Mel Karmazin As Viacom President

[armymad]

SETH SUTEL, AP Business Writer SETH SUTEL, AP Business Writer

NEW YORK - Mel Karmazin, one of the most highly regarded executives in the media industry, resigned suddenly as the No. 2 executive at Viacom Inc., the media conglomerate that owns CBS and MTV.


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He was replaced by two senior Viacom executives, CBS head Leslie Moonves and MTV chief Tom Freston, the company announced Tuesday. The moves clear the way for either Freston or Moonves to succeed Sumner Redstone, who is 81 years old, as CEO.


Redstone agreed to step down as CEO within three years and to designate a successor sometime before then, the company said. Given years of rumored friction between Redstone and Karmazin, it was not clear that Karmazin, 60, would have eventually succeeded Redstone.


Redstone, speaking in a conference call with Wall Street analysts, said it was \"extremely likely\" that he would be succeeded by either Freston or Moonves. While Viacom will suffer a loss of talent with Karmazin's departure, the moves help clarify the company's succession strategy — a topic investors have been pressing the company about.


Karmazin said in an interview that the persistent concerns among investors about his relationship with Redstone were not serving his interests or those of the company.


\"I was naive enough to think that if I signed a new contract a year ago that all of this Mel-Sumner stuff would disappear,\" Karmazin said. \"I thought it was time to leave.\" Karmazin declined to comment about his relationship with Redstone.


Redstone has dismissed persistent concerns that he had a rocky relationship with Karmazin. However, he also acknowledged on the call that Karmazin did not discuss his decision to resign with Redstone directly. Instead, Redstone said he learned of Karmazin's decision through another executive, whom he did not name.


Speaking with analysts, Redstone said Karmazin left because of \"frustration\" with the company's sagging stock price and issues related to the radio division, which has been struggling.


Redstone stressed that no one at Viacom had asked Karmazin to resign. He also said Karmazin had been in the running as a candidate to succeed him as CEO.


In a separate conference call with reporters, Redstone parried several other questions about the reasons for Karmazin's departure. \"He just decided he was better off going in another way,\" Redstone said. \"Mel was frustrated about something — I hope it wasn't about me.\"


Redstone said he regretted Karmazin's departure and wished him well. He also said Karmazin would stay on as a consultant for two months to help with the transition.


Investors have been pressing Viacom to clarify its plans for succession, especially given Redstone's age. Even though Redstone has voting control of Viacom through a special supervoting class of stock, he made clear in his announcement that he was working with the company's board on the succession issue.


Karmazin, who became the head of CBS Corp. before it merged with Viacom in 2000, was highly regarded in the industry and on Wall Street.


He worked his way up through the ranks in the radio business, and is known to be close to several of Viacom's leading radio personalities including Howard Stern and Don Imus. Imus broke the news of Karmazin's departure Tuesday morning on a show broadcast by MSNBC.


Redstone suggested that Viacom's new management team would consider getting rid of the radio business, saying the company would have a \"hard look\" at that operation as well as other assets. \"There is no sacred cow,\" Redstone said. \"But for the time being we're committed to radio.\"


Freston, who is 58, has been chairman and CEO of the MTV Networks unit since 1987. Moonves, 54 years old, has been chairman and chief executive of CBS since 2003 and joined CBS in 1995 as president of its entertainment operation.


Investors took the news of the management shakeup in stride. Viacom's widely held \"B\" class shares closed down 39 cents at $36.50 in heavy trading on the New York Stock Exchange (news - web sites).





However, the sudden loss of Karmazin is likely to disappoint many on Wall Street. In a note to investors, Merrill Lynch analyst Jessica Reif Cohen called Karmazin's departure \"a very significant negative\" factor for the company since Karmazin was \"an extremely talented operating executive.\"

i wonder why he chose today

[EffinC]

Karmazin is easily the best executive out there in radio. He's got a proven track record of earning money and signing talent.

He's a hardliner, who was never known to back down (O&A excluded) in the face of machinegunning from the media or industry "insiders".

If you ask me, there is either some form of massive movement inside of infinity to buckle under the FCC heat and he simply couldn't be a part of such a pussy move........or else he has the 6th sense of knowing when to call it a day.

I don't think Mel will be dormant very long. It's well known he wasn't happy with the power struggle at Infinity, despite the fact that he is lightyears more qualified than any of the "company men" who have been handpicked over him throughout the years. Now Redstone's daughter is manuevering to take what is rightfully his? Fuck that, punch out.

Where ever he goes, he's going to stomp CBS/Infinity at the end of the day. The people Infinity install as GM's and PD's are just comical, and they're new-age "Have 1 GM run 3-5 STATIONS!" way of doing business is a blatant act of corner cutting. If the guy is a dipshit, he'll be a dipshit in several cities.

Him moving to satellite radio would only guarantee the medium as being a contender in the future.

[diceisgod]

You rule

[GreasyItalianPrincess]

DIG should really take credit for him stepping down.

[EffinC]

Alan Sniffen reported today that Mel came to his office. Unfortunately for the Online Radio Guru, Mel only came to get his teeth fixed....not talk about career moves.