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The Mel mantra

Viacom President Mel Karmazin insisted again last week that advertising is generally sound and the company's ad-driven businesses are well-positioned this year to gain market share, particularly CBS and TNN.

But Karmazin did acknowledge that the company is cutting expenses and limiting its capital expenditures. Along with increasing revenues, that's how to grow a business, he said. "We're pulling all three of those levers."

Karmazin told The Big Picture crowd that Viacom was still on track to achieve 20% pretax earnings growth this year, to about $6.2 billion. But he described growth in the just ended first quarter as "modest."

And he complained that investors were undervaluing Viacom's stock: "You'd think we'd said we were going to make $3 billion," not $6.2 billion, he said. Viacom stock is down about $20 from its high so far this year of $60. The company is buying back $2 billion of its stock under a recent authorization.

Karmazin said CBS should gain "extraordinary amounts" of ad-market share this year given its gains, particularly on Thursday nights, the most sought-after and priciest night on the network schedules.

With Survivor, CBS could end up winning the night for the season, for the first time in 17 years. CBS currently has about 28% of the three-network share of advertising, he said. He also said the TNN cable network has climbed into the top 10 rated networks and should take "huge market share" in the coming upfront.

Karmazin said CBS will be prepared to swap or otherwise dispose of TV stations to get back under the ownership cap of 35% if the company's court appeal to get the FCC to stay enforcement of the current cap fails. When Viacom bought CBS, the companies' combined TV station coverage soared to 41%.