Viacom is considering breaking itself up in a move that could see the US media conglomerate's cable TV and film assets separated from its television and radio arm.
Viacom last night admitted it was considering the move as a way of addressing its ailing share price. It will also intensify speculation about who will succeed Sumner Redstone, Viacom's octogenarian chairman and chief executive.
The likely split will put Viacom's CBS and Infinity radio operations in one company, headed by the co-president Leslie Moonves. The other company would include its MTV cable networks and Paramount film studio. It would be led by Viacom's other co-president, Tom Freston.
The pair were named co-presidents last summer, when Mel Karmazin resigned from the job after a series of bust-ups with Mr Redstone, and were seen as rivals to head Viacom.
In a statement after the New York market closed last night, Mr Redstone said the differing "growth characteristics" of its various businesses had hampered its ability to receive full market value. "We believe that a separation of our businesses into distinct and strong operating entities would allow us to optimise our capital structure and create unique investments that are more appealing to investors with different objectives," he added. Viacom shares in New York had climbed 6 per cent as speculation of a possible split circulated yesterday.
One of Mr Freston's tasks will be to turn around Paramount Pictures, which has been plagued by a series of flops, including The Stepford Wives and Alfie.
The company plans to announce further details of the possible separation in the second quarter of 2005.