Viacom topper Sumner Redstone wants to borrow more money to spend on content and is prepared to lower his company’s bond rating to do it.
Speaking at a media conference in Phoenix, Redstone said his conglom is “underinvested” in many of its businesses, particularly on the Internet.
“We are now scrutinizing lowering our bond rating to BBB,” he said. “We’re looking at the question of whether we should accept a lower rating to leverage the company and use the money for the benefit of our stockholders.”
Redstone said such a move could possibly let Viacom access billions more dollars.
Among the possible uses of additional cash he mentioned were accelerating Viacom’s ongoing stock buyback, increasing spending on Internet content or acquiring another cable network.
“A lot of our money will be used to increase our presence on the Net, where we are underinvested and underrepresented,” Redstone said. “You have to take some risks and make investments in order to make a lot of money.”
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Viacom acquired Netco Sportsline late last year and unsuccessfully bid for financial news site Marketwatch.
Redstone also praised new Paramount topper Brad Grey for his talent relations and entrepreneurial attitude. Asked about pay, he said Grey is making “slightly above the normal compensation for a head of a studio.”
Viacom co-prexy Leslie Moonves appeared with Redstone and said one of his toughest challenges is the struggling radio business, where he plans to divest many of the division’s smaller stations and focus on the top 100 markets, in which Viacom makes 80% of its radio revenue.
In film, Redstone described Paramount as “on the rebound,” sayingthat “The SpongeBob SquarePants Movie” will make “a lot of money” and “Lemony Snicket’s A Series of Unfortunate Events” will make “some money.” He predicted that “Coach Carter,” starring Samuel L. Jackson, will make more than$20 million in its upcoming four-day opening weekend.
Redstone repeatedly discussed his interest in the vidgame business, where he owns publisher Midway as a separate investment from Viacom. But he didn’t announce any particular moves by the conglom in games.
Exec also talked up opportunities in China, where Viacom is the only foreign company with an equity partnership in a local media enterprise.