Back in 1996, I was having lunch with Tom Freston. Paramount was about to release the movie Beavis and Butt-Head Do America, and Freston talked frankly about MTV's often strained relationship with the studio.
“So because we're all part of the same corporate family, we of course make the Beavis and Butt-Head movie with Paramount,” said Freston. “Then when it's released, we'll promote the hell out of it on MTV, and we'll all make a lot of money. But we just as well could have done the movie with another partner and still made a lot of money. Who knows? Maybe some other studio would have been a better creative fit, and we would eventually end up making even more money.”
Viacom Chairman Sumner Redstone had acquired Paramount two years earlier, in 1994, and the relationship between the studio and Freston's MTV fiefdom (Nickelodeon, VH1, etc.) never got much easier over the course of a decade. Too often, Freston's cost-efficient, rapidly growing networks had to pay for the sins of their corporate brethren. He wanted a development budget to match his performance, not be weighed down by a bad year at Paramount.
Freston has never liked the word “synergy” or had much faith in the corporate mantra that bigger is better. That's why when Redstone announced he wanted to split Viacom in two (see page 18), I thought about that lunch nine years ago and knew that, if the idea didn't originate at least in part with Freston, it certainly had his hearty blessing. He hasn't spoken much in public since the split announcement, but as far back as 1994, in this magazine, Freston made his feelings clear: “Synergy is an awful word. It's hard to pull off in a company that has creative products, because they're not going to work with somebody just because they're in the same company.” Paramount had been in the Viacom fold for two months at this point.
When we broke bread way back when, Freston had some career advice for me. “Hey Max, if you ever decide to write a book,” he said. “Why don't you do one called Synergy, Sminergy!”
Of course, these days Freston's domain as co-COO of Viacom includes the film division of Paramount. In an interview last June, after the abrupt departure of COO Mel Karmazin resulted in his and Les Moonves' promotion to co-COO status, Freston seemed to relish finally having the studio reins after years of collaboration. “We've made 27 movies with Paramount,” he told B&C. “Making a movie with Paramount versus having Paramount report to you is different.”
Not all of Paramount reports to him; the syndication operation is Moonves' responsibility. That arrangement is expected to remain in place even if Redstone's split of the company goes forward.
As B&C Business Editor John Higgins notes on page 18 in his analysis of Redstone's plan, Freston would emerge with the growth part of the empire, including the various networks he has been pushing worldwide. Meanwhile, Moonves would be left with the old industries, from broadcast networks to radio to billboards, which may still throw off cash but have relatively small room for growth.
At that memorable '96 meal, Freston dismissed talk circulating at the time that he was on a shortlist to run a broadcast network. “Why would I want to do that and get strapped into an economic model where I'm spending $1 million or more an hour on programming,” he said. “I'd rather be some place where it costs me about $40,000 or less an hour instead.”
And these days, the Viacom co-COO would obviously rather rule a place where his fortunes are tied to the things he can control.
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