Entertainment giant Viacom has been shaken by the resignation of president Mel Karmazin on Tuesday, and chairman of the Viacom Entertainment Group Jonathan Dolgen on Wednesday. HITS Daily Double has a nice summation of the Karmazin situation:
- Sumner Redstone’s bombshell announcement yesterday that he will relinquish his CEO title at Viacom, which he controls, within three years—combined with Mel Karmazin’s sort-of surprise resignation and the promotion of MTV Networks’ Tom Freston and CBS’ Les Moonves to fill the gap—has, naturally, caused quite a stir in the press.
The Wall Street Journal leads the way with an in-depth analysis of the circumstances leading up to yesterday’s announcement and the likely changes ahead. Along with details of the widely reported strife between Redstone and Karmazin over the years, the paper says it was Karmazin’s lessening ability to deliver strong results on Viacom’s largely advertising-dependent businesses that left him vulnerable.
Now, Redstone and the Viacom board will re-examine the company’s strategy. “We’re going to take a good hard look at all of our assets, including our radio assets,” Redstone, 81, told analysts yesterday. “There is no sacred cow.” But, he said, “For the time being, we're committed to radio.”
....And then there’s the question of Redstone’s daughter, Shari, 50, who has been an increasing presence at Viacom and now sits on its board. Some think Redstone will want to give her a management postion at the company, though he has repeatedly denied that she will have a role in operations. Nevertheless, she is in line to eventually take over Redstone’s controlling Viacom stake.
Karmazin reportedly made up his mind to leave Viacom after the company’s May 19 annual meeting, telling his lawyer, Allen Finkelson of Cravath, Swaine & Moore, to “pull the trigger” on the exit clause in his contract. Finkelson reportedly then notified Viacom’s outside counsel that Karmazin would be leaving. Redstone was never contacted directly, the Journal says.
....Meanwhile, the New York Post put together a whopper of a package—six headlines in all—covering angles including Karmazin reportedly choosing to walk before being ousted, the likelihood of his reps reaching out to Disney in the days ahead, Howard Stern’s outrage ("I can't leave right today but, believe me, I'll be gone in a month"), the purported Freston-Moonves power struggle, Redstone’s patient maneuvering to come out on top, and daughter Shari’s inevitable control of the company.
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