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BETTY ANN BOWSER: Analysts say this is the biggest media merger in
history. At a news conference in New York City this morning Viacom President
and Chief Executive Officer Sumner Redstone made the announcement.
 SUMNER
REDSTONE: This is a partnership that makes perfect sense because Viacom
and CBS are natural partners. What we are announcing today is a merger
of equals -- a merger that is unequaled in the quality and power --
the power of its content, the breadth of its distribution -- audiences,
consumers around the world will benefit from this merger and in the
process we will create an $80 billion giant.
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BETTY ANN BOWSER: If approved by the Federal Communications Commission,
the deal will create a company with a major television network, a movie
production studio, vast holdings in cable television, the largest outdoor
advertising company and assets that will rival other media moguls like
Time Warner and Rupert Murdoch's News Corporation. The deal comes one
month after the FCC announced it intends to allow companies to own more
than one TV station in a single  market
-- under certain conditions. CBS already owns 14 television stations.
Viacom has 19. And in five cities both Viacom and CBS each currently
own TV stations. The FCC doesn't allow any company to penetrate more
than 35 percent of the American television market with its ownerships
of stations. CBS President Mel Karmazin said he will try to persuade
the FCC to change that rule.
 MEL
KARMAZIN: We have said many times, I mean long before this merger, that,
you know, with the Internet and with technology, that the limit -- limiting
a company to 35 percent of the country is really not a relevant law
any longer. It may have made sense at one time, and, yes, we certainly
would like to see that cap changed but at end of the day it's up to
the regulators and if the regulators see it as we do, it should go away.
If in fact it doesn't, then we will find ourselves with 35 percent,
with 41 percent of the country needing to get down to 35 percent. And
we will through swaps or through asset divestitures be in compliance.
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BETTY ANN BOWSER: The new company will keep the name Viacom. In addition
to Paramount Pictures -- which produced the Oscar winning movie "Titanic,"the
largest grossing picture of all time -- Viacom will also own the CBS
television network. And Showtime, which  would
be able to broadcast programs and movies made by Paramount. It will
also own CBS News and the top rated news magazine program "60 Minutes."
It will also own Blockbuster Video, the world's leading retailer of
video rentals, with 6,000 stores in 27 countries. Karmazin said the
breadth and the depth of the new company will make it ripe for cross
promotion.
MEL KARMAZIN: We will reach the people in the home, obviously, watching
the number one network, watching our cable channels. We will reach people
outside the home, when they're in their cars and seeing our billboard,
and seeing our bus advertising, and listening to our radio stations.
You know, we have done a great deal of cross promotion within CBS. There
is the ability of working hand in hand as TNN and Country Music Television
has done with our country music radio stations. There is the opportunity
for MTV to do it with our rock stations. So, we really see this thing
as being a great cross promotion.
BETTY ANN BOWSER: The new company will be headed by Redstone, who will
remain CEO, and Karmazin will become its new president.
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