This paper provides a comprehensive overview of Viacom, once the world's third-largest media conglomerate, examining the company across several dimensions. It traces Viacom's historical roots from the 1912 founding of Famous Players Film Corp through decades of landmark mergers and acquisitions, including the CBS merger and BET acquisition. The paper reviews key financial data, surveys major competitors such as Time Warner and Walt Disney, and critically assesses Viacom's foreign interests and political controversies. It concludes with an analysis of the company's future expectations — including its planned split into two entities — and offers a personal assessment of whether Viacom stock represents a sound investment.
The paper demonstrates effective use of comparative analysis, placing Viacom within a competitive landscape by benchmarking it directly against Time Warner, Walt Disney, and other rivals using parallel revenue and asset figures. This technique grounds subjective assessments of Viacom's strength in objective, quantifiable data.
The paper opens with a brief introductory overview before moving into a detailed historical narrative organized chronologically. The financial and M&A section transitions into a competitive analysis, followed by a critical discussion of foreign and political controversies. The future expectations section then synthesizes these threads into a forward-looking assessment. The paper closes with a personal opinion on stock purchase that draws on all prior sections, followed by a short conclusion and a full bibliography.
Viacom is one of the world's most valuable media and entertainment companies, 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, 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 provides an overview of the Viacom company, discussing its historical background, a brief overview of financial data, mergers and acquisitions, competition, foreign interests, and future expectations. It concludes with an assessment of whether stock should be purchased in the company.
Viacom's history reveals that the company has been shaped by a series of antitrust moves and leveraged buyouts, many of them occurring decades before Viacom was actually formed. The company has programming that appeals to audiences in every demographic category, which has made Viacom a leader in the creation, production, and distribution of entertainment, news, music, and comedy. Viacom's history can be best understood through a breakdown of several of the segments 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 content, 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. Notable series include CSI: Crime Scene Investigation, CSI: Miami, and CSI: NY, as well as UPN's hit comedy One on One, and syndication successes such as the Entertainment Tonight franchise and the No. 1-rated courtroom series Judge Judy.
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!, 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 the then-current release War of the Worlds. Paramount Pictures also co-produces niche films with MTV Films and Nickelodeon Movies, such 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 the interactive attraction Star Trek: The Experience at the Las Vegas Hilton.
Viacom's annual income is $23.2 billion, with a total of 126,820 employees. The company's share volume is 7,057,100; its market cap is $49,894,897,029 with 1,453,814,016 shares outstanding. Viacom's financial success can be attributed in large part to 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 forced film studios to sell off their movie theaters. In 1970, the FCC limited the financial interest television networks could have in syndicated programming. As a result, Viacom was formed after CBS spun off its television-programming segment. In 1981, Dan Rather replaced Walter Cronkite as anchor on the CBS Evening News, and Viacom scored its biggest hit with the launching of the MTV cable channel.
In 1985, Ted Turner made a takeover attempt on CBS. Loew's president, Laurence Tisch, bought a 25% share in CBS to block Turner's takeover. Loews at that time was a multinational 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 then began a series of acquisitions. In 1994, Viacom acquired Paramount Communications for $10 billion, outbidding competitor USA Networks. Shortly afterward, the company bought Blockbuster Video for $8.4 billion and 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 Broadcasting and its outdoor advertising group for $4.7 billion, a deal that was largely a result of the Telecommunications Act of 1996. That Act heavily deregulated the media industry and allowed a company to significantly increase the number of radio stations it could own. In 1997, Viacom sold its educational, professional, and reference publishing businesses to Pearson for $4.6 billion, retaining 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, coming one month after the FCC approved broadcast duopolies. Under this merger, the new Viacom had 33 television stations, eclipsing the FCC's 35% ownership cap — a cap based on the share of the nation's television households reached by any single company's stations.
In 2001, the United States Court of Appeals, DC Circuit gave 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 owned two broadcast stations to eight. In 2003, Infinity Broadcasting owned and operated 185 radio stations, second in size only to Clear Channel Communications. Viacom Outdoor became the largest outdoor advertising entity in North America, and the Viacom Television Stations Group owned and operated 39 TV stations. Viacom has thus built itself on its many mergers and acquisitions.
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