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.
Nepotism is a very relevant and lively remnant of the feudal system, just ask Christie Hefner.
The Hollywood Reporter has more on Dolgen:
- Under Viacom’s new structure, all the company’s film operations report to Freston, while all its TV divisions report to Moonves. That left Dolgen’s role as head of the Entertainment Group, which had previously encompassed film and TV production as well as Simon & Schuster and Paramount Parks, significantly diminished.
“Jon simply felt there was no appropriate place for him at Paramount,” said Redstone, who hired Dolgen away from Sony Pictures when Viacom and Paramount merged 10 years ago.
Said Dolgen, who has neraly two years left under his contract: “Basically, they have a new management structure. Tom and Les are qualified good guys and friends; I think they’ll do just fine. But there really isn’t an appropriate role for me, so it’s time to go.”
In an industry beset with financial waste, Dolgen distinguished himself by insisting on financial discipline at Paramount and favored co-financing arrangements as a way of managing risk. But by elevating Moonves and Freston over Dolgen, Redstone also acknowledged that their respective divisions — CBS and MTV — had become the company’s profit centers as Paramount struggled to recover from a two-year slump.
….”When I look at the whole thing, I’m happy with the success we have had, and on balance, I think we ran it extraordinarily well,” Dolgen said. “We modernized the place. We fixed the way it worked inside. We made it economically viable, and the work we have done will hold the company in good stead in the future.”
On the TV side, the record was more mixed. Paramount TV prospered in the early ’90s with such shows as “Frasier” and the syndicated “Star Trek” spinoffs, but despite an occasional hit like “JAG,” it has not maintained that momentum.
Dolgen did play a key role in the launch of the UPN network, which reported to him until December 2001. But then, in one of the first suggestions of how fortunes were changing at the company, UPN was assigned to Moonves’ supervision so that it would be more closely aligned to CBS.
- In his first public outing as one of the heirs to the throne at Viacom Inc., CBS chief Leslie Moonves promised Wednesday he would retain a hands-on approach at the network he rescued from the ratings cellar.
“I know there’s a lot on my plate now, but let me repeat: CBS will always be the jewel in my crown,” Moonves assured attendees at the annual affiliates meeting.
Moonves, who retains his position as chairman and CEO of CBS, and MTV Networks chairman Tom Freston were appointed co-presidents and co-chief operating officers of Viacom Tuesday when Mel Karmazin quit after an uncomfortable tenure as the No. 2 to Viacom chairman and CEO Sumner Redstone. Moonves adds responsibility for Paramount TV and the radio and outdoor businesses of Viacom’s Infinity units.
Addressing a crowd of representatives from more than 200 affiliated stations nationwide, Moonves emphasized that his new post would be advantageous for CBS. He cited potential synergies among his enlarged purview, including increased promotional cooperation for network programing from the radio and billboard divisions and an intent to divert shows from top writers and producers at Paramount TV to CBS. [Hollywood Reporter]