he had been so optimistic of a deal this week, he had even sent a word of congratulations to Stern on a Christmas card.
Stern has never discussed the hard facts and figures of his contract.
But The Post has calculated that Stern's value to just four Infinity stations surpassed the $18 million Forbes mag says he made for everything he did in 1999 - radio, CBS-TV's syndication arm, E! cable and the TV shows "Son of the Beach" and "Doomsday" both of which he produces.
And CNBC said Stern had been offered about $18 million for each year of a new five-year radio pact - a 50 percent increase from the $12 million per year the financial station estimates he collects now for radio.
Stern's impact on CBS/Infinity's bottom line is considerable - accounting for at least $25 million in advertising revenue for his New York outlet K-Rock alone, according to Post estimates.
His wake-up show is on 54 stations.
Still, radio-industry insiders believe Stern - who has been with Infinity since 1985 - is just stringing his listeners along to grab bigger ratings and more headlines.
One insider at WXRK, the New York station where Stern's show is based, told The Post last night it would be "an absolute shock to everybody here" if Stern doesn't come to terms with Infinity.
Even if that's true, Stern is milking the drama for all it's worth.
He has ordered Dell'Abate to invite members of the press to the WXRK studios today to interview him about his possible last show.
from the NY Post
December 11, 2000
DON'T hold your breath waiting for Howard Stern's "last radio show" this Friday.
The top-rated Stern blew the trumpets when he first told listeners last September that he'd be "gone in three months."
Now, it sounds like he's just tooting a kazoo as his contract deadline nears.
The only suspense left is when - not if - he'll re-sign with CBS/Infinity, it appears.
After three months of repeatedly predicting doomsday - even consoling Arnold Schwarzenegger when the actor fretted, "I will miss you" - Stern has suddenly backpedaled, leaving the impression a new deal is imminent, if not already signed.
Last week, Stern told a concerned caller there was a "60 percent chance" he'd sign a new deal but later claimed he didn't mean he's "close to signing - that would be 90 percent."
Then, when word leaked from the West Coast that minions were scouting L.A. sites for a remote broadcast in January, Stern told listeners he was merely conducting business as usual "in case" he re-signs.
Last Friday, he happily promoted this week's guests and uttered not a peep about this Friday's show being his much-threatened swan song.
Some drama.
So how much money is the self-dubbed King of All Media likely to get when - OK, if - he returns in January after his holiday hiatus?
Stern's agent and a CBS/Infinity spokesman have consistently declined to comment on the status of negotiations or what he currently earns.
But two weeks ago, CNBC's "Business Center" said it believed Stern had been offered an "estimated" $18 million for each year of a new five-year radio pact.
The financial channel said that's a 50 percent increase from the $12 million per year it estimates he collects now for radio.
(Earlier this year, Forbes magazine estimated Stern's total take - from radio, TV and other projects - at $18 million in 1999.)
Stern's impact on CBS/Infinity's bottom line is considerable - accounting for at least $25 million in advertising revenue for his New York outlet, K-Rock, alone, according to Post estimates.
His syndicated wakeup show is on 54 stations, including about a dozen owned by CBS/Infinity.
The only company likely to be a contender for Stern's services is radio behemoth Clear Channel, which owns 1,120 stations - including five in New York City.
But it does not appear that Clear Channel has made a serious run at Stern.
In any event, the admittedly insecure radio star has said he's happiest around people he knows, including long-time champion Mel Karmazin, who is president of Viacom/CBS/Infinity.
Karmazin, who rescued Stern after he was fired by WNBC in 1986, vigorously defended the shock jock against several FCC complaints.
It's not over 'til it's over, of course, but one thing is for sure.
This Friday will be Howard Stern's final show - of the week.
from the NY Daily News
December 6, 2000
Howard Stern told a caller yesterday there is a "60%" chance he will sign a new contract with Infinity Broadcasting and continue on WXRK (92.3 FM).
Stern said talks have resumed between Infinity and his agent, Don Buchwald. His current deal runs out this month.
Stern has been dramatizing the process by playing promos that say Dec. 15 will be his last show - which is true. The question is for how long. He leaves on his annual holiday break that day.
Meanwhile, he probably doesn't mind the unconfirmed rumors that one of the two satellite radio companies launching next year, XM or Sirius, has offered him part ownership to sign with them.
Nabbing Stern would make satellite radio an instant player - no small thing when it must convince listeners to buy a receiver chip and pay a $10 monthly fee. Stern, meanwhile, could say he established this whole new area of radio. He could also break free from the content restrictions of commercial radio.
The problem is that no one knows how popular satellite radio will become. Either service would be happy to have 2million subscribers, which would mean less than 5% of the country could hear Stern. At the end of the day, that might push him a little too far out of the mainstream.
--snips--
from Radio Ink
December 6, 2000
Howard Stern is giving every indication on the air that he is in a real struggle with Infinity Broadcasting to get a new contract inked before his current deal expires next Friday. And, today he told his audience that he is unlikely to continue on the air, working without a contract, if he cannot come to terms with Infinity. "It's my own fault. I laid down the law and said the 15th was my last show". At the end of his previous contract Stern continued to do his 4 plus hour show despite not having a new contract signed.
It's always hard to tell with Stern if what he talks about in regard to his contract is real or just an additional play for ratings. Especially when the New York City newspapers zero in on his every move and every word. Why not play the game to the very last minute, especially when you have the media eating out of your hands like he does. It gives him constant press in Radio's largest markets. Last month, in an exclusive interview, Stern told Radio Ink magazine that everything listeners hear on the air is real.
Today when discussing the negotiations Stern said at some point someone has to compromise. "Whatever my agent tells me to compromise, I will. I just don't want to lose money". Stern went on to say that it wasn't really the money, it was material things like better lighting in his studio. "I/m not being a ballbuster".
Stern has a strong sense of loyalty to Mel Karmazin. And perhaps if Karmazin wasn't the one who took a shot on Howard many years ago the Radio megastar would already be signed sealed and delivered to a competitor. "They know I want to work here, so its hard for me to just walk away". Stern says his deal with Infinity is 60% done. However, 40% is a long way to go with a little over a week remaining to negotiate.
Stern said again today that he is "actively considering other Radio networks". Clear Channel seems to be one of the few that would be able to afford and distribute the show. There has been no comment from the Clear Channel family.
from FMQB.com
December 4, 2000
Stern's five-year deal ends December 15, the date he and his morning crew begin their perennial three-week holiday vacation. Negotiations his agent Don Buchwald is having with Infinity aren't going well, Stern claims, hinting that the two sides view the future from different perspectives. Stern sees the radio industry coming off record revenues. Infinity apparently has a more cautious outlook, following the loss of considerable chunks of dot-com business.
Reaffirming his loyalty to Infinity chief Mel Karmazin, Stern also says he has "places to go." He's talked with other suitors "who are quite frankly very interesting people," he says, before floating the idea of having celebrities bid farewell to the show in a December 15th send-off broadcast.
Most observers expect Stern to continue milking the contract impasse for all the press it'll muster -- right up until vacation. It's tough to imagine Infinity not renewing a talent that many of its most lucrative stations are built upon. Karmazin has always paid premium prices for top talent. He just backed up the Brinks truck in Detroit, for a five-year deal that makes WOMG's Dick Purtan the highest paid broadcast performer in the Motor City.
-Paul Heine
Requires free registration at: http://216.158.56.153/fmqb/upfront/upfront2f.html
from the NY Daily News
November 30, 2000
"Howard says goodbye. Coming Dec. 15," said the announcer, backed by sweet music.
Stern and Infinity have not reached an agreement on a new contract and his current deal expires at year's end. The show is scheduled for a regular vacation after Dec. 15. His possible departure leaves open the question of what happens to his syndicated series, which airs Saturday nights on WCBS/Ch.2. That show is culled from his daily radio show and is produced about three weeks in advance. But if Stern isn't doing new programs on WXRK, it could kill the syndicated show.
His E! channel series, also culled from the daily show, has been on for years and could air in reruns indefinitely. The syndicated show, though, is a bit trickier because stations want fresh episodes.
Representatives for CBS, which owns Infinity, decline to discuss any aspect of Stern's contract. Stern has made the contract issue part of his daily show.
--snips--
from the NY Post
November 28, 2000
With less than three weeks remaining before his threatened "final show," Howard Stern says negotiations on his new radio contract have stalled - and he's not optimistic about the ultimate outcome.
"I love this company and I want to work here in the worst way, and I'm working very hard to make that happen," Stern told K-Rock (92.3 FM) listeners yesterday morning.
"But I don't see us coming to some conclusion. The company has a point of view and I've got a point of view."
Stern's latest five-year deal with Viacom/CBS/Infinity runs out at the end of next month, but the top-rated Stern and his crew begin their three-week holiday vacation after the Dec. 15 show.
"Everyone says, 'Come on, you've got a contract,'" Stern said. "I have no contract. Nothing. Dec. 15 is our last show.
"I got places I can go. I have spoken to other people who are quite frankly very interesting people," Stern claimed. "Very exciting things [are] going on."
Stern said his bosses are pleading poverty because radio advertising growth has stalled after several years of double-digit increases.
"We just came off some record business," he reported. "Everyone says, 'Well, times are bad right now.'"
Stern's agent and a CBS spokesman declined to comment.
--snips--
from the NY Daily News
November 21, 2000
Meanwhile, he's counting the size of the crowd gathering below.
Could the most successful morning-show host in America leave Infinity and WXRK? Could it be true, as he told Arnold Schwarzenegger last week, that the Dec. 15 show will be his last?
Sure, it's possible. But let's say that the betting in the radio biz is heavily against it.
Reasons he might leave:
1. He gets a better offer. Clear Channel, Infinity's main radio rival, has been mentioned. Premiere is a syndicator that loves big names like Rush Limbaugh and Laura Schlessinger.
2. He is burned-out. He often says he still loves radio but hates everything else he has to put up with. Like any long-running star, he has listeners arguing that he sometimes does it on autopilot.
3. He wants to try something else. If he wants to take a full-time shot at movies, producing or whatever, he can afford it.
Reasons he's likely not to leave:
1. Radio is the mother ship. Without radio, there's no TV show. No video. How do his books do? Without radio, he can't promote the products daily to millions.
2. Infinity boss Mel Karmazin has been good to him - paying off the FCC, pushing his TV show.
3. Infinity, through the CBS link, has more in-house cross-media connections than any potential rival.
4. Karmazin knows how much money stars like Stern (or Imus) make for him - not only on the flagship station, but through syndication and general awareness of radio and his stations. For Karmazin, losing Stern to a radio rival would be like George Steinbrenner losing Derek Jeter to the Indians.
5. Infinity's former main rival AMFM loved to spend big on stars. Clear Channel hasn't been that kind of operation. At the moment, it's consolidating and cutting back. Premiere reportedly has seen revenues drop for the besieged Dr. Laura.
6. Stardom produces nice personal perks, and on the professional level, the way showbiz works, it could be a gamble who would take his calls if he left radio.
So will Stern leave after the Dec. 15 show? Absolutely. Like most radio hosts, he stays on the air in December until the Arbitron rating period ends, then takes a couple of weeks off.
It would surprise nobody if he stayed home the first week in January, with no explanation and only silence or cryptic no-comments from all parties involved. Rumors would start that Opie and Anthony are replacing him, and why would they spoil their own fun by denying it?
Drama, it's called. It's what Stern's sidekick Jackie Martling did with his holdout last year, so imagine the possibilities in Stern doing it himself.
Now, Stern could be dead serious about bolting his gig. But if this drama ends with Howard back on the air and word mysteriously leaking out that he signed one of the biggest deals in radio history, let's say no one would be shocked.
--snips--
from Radio Ink
November 20, 2000
Stern told Radio Ink magazine in September that he expects to get the deal done with Mel Karmazin and Infinity broadcasting. A high ranking Infinity manager also tells Radio Ink that when the time comes, Mel would get on the telephone and call Howard to get the deal done. That time may be now. Stern has a great deal of respect and loyalty for Karmazin who was one of the only people to believe in his talent when Stern started his rise to the top.
Despite the fact that there have been several newspaper reports detailing recent ratings declines in the Howard Stern show, the shock-jock has been a cash cow for Infinity for nearly two decades. The newspapers blindly blame the off-tick in ratings on Stern's personal life. Stern, recently divorced, talks more about his single life in New York City now that he is away from his wife Alison.
Many a jock has also tried to copy his shtick in an effort to make it to the top.
from the NY Radio Message Board
Posted on November 17, 2000
The New York Post's web site did not post John Mainelli's story from today's paper on Howard Stern's current contract stand-off with Infinity. Here's John's story:
Howard Stern vows his last K-Rock radio show will be December 15th -- just four weeks away.
"Let me tell you something, Arnold," Stern told show guest Arnold Schwarzenegger yesterday morning, "December 15th is my last show."
New York's top-rated wakeupper didn't elaborate, except to console the movie star, who fretted that "this will be the last interview I do with you.
"It's exactly this kind of talk that I will miss when you don't sign your contract," Schwarzenegger told Stern, who had just asked if the full-body massages he gets on movie sets include the most intimate of areas.
Though Stern's current five-year contract runs out the end of the year, Stern and his staff start their usual three-week holiday vacation in mid-month -- this time with no apparent plans to come back in January.
If this is negotiating bluster -- or really the end -- no one's saying.
Stern agent Don Buchwald and a Viacom/CBS/Infinity spokesman declined to comment yesterday.
Stern's vow to quit in four weeks flies in the face of recent comments by Viacom/CBS/Infinity chief Mel Karmazin that "it won't happen."
Earlier this week, The Post's Neal Travis overheard Karmazin tell a fellow broadcaster, "Howard and I have been together too long, through too much, to have a parting of the ways."
It was Karmazin, then head of the Infinity radio group, who rescued Stern in 1986 after he was fired by the now-defunct WNBC by putting him on then-fledgling K-Rock (92.3 FM).
Stern's most likely suitor, failing a last-minute deal with his old pal, is 1,120-station giant Clear Channel, which recently acquired five New York City FM stations -- any one of which would benefit greatly from having Stern kick off its broadcast day.
from the NY Post
November 14, 2000
CBS chief Mel Karmazin is tight-lipped with the press, but that doesn't stop us from reading his lips on occasion. So I stood near him and eavesdropped on his conversation with a fellow broadcaster at the Center for Communication lunch honoring Howard Stringer the other day. They were talking about another Howard - Mel's top-rated radio star, Howard Stern, who has been threatening to quit K-Rock when his contract expires soon. "It won't happen," Karmazin said. "Howard and I have been together too long, through too much, to have a parting of the ways."
from RadioDigest.com
November 13, 2000
By Tomm Looney
CLEAR CHANNEL TO SNATCH STERN FROM CBS/INFINITY?
Howard Stern fans and radio industry insiders in New York were stunned when they picked up their copy of the New York Post last Thursday morning at Big Apple newsstands.
Radio superconsultant and Post radio scribe John Mainelli is reporting that communications giant Clear Channel Communications may be involved in a quiet, behind-the-scenes bidding war for the services of radio supernova Stern!
"1,120-station giant Clear Channel gained a big foothold in New York City last September by acquiring five FM stations, all of which would get a major morning boost by having Stern," Mainelli writes. "Those stations -- Lite FM, Z100, WKTU, Jammin' 105 and Q104 -- are presided over by Clear Channel CEO Randy Michaels, a fan of rowdy talk radio." Stern has also been crabbing on the air that his contract negotiations with CBS/Infinity may have become acrimonious.
"It's almost over, and I haven't been re-signed by this company," Stern told his syndicated audience of an estimated 10 million. "Basically now the attitude is, 'If Howard goes, he goes. If he stays, he stays.'
"It's been like, here's what you're worth. Take it or leave it ... Can you imagine? I'm not even signed by my own company yet," Stern sighed. "Ugh, very sad ... I'd like to re-sign with the company, but ... "
Stern never went on to explain the "but."
Clear Channel and CBS/Infinity did not provide comment for Mainelli. However, Stern admitted on the air recently that he's "heard from different companies that want to hire me away."
Stern's CBS/Infinity contract expires in three weeks.
--snips--
from the Boston Herald
November 10, 2000
WXKS/WJMN parent company Clear Channel owns 1,120 stations and could find a place for Stern. It's fun to think of the chaos that would happen if WBCN lost him. On the other hand, what would Kiss-108 or Jam'n-94.5 do with longtime morning hosts Matt Siegel and Baltazar?
Another wild card: former WAAF-FM (107.3) bad boys Opie and Anthony, also signed to CBS/Infinity, will become free agents soon. Could they end up in Stern's old chair and on WBCN?
- DEAN JOHNSON
Compiled by Joel Brown from staff and wire reports.
from FMQB.com
November 9, 2000
--snips--
Howard Stern is coming dangerously close to the end of his current contract and there’s still no renewal with Infinity. According to the New York Post (11/9), Stern’s current five-year deal runs its course at the end December and a new one has yet to be worked out. "It’s almost over," Stern told a listener earlier this week. "I haven’t been re-signed by this company. Can you imagine? I’m not even signed by my own company yet" ...
--snips--
[Howard's contract runs out at the end of this year.]
from Forbes via Yahoo!
November 6, 2000
--snip of a Paul Harvey article--
Harvey's $10 million yearly paycheck--plus an additional $3 million or more for commercial endorsements--prove you don't have to be a shock-jock to get rich in radio. While he's not radio's top earner, he's certainly in the company of the medium's elite. Conservative commentator Rush Limbaugh made the most last year, $22 million. Stern made $18 million. Dr. Laura Schlessinger made $13 million and Imus, $10 million.
--snips--
from Yahoo!/Forbes
November 1, 2000
What does it take to rule the airwaves and the Web? Personality? Style? Controversy? A good publicist? Chances are it takes elements of all these to crack the code on radio, television and the Web. The challenge is that each medium has its own strengths, and media heavyweights are finding it difficult to transcend the boundaries. TV, for example, is multidimensional, with sight and sound that burns images and personalities into the subconscious. The Web has a more singular focus, using words and still images to convey personality, and it's difficult for many high-powered media stars to get their due on the Internet.
Data from Nielsen/NetRatings shows that, in the race for a cross-media king or queen, conservative talk show host Rush Limbaugh has a fairly good lead. Several reasons account for this: One is that it is prime political season and Rush Limbaugh is a major political animal.
He uses his Web site beautifully to complement the topics on his radio broadcast and even provides an archive for those who missed something big, such as his interview with George W. Bush. He also thrives on controversy. His Web site took full advantage of the controversy about Rolling Stone magazine's airbrushed photo of Al Gore.
Unique Audience For Various Kings And Queens Of Media (U.S. At-Home Surfers) NM = Not meaningful; the number of Nielsen/NetRatings panelists who visited the site during the given period was too small for accurate projection of an Internet audience;
Source: Nielsen/NetRatings, October
Oct. 1 - Oct. 8 - Oct. 15 - Oct. 22
Rushlimbaugh.com 169,920 - 140,699 - 250,469 - 398,608
Marthastewart.com 176,520 - 291,214 - 293,899 - 276,998
Oprah.com 205,736 - 238,098 - 204,142 - 203,838
Howardstern.com NM - NM - NM - 136,539
Make no mistake about it, Rush Limbaugh's success on the Web is not just seasonal. He is a well-tested broadcast professional who not only has an instinct for what will spark audience interest but is also a master showman with his finger on the pulse of American media consumers. It will be most interesting to see how he leverages his fervent Web audience once the dust from the Bush-Gore race settles.
Dr. Laura Schlessinger, radio's self-proclaimed moral conscience, draws too little Web traffic to make Nielsen/NetRatings' weekly audience measurement counts. What makes this especially strange is that Dr. Laura hawks her Web address on her show every few minutes. She also has books and a TV program to spotlight her name in the public arena. In September, Dr. Laura drew a shade more than 184,000 unique surfers (mostly women) to her Web site. Is it possible that a Web site that has the slogan "Go do the right thing" is not destined for critical success?
At the polar extreme from Dr. Laura is the self-proclaimed "King of All Media," Howard Stern. Sans Web, Howard Stern is the closest thing to an across-the-media-spectrum deity with success in radio, TV, movies and books. Until a few weeks ago, Stern was noticeably absent from the Web waves. Then Howardstern.com was simply mentioned on his radio program and (as the data shows) Web surfers went to the site in droves. Ill equipped for such an onslaught, the site was shut down for redesign, Stern explained on air. During its brief time in service, fans flocked to see Stern's "death pool" and (here's a shocker) pictures of scantily clad women.
To date, Stern has been adamant about keeping his live radio show off the Web, and that makes some sense because it would be difficult for his show to replicate the radio program's advertising success on the Web. Still, with streaming media advancing rapidly, the Stern gang must either embrace the Web as a delivery platform or get out of the way and let the train pass.
Oprah Winfrey and Martha Stewart rate a mention because they are multimedia threats. However, even with their massive TV exposure, both deliver so-so numbers in the Web-personality parade.
The eventual winner in the contest for king or queen of all media might be none of the above. What is missing from all of these characters is true cross-demographic acceptance, especially from those in the prime Web demographic. In the future, the ruling cross-media star might be MTV's Tom Green or someone like Jimmy Kimmel (of Comedy Central's The Man Show and Win Ben Stein's Money and Fox Sports). Stranger things have happened.
Go to www.forbes.com to see all of our latest stories.
from PRNewswire
NEW YORK, Oct. 31 /PRNewswire/ -- Viacom Inc. (NYSE: VIA, VIA.B) and Infinity Broadcasting Corporation (NYSE: INF) announced today that they have entered into a definitive merger agreement under which Viacom will acquire all the issued and outstanding shares of Infinity Common Stock that it does not currently own for 0.592 of a share of Viacom Class B Common Stock per share of Infinity Class A Common Stock. The merger is expected to be completed in the first quarter of 2001.
The exchange ratio represents an increase from Viacom's previously disclosed offer of 0.564 of a share of Viacom Class B Common Stock per share of Infinity Class A Common Stock. Viacom currently holds 100% of the Infinity Class B Common Stock, which represents approximately 64.3% of the total outstanding shares of the Infinity Class A and Class B Common Stock and approximately 90% of the combined voting power of the Infinity Class A and Class B Common Stock. Viacom does not currently hold any of the Infinity Class A Common Stock.
The Infinity Board of Directors approved the merger agreement after receiving the unanimous recommendation of a special committee of independent directors, which was advised by separate legal and financial advisors. The special committee has received the opinions of its financial advisors that, as of the date of the merger agreement, the exchange ratio is fair to the stockholders of Infinity, excluding Viacom and its affiliates, from a financial point of view. The transaction was also unanimously approved by the Board of Directors of Viacom.
"This transaction is a win-win for the stockholders and employees of both of these extraordinary organizations," said Sumner M. Redstone, Chairman and CEO of Viacom. "We are extremely pleased that we were able to agree on an exchange ratio that is fair to both Infinity and Viacom stockholders, who will reap the rewards of this union for many years to come."
"There could be no better time to fully integrate Infinity with Viacom's tremendous portfolio of assets," said Mel Karmazin, President and Chief Operating Officer of Viacom. "This transaction not only enhances Viacom's powerful and diverse operations, but creates a company that is financially even stronger and even better positioned to deliver superior returns to stockholders. Infinity is performing at record levels and continues to generate a tremendous amount of free cash flow that will now fully benefit Viacom, increasing the Company's opportunity to make cash flow accretive acquisitions and to repurchase its stock."
Mr. Karmazin added, "I'd like to thank the members of the Infinity board's special committee, Jeff Sherman and Bruce Gordon, for their careful evaluation and negotiation of Viacom's offer, as well as their significant contributions as Infinity board members."
Investors are urged to read the relevant documents that will be filed with the Securities and Exchange Commission by Viacom and Infinity in connection with the merger because they will contain important information, including the identities of the participants in any solicitation of proxies or consents from Infinity stockholders and a description of such participants' interests in any such solicitation. You will be able to obtain a free copy of the documents filed with the Commission by Viacom and Infinity at the Commission's website http://www.sec.gov. Viacom and Infinity investors will also be able to obtain a free copy of the relevant documents by contacting Investor Relations at Viacom at: 800-516-4399, 1515 Broadway, New York, NY 10036 or http://www.viacom.com.
Infinity Broadcasting Corporation is one of the largest radio broadcasters in the United States, where it owns and operates 187 radio stations. Infinity is the largest outdoor advertising company in North America, with operations in the United States, Canada and Mexico. Infinity also owns outdoor advertising properties in Europe, with operations in the United Kingdom, the Netherlands, France, Italy and Ireland. Infinity also manages and holds an equity position in Westwood One, Inc. (NYSE: WON).
Viacom is the No. 1 platform in the world for advertisers, with preeminent positions in broadcast and cable television, radio, outdoor advertising and online. With programming that appeals to audiences in every demographic category across virtually all media, the company is a leader in the creation, promotion and distribution of entertainment, news, sports and music. Viacom's well known brands include CBS, MTV, Nickelodeon, VH1, Paramount Pictures, Infinity Broadcasting, UPN, TNN, CMT, Showtime, Blockbuster and Simon & Schuster. More information about Viacom and its businesses is available at http://www.viacom.com.
This document contains both historical and forward-looking statements.
All statements, other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934. These forward-looking statements are not based on historical facts, but rather reflect Viacom's and Infinity's current expectations concerning future results and events. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Viacom and Infinity to be different from any future results, performance and achievements expressed or implied by these statements. The following important factors, among others, could affect future results, causing these results to differ materially from those expressed in our forward-looking statements: changes in advertising market conditions; changes in the public acceptance of Viacom's and Infinity's programming; changes in technology and its effect on competition in Viacom's and Infinity's markets; changes in the Federal Communications Laws and Regulations; failure of the transaction described to be completed for any reason; and other economic, business, competitive and/or regulatory factors affecting Viacom's and Infinity's businesses generally.
The forward-looking statements included in this document are made only as of the date of this document and under section 27A of the Securities Act and section 21E of the Exchange Act; we do not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.
SOURCE Viacom Inc.
Web Site: http://www.viacom.com
from Newsday
September 19, 2000
Howard Stern, the King of All Media, says he doesn't listen to radio much any more because it's too depressing. In a wide-ranging interview in the industry journal Radio Ink, (the entire interview is available here), Stern, the quintessential shock jock whose morning show on K-Rock (WXRK/92.3 FM) dominates New York's airwaves, also said he thinks he will still be on the air next year, if he can work out details of a new contract with Infinity Broadcasting, which syndicates his show.
Saying that there are no original voices on the air, Stern took a particular shot at-or perhaps gave a backhanded compliment to-WNEW/102.7 FM, a sister Infinity station, where putative rivals Opie and Anthony have been conducting a war with him. "That is an entire radio station devoted to Howard Stern soundalikes ... I told the company that if they make a Howard Stern show all day, it dilutes what we do. It burns everyone out." As for increasing his presence on the Internet, which a lot of the younger personalities are using extensively, Stern acknowledged that "the Internet represents my future." But, complaining about the current quality of streaming video and the uncertainties of streaming audio, he said, "I refuse to do it until it is right." Which is essentially the position of Infinity boss Mel Karmazin, who has banned all his stations from live Internet broadcasts until the company can figure out how to make money from them.
from the NY Post
September 8, 2000
By JOHN MAINELLI
HOWARD Stern and his employer, Viacom/CBS's Infinity Broadcasting, seem to be raising the stakes as negotiations on Stern's new contract come down to the wire.
"I see it happening. I'm leaving. I'm going to be gone in three months," Stern told listeners yesterday on his nationwide wakeup show.
Stern's latest five-year contract runs out in December and, although he's re-upped sooner in the past, nothing's happened yet.
"The merger [between Viacom and CBS] was the worst thing ... because basically now the attitude ... is 'If Howard goes, he goes. If he stays, he stays,'" Stern complained.
Meantime, radio's premiere bad boy was uncharacteristically mum about some major press he got yesterday - a Wall Street Journal article trumpeting his recent ratings decline in New York and several other big cities.
As The Post reported last July, Stern clung to his crown as No. 1 in New York - but his lead over No. 2 all-news WINS/1010 AM shrunk to just over half a ratings point.
Subsequently, Arbitron reports for Los Angeles, Chicago and at least three other cities showed similar ratings declines.
The Journal article caused more than a few industry skeptics to wonder if Infinity isn't playing the negotiating game, too - especially when the paper estimated Infinity's total take from Stern at a mere "more than $20 million annually."
"I would say that's way low," a New York station manager told The Post. "I would say it's $20 million just for New York."
Based on conservative Post calculations last April, Stern grossed more than $70 million for just four Infinity stations last year - not counting eight others and 35 affiliates.
from Reuters, via YAHOO! News
Thursday September 7, 2000 5:39 PM ET
NEW YORK (Reuters) - Maybe America is tiring of "Lesbian Dial-a-Date", "Spot the Jew", "Homeless Jeopardy!" and interviews with strippers about politics.
"Shock Jock" Howard Stern's radio ratings are sliding and listeners who still do tune-in to the self-proclaimed "King of All Media" are tuning-out sooner, ratings showed on Thursday.
Even though his morning show is still the top-rated in New York, it's enough to make sidekick "Stuttering John" take a vow of silence and writer "Jackie the Jokeman" join a monastery.
According to the spring radio ratings figures compiled by Arbitron Co., ratings for "The Howard Stern Show" have tumbled in New York and Los Angeles in the last two years.
In his hometown of New York, Stern's cumulative audience on WXRK-FM has dropped 12 percent from 1.2 million weekly in 1998 to 1.05 million now. In Los Angeles, where his four-hour daily talk show is broadcast on tape on KLSX-FM, it is down 20 percent from 451,900 two years ago to 357,800 a week today.
According to Arbitron, Stern's loyal fans also are listening less -- down an hour to an average four hours and 45 minutes per week last year.
Stern, 46, who broke the mold of traditional American radio in the last decade, has also suffered ratings slumps in Chicago, San Francisco, Miami and Philadelphia. He declined to comment on the ratings figures.
The radio personality, who worked as a disc jockey for several stations in the early 1980's, developed a new kind of show combining raunchy and provocative humor at WNBC-AM in New York, where he virtually defined the term "Shock Jock."
After being fired by WNBC in 1985, the lanky, long-haired Stern was picked up by Infinity Broadcasting(NYSE:INF - news), whose Mel Karmazin took a gamble on the quirky radio guy talking about sex, race and bodily functions.
Stern and his foil, Robin Quivers, would laugh at the news or a cast of characters would perform spoof TV gameshows like "Spot the Jew", which featured a Kurt Waldheim sound-alike. Other times Stern would invite women to visit the studio and expose their breasts.
Since his show took off, Stern has become a huge revenue generator for Infinity, which is now part of the Viacom Inc. (NYSE:VIA - news) entertainment empire. Stern's show is carried on 50 radio stations and brings in some $20 million annually in advertising revenue and licensing fees for Infinity.
Arbitron's Thomas Mockarsky said even though "his ratings have slipped, he's still clearly number one in New York in all demographics. In LA, he's slipped from Number 3 to Number 6."
"He's very much a male phenomenon, I don't even look at the numbers for women," said Mockarsky.
Nicole Ovadia, an editor at Inside Radio magazine in Mt. Laurel, N.J., said Stern's effect on radio was immeasurable. "He's had a huge impact, he spawned a whole new genre of radio personalities.
"In radio, different formats come and go, (but) I'm not sure if you can say yet if this is the beginning of the end of shock radio."
Ovadia put the ratings decline down to several factors.
"His audience is growing older, they listen to less radio and tend to change the dial," she said. "Also he's not recruiting new young listeners at the same rate, he has been copied left and right and there are a lot of shock jocks out there.
"But I don't think Infinity is ready to yank Howard off the air," she said.
Suzanne Gerber, editor of Vegetarian Times, and the kind of professional woman one would not expect to be a fan, said she believed Stern was "a genius".
"Three years ago, I thought he was sexist, hateful, immature and a bad person -- but I'd never listened to the show. Now I think it's probably the best entertainment out there."
Gerber likened Stern's show to "live theater. He not only has his finger on the pulse of America, he channels it. He's not what people think he is. He's no racist or sexist and he has zero tolerance for people with zero tolerance for gays."
from THE WALL STREET JOURNAL Via MSNBC
September 7, 2000
Sept. 7 - Could the self-proclaimed king of all media's crown be slipping? Howard Stern, the raunchy radio personality who has made buckets of money for his bosses at Viacom Inc.'s Infinity Broadcasting, is in a slump.
FEWER PEOPLE are listening to the 46-year-old "shock jock," who rewrote the rules of radio talk shows. And even those who do tune in are less likely to hang on his every word.
A quick look at Mr. Stern's recent numbers tells the story. In New York and Los Angeles, two of his strongest markets, ratings have tumbled. In New York, on Infinity's WXRK-FM, according to Arbitron Co., Mr. Stern's audience has dropped 12% in the last two years, from 1.2 million listeners weekly in the spring of 1998 to just over one million this past spring. In Los Angeles, on KLSX-FM, Mr. Stern has lost 20% of his audience over the same two-year time period. He is bringing in 357,800 daily listeners, compared with 451,900 in 1998.
Of greater concern is that, according to Arbitron, his rabid fan base doesn't listen as much as in the past. This past spring, Mr. Stern's average New York listener caught four hours and 45 minutes of his show a week - down an entire hour from spring 1999. In Los Angeles, where commutes in the car are longer, listeners tuned in for an average of five hours and 15 minutes a week, down 45 minutes.
Other markets where Mr. Stern's ratings have declined include Chicago, San Francisco, Philadelphia and Miami. Average listening times have also slipped in several of those cities, as has Mr. Stern's strength drawing in the key demographic of men ages 18 to 34, a group that advertisers covet.
Of course, Mr. Stern is still the top FM radio personality in the country, and even if his audience is declining, no one else is noticeably gaining. Since joining Infinity in 1985 after being fired by NBC, he has become one of the biggest revenue generators for the industry's largest radio operator. His show, which is carried on some 50 radio stations, takes in more than $20 million annually in ad revenue and license fees for Infinity.
Industry analysts attribute the recent ratings declines to the fact that Mr. Stern's core audience, which has been with him for anywhere from 15 to 20 years, just doesn't listen to the radio as much anymore. In addition, he faces more competition from his many imitators.
"A lot of loyal Howard listeners are getting older," says Mike Bettelli, a consultant for Jones Broadcast Programming, Seattle, who adds, "How do you top yourself and the great ratings you've gotten in the past and attract a new audience?"
It has also been a rough year for Mr. Stern behind the scenes, and that, too, appears to be having an impact on his show. His 22-year marriage to wife Alison ended earlier this year, and the split seems to have affected his on-air persona, with some fans and critics charging that the innovative DJ lacks his old firepower.
"He's going through the motions," says longtime listener Phil Albinus. "How many strippers can he quiz asking if they know who FDR is?" Mr. Albinus, who is 35 years old, echoes the thoughts of many Stern fans who think the separation has changed the tone of the show. "He was this geeky schlubby guy who went home to his wife and looked at his fish; I don't identify with him having dinner at Nobu with aspiring actresses and models."
Mr. Stern, who declined to be interviewed for this article, also appears to be getting a bit thin-skinned. For years, he has taken great joy in humiliating those that would dare to compete against him. He went after rivals in Los Angeles and Philadelphia mercilessly, even ridiculing a disk jockey there whose wife had committed suicide. But earlier this year, Mr. Stern complained to his bosses at Infinity about the antics of rival radio DJs Opie and Anthony, whose afternoon show is carried by Infinity's WNEW-FM New York. Mr. Stern was upset that the duo had dared talk about him on their show - and he got Infinity to forbid them from mentioning him or his show on their broadcast.
His bosses at Infinity aren't worried. "Every year someone will say Howard has peaked," says Infinity's chief financial officer, Farid Suleman, who attributes any ratings decline to the fragmentation of the media world and adds that in terms of ad revenue, Mr. Stern's numbers continue to rise. "Howard is one of the few true broadcasters left who is still reaching huge numbers of people," Mr. Suleman says.
"Numbers go up and down for no apparent reason," adds WXRK General Manager Tom Chiusano. He acknowledges that "yes, the difference between No. 1 and No. 2 has been greater," but quickly points out that WXRK is having a record revenue year, mostly because of "The Howard Stern Show."
Infinity hopes to sign Mr. Stern to a new deal shortly because his current contract expires at year's end. As he has done in the past, Mr. Stern is indicating that he is tiring of the morning grind. Even with the drop in ratings, Mr. Stern is a key component of Infinity's success, and the company doesn't want to lose him.
While Mr. Stern's ratings have dropped, it remains to be seen whether this is a trend or just a hiccup. Johnny Carson's ratings declined as he aged, yet he still remained the king of late night.
"Here is a guy who on his wits manages to beat 2,000 other radio stations," says radio consultant Walt Sabo of Mr. Stern. "Howard's worst day is better than anyone else's."
from PRNewswire
Based on the Viacom Class B Common Stock closing price of $71.00 on August 14, 2000, the per share consideration equals $ 40.04 per share of Infinity Class A Common Stock, representing a 13.6% premium over the Infinity Class A Common Stock closing price of $35.25 per share on that date. Viacom currently holds 100% of Infinity's Class B Common Stock, which represents approximately 64.3% of the equity of Infinity and approximately 90.0% of the combined voting power of Infinity's Class A and Class B Common Stock. Viacom does not currently hold any of Infinity's Class A Common Stock.
Sumner M. Redstone, Chairman and Chief Executive Officer of Viacom, said, "With both Viacom's and Infinity's core businesses performing at record levels, it is the perfect time to bring them more closely together. Under Mel Karmazin's leadership, Infinity has become the most successful radio and outdoor advertising company in the world. Combining Infinity with Viacom will now create a company that is financially even stronger and strategically even better positioned to generate superior returns to shareholders."
Mel Karmazin, President and Chief Operating Officer of Viacom, said, "While the Infinity IPO has been extraordinarily successful, we believe that Infinity stockholders can realize even greater value through Viacom's offer. Not only does the offer provide a significant premium on a tax-free basis, it also enables Infinity shareholders to participate in the extraordinary opportunity created by Infinity's full integration with Viacom's unique and powerful businesses."
The merger proposal is subject to approval of Infinity's independent directors.
Investors are urged to read the relevant documents that will be filed with the Securities and Exchange Commission by Viacom if the merger transaction proceeds because they will contain important information. You will be able to obtain a free copy of the documents filed with the Commission by Viacom and Infinity at the Commission's website at http://www.sec.gov. Investors will also be able to obtain a free copy of the relevant documents by contacting Investor Relations at Viacom at: 800-516-4399, 1515 Broadway, New York, NY 10036 or http://www.viacom.com.
Viacom is the No. 1 platform in the world for advertisers, with preeminent positions in broadcast and cable television, radio, outdoor advertising, and online. With programming that appeals to audiences in every demographic category across virtually all media, the company is a leader in the creation, promotion, and distribution of entertainment, news, sports, and music. Viacom's well-known brands include CBS, MTV, Nickelodeon, VH1, Paramount Pictures, Infinity Broadcasting, UPN, TNN, CMT, Showtime, Blockbuster, and Simon & Schuster. More information about Viacom and its businesses is available at http://www.viacom.com.
SOURCE Viacom Inc.
Web Site: http://www.viacom.com
from the NY Daily News
June 13, 2000
Mel Karmazin wants to take back Howard Stern and Don Imus all for himself and the price tag could run as high as $16 billion.
Karmazin, the president of Viacom, could be nearing a deal to swallow up Infinity Broadcasting, the radio and outdoor empire he built that's home to Stern, Imus, WNEW (102.7-FM), WFAN (660-AM) and other broadcasting jewels.
Shares of Infinity — already 64% owned by Viacom — surged nearly 9% yesterday before settling up 2 1/16 at $34.93.
Viacom shares slid 1/2 yesterday to $66.75, still just below their 52-week high of $68.18.
According to Wall Street estimates, Viacom would likely fork over at least $42 a share for Infinity in a stock swap that would be valued at about $16 billion.
Wall Street began to buzz about a possible Viacom buyback of Infinity — the company was spun off in December 1998 — after a report from SG Cowen analyst Ed Hatch.
Viacom officials declined to comment.
Recently, however, Karmazin has said he thought the broadcaster's shares were undervalued and that he'd consider buying the Infinity shares Viacom didn't already own if the stock did not rise.
While Infinity has performed far better than most other radio stocks, its price this year has declined 3%.
By snapping up all of Infinity, Viacom would tune in $1 billion more in operating profits, allowing the massive media power that just merged with CBS to move on further acquisitions.
"This makes one very nice package," said Barry Hyman, who follows the media industry for Ehrenkrantz King Nussbaum.
"They would be bringing under one roof a large cash flow generator," he said.
Buying up Infinity would be a classic move for Karmazin, known for shuffling assets to build value for his shareholders.
Karmazin partly sold off Infinity to shareholders with the goal of creating a currency to finance acquisitions and spotlight the strength of the radio business.
from the Drudge Report...
XXXXX DRUDGE REPORT XXXXX SUNDAY MAY 14, 2000 16:29:08 ET XXXXX
RADIO QUAKE: SHOCK JOCK STERN WEIGHS $100 MILLION PAYDAY
**Exclusive**
Radio jock Howard Stern has been offered a new multi-year contract valued at $100 million, the DRUDGE REPORT has learned.
"It's the most lucrative offer in the history of the medium!" one well-placed source involved in the negotiations between Stern and CBS/INFINITY revealed.
[Eat your hearts out, Friends Cast] Sources indicate that CBS is determined to sign Stern to a new 5-year deal.
"Money is not at issue," said one insider. "The total value of CBS' offer is over $100 million. It's really up to Howard, if he wants to continue."
"I feel competitive and I still enjoy doing the show but I have personal decisions to make," Stern told reporters last month.
Stern's current contract pops in November.
from RadioDigest.com
May 8, 2000
Fmtalki.com, the talk project of 97.1 FM Talk (KLSX-FM, Los Angeles), debuts today. The site will feature streaming audio of some of the station's regular programming, and 'Net-exclusive shows will eventually launch as well.
"It'll be like our on-air product will be ESPN and our Internet stuff will have an ESPN2 option," said a source at CBS.
The KLSX site is produced by "Feed the Monster," which recently won a bunch of awards for its work with KROQ (106.7 FM, Los Angeles), B-96 (WBBM 96.3 FM, Chicago), WBCN (104.1 FM, Boston) and many other Infinity stations.
from cbs.marketwatch.com
May 4, 2000
WASHINGTON (CBS.MW) -- Viacom closed its $49.6 billion acquisition of CBS, completing one of the biggest deals in U.S. media history.
The Federal Communications Commission on Wednesday approved the merger, clearing the way for the creation of a $91 billion media powerhouse with vast properties in television, radio and movies.
The new company will be called Viacom.
Shares of Viacom rose 1 3/8 to 55 3/4. CBS shares stopped trading Wednesday at 58 3/4.
But a lot of industry players believe Viacom will ultimately be able to hold on to both CBS and UPN.
"The expectation is that the FCC will change their rules within the next year," said Dennis McAlpine, an analyst at Ryan Beck & Co. "There are clearly no other buyers for (UPN), ... and if Viacom has to shut it down that's not what the FCC wants in terms of diversifying programming."
Throughout its five-year existence, UPN has prominently featured a number of ethnic sitcoms, such as "Moesha," "Malcom and Eddie," "The Parkers" and the now-defunct "Homeboys From Outer Space."
During the 1999-2000 season, the country's major networks narrowly avoided a boycott by the NAACP due to a lack of minority representation in their programming. The loss of UPN might be perceived as a step backward, even though CBS, NBC, ABC and Fox agreed to step up minority hiring efforts.
The FCC also gave a joined Viacom-CBS a year to sell enough television stations to comply with rules that bar a company from owning stations that have a combined reach of 35 percent of the nation's television-watching households. At present, the new Viacom reaches 41 percent.
Redstone and many other broadcasters say that in a media world now saturated with cable television, the Internet and satellite broadcasting, diversity of ownership has increased so much that many of the FCC's long-standing restrictions are outdated.
"Everybody knows (the 35 percent cap) doesn't make any sense," Redstone said. "You guys know it, and they know it in Washington, too. They couldn't get it changed in time for the closing of this merger."
If the rule isn't changed in the next 12 months, Redstone said he'll try to swap many of the stations for stations in markets where Viacom-CBS can establish duopolies -- set-ups in which it owns more than one station -- in its largest markets. Other stations would be sold outright.
The media conglomerates also were given six months to comply with a rule that limits the ownership of TV and radio stations by one entity in the Los Angeles, Chicago, Sacramento, Dallas-Ft. Worth and Baltimore markets. The rules allow ownership of up to two television stations and six radio stations or, in some cases, one TV station and seven radio stations.
The FCC said the new company would exceed these limits.
Three commissioners voted in favor, with two dissenting in part.
Last month, the Justice Department gave a thumbs-up to the merger, citing no antitrust concerns.
Redstone said in a statement Wednesday that the coming completion of the merger is "a truly momentous and historic occasion" that will create an "unparalleled" entertainment and information enterprise.
He said that three-quarters of company's assets are in the fastest-growing areas of the industry, with growth rates of at least 20 percent and margins of almost 45 percent.
One note of caution was expressed by Barry Hyman, chief market strategist at Ehrenkrantz, King Nussbaum. To Hyman, the Department of Justice's battle with Microsoft and Time Warner's ongoing war with Disney have contributed to an atmosphere in which the activities of media juggernauts will be increasingly questioned.
With regard to the Time Warner-Disney fight, "the only reason this occurred is because these companies are too big," Hyman said. "And they wield so much power that they can just do that at the expense of the consumer. So ... as this media sector gets very consolidated, I think there's going to be a lot of scrutiny."
Time Warner Cable and Disney have been at an impasse since December over the retransmission fees Time Warner will be required to pay to add three of Disney's channels to its premium cable lineup. Last Sunday, Time Warner blacked out ABC stations on seven of its systems, causing a firestorm that temporarily died down Tuesday when the two sides agreed to extend their negotiations to July 15.
In September, New York-based CBS, which holds a substantial stake in MarketWatch.com, the publisher of this report, and Viacom announced they would merge in a $37 billion deal that would combine a major TV network with the owner of MTV Networks, Paramount Pictures and Blockbuster.
from RadioDigest.com
April 20, 2000
"This is what I've heard is in the development stages," said a major player in the radio industry who wished to remain anonymous. "Supposedly, Clear Channel got word through back channels to Howard that they were interested in getting into a bidding war for his services. Word came back to Clear Channel that Howard wants to make big money and do the show on the Internet with sole ownership of the show. He would still likely keep a relationship with CBS/Infinity though. He'd partner up with AOL and CBS/Infinity and do his show on the Internet, with full, live video streaming. It'll be the same show, just not on any particular radio station. It'll be a 'Net show. You'll have to log on to the Howard Stern show via the Internet, if Howard has his way.
"Also, Howard has talked also about doubling up with a satellite radio company, so commuters will have access in their cars," added the source. "It's all on the drawing board now. It's in an embryonic stage, but it's a serious possibility."
-- snips --
Hall of Fame Nominees Announced
Howard Stern, Dick Bartley, Walt "Baby" Love and Bob Kingsley are among the notable names heading the list of network and syndicated hosts nominated for the Radio Hall of Fame at Chicago's Museum of Broadcast Communications. Also nominated was Milo Hamilton, the radio voice of the Houston Astros.
Winners will be inducted at a black-tie dinner Nov. 18 in Chicago. Casey Kasem, himself a member of the RHOF, will host.
from the Financial Post (Canada)
March 02, 2000
Family owned media companies -- a tradition in Canada with such empires as Shaw Communications Inc. and Seagram Co. -- could soon be a thing of the past with the rapid consolidation of the industry, predicts a top executive at CBS Corp.
David Pearlman, co-chief operating officer at CBS Radio, the second-largest U.S. radio company, said it is time to let go of the romantic notion of media firms with strong family ties and consider instead what is good for the business.
"You have to ultimately make a decision that benefits whoever your investor may be, whether it be public, private, banking concerns or whatever your capital market is dictating," Mr. Pearlman said in an interview in Toronto yesterday. "It is better for the radio industry to have strong. viable, financially stable companies, which ultimately create better consumer programming."
His comments come at the same time Seagram is rumoured to be looking to sell its family controlled liquor and entertainment division, and Quebec's Chagnon family has agreed to be minority shareholder in the proposed merger of its Le Groupe Videotron ltee with Rogers Communications Inc., another family founded communications group.
Mr. Pearlman, recently rated one of the 40 most powerful people in radio, was speaking about the effect of mega-mergers on the media industry at the Canadian Music Week conference.
The CBS executive, who started off in the radio business with one station of his own and now has 163 under CBS, advised the audience of radio executives to embrace consolidation.
"Remember, content is king and you have content in your country," said Mr. Pearlman, whose parent company, CBS, is being bought by Viacom Inc.
Despite his enthusiasm for the convergence trend, which is the marriage of media and Internet technologies, Mr. Pearlman said his company has made the decision to not put its product, such as the Howard Stern radio show, on the Internet.
Although it is believed radio is threatened by the Internet and should be more adaptable to the technology, Mr. Pearlman said CBS has taken a stand that, until a better business model is invented to keep local stations alive, the company will not broadcast its radio content via the World Wide Web.
"We are by no means hiding under the covers," he said. "We are into localism, it is very important. Somebody is going to figure out how to maintain localism on the Internet. I don't know how to do that today."
Still, Mr. Pearlman pointed to such proposed mergers as America Online's takeover of Time Warner Inc., as well as BCE Inc.'s bid for Canadian broadcaster CTV Inc., as only the beginning of the consolidation movement in the industry.
Despite his enthusiasm for Canadian radio and television content, Mr. Pearlman said his company has no immediate plans to do any deals similar to what competitor, U.S.-based Liberty Media Group announced with Corus Entertainment Inc. last week. Liberty, whose properties include The Discovery Network and several radio stations, has agreed to take a 19.9% stake in Corus, which owns YTV.
"It might make some sense in the future to go north of the border, but I can't promise that. There are so many regulatory hurdles. But I can't imagine at some point in the future if that opportunity existed we wouldn't, particularly given the great relationship between Canada and the U.S."
However, Mr. Pearlman said CBS would only be interested in a voting position, which Liberty does not have with Corus.
from the Dallas Business Journal
November 15, 1999
Lisa Tanner - Staff Writer
Participants in the discussion at Truluck's restaurant were Ron Chapman, longtime morning-drive personality at KVIL-FM (103.7); Doug Adams, former general manager of KXAS-TV (Channel 5); and Jerry Bobo, general manager of KRLD and general manager of the Texas State Networks.
DBJ: Your industry seems to be in a new era, with forces like the Internet challenging at every turn. Exactly how have things changed?
Chapman: One of the major changes is that I'm here doing a seminar for KRLD! The major change has been in the ownership rules. Now companies are allowed to own five FM stations and two AMs in one market. Our company, CBS/Infinity, does that (including owning KVIL and KRLD).
But, I got my reputation in radio by clobbering the brains out of the competition. If they gave away $1,000, I gave away $50,000. We would just browbeat the other program directors and promotion directors into submission.
Now I'm supposed to cooperate with those guys! It's a whole different world. We're working together and selling together. Now there is someone who sells Infinity -- not just KVIL or KRLD, but all the Infinity stations. There is a person who does all of the Infinity promotions. You give her a ton of money -- we're not talking about a $20,000 schedule, but $600,000 for a single buy.
Of course, we're not the only ones doing that. Clear Channel Communications is doing the same thing. There are now two behemoths in this market -- Clear Channel and CBS -- and it's a chess game of strategic formatting against each other.
The Internet is going to change radio, and here's why: There's a ton of new advertising coming on to radio, because all of those Internet sites, all of the dot-coms, have to let you know they are out there. They have to advertise, and guess who they come to? Radio.
BOBO: There's a point B to Ron's comments. The Internet enhances radio, and radio enhances the Internet. We have become a content provider for the Internet, with all types of shows. It's easier for a news/talk product to provide shows for the Internet, and it's a tremendous source of revenue for us as well.
Chapman: Let me tell you where we're going with that. CBS has not allowed any of its radio station's audio to go on the Internet. And the reason is that our company wanted to find a way to make money on that. Now we are building a series of Internet properties that will be under the CBS banner. Eventually, they'll offer a package just like AOL does, only it's CBS.com. You'll pay $18.95 per month, and you'll not only get all of the services, but you'll get to pick 10 different CBS stations across the country whose audio you can hear. You can pick Howard Stern or Don Imus, for example, and get all of the CBS features.
Then, if we have a network of users and we're on the air and we play Celine Dion from the "I Believe" CD, for example, the future is this: I can say, 'You can have that (CD) in your home by 10 a.m. tomorrow; simply click CBS.com today and it's done.' Then suddenly we're in the music merchandising business. And all the rules change. We become the source of music, and there's a big shift of power.
--snips--
September 7, 7:35 am Eastern Time
Company Press Release
SOURCE: Viacom Inc. and CBS Corporation
The new company, which will be called Viacom, will be led by Sumner Redstone, who will remain Chairman and CEO of Viacom. Mel Karmazin will become President and Chief Operating Officer. All operations of the combined company will report to Mr. Karmazin.
The new Viacom will be the world's leading company in the production, promotion and distribution of entertainment, news, sports and music with unmatched content and a portfolio of the world's most powerful brands. Extraordinary assets in broadcast and cable television, a pre-eminent motion picture studio, the leading radio and outdoor media company and a growing portfolio of Internet ventures will create the largest seller of advertising across the media landscape. The merger should also serve the public interest by helping to sustain the continued vitality of free and universal broadcasting.
Mr. Redstone said: "This exciting merger creates the industry-leading media company for today and a dynamic growth vehicle that will benefit shareholders well into the future. Our union will be king -- not just in content, but in its distribution, marketing, and packaging. We will be global leaders in every facet of the media and entertainment industry, financially strong from day one, with an enviable stable of global brands. With Viacom and CBS performing at the top of their games, the timing for this could not be better. Mel Karmazin is an excellent manager and a gifted leader who shares my focus on building value for shareholders. Together, with all the employees of Viacom and CBS, we will create an even brighter future. Indeed, the creation of this formidable media giant marks the beginning of a new era of explosive growth domestically and around the world."
Mr. Karmazin said: "The new Viacom will be the first 21st Century media company, with strong brands that lead the industry in all aspects of our operations, a wealth of world-class content in film, television, radio, publishing and the Internet, and the best distribution system in the business in both the established and new media. It has been noted before that the fit between our two companies is extraordinary. Each of us brings unique and complementary strengths to the business mix, and opportunities for creative synergy and revenue generation are many and exciting. I look forward to working with Sumner and the great teams of people at both CBS and Viacom to build this new enterprise into all it is capable of being, for the benefit of our shareholders, advertisers, audiences and employees. The future is virtually unlimited for this new and exciting company."
Under the terms of the agreement, CBS shareholders will receive for each share of CBS 1.085 shares of Viacom Class B shares, which at the September 3, 1999 closing price of $45.06 per Viacom Class B share, is valued at $48.89 per CBS share. This transaction, which has an enterprise value of $80 billion, will be tax free for shareholders of CBS and Viacom. On a pro forma basis, the new Viacom would have generated approximately $21 billion in 1998 revenues and approximately $4.0 billion in EBITDA. Mr. Redstone remains majority shareholder of Viacom's Class A voting shares and will continue to control the company.
The union of the two companies offers a dramatic opportunity to drive revenues and enhance shareholder value. Reaching the greatest number of viewers and listeners of any media enterprise, spanning all ages and demographics, the new Viacom will be the premier outlet for advertisers in the world. Content will be driven and promoted across virtually all media segments, including broadcast and cable television, radio and outdoor advertising, and new media. The company will also be a pivotal player in the world of music. Through its Infinity Radio stations and the branded promotional power of MTV, MTV2, VH1, CMT, TNN and over the Internet, Viacom will reach more music fans than any other entity worldwide. The scale of the enterprise will also enable the company to acquire programming more efficiently and maximize the effectiveness of its sales force.
Subject to actions taken to obtain regulatory clearances, the merged company will include:
* Industry-leading cable networks, each uniquely powerful in its own target demographic, including MTV, Nickelodeon, VH1, TNN, CMT, MTV2, TV Land, Home Team Sports and Midwest Sports Channel; pay channels Showtime, The Movie Channel and FLIX, and interests in Comedy Central, Noggin and Sundance Channel, and significant cable programming operations worldwide;Mr. Karmazin added: "The new company's opportunities for growth over the Internet are also excellent. As you know, we have been dynamically expanding in new media for the past year or so, adding the CBS brand to some of the most visible sites on the Web in financial news, sports, entertainment and e-commerce, among others. Viacom has its own growing Internet presence in a variety of successful Web sites, most notably mtv.com and Nick.com, which will join with our growing portfolio of Internet concerns. Here again, the powerful brands of our two companies -- from the CBS Television Network, CBS News and CBS Sports to MTV, VH1, Nickelodeon and Paramount -- will enable us to establish and maintain the most dynamic and visible Internet strategy in the media business."* A majority interest in Infinity Broadcasting Corporation (NYSE: INF - news), the premier radio and outdoor media company in the world;
* The largest television group in the nation, including the CBS Television Network, the #1 broadcast network in the industry for the 1998-1999 television season, and stations in all top ten markets and 18 of the top 20 markets in the nation; with the potential for strong TV duopolies in Philadelphia, Boston, Dallas and other top U.S. markets;
* Paramount Pictures, a leader in theatrical motion pictures since 1912, with more than 2,500 titles in its library, including such Oscar winners as Forrest Gump, Braveheart and Titanic (the highest grossing motion picture of all time);
* Preeminent production and syndication operations, with CBS Productions, Paramount Television, Eyemark Entertainment, Viacom Productions, Spelling Television, and, subject to the completion of CBS's pending acquisition, King World Productions, Inc., among others, all contributing content, sales and distribution capability;
* Simon & Schuster, a leading consumer book publisher, which, during the last year, placed 64 titles on The New York Times Best Sellers list;
* Blockbuster Video, the world's leading retailer of rentable home videocassettes, DVDs and video games, with over 6,000 stores in 27 countries;
* Five theme parks, which entertain more than 13 million visitors annually, and create another distribution channel for the company's entertainment content;
* A significant and growing Internet presence, with brands on some of the best-known sites on the Web, including cbs.sportsline.com, cbs.marketwatch.com, mtv.com, SonicNet.com, vh1.com, and Nick.com.
Viacom Deputy Chairmen Tom Dooley and Philippe Dauman, who will continue to serve on the Board of Directors of the combined company, will leave the Company on the effective date of the merger.
Mr. Redstone stated: "Viacom would be no more than a dream today if not for the intelligence, persistence and insight of my two Deputy Chairmen, Philippe Dauman and Tom Dooley. My thanks to both of them for their immeasurable contributions over the last decade and beyond. We wouldn't be here if not for them. They will continue to be my trusted friends and advisors on the Viacom Board."
The Board of Directors of the new company will consist of the current ten members of the Viacom Board and eight members of the CBS Board as designated by CBS.
The transaction is subject to certain closing conditions, including FCC approval, expiration of the Hart-Scott-Rodino waiting period and the approval of CBS Corporation shareholders, and is expected to close in the first half of 2000. CBS's pending acquisition of King World Productions Inc. was scheduled to be voted on by its shareholders today. The King World shareholders meeting will be postponed for what is expected to be a short period. The contemplated split-off of Blockbuster is subject to the receipt of a revised IRS ruling.
Morgan Stanley Dean Witter and Co. acted as financial advisor and Shearman & Sterling acted as legal advisor to Viacom. Evercore Partners Inc. acted as financial advisor and Cravath, Swaine & Moore acted as legal advisor to CBS.
Viacom Inc. is one of the world's largest entertainment companies and a leading force in nearly every segment of the international media marketplace. The operations of Viacom include Blockbuster, MTV Networks, Paramount Pictures, Paramount Television, Spelling Television, Paramount Parks, Showtime Networks, Simon & Schuster, 19 television stations, and international theatrical exhibition operations. Viacom also owns half-interests in the Comedy Central cable channel, the UPN television network and UCI, an international theatrical exhibition chain. National Amusements, Inc., a closely held corporation which operates approximately 1,300 motion picture screens in the U.S., the U.K. and South America, is the parent company of Viacom.
CBS Corporation, the world's largest pure-play media company, is composed of CBS Television, Cable and a majority stake in Infinity Broadcasting Corporation, its radio and outdoor business. CBS Television is comprised of the CBS Television Network and 15 CBS owned television stations, seven of which are in the Top 10 markets. CBS Cable consists of two country networks and regional sports operations. Infinity Broadcasting Corporation operates 163 radio stations and TDI, the Company's outdoor business. Infinity recently entered into an agreement to acquire Outdoor Systems, Inc.
Note: Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of CBS, Viacom, or the combined companies to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Reference is made to the Companies' Annual Reports on Form 10-K for the 1998 year and subsequent reports filed with the Securities and Exchange Commission for additional information concerning such risks and uncertainties.
SOURCE: Viacom Inc. and CBS Corporation
from: The Los Angeles Times
July 2, 1999
By STEVE HOCHMAN, Special to The Times
Right now, sitting at your desk at home or at work, you can use your computer to listen to a radio station broadcasting traditional music from Turkey. Or you can hear a ball game from Boston. Or you can tune in a program catering to tastes you share with only a handful of people around the world.
Every day, the use of Internet radio--the transmission of broadcast radio programming as well as audio programs carried only on the Net--is growing rapidly. Dallas-based Broadcast.com serves up hundreds of U.S. radio stations via its Web site, as does Real Audio, whose RealPlayer is one of several popular software media players available for free download. And Microsoft's latest version of its Internet Explorer browser includes a radio feature for its Windows Media Player, with stations hooked in from Europe, South America, Asia and Africa as well as North America.
In the past six months, the number of people saying that they had tried out Internet radio jumped from 6% to 13%, and the pace continues with that figure expected to more than double again in the next six months.
But if you want to hear alternative-rock leader KROQ-FM (106.7) or oldies giant KRTH-FM (101.1), you still have to do it the old-fashioned way--turn on your radio. Alternative-rock from Poland and oldies from the Czech Republic, sure. You can even hear KNAC, the L.A. hard-rock station that left the airwaves in the early '90s but has been resurrected in cyberspace. But not KROQ and KRTH.
That's because they are owned by Infinity Broadcasting Corp., the radio division of CBS Corp., which has prohibited any of its stations from "streaming" (sending their live programs) over the Internet, preferring to wait until strategies and technologies are more advanced before spending money on exploring such relatively unknown territory.
Meanwhile, rival Disney-owned ABC has launched head-first into the World Wide Web, with most of its major stations on the Net, including local talk outlet KABC-AM (790) and rock station KLOS-FM (95.5), along with the national Radio Disney network, heard here over KDIS-AM (710).
It's a tortoise-versus-hare race that, in many ways, will shape the future of Internet radio, a territory that most everyone in the business agrees will be the dominant force of audio transmission in the future.
* * *
At stake for these mega-corporations is a huge prize: potential access to a truly global audience that offers not just potential advertising revenues beyond the wildest dreams of today's radio owners, but also opportunities for broadcasters to join the e-commerce parade selling music and other products directly to their audience. Like this record? Buy it now!
But they also face the challenge of a truly free market--something that doesn't really exist in broadcast radio, where a finite number of signals is licensed and regulated by the Federal Communications Commission, with prices for stations in major markets having broken the $100-million mark. On the Internet, anyone can play, from a giant Microsoft or America Online to any kid with a PC in his room. Want to start a station devoted to Tuvan throat singing and nothing else? Go right ahead.
So looking into that open-field future, it's hard to get predictions about whether ABC's or CBS' approach makes the most sense--or even any kind of guess as to how the shape of radio and the nature of listening to it will change. The only certainty: It will change.
"This is like Jell-O--no one can get their fingers around it," says B. Eric Rhoads, publisher of Radio Ink, a new trade magazine that will be holding an Internet radio conference in October in Silicon Valley.
"Up until 18 months ago, there was no large strategy for broadcasters about the Internet," says Rick Mandler, vice president of new media at ABC, charged with developing Internet broadcasting for both radio and television.
Mandler is overseeing an aggressive launch into cyberspace, but he acknowledges that the results are inconclusive thus far.
"In May, we served up 1.8 million streams [of programming]," he says. "But we had an average concurrent audience of just 1,300 listeners total, listening for an average of about half an hour. That's all our stations combined, with a total audience on the Internet equal to a medium market broadcast station. But you've got to start somewhere. We want to move our brands into this space and establish programming for it."
Those rooting for the hare note that 20 years ago, ABC made aggressive entries into the young cable TV world, and quickly became a leader in that market, while CBS was slow to get goi