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The question is: Does Karmazin's departure significantly affect the future of Viacom? My answer: Probably not.

Well, I'll guess it sure affects some parts of the company.

Radio, for instance. Time Warner doesn't have a radio division. NBC (GE) doesn't have a radio division. Fox doesn't have a radio division. Disney has a small division, almost completely ungrown since deregulation allowed you to own 1,000 stations instead of 14.

If they didn't have Blockbuster to spin-away (since nobody wants to buy it, and they're going to force it on shareholders as a special present) I'd say they're likely to spin off radio as well. It's a standalone, it doesn't really contribute to films, publishing, theme parks, television, cable, or anything else.

And then there's the Stern problem.

Radio is what, about 15% of the business? (Don't kill me; I'm too lazy to look it up right now.) If Mel doesn't land the Disney job (or equivalent), I'll look for him to buy it and own most of it himself.

[I also note the departure of the Chairman of Viacom Entertainment Group, Jonathan Dolgen. (He oversaw Paramount Pictures, among other things.) Freston & Moonves were given his portfolio even before he resigned, so it was obvious, and inevitable. He got along with Mel (he was tightfisted and cost conscious) and that put him on the wrong side of the room. Redstone announced they were going to put "more money" into financing pictures, something Dolgen didn't want to do.]

So I'd expect changes. Maybe more. I note that neither Freston nor Moonves have spent a day "in radio", and that MTV has exactly nothing to do with the radio industry nor with running radio stations, so rotsa ruck. That doesn't mean that there isn't a competent lieutenant down there somewhere, but the radio division just lost some expertise and the film division is on a new experiment as well.

Yeah, I'd say "maybe some changes."
 
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Goofy,

I just scanned the annual report. I got a good feel for what Viacom is about. I like the company a lot.

The revenues from the Radio devision are about 8% of total revenues.

db
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The revenues from the Radio devision are about 8% of total revenues.

OK. I'm remembering it as much larger. Maybe I'm including the revenues from the billboard division, which is part of Infinity Radio, or at least was at one time.
 
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goofy,

Are you a long term investor in Via?

And what are your insights into Via that make it interesting to you?

At some time in the future I want to buy into Via.

db
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goofy,
Are you a long term investor in Via?
And what are your insights into Via that make it interesting to you?
At some time in the future I want to buy into Via.


In a manner of speaking. I used to run stations for Westinghouse in the broadcast division. I had options grants, most of which I have sold. I still have a fair amount of stock, so I keep tabs.

Since I left the company they have purchased CBS, regenerated Infinity Radio, then been acquired by Viacom. I left about a year before Karmazin came in, thank goodness, because he and I would not have laughed at the same jokes. However as another former employee says to me "...but I'm glad to have him running the show now that I'm gone."

Oops, he's gone too. I like Mel - from a distance. I'm a bit concerned now that he's blown out. Redstone wants to stick his kid(s) in there, he has all the voting stock, and it's a big, fat, entertainment conglomerate just like Time Warner or Fox, and I'm not sure how fertile their soil is for significant growth going forward. But neither am I running around playing Chicken Little, OK?
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goofy,

I just did a scan of News Corp and TW. You know News Corp looks better than any of them.

If we are in a bear market or better yet a bear economy for now....one day we will come out of it....a long term hold on a property with the ability to corner quite a few advertizing dollars is not such a bad idea.

If in a decade News corp went from a $20 billion market cap to a $180 billion mcap that would obviously be 9 times your money. Say this were possible in the next 15 years...okay...

Via is mcapped at about $65 billion and TW is mcapped at $75 billion. Nine times those values over a 15 year period would be too extreme. There is also a clear arguement that Murdoch is running News corp pretty well.

What impressed me the most about Via was the local brands of radio and tv. Of course that overhead does not come cheaply. Murdoch's satellites may come cheaper. Perhaps what impressed me about Via I need like a hole in the head.

I donno......but when buying cheaper is better. News corp is not second rate in this race just because it is a factor of three or four times cheaper.

Good luck,

db

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If in a decade News corp went from a $20 billion market cap to a $180 billion mcap that would obviously be 9 times your money. Say this were possible in the next 15 years...okay...

I don't believe it is. Both News Corp and Viacom were built in the past 15 years by acquisition, startup, and the heavy use of debt. I don't think they could grow "9 times" larger doing the same thing. They are already huge, probably unweildly conglomerates - in a land where most media companies have already consolidated to a point where any more will invite antitrust scrutiny.

I have to wonder what could they add to the stable? Satellite? Been there. TV network? Nope, got one. Cable channels? Maybe, but who is going to sell the big ones to them? Are they going to start a bunch from scratch? That's a tough putt these days. Cable systems? Maybe, but there's little advantage in being the #6 cable MSO, and #1, #2, and #3 are pretty well spoken for. Amusement parks? Already in the hands of the big guys. Billboards? Possible, I suppose. Newspapers? Nah, too sleepy.

So no, I don't think they're going to repeat that performance over the next 15 years. Anything is possible, but I don't believe the organic growth will lead to anything like that, nor is there enough "acquisition" to make it happen.

I can't compare News to Via or TW because I had too much media back in the 90's (because of my Viacom holdings - and the big run of AOL - "media" made up something like 70% of my portfolio.) I sold out my Disney and GE, the slug of RRDonnelly that I had, and a large part of my Viacom and AOL. I still have some of each, but enough that I wouldn't add "media" to the mix for those obvious personal reasons.

So for that reason I haven't even looked at News. Or any of the others. Sorry.
 

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Goofy,

some of the issues we can only speculate about are inflation....can the media companies win an inflationary battle? and coming out of the bear economy...with inflation...will profits be much higher...will advertising in this massive global economy take off?

there will be another side to the bear. There will in my life time be a bull again.....

If all things were equal News Corp is a $20b company and Via is a $65b company. News corp with the satellites has a smaller work force.....benefits pension liabilities etc....while a high satellite cost....I'd rather spend on satellites....

It is always darkest before the dawn......

db
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