Viacom Cbs: "They Have It All Now"

It all started over lunch at Viacom Inc.'s Times Square headquarters on Aug. 11. On one side of the table was Sumner M. Redstone, Viacom's bristly 76-year-old CEO. On the other was fast-talking Mel Karmazin, CEO of CBS Corp. The Federal Communications Commission had just struck down the rule barring one company from owning two television stations in one market--a move that instantly jacked up the valuations of TV stations and may well have changed the dynamics of broadcasting. The meeting of the two CEOs was about how Viacom and CBS might swap some stations to take advantage of the new rule. But one meeting led to another, and soon, Karmazin upped the ante, proposing that CBS buy Viacom. Redstone said no. O.K., said Karmazin, Viacom can buy CBS.

So began the biggest media deal in history. After several more meetings, at Viacom and later, at Karmazin's apartment, where the men huddled to avoid prying eyes, the moguls and their minions worked out the details. On Sept. 7, Viacom agreed to pay $37 billion in stock to combine the two companies into a new megamedia empire capable of taking on the likes of Time Warner, Walt Disney, and News Corp. Keeping the Viacom name, it will encompass a major TV network, a Hollywood studio, top cable channels, including MTV, Nickelodeon, and The Nashville Network, TV stations, and Infinity Broadcasting, the biggest radio-station and outdoor-advertising group in the U.S. Add to that King World Productions (the game and talk-show producer CBS has agreed to acquire) and Viacom's theme parks, movie theaters, and publisher Simon & Schuster.