• by March 17, 2005

WHEN THE SUMNER OF THE PARTS IS GREATER THAN THE WHOLE - We've always thought Sumner Redstone was a genius, even if his tactics occasionally seem twisted. But the idea of splitting Viacom up into two separate public companies run by two of the media world's best value creators is a genius twist. And it just may manage to accomplish the thing that former heir designate Mel Karmazin could never manage to muster, much to his own frustration: Getting Wall Street to recognize the underlying value of Viacom's equity. The move, should Viacom actually pull it off, recognizes that the real value behind big media players isn't their technology or their content, but their intellectual capital. By that, we don't simply mean intellectual properties, though that is clearly part of the equation. What we mean is people with the intellect to capitalize on media properties. And that's something both Tom Freston and Leslie Moonves have demonstrated consistently over the years, no matter what cards they were dealt.

And while many on both Wall Street and Madison Avenue focus on the financial structure and market place, wondering if Viacom's move, coming on the heels of Liberty Media's decision to spin off Discovery Communications signals a trend toward a wave of deconsolidation within the media industry, we think this is more about the people involved.

We're not alone. Merrill Lynch securities analyst Jessica Reif Cohen has already coined new stock market symbols that symbolize the real value that will be unlocked by the split. "Two tickers instead of one: Les and Tom," she suggested in her research note today.

That made us wonder what other personality driven spin-offs might make sense? Here's our list of ticker symbols we'd like to see:

KLU - How a pure-play media services company might trade if it were spun off from PUB (that's Publicis, if you don't know Street lingo).

VRK - What the financial industry might call a split resulting from within an existing pure-play media services company that trades under the symbol (AEGSF.PK).

GLB - How Wall Street would refer to the entity created if Sir Martin (WPP) opted to do the same.

FCK - The only logical ticker symbol if MediaCom U.S. Chairman Jon Mandel managed a management buy-out from new boss Irwin Gotlieb.

FKD - What investors might call the ticker symbol if Interpublic (IPG) were to spin off its media services agencies.

Okay, so we're no better at coining tickers than we are at writing Riffs, but you get the idea. In a business like media, it's the people behind the assets that give the assets value. They even have a term for it on Wall Street. They call it "goodwill," or an intangible asset that cannot be amortized like a capital fixture. In fact, they often are not fixed. We forget who the smart Madison Avenue guy was who used to use this line to explain the concept of goodwill in the advertising industry, but he would say, "Everyday at 5:00 100% of my assets go down the elevator."

And that, dear readers, is the real reason why Viacom will split up into two separate companies. Viacom's investors simply cannot afford to let one of their two key "tickers" go down the elevator and not come back the next day. Not if they want to see their shares keep on ticking.