• by Paul Gough , April 22, 2003

Viacom said Tuesday that it would buy AOL Time Warner's 50% stake in Comedy Central and become the basic cable network's sole owner. The $1.225 billion cash deal is expected to close by the end of the second quarter.

Few changes are expected at Comedy Central, which will become part of Viacom's MTV Networks unit that also includes VH1, TNN, Nick at Nite and CMT. Larry Divney will keep his post as president and the channel's headquarters will remain in New York and Los Angeles.

The basic cable channel launched April 1, 1991 and bills itself as the only 24-hour ad-supported basic comedy network. Targeting adults 25-34 and skewing heavily male, Comedy Central has more than 82 million cable households (92% of cable households). With the acquisition, Viacom will have a 62% reach of all people 18-49 when Comedy Central is combined with MTV, VH1, CMT, Nick at Nite and TNN.

"This is really a terrific acquisition for Viacom that allows us ... to take full advantage of its highly compatible target demographic within the MTV Network family of leading basic cable networks," Sumner Redstone, chairman/CEO of Viacom, said Tuesday morning in a conference call with analysts and advertisers. In the past year, Viacom has bought full ownership of Noggin from partner Children's Television Workshop and also purchased the College Television Network.

President/COO Mel Karmazin said Comedy Central's acquisition fit into Viacom's growth needs and adds a well-established brand, revenue diversity and more cross-selling opportunities within the MTV Networks unit. "It's a great brand unto itself even without the benefits we can bring to the table," Karmazin said. Comedy Central has from time to time been cross-sold with the company's other properties through Viacom Plus. But Karmazin said that in the past if it was a choice between $1 million ad deal on MTV or $1 million on Comedy Central, Viacom Plus would obviously go to MTV because Viacom owned the network outright.