|
Viacom combines TV units
|
 |
December 10, 2001: 5:18 p.m. ET
CBS and UPN to have combined management; asbestos concerns dog stock.
|
NEW YORK (CNN/Money) - Viacom Inc. is combining its established CBS television network with the upstart UPN network as of January, the company announced Monday.
A company spokeswoman said it is premature to say what cost savings or job cuts might be associated with the move. The company's statement said the move is a natural extension of last year's purchase of CBS by Viacom.
"Today's announcement is the culmination of a process that began with the merger of Viacom and CBS and realizes an important opportunity to bring new efficiencies to the broadcast business, while maintaining the distinct voices of CBS and UPN," said a statement from Viacom President Mel Karmazin.
UPN started in broadcasting in 1995. Today it reaches about 84 percent of television viewers. A change in Federal Communications Commission rules in April allowed the company to own both broadcast networks.
Viacom bought complete control of the network from its original partner Chris-Craft Industries Inc., although broadcaster Chris-Craft sold many of its owned and operated statements to Viacom competitor News Corp. (NWS: Research, Estimates) , which controls Fox Entertainment Group Inc. (FOX: down $0.49 to $25.83, Research, Estimates)
Viacom said that CBS CEO Leslie Moonves will now oversee UPN, which despite the News Corp. purchase has 34 owned-and-operated stations around the nation.
The company also announced that Kerry McCluggage, Chairman of the Paramount Television Group who helped create the UPN network, will be leaving the company at the end of January.
Shares of the most commonly-traded class B shares of Viacom (VIA.B: Research, Estimates) lost $4.23, or 9 percent, to close at $41.20.
It appeared Viacom's stock drop was a reaction to concerns about exposure to asbestos litigation due to the former ownership of CBS by the Westinghouse Electric Corp., which bought CBS in 1995, and started selling its non-media operations the following year.
Asbestos liability is of greater concern to investors following a $30 million jury award Friday against oil service firm Halliburton Co. (HAL: up $2.00 to $14.00, Research, Estimates), which sent its shares down by 42 percent in Friday trading.
Click here for a look at media and entertainment stocks
Viacom Monday confirmed an analyst's research note that said it has 129,000 pending asbestos claims against the company, involving two asbestos-containing products not sold since 1974 - steam turbines and Micarda, a counter top covering used on sea vessels. The company issued a one-paragraph statement saying it believes its reserves and insurance are more than sufficient to cover any such potential claims. 
|
|
|
|
|
|
|
