Media Headliners: Dual appointment at Viacom shows there's room at the top

Will Tom Freston and Leslie Moonves still be friends in three years?

You've got to hand it to Sumner Redstone. At 81, the chairman and chief executive of Viacom is still one of the wiliest old foxes around.

Last week, he opted to replace his number two, Mel Karmazin, the chief operating officer of Viacom, with two senior executives.

Redstone has promoted the MTV chairman and chief executive, Tom Freston, and the CBS chief executive and chairman, Leslie Moonves, to the role, thus ensuring they strain every sinew to compete for Redstone's job, which will become vacant in three years.

And while it is always nice to see a man called Les rise to the top of the media world, particularly when he is a former actor (having appeared in such classics as The Six Million Dollar Man), the move raises some important questions about Viacom's future.

Redstone and Karmazin, according to extensive reports, did not get on well. Karmazin opted to leave the company, with Redstone putting out the story that his number two, who came on board when Viacom merged with CBS five years ago, was disillusioned by the performance of Viacom's shares and its Infinity radio division.

By coincidence, of course, Karmazin's departure chimed with a move by Viacom's corporate governance board to introduce a succession plan in light of Redstone's upcoming retirement. Freston and Moonves were installed swiftly as heirs apparent. Cynical observers suggest Karmazin got out before the succession was revealed.

During a media conference call last week, Redstone nimbly sidestepped the issue of whether Karmazin was ever likely to succeed him, saying: "The board was working for an extended period on a succession plan. The ball was in their court. The governance board considered several candidates and Mel was one but, by leaving, he eliminated himself. The result pleases me because we have two great leaders."

But aside from ensuring that two very capable men work their butts off for three years, why has Viacom appointed a double act to head its operations?

Well, the huge Viacom portfolio needs some managing. Freston, who has run MTV for 17 years, will take responsibility for the publisher Simon & Schuster, the cable network Showtime and the Paramount film division.

Moonves will continue to run CBS while overseeing Infinity, Viacom Outdoor and Paramount's TV operation.

The splitting of operational responsibilities between two executives is not unknown among US media giants. Time Warner divided operational control between Jeffrey Bewkes and Don Logan in 2002. But Freston and Moonves know they are competing for the top job, adding, critics suggest, to the potential for a breakdown in the relationship.

Not that you'd guess from the love-in at last week's press conference.

"Les and Tom are two of my favourite people," Redstone gushed. "They're friends and I'm their friend. We go out socially ... and they have the same regard for each other."

It is easy to see why Freston and Moonves might get along. They are both in their mid-50s and have track records of building broadcasting businesses through creative content against the odds. They are also powerful within Viacom - MTV and CBS account for most of its income.

Moonves paints a picture of brotherly affection, saying: "I could not ask for a better partner than Tom ... the relationship and respect is so strong that we'll be conferring on everything."

Freston, after gaining an MBA from New York University, was at MTV from its launch in 1981. He has helped it grow into a global business with turnover of close to $4.7 billion and can lay claim to being part of the team that invented reality TV with surprise hit The Real World in 1992.

He has often talked about maintaining an alternative, creative-led culture at MTV. He is comfortable with delegating and willing to let executives take risks. Freston has also, rather too conveniently, played down his wish to take on a wider role at Viacom. Last year, amid speculation that he would replace Karmazin, who then signed a three-year contract, Freston said: "I was rooting for Mel to stay. I really like my job."

Moonves is more bullish about his own capabilities. Before taking this enlarged role, he was known as "the Godfather" in New York TV circles because of his gregarious personality and all-consuming knowledge of the industry. As an actor, he appeared on Broadway before hitting the small screen and later producing stage shows and TV hits such as Dallas.

While the president of Warner Brothers TV, he was responsible for developing Friends and ER. Under his leadership, CBS has moved from third to first slot in the network ratings thanks to hits such as CSI: Crime Scene Investigation.

Freston argues that he and Moonves can build on Viacom's reputation as a creative leader. "Part of our success is attracting top creative people ... We're both very talent-friendly. The way to make money is with great content," he says.

It will be interesting to see if Freston and Moonves are still cosying up over dinner with Sumner in three years' time. After all, one of them could be left with a very bitter taste in his mouth.