The Viacom split makes excellent strategic sense as the two parts will present more focused investment options and ensure steady cash flow. Especially when Viacom’s stock has not performed better than most top media stocks. While Time Warner’s stock price was down by only 8.3%, and Walt Disney’s by 12%, Viacom’s stock price is down 20%. Sir Martin Sorrell’s WPP group is perhaps the most pristine example of how media companies of the same group perform more efficiently when managed as independent businesses. Redstone’s decision could well now become fashionable.
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Source: IIPM Editorial, 2006
