Frustrated with a languishing stock price, media conglomerate Viacom Inc. - which owns Paramount's Kings Island theme park in Mason - said late Wednesday that it is considering a plan to split into two companies to allow investors to value its businesses separately.
Read more from AP via The Cincinnati Enquirer.
Expecting 20% annual growth (in stock price & revenue) is a ridiculous in a mature industry. That kind of mindset is actually why the AOL-Time Warner merger occurred, and simultaneously erased billions in share holder value...
If Viacom is like most when they spin off units, the expected lower performer usually gets saddled with the majority of debt, to free up the other side's balance sheet.
But your observation is right on. Quarterly results are, but should not be, the sole metric of success.
Someone at Viacom needs their head examined.
I still don't think Viacom is nearly as good as their competitors at taking advantage of synergy, but at least the mechanisms for doing so were in place. Disney is certainly a lot better with that aspect (of course, they pretty much invented the concept for media companies...) I think NBC/Universal is pretty good at synergy as well. I haven't been to the parks since NBC took over, but they've done an outstanding job of leveraging the network (NBC) and cross-promoting their cable assets (Bravo/USA/Telemundo and the news channels), to the point where they've pretty much merged into one entity. At least 75% of my TV viewing is spent watching NBC/Universal assets...*** This post was edited by JZarley 3/19/2005 9:45:19 AM ***
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