Topper sez 'recession is over for media companies'
Viacom chief Sumner Redstone pumped his corporate pompoms energetically at a West Coast investors conference Wednesday, while he less characteristically shifted from needling the media competish to tubthumping on behalf of the segment generally.
“The plain truth is (that) 2003 marks a threshold for global media and entertainment — a threshold to the next level of breakthrough financial performance,” Redstone proclaimed.
Repeating anew a familiarly rosy overview of Viacom fundamentals, Redstone said continued federal deregulation could further boost company fortunes. “The recession is over for media companies,” he said.
The cheerleading act went down well enough with those assembled at the Salomon Smith Barney conference in La Quinta, Calif., as the Gotham conglom is an established segment darling.
“But we are not alone in the catbird seat,” Redstone added. “News Corp., AOL Time Warner, GE and cable and newspaper operators also stand to benefit considerably, as do television group owners who would like to pursue duopoly combinations in smaller markets. Rupert Murdoch, Michael Eisner, Richard Parsons, Barry Diller — these are all smart guys, and I don’t mind saying it.”
Media execs are newly attuned to a gospel of fiscal conservatism, he suggested.
“My recommendation to investors in this business would be to identify those media companies that demonstrate focus, those companies that say no to absurd movie budgets or ill-conceived market forays or flawed e-business models,” Redstone urged. “Discretion is the better part of valor, as media companies go about the business of building enduring brand connections with global consumers.”
He called conglom’s Paramount studio the “most consistent cash generator (among Hollywood majors), though it’s true we didn’t have a blockbuster this year.”
What Redstone specifically omitted saying in his prepared remarks was how long his own well-regarded prexy Mel Karmazin will be sticking around Viacom. The question was surely on the mind of everyone on hand — and upon the lips of one analyst, who asked about the matter in a question and answer sesh.
“You don’t want to hear that one again,” the 79-year-old chairman-CEO initially replied when queried by Salomon’s Jill Krutick.
“OK — the Mel question,” he relented after a couple of beats. “I think Mel is going to stay (because) Mel has been offered the second-best job in the media industry. I hold the best job, and I’m not ready to give that up yet. … I don’t think he would go to Disney or AOL if he could — and he can’t, because those positions aren’t available.”
But perhaps of equal note, he added: “If anybody thinks that if Mel goes or if I go this company will go in the tank is mistaken.” The company “will still go on to achieve new heights.”
Redstone previously said he was trying to find a way of extending Karmazin’s tenure that would keep both him and his prexy happy. But industryites increasingly speculate that Karmazin will bolt within the year, with a key sticking point said to be Redstone’s insistence on more say in matters such as the hiring and firing of top execs.
Cheerleader for troops
“Viacom is known throughout the industry for the caliber and depth of its management team, from Mel on down the line,” Redstone told attendees.
Earlier in the day, DreamWorks principal Jeffrey Katzenberg engaged in an unskedded Q&A with analysts. And Michael Campbell, co-CEO of exhib Regal Entertainment, told the confab audience that robust box office has helped the exhib sector turn the corner after an industrywide fiscal crisis of historic proportions. Campbell suggested that Regal would continue to make selective acquisitions in an attempt to grow its market share from the current 23% to 30%.