• by Wayne Friedman , Staff Writer, January 12, 2006

Sumner Redstone, the executive chairman of the new Viacom and CBS Corp, may have split his company in two--but doesn't mean his now-two companies, Viacom Inc. and CBS Corp., are any less powerful. Divorce is a good thing.

He believes other media companies will go the same way. "As some of my friends know, divorce is sometimes better than marriage." Except perhaps this divorce, where one person still controls two companies.

Redstone loves to say--and fully wrap himself in--the "control's the thing" mode of thinking. Slicing his company mostly along cable and broadcast assets has been a pretty daring move. And though no one talks about it, it has set up a daring competition between Les Moonves, chairman of CBS Corp. and Tom Freston, chairman of the new Viacom.

So far, Redstone says, the split has worked, as both companies have been--even in a short time--thriving. Viacom--through Paramount--has agreed to buy up DreamWorks' live action unit. CBS Corp. has made a number of new distribution deals for its programs with iTunes Music Store, Comcast Corp, and Google.

Other media companies will follow Redstone's predictions--especially if Viacom's stock climbs higher, which has been his main intention all along.

This kind of split doesn't mean each unit can't cross party lines. CBS said it would pursue cable assets where it doesn't conflict or compete with Viacom's cable assets. With this thinking, Redstone would also like to have a CNN in his stable of assets. He says that a CBS-CNN combination would be great. Right now he says Dick Parsons, chairman of Time Warner, has only considered joint ventures for CNN.

Time will tell whether the stock prices of both the new Viacom and CBS Corp. will head in the direction Redstone envisioned back in 2004--that's when he named Les Moonves and Tom Freston co-presidents and co-COOs of Viacom.

Is Redstone a real showman? There are limitations--even with new technologies that would seemingly make new business thrive. At heart Redstone has been a theater owner. His roots come from his longtime movie theater asset National Amusements, so he reacted strongly to the idea the movie industry has been mulling, allowing simultaneous releases of feature films in theaters and on DVD or video-on-demand platforms: "It's not going to happen," he says. "Any exhibitor playing pictures under those circumstances would be committing suicide."

Divorces are a natural occurrence in business. But apparently, as a side effect, suicide isn't an option.