Viacom Is One of the

Viacom is one of the world's most valuable media and entertainment company, with operations spanning 164 countries and territories worldwide. Viacom owns two broadcast networks, 79 cable networks, 40 owned-and-operated television stations, 180 radio stations, a leading outdoor advertising company, three television production and syndication units, a major motion picture studio, and more than 1,000 movie screens, a worldwide publishing company and five regional theme parks. Some of Viacom's well-known brands include CBS, MTV, Nickelodeon, VH1, UPN, Comedy Central, and Showtime.

This paper will provide an overview of the Viacom company, discussing its' historical background, a brief overview of financial data, mergers and acquisitions, competition, foreign interests, and its' future expectations. It concludes with an explanation of whether or not stock should be bought in the company. Historical Background This brief overview of Viacom's history reveals that Viacom historically has been shaped by a series of anti-trust moves and leveraged buyouts, many of them occurring decades before Viacom was actually formed.

Viacom's history reveals that the company has programming that appeals to audiences in every demographic category. This has made Viacom the leader in the creation, production and distribution of entertainment, news, music and comedy. Viacom's history can be best understood via a breakdown of several of the segments that the company owns. CBS Television Network is the No. 1 most-watched network with more than 200 affiliated stations providing viewers with some of the nation's best entertainment, news and sports programming.

Popular programs include CSI: Crime Scene Investigation, Survivor, The Late Show with David Letterman and 60 Minutes. Sports franchises include the NFL and the NCAA Basketball Championship; daytime drama The Young and The Restless leads a daytime programming lineup that has been No. 1 for more than 15 years. Also under the Viacom umbrella, MTV Networks owns and operates many of the most popular basic cable television programming services. MTV: Music Television, the world's most widely distributed television network, reaches more than 412 million subscribers in 164 countries and territories.

Nickelodeon serves more than 181 million subscribers worldwide via localized channels, branded blocks and individual programs. VH1 reaches more than 116 million subscribers around the world, and Comedy Central reaches nearly 88 million subscribers in all 50 states and U.S. territories. Other services include Spike TV, CMT: Country Music Television, Nick at Nite, TV Land, MTV2, LOGO, mtvU and The Digital Suite from MTV Networks; MTVN is also involved in a variety of entertainment businesses that extend its brands, including films, books, online and consumer products.

Internationally, MTVN owns and operates, participates in as a joint venturer, and licenses third parties to operate, approximately 80 MTVN program services including MTV, VH1, Nickelodeon, Spike TV, Paramount Comedy, The Box, CMT, Game One, Viva, TMF and TV Land. These program services reach audiences in Canada, Asia, Europe, Australia, Latin America, the Caribbean and Africa.

BET is comprised of Black Entertainment Television, the largest national cable network serving African-Americans, reaching more than 90 million subscribers; digital networks BET Jazz: The Jazz Channel, the country's only 24-hour network devoted to jazz music, and BET Gospel. BET Pictures produces made-for-TV movies and documentaries, and BET.com is the leading online destination for African-Americans. Showtime Networks Inc. (SNI) owns the premium television networks Showtime, The Movie Channel and FLIX. SNI owns a 30% interest in Sundance Channel, which is a venture among NBC Universal, Robert Redford and SNI.

Through Showtime PPV, SNI also produces, markets and distributes major sports and entertainment events for exhibition to subscribers on a pay-per-view basis. The Viacom Television Stations Group consists of 40 television stations, reaching 15 of the top 20 television markets in the United States. The division includes 21 owned-and-operated CBS stations, 16 UPN-affiliated stations and three stations not affiliated with the major networks. The Viacom Television Stations Group owns multiple stations in 10 major markets, including Boston, Dallas, Detroit, Los Angeles, Miami, Philadelphia, Pittsburgh, Sacramento, San Francisco and West Palm Beach.

Paramount Television is one of the largest producers and distributors of television programming for network and cable primetime, daytime, first-run syndication and international cable platforms. The division offers for license more than 55,000 hours of its programming library to more than 125 countries, in more than 30 languages, through its production and syndication units Paramount Network Television and Paramount Domestic Television.

Some of the most notable series include top CBS dramas CSI: Crime Scene Investigation, CSI: Miami and CSI: NY as well as UPN's hit comedy One on One for Paramount Network Television, and such syndie successes as the Entertainment Tonight franchise and television's No. 1-rated courtroom series Judge Judy for Paramount Domestic Television. CBS Enterprises, a premier provider of television programming around the globe, oversees the operations of King World Productions, Inc., the domestic syndication arm, as well as King World Media Sales and CBS Consumer Products.

King World is the preeminent company in television syndication, distributing six of the top 10 syndicated series, including the two highest-rated talk shows The Oprah Winfrey Show and Dr. Phil, the two highest-rated game shows Wheel of Fortune and Jeopardy!, and the highest-rated off-network comedy Everybody Loves Raymond and the highest-rated off-network drama CSI: Crime Scene Investigation.

CBS Paramount International Television was recently established to handle international sales for CBS and Paramount television programming around the globe; some of its series include Late Show with David Letterman and America's Next Top Model. Globally, it distributes such long-running syndicated favorites as The Oprah Winfrey Show, Dr. Phil, Wheel of Fortune, Jeopardy! And Inside Edition. Infinity Broadcasting, which owns and operates 180 radio stations, is one of the largest operators of radio stations in the United States. Approximately 91% of its radio stations are located in the 50 largest U.S.

radio markets. The geographically wide-ranging stations serve diverse target demographics through a broad range of programming formats, such as rock, oldies, news/talk, adult contemporary, sports/talk and country. Paramount Pictures, one of the original major motion picture studios, has been a leading producer and distributor of feature films since 1912. Its more than 1,100-title library includes Oscar winners such as Braveheart, Forrest Gump and Titanic (the highest-grossing motion picture of all time), as well as current release War of the Worlds.

Paramount Pictures also co-produces such niche films with MTV Films and Nickelodeon Movies as The Longest Yard and The SpongeBob SquarePants Movie. Paramount Home Entertainment, a global leader in the distribution of filmed entertainment on videocassette and DVD, distributes theatrical releases from Paramount Pictures, Paramount Classics, Nickelodeon Movies and MTV Films, as well as non-theatrical releases both in the United States and abroad. Under the publishing segment of Viacom, Simon & Schuster publishes more than 1,600 titles annually under 38 well-known trade, mass market, children's and new media imprints.

The division published 100 New York Times Best Sellers in 2004, including 17 at No. 1. Viacom also has business in the theme park segment; Paramount Parks is one of the premier theme park companies in the world and entertains more than 13 million visitors annually at its five North American theme parks and interactive attraction Star Trek: The Experience at the Las Vegas Hilton. Financial Data / Mergers and Acquisitions Viacom's annual income is $23.2 billion, with a total of 126, 820 employees. The company's share volume is 7,057,100; market cap is 49,894,897,029 with 1,453,814,016 shares outstanding.

Viacom's financial success can be attributed to in large part by its' many mergers and acquisitions accumulated over the years. The following is a brief outline of some of the important mergers that assisted in forming this global giant. In 1912, Adolph Zukor founded the Famous Players Film Corp, which later became Paramount Pictures as a result of bankruptcy and reorganization.

In 1941, CBS launched the first commercial black and white television broadcast, and in 1949 the Department of Justice announced the Paramount decree which forces the film studios to sell off their movie theaters. In 1970, the FCC limited the financial interest television networks can have in syndicated programming. As a result, Viacom was formed after CBS spins off its television-programming segment. In 1981, Dan Rather replaced Walter Cronkite as anchor on the CBS Evening News, and Viacom proceeded forward with its biggest hit with the launching of the MTV cable channel also in 1981.

In 1985, Ted Turner makes a takeover attempt on CBS. Loew's president, Laurence Tisch, buys a 25% percent share in CBS to block Turner's takeover. Loews at that time was a multi-national conglomerate with interests ranging from tobacco to insurance. Several others made unsuccessful bids for CBS, and in 1986 Tisch became CEO of CBS. In 1987, NAI (National Amusements), an operator of drive-in movie theaters, bought a majority interest in Viacom. NAI was already owned by Sumner Redstone, who began a series of acquisitions.

In 1994, Viacom acquired Paramount Communications for $10 million, against bidding competitor USA Networks. Shortly afterwards, the company bought Blockbuster Video for $8.4 billion, merged with Paramount (which included Simon & Schuster). In 1995, it spun off its cable systems, and took a 50% position in the UPN network in 1996. In 1996 Westinghouse/CBS bought Infinity radio broadcasting and outdoor advertising group for $4.7 billion, a deal that was largely the result of the Telecommunications Act of 1996.

The Telecommunications Act heavily deregulated the media industry and allowed a company to significantly increase the amount radio stations it could own. In 1997, Viacom dealt its educational, professional and reference publishing businesses to Pearson for $4.6 billion, and retains Simon & Schuster. In 1999, CBS bought King World Productions, the leading television program syndicator at that time, for $2.5 billion. On September 7, 1999, Viacom and CBS announced their merger, a $50 billion deal. This was the largest media merger of that era, which came one-month after the FCC approved duopolies.

Under this merger, the new Viacom had 33 television stations, eclipsing the FCC's 35% ownership cap. This cap was based on the amount of stations one company owns that reach 35% or more of the nation's television households. In 2001, the United States Court of Appeals, DC Circuit gives Viacom temporary approval to exceed the 35% ownership cap. Also that year, Viacom completed a $3 billion deal for BET Inc. In 2002, Viacom completed the acquisition of KCAL-TV (Los Angeles) from Young Broadcasting Inc. For $650 million.

This deal formed a Viacom duopoly in Los Angeles raising the number of markets where it owns two broadcast stations to eight. In 2003, Infinity Broadcasting owned and operated 185 radio stations, second in size to only Clear Channel Communications. Viacom outdoor became the largest outdoor advertising entity in North America, and Viacom Television Stations Group currently owns and operates 39 TV stations. Thus, Viacom has built itself on its' many mergers and acquisitions. Competition As with any giant-sized company, Viacom has many competitors.

One such competitor is Time Warner (formerly AOL Time Warner), with revenues of approximately $34.2 billion. Time Warner is the product of the 2001 merger of America Online with Time Warner. This company's reach extends across the vast properties of the two companies from which it originated. America Online brought its flagship online service, Netscape, and several interactive services to the merger. Those operations were combined with old media spanning film and TV, cable, publishing, and professional sports, and include such brands as Warner Bros and Time Warner Cable.

Another major competitor is Viacom is Walt Disney, with revenues of $23.5 billion. The Walt Disney Company is the #2 media conglomerate in the world, behind Time Warner. Disney owns the ABC television network, 10 broadcast TV stations, and more than 70 radio stations. It also has stakes in several cable channels such as ESPN (80%) and A&E Television Networks (37%). Its Walt Disney Studios produces films through imprints Walt Disney Pictures, Touchstone, Hollywood Pictures, and Miramax.

Walt Disney Parks and Resorts, which includes Walt Disney World and Disneyland, owns the most popular resorts in North America. Finally, Walt Disney Group oversees the Mouse's Web properties (ABC.com, Disney Online, ESPN.com). A few of the other competitors include Vivendi Universal, with revenues of $22.6 billion, and News Corp. (FOX), with revenues of $14.3 billion. Foreign Interests Viacom has operations in about 165 countries. Its' international sales for 2004 were $3,713.9 million.

Viacom's holding company, National Amusements, owns Showcase Cinemas and Multiplex Cinemas with about 1,400 screens across the U.S., the UK, and Latin America. Unfortunately, it is the foreign interests segment of Viacom that has received the most criticism. For example, in February 2003, the grass-roots advocacy group-solicited donations from its email members to raise $75,000 to place an anti-war ad on billboards in four major American markets.

The group claimed that they raised the amount from members in two hours, and when they approached Viacom Outdoor, the company refused to post the ads, according to MoveOn. In March 2003 MTV, another Viacom-owned entity, refused to accept a commercial opposing war in Iraq, citing a similar policy against advocacy spots that it says protects the channel from having to run ads from any cash-rich interest group whose cause may be loathsome. Accordingly, the youth-oriented music station regularly airs recruitment ads for the U.S. Army.

Furthermore, in January 2004, CBS rejected a request from MoveOn to air, during the forthcoming SuperBowl event, a 30-second ad that criticizes the Bush administration's run-up of the federal deficit, saying that it violated the network's policy against accepting "advocacy advertising." At the same time, CBS is allowing ads placed on the docket by the White House's anti-drug office. In 1994, in the wake of the CEO of Viacom's declaration of support for George W.

Bush, Viacom refused to air political advertising from advocacy organizations on its cable channels (MTV, VH1 and Comedy Central). The independent progressive group Compare Decide Vote produced an ad comparing the presidential candidates' policy positions on issues important to young people, which the group says was accepted for placement by MTV Network's Comedy Central. Two days later, the station rejected the ad, citing an MTV Networks policy against running advocacy ads.

The reason behind Viacom's policy distinction between issue-ads and political campaign ads was that across all Viacom's properties, such issues were talked about every day. However, it was later pointed out that the reasoning that it was outside perspectives on important political issues and was blocked because Viacom's own coverage of the issues was sufficient was undermined by CBS's decision to hold until after the election a 60 Minutes story on forged documents that the Bush administration used to sell the Iraq war.

The network stated that it would be inappropriate to air the report so close to the presidential election. Although Viacom has been reported to have stifled the messages of both political organizations and its own reporters, Sumner Redstone, CEO of Viacom has made his own political voice heard clearly. Redstone formerly stated that he votes for Viacom; Viacom is his life, and he believes that a Republican administration is better for media companies than a Democratic one.

This comment was severely criticized by media critics, who stated that a politically motivated delay would be reprehensible, a worse abdication of the network's journalistic responsibility than even Rather's careless rush to judgment on the supposed National Guard memos. Future Expectations Despite the criticism on Viacom's international stance, the future expectations of Viacom appear bright, especially if the company continues its path of mergers and acquisitions. According to the press, the CBS group has eyed foreign broadcasters, including SBS Broadcasting, which recently sold to a consortium of financial buyers.

The press report stated that Viacom would definitely be interested in purchasing CNN if it were for sale. The report also stated that Viacom would also look into buying Univision, however, the company cannot own more TV stations under the 40% cap initiated by the FCC. Paramount has reportedly explored buying a couple of studios, but also reported that there were not very many, and that they were very expensive.

Viacom's focus will be on strengthening the new Viacom's core brands, such as MTV, and developing others and beaming them to consumers by any and all means possible, including the Internet, broadband and wireless. Viacom recently lost a bid to competitor News Corp., for MySpace.com and IGN. According to Viacom insiders, wireless deals mostly outside the U.S. now bring in well over $100 million in revenue, which will easily swell to $500 million in three to four years.

Viacom's current $75 million from online advertising is growing fast, and the company is said to currently said to be in talks to buy iFilm for $50 million. Viacom has also reported that it would focus on smaller "tuck in" acquisitions. Another future expectation of Viacom is the great expectations of cash for carriage as CBS starts renegotiating contracts with cable operators solo.