• by June 1, 2004

PEL MEL -- If Mel Karmazin was going to cut-and-run, he couldn't have picked a better time as far as Viacom is concerned. The company has two extremely capable successors - MTV Networks' Tom Freston and CBS' Leslie Moonves - though their co-president/COO status sets the Viacom-ers up for a bloody duel to succeed Sumner Redstone when he retires in the next three years. Perhaps the best thing about the timing, is that Karmazin had already put his stamp on the upfront strategies and timing of Viacom's TV networks, having overseen extremely successful kids and MTV Networks' upfront sales efforts, and putting CBS in a solid position as the lead broadcast network.

"We anticipate that CBS will enjoy total advertising dollar commitments up 10 percent with the largest CPM gains and the most consistent schedule," predicted Merrill Lynch research diva Jessica Reif Cohen in an assessment rushed out to investors early this morning. "In the kids' upfront, Nickelodeon appears to have enjoyed double-digit pricing increases vs. a year ago. MTV Networks should be up a solid double-digit amount, i.e. mid-teens. For the first time, Viacom will allow advertisers to purchase advertising across several cable networks in a single spot, offering significant audience in a single buy."

Despite the rosy Wall Street view, investors were quick to short Viacom's stock during early trading today after learning of Karmazin's departure. In fact, the Merrill Lynch equities research queen said she viewed the announcement as "a very significant negative for Viacom as this represents the loss of an extremely talented operating executive."

Why Karmazin would time his split-up now may not be clear. It's not like he has a college-aged daughter preparing for a graduation. And while it may have more to do with another person's daughter - Redstone's daughter Shari, who has been angling to have a bigger voice in her dad's candy store - papa, at least, is denying that as a reason for the fall out: "My daughter will not play an executive or operating role at Viacom, is that clear?" Redstone said flatly during a briefing Tuesday morning.

One thing is clear though: why Karmazin chose to make the split at a time when Viacom's operations are doing so well. He had plenty of reason in his package to do so: 25 million to be exact.