The long-contentious relationship between Mel Karmazin and chairman and CEO Sumner Redstone has finally come to a close as Viacom Inc. announced that its No. 2 has resigned his position.
The exit of Karmazin -- who had been serving as president and chief operating officer since CBS Corp. was purchased by Viacom in 2000 -- has paved the way for the elevation of MTV Networks chairman and CEO Tom Freston to the position of co-president and co-COO of Viacom, along with Les Moonves, who has been serving as chairman and CEO of CBS.
In their new roles, both Freston and Moonves will jointly oversee all of Viacom’s operations, reporting to Redstone.
For his part, in addition to MTVN, Freston will have responsibility for Showtime Networks Inc., Black Entertainment Television, Paramount Parks, Simon & Schuster and the motion-picture operations of Paramount Pictures.
Moonves, in addition to overseeing Viacom's broadcast-television businesses, now has operational oversight for Paramount TV, Infinity Broadcasting Corp. and Viacom Outdoor.
Viacom’s board of directors, in an announcement, indicated that the appointments are part of a corporate succession plan that will provide for the transition to the next generation of executive management, under which Redstone, now 81, will relinquish his role as CEO within three years.
In the interim, Redstone will continue to work with the board to identify his successor and to designate candidates for other senior positions in the corporation.
The plan was developed with Redstone by the board's governance committee, comprising three independent directors. The board said this plan has been unanimously approved by its members.
“I have worked closely with both Tom and Les for many years, and there are no two finer executives in the media industry,” Redstone said in a prepared statement. “Each has presided over phenomenal growth stories -- Les in broadcast and Tom at the cable networks -- and each has served as an integral member of Viacom's senior management team. Obviously, Tom and Les are the two leading candidates to be the next CEO of Viacom.”
Succession was just one of the issues Karmazin and Redstone clashed on over the years. Both had different views on acquisitions and ad-sales strategies. Karmazin’s gilded reputation on Wall Street had tarnished in recent months as the company’s radio business has struggled.
In a prepared statement, Karmazin said, “After more than 20 years with the company, for personal and professional reasons, I have decided to leave Viacom and pursue other challenges. Viacom is performing exceptionally well with leadership positions in all of its businesses. The company's very talented management team will ensure its continued success.”