NEW YORK (CNNfn) - Reflecting a change in its fundamental strategy, Viacom Inc. will focus on growing the Blockbuster Entertainment business in order to help further invigorate the stock.
"Our job was to fix (Blockbuster)," said Sumner Redstone, chairman and chief executive of Viacom. "We've done that. Our job is to grow it now." (228K WAV) or (228K AIFF)
As late as last year, Viacom signaled its intentions to sell the video rental business, which was purchased in the multibillion dollar acquisition of Paramount Communications. As part of the transaction, Viacom also acquired the assets of Spelling Entertainment.
Redstone has told investors on several occasions that Viacom plans to sell non-core assets in order to pay down debt. During a speech Tuesday at the "Big Picture" media conference hosted by Schroder & Co. and Variety magazine, he reiterated his intention to sell the Simon & Schuster publishing unit. However, he denied speculation that he would sell Viacom's 50 percent stake in Comedy Central, a cable network that is jointly owned with Time Warner.
"Comedy Central is not a possibility," he said.
Redstone also took issue with the criticism that media companies have faced in recent years. For more than 15 years, the press has reported that media companies face declining audiences and losing market share and higher costs, he said. (305K WAV) or (305K AIFF)
"Ours is not a business that lends itself to summary judgments. Our business is strewn with failed predictions
the entertainment juggernaut continues," he said.
Asked if the success of "Titanic," the $200 million venture between Paramount and News Corp.'s 20th Century Fox division, will result in sharply higher movie budgets for Hollywood, Redstone said he did not expect his studio to start investing in $300 million films any time soon.
However, he said Paramount, which capped its investment in "Titanic" at $65 million, would continue to do partnerships with other studios.
-- by staff writer Robert Liu