Viacom Interested in NBC, TooBy Lisa
June 13, 2001 - 10:45 AM
The future of Enterprise network UPN was secured in May, when the Federal Communications Commission (FCC) bended its network ownership rules to allow parent company Viacom to own both UPN and CBS. Now even this rule change might not be enough to accommodate Viacom's plans for expansion.
Viacom President Mel Karmazin addressed the National Cable & Telecommunications Association's Cable 2001 conference on Monday. The executive said that his company would definitely be interested in buying the General Electric-owned NBC network - and then expressed an interest in CNN as well.
"If [General Electric] decided that it wanted to hire an investment banker and sell NBC," Karmazin said, "We would absolutely love to receive one of the [prospectus] books and to sit there and make a bid. But in order to do that, the dual network rule has to go, the rule about duopoly within a market has to go as well." When asked about CNN, he said: "If it were available, certainly we'd be interested."
Current FCC rules prohibit a company from owning more than one of the four major television networks. UPN owener Viacom bought CBS last year, making it the first company to own two nationwide broadcasting networks. The FCC responded to the acquisition by relaxing its dual network rule, allowing companies to own two networks, as long as both weren't part of the 'Big Four' of CBS, NBC, ABC and Fox. However, according to Karmazin, the regulations are still too tight. In light of the competition for television networks from the internet and cable networks, Karmazin felt the FCC rules were "a little silly."
Neither NBC nor CNN is actually for sale, and Karmazin later said his comments were only theoretical. A source close to NBC reportedly said: "Frankly, there's no way in hell GE is going to spin off NBC."
Despite widespread industry concerns about the slowdown in the advertising market, backed up by slow upfront sales, Karmazin insisted that Viacom would not be affected. "It's not a terrible market," he said. "It's terrible compared to last year, because last year was an aberration." 2000 saw record sales in the upfront period, when networks try to sell as much of their advertising space as possible before the television season begins. Buoyed by popular shows like Enterprise and Buffy the Vampire Slayer UPN is expected to be one of three networks that will improve its ad sales from last year. (story)
Karmazin also expected Viacom to make a substantial profit. The company enjoyed its best first quarter in history in the first half of this year, and he expects the second quarter to be the best as well.