The Sumner Redstone, Chairman of Viacom and CBS Corp, (personal net worth 7.5 billion) interview on Charlie Rose last week was extremely revealing. The shock wave last month in broadcasting and Wall Street circles was the surprise firing of Tom Freston by Redstone. Freston, CEO of Viacom after Redstone broke the company in two, was one of the prime movers that helped build Viacom, but not fast enough for Sumner.
In the Rose interview, Charlie would not let the core issue of Freston’s firing go. He finally got Sumner to admit that the issues were two. One, the stock was under performing compared to its sister CBS Corp under its CEO, Les Moonves. Viacom's value was down 11% year over year compared to CBS Corp which was up 12% for the same period.
But the real core reason that stuck in Redstone’s crawl was he had ordered Freston to buy MySpace.com for an agreed price of 500 million. Freston baulked and Redstone’s archrival, Rupert Murdoch scooped it up for 580 million. This made Rupert again the darling of Wall Street. MySpace is currently valued at 1.5 Billion. (I guess billionaires have fragile egos)
Sumner admitted in the Rose interview, that the loss put it over the edge for him. He felt that the internet and new technologies are crucial to the future viability of his companies. (Now why can’t we get thinkers like that?)
At 83, the man still thinks 10 to 20 years ahead even if he still lives in the modest house he bought for $43,000. Not only did Viacom lose a billion dollars in equity gain via the MySpace loss, but Sumner lost a reported 700 million in the devaluation of Viacom stock. (He also lost another 113 million in the first two weeks after he fired Freston) it is no wonder that Moonves is always watching the CBS Corp stock ticker with one eye and the overnight ratings with the other.
The message is clear. For “old” media to compete, it has to learn to incorporate the “new” media and find ways to create revenue with it. If Sumner Redstone can see that and he’s 83, then there is still possible hope for SJL and Nexstar. The train is leaving the platform, who locally will be on it and who will be left at the station? (A prophetic thought)
I think I can… I think I can…I know I can…I know I can.
In the Rose interview, Charlie would not let the core issue of Freston’s firing go. He finally got Sumner to admit that the issues were two. One, the stock was under performing compared to its sister CBS Corp under its CEO, Les Moonves. Viacom's value was down 11% year over year compared to CBS Corp which was up 12% for the same period.
But the real core reason that stuck in Redstone’s crawl was he had ordered Freston to buy MySpace.com for an agreed price of 500 million. Freston baulked and Redstone’s archrival, Rupert Murdoch scooped it up for 580 million. This made Rupert again the darling of Wall Street. MySpace is currently valued at 1.5 Billion. (I guess billionaires have fragile egos)
Sumner admitted in the Rose interview, that the loss put it over the edge for him. He felt that the internet and new technologies are crucial to the future viability of his companies. (Now why can’t we get thinkers like that?)
At 83, the man still thinks 10 to 20 years ahead even if he still lives in the modest house he bought for $43,000. Not only did Viacom lose a billion dollars in equity gain via the MySpace loss, but Sumner lost a reported 700 million in the devaluation of Viacom stock. (He also lost another 113 million in the first two weeks after he fired Freston) it is no wonder that Moonves is always watching the CBS Corp stock ticker with one eye and the overnight ratings with the other.
The message is clear. For “old” media to compete, it has to learn to incorporate the “new” media and find ways to create revenue with it. If Sumner Redstone can see that and he’s 83, then there is still possible hope for SJL and Nexstar. The train is leaving the platform, who locally will be on it and who will be left at the station? (A prophetic thought)
I think I can… I think I can…I know I can…I know I can.
Congress passed a law on February 1, 2006, setting a final deadline for the DTV transition of February 17, 2009. Most television stations will continue broadcasting both analog and digital programming until February 17, 2009, when all analog broadcasting will stop.." FCC http://www.dtv.gov/
1 comment:
I was listening to "Imus In The Morning" on JET Radio. Apparently, there is a rumor floating around that former Disney CEO Michael Eisner is Sumner Redstone's choice to be the new CEO of Viacom.
Hmmm, I thought Eisner burned out at Disney and ran afoul of shareholders? That's the fun thing about rumors!
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