Karmazin Steps Down at Viacom

NEW YORK Mel Karmazin has resigned as president and chief operating officer of Viacom, following several years of an uncomfortable working relationship with company chairman and CEO Sumner Redstone.One year ago, Karmazin signed a contract extension through 2006, despite his private feuding with Redstone and reports that he was ready to depart. While that contract extension reduced some of Karmazin's internal power, it also contained an exit clause that permitted him to leave if he was overruled by Redstone on certain corporate decisions. Apparently, he exercised that clause in resigning. "After more than 20 years with the company, for personal and professional reasons, I have decided to leave Viacom and pursue other challenges," Karmazin said in a statement. He walks away from Viacom with a monetary package estimated to be $25 million. Upon Karmazin's resignation, the Viacom board promoted both CBS chairman and CEO Leslie Moonves and MTV Networks' chairman and CEO Tom Freston to co-presidents and co-COOs of Viacom. In their new roles, they will jointly oversee all operations of Viacom and will report to Redstone. In addition to MTV Networks, Freston will supervise Showtime Networks, BET, the motion picture operations of Paramount Pictures, Paramount Parks and Simon & Schuster. On top of his CBS duties, Moonves also will be responsible for Paramount TV, Infinity Broadcasting and Viacom Outdoor.At the same time, Redstone said he will step down as CEO of Viacom within three years. Prior to that, he will continue to work with the board to come up with a successor and to restructure senior positions within the company. "We very much regret Mel's decision to resign and we wish him well," Redstone said. "He has been instrumental in Viacom's operating success since our merger with CBS and he leaves with an extraordinary track record of accomplishment." According to Redstone, Karmazin will stay on board for two months as a consultant to help Freston and Moonves transition into their new roles. One of the architects of radio consolidation, Karmazin began his broadcasting career in 1973 with a stand-alone station in San Jose, Calif., to create Infinity Broadcasting, which was eventually merged into Westinghouse in 1996 and CBS in 1997. When Viacom purchased CBS in 2000, Karmazin became COO. At least one Viacom high-profile on-air personality was dismayed at Karmazin's resignation. "Mel's my guy," said Howard Stern. "The whole radio division is his creation. This is sadder than the Friends ending." Stern in the past has threatened to leave Infinity if Karmazin were to leave.

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Karmazin Steps Down at Viacom

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