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Viacom's final logo, used from 1990 to 2006
|Traded as||NYSE: VIA|
|Industry||Broadcasting and publishing|
|Fate||Split into CBS Corporation and the current incarnation of Viacom|
|Successors||CBS Corporation (legal)|
Viacom (spin off)
|Defunct||January 3, 2006|
Infinity Broadcasting Corporation
Simon & Schuster
King World Productions
Westinghouse Licensing Corporation
The original incarnation of Viacom Inc. (originally an initialism of Video & Audio Communications) was an American media conglomerate. During the 1970s and 1980s, Viacom was a prominent distributor of syndicated CBS television series. They also distributed syndicated shows which originated during the 1980s, with the biggest examples being The Cosby Show and Roseanne (which were produced by Carsey-Werner Productions, who later began distributing their own programming). On December 31, 2005, Viacom split into two new companies, resulting in the creation of CBS Corporation and the current incarnation of Viacom.
Viacom began as CBS Films, the television syndication division of CBS established in 1952 and renamed as CBS Enterprises Inc. in January 1968. The division was incorporated in 1970 as Viacom and spun off in 1971, amid new FCC rules forbidding television networks from owning syndication companies (the rules were later repealed).
In addition to CBS TV series syndication rights, Viacom also held cable systems with 90,000 cable subscribers at that time the largest in the US. In 1976, Viacom started Showcase pay movie channel with Warner-Amex taking a half share ownership. The company went into original programming production starting in the late 1970s until the early 1980s with middling results.
String of acquisitions
Viacom's first broadcast station acquisition came in 1978 when the company purchased WHNB-TV in New Britain, Connecticut, changing its call letters to WVIT. Later that year, Viacom added the Sonderling Broadcasting chain, giving it radio stations in New York City, Washington, D.C., Houston, and San Francisco, and one television station, WAST (now WNYT) in Albany, New York.
In 1983 Viacom purchased KSLA-TV in Shreveport, Louisiana, and WHEC-TV in Rochester, New York, in separate transactions. This was followed in 1986 with (ironically) CBS-owned KMOX-TV in St. Louis; with the purchase, that station's call letters were changed to KMOV.
In 1984, Viacom bought Warner-Amex Satellite Entertainment, which owned MTV and Nickelodeon, renaming the company MTV Networks. Viacom also received Warner-Amex's share of Viacom/WASEC joint venture Showtime Networks, Inc, which included Showtime and The Movie Channel. This led to Viacom becoming a mass media company rather than simply a distribution company.
In 1986, movie theater owner National Amusements bought controlling interest in Viacom, which brought Sumner Redstone to the company. Redstone retained the Viacom name and made a string of large acquisitions in the early 1990s, announcing plans to merge with Paramount Communications (formerly Gulf+Western), parent of Paramount Pictures, in 1993, and buying the Blockbuster Video chain in 1994. The acquisition of Paramount Communications in July 1994 made Viacom one of the world's largest entertainment companies.
The Blockbuster acquisition gave Viacom access to large television holdings controlled by Aaron Spelling's company, Spelling Entertainment; along with his own productions, Spelling controlled the pre-1973 ABC and NBC back catalogs by way of Worldvision Enterprises and Republic Pictures. Shortly after the UPN network started operations in January 1995, Viacom/Paramount sold off its non-UPN affiliated stations to various owners over the next couple of years.
In 1999, Viacom made its biggest acquisition to date by announcing plans to merge with its former parent CBS Corporation (the original, not the current one). The merger was approved in 2000, bringing cable channels TNN (now Paramount Network) and Country Music Television (CMT) under Viacom's wing, as well as CBS's production units and TV syndicaters Eyemark Entertainment (formerly Group W) and King World. CBS's production unit and King World (which has since folded Eyemark) operated under their own names; however, TNN and CMT were merged into MTV Networks almost immediately.
In 2001, Viacom completed its purchase of Black Entertainment Television (BET). As with TNN/Spike TV and CMT, it was immediately integrated into MTV Networks, causing some outcry among BET workers in the Washington area (where BET was based before the merger). As a result, BET was separated from MTV Networks.
Although a majority economic interest in Viacom was held by independent shareholders, the Redstone family maintained 71-percent voting control of the company through National Amusements' holdings of Viacom's stock.
In 2002, Viacom bought independently run music channel TMF, which at the time was broadcasting in Belgium and the Netherlands. In June 2004, Viacom bought VIVA Media AG, the German equivalent to MTV. The same month, plans were announced to dispose of Viacom's interest in Blockbuster later that year by means of an exchange offer; the spinoff of Blockbuster was completed in October.
Also in 2002, Viacom acquired the remaining shares of Infinity Broadcasting radio chain. And in April 2003, Viacom acquired the remaining ownership shares of Comedy Central from Time Warner, making Comedy Central integrated into MTV Networks.
From its formation until 1995, Viacom operated several cable television systems generally located in the Dayton, San Francisco, Nashville and Seattle metropolitan areas. Several of these were originally independent systems that CBS acquired in the 1960s. The division was known as Viacom Cablevision until the early 1990s, when it was renamed to just Viacom Cable. By 1995, Viacom Cable had about 1.1 million subscribers. Viacom sold the division to TCI in 1995.
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In March 2005, Viacom announced plans of looking into splitting the company into two publicly traded companies under the continuing ownership of National Amusements. The company was not only dealing with a stagnating stock price, but also the internal rivalry between Les Moonves and Tom Freston, longtime heads of CBS and MTV Networks respectively. After the departure of Mel Karmazin in 2004, Redstone, who served as Chairman and Chief Executive Officer, decided to split the offices of President and Chief Operating Officer between Moonves and Freston. Redstone was set to retire in the near future, and a split would be a creative solution to the matter of replacing him.
The split was approved by Viacom's board June 14, 2005, took effect December 31, 2005, and effectively reversed the Viacom/CBS merger of 1999. The existing Viacom was renamed CBS Corporation (thus restoring its pre-merger name) and was headed by Moonves. It now includes Viacom's "slow growth businesses", namely CBS, The CW (a merger of UPN and The WB), CBS Radio, Simon & Schuster, CBS Outdoor (formerly Viacom Outdoor), Showtime, CBS Television Studios, CBS Television Distribution and CBS Studios International. These, according to some analysts[who?], were suffocating the growth of the MTV Networks cable business. The split effectively made CBS an independent company again.
In addition, CBS Corporation was given Paramount Parks, which it later sold to amusement park operator Cedar Fair on June 30, 2006, and the CBS College Sports Network, now known as the CBS Sports Network.
Additionally, a new spin-off company was created called Viacom, which was headed by Freston. It comprises MTV Networks, BET Networks, Paramount's movie studio, and Paramount Pictures' home entertainment operations. These businesses are categorized as the high-growth businesses (MTV Networks and BET Networks in particular), and if they were split into a separate company, it could infuse new funds/capital to allow for future acquisitions and expansion.
In September 2006, Redstone fired Freston and named Philippe Dauman as the new head of Viacom.
National Amusements is the administrator of the two companies formed after the split.
Postponed re-merger of Viacom and CBS
On September 29, 2016, National Amusements sent a letter to the company and CBS Corporation, encouraging the two companies to merge back into one company. On December 12, the deal was called off.
On January 12, 2018, CNBC reported that Viacom had re-entered talks to merge back into CBS Corporation, after Disney's proposed acquisition of 21st Century Fox assets, AT&T's acquisition of Time Warner, and the heavy competition from streaming companies such as Netflix and Amazon. Shortly afterward, it was reported that the combined company could be a suitor for acquiring the film studio Lionsgate. Viacom and Lionsgate were both interested in acquiring The Weinstein Company.
On March 30, 2018, CBS made an all-stock offer slightly below Viacom's market value, and insisting that its existing leadership, including long-time chairman and CEO Leslie Moonves and COO Joe Ianniello, oversee the re-combined company. Viacom rejected the offer as being too low, requesting an increase by $2.8 billion, and requesting that Bob Bakish be maintained as president and COO under Moonves instead of Ianniello. It was reported these conflicts had resulted from Shari Redstone seeking more control over CBS and its leadership.
Eventually, on May 14, 2018, CBS Corporation sued National Amusements and accused Shari Redstone of abusing her voting power in the company and forcing a merger that was not supported by it or Viacom. CBS also accused Redstone of discouraging Verizon Communications from acquiring it, which could have been beneficial to its shareholders.
On May 23, Leslie Moonves stated that he considered the Viacom channels to be an "albatross," and while he favors more content for CBS All Access and Showtime Anytime, he believes that there are better and cheaper deals for CBS than the Viacom deal, such as Metro-Goldwyn-Mayer, Lionsgate or Sony Pictures. Moonves also considered Bakish a threat because he does not want an ally of Shari Redstone as a board member of the combined company, nor does he want Bakish to succeed him as the CEO.
On September 9, 2018, Leslie Moonves was fired by CBS after getting accused by twelve women of sexual assault. National Amusements has agreed to make no proposal of a CBS-Viacom merger for at least two years after the date of the settlement, although the two companies are allowed to propose a merger on their own.
Over the years, the pronunciation of the name Viacom has changed. As noted by Ralph Baruch, Viacom's first chairman, it was initially pronounced // VEE-ə-kom. Subsequent to Sumner Redstone's National Amusements purchase of the company in 1986, the pronunciation favored by Redstone and included in its audible identification marks is pronounced // VY-ə-kom.
^ Viacom was initially founded in 1971 but was reincorporated in 1985. Effective December 31, 2005, this corporate entity changed its name to CBS Corporation. The present firm known as Viacom was also established at that date and is a new spin-off company created during the CBS-Viacom split.
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In the beginning, Sumner's Viacom—which he had renamed VIE-uh-com during the first board meeting, in a nod to his fighting spirit […]