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Now Showing at Viacom: Profits

By Brian R. Hook
October 24, 2003
I hardly ever watch CBS. It seems like the shows are geared for an older audience. I can't remember the last time I watched MTV. It is definitely geared toward younger folks. In fact, I can't think of any product produced by Viacom (NYSE: VIA) that I do watch on a regular basis. But that doesn't stop me from liking the company, because it continues to amaze me.

Despite a sluggish overall market in advertising during the third quarter, Viacom yesterday reported a 5% increase in revenues and a 9% pop in net income. Even better, free cash flow jumped from $214 million to $708 million.

Over the years, CEO Sumner Redstone has created a true media powerhouse. While others have struggled throughout the advertising downturn, Viacom has prospered. The company's chief operating officer, Mel Karmazin, seems to be a virtual sales machine who sees positive momentum in advertising revenue and a resurgence in both national and local ad markets. (If the past is any guide, of course, politicians are going to spend lots of money during the 2004 campaign season.)

Karmazin and Redstone have been known to squabble with each other over the years. They need to keep that to a minimum and focus on sales. As a pair they are unstoppable. Top line growth, bottom line growth, and strong free cash flow. What a combination! Now, that's entertainment.

Brian R. Hook, publisher at, can be reached by email at
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