Viacom Inc. finally has a succession plan in place and it doesn’t include Mel Karmazin.
Ending a rocky five-year relationship with CEO Sumner Redstone, Karmazin resigned as president and chief operating officer of Viacom early Tuesday. The company said CBS Television chairman Leslie Moonves and MTV Networks chairman Tom Freston will replace him as co-COOs of the corporation.
The company also indicated that Redstone will relinquish the role of CEO of Viacom within three years, setting up Freston and Moonves as the top two candidates to replace him.
The company said Redstone would work with the board prior to his stepping down to find his successor.
In their new posts, Freston and Moonves will oversee all of the operations of Viacom, reporting to Redstone. The company’s corporate staff will report directly to Redstone.
In addition to MTV Networks, Freston will be responsible for Showtime Networks Inc., Black Entertainment Television, Paramount Parks, Simon & Schuster and the film operations of Paramount Pictures.
In addition to overseeing Viacom’s broadcast-TV businesses, Moonves will be responsible for Paramount TV, Infinity Broadcasting Corp. and Viacom Outdoor.
Redstone insisted on separate calls (with analysts and the press) that he had not asked for Karmazin’s resignation and that it was Karmazin's decision and his alone. Redstone acknowledged that he did not try to persuade Karmazin to stay and in fact couldn’t pinpoint the last time he had spoken to Karmazin.
Redstone said he had learned second-hand from another executive at Viacom that Karmazin intended to resign about two weeks ago. The unnamed executive said that Karmazin expressed his frustration with the company’s problems in the radio and outdoor division as well as the fact that the price of Viacom’s stock was not higher.
Redstone suggested that he did not try to persuade Karmazin from leaving because the latter had made up his mind.
Redstone insisted, contrary to widespread belief, that there were “no issues” of dispute between himself and Karmazin. Meanwhile, Redstone said that Moonves and Freston are “two of my favorite people. We are friends and that makes our job easier. I think we make a great team.”
Redstone said that Karmazin did not have a non-compete agreement, although he will remain with Viacom for a 60-day transitional period. Karmazin told CNBC Tuesday that he’d like to run another media company but wasn’t specific.
There has been speculation Disney might approach him about running the company, speculation that Disney responded to by insisting that Michael Eisner will continue to be Disney CEO for the foreseeable future.
Redstone said that Viacom was not looking to make any major acquisitions in the near term, but that it was interested in buying additional “cable programming assets,” as well as TV and radio stations in the big markets.
Putting Moonves in charge of Infinity -- the radio company Karmazin started and ran before it was bought by Westinghouse/CBS/Viacom -- gives shock jock Howard Stern a new boss.
Last Thursday, Stern threatened to leave if Karmazin exited over the succession issue and said Frank Flores -- sales manager of Stern's originating station, WXRK(FM) New York -- would also exit if Karmazin went.
Stern was still on the air Monday, saying Karmazin was his guy. Flores was still around, as well, according to a station spokeswoman.
Karmazin has been a long-standing defender of Stern against Washington. He has refused to brand Stern as indecent despite increasing pressure from legislators -- Sen. Sam Brownback (R-Kan.) in particular -- following the Janet Jackson/Bono-induced indecency crackdown.
--John Eggerton contributed to this report.
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