Joint Statement of Sumner M. Redstone Chairman and Chief Executive Officer Viacom Inc. and Mel Karmazin President and Chief Executive Officer of CBS Corp.

• Position: *

Viacom

CBS

1. INTRODUCTION

   On September 6, 1999, Viacom Inc. and CBS Corporation agreed to combine the two companies in a merger of equals. Sumner Redstone will lead the new company, to be called Viacom, in his continued role as Chairman and Chief Executive Officer, as well as majority shareholder. Mel Karmazin, now President and Chief Executive Officer of CBS, will become President and Chief Operating Officer of the new Viacom, with all operations of the combined company reporting to him.

   The assets and markets of the two companies are highly complementary, have very little overlap, and, once merged, will achieve significant economies of scale, resulting in new programming, new jobs, lower costs and an increase in exports of Viacom's brands, for the benefit of Americans and all consumers around the world. Subject to governmental approvals, Viacom will meld its brands and assets in basic and premium cable networks (for example, MTV, Nickelodeon, VH1 and Showtime), movie production (Paramount Pictures), television program production and syndication (Paramount Television), broadcast television stations, theme parks, publishing (Simon & Schuster), home video and rental and retailing (Blockbuster) and Web sites, with CBS's television network, broadcast television stations, basic cable networks (Country Music Television (CMT) and The Nashville Network (TNN)), regional sports operations, radio stations (Infinity Broadcasting), outdoor business, and online holdings, to create a U.S.-based global media company that is positioned to seize the myriad opportunities and confront the formidable challenges of the twenty-first century. Such opportunities include serving the explosive media and entertainment demands of the domestic and international arenas through the Internet and other distribution channels we know today, while the challenges include maintaining a voice in an increasingly fragmented and technologically evolving marketplace.

   The proposed merger of Viacom and CBS is no accidental pairing. Rather, it represents another strategic and significant landmark in a farsighted vision of constructing a competitive media and entertainment company flexible enough to adapt to changing times. The vision took seed some forty years ago with a handful of drive-in movie theatres. With the waning audience for such theatres, those holdings were expanded to include the much-in-demand indoor, multiplex variety of theatres. And, in turn, it was with this base set of assets in 1987 that Viacom and its cable networks, including MTV and Nickelodeon, were acquired. Seven years later, Viacom's cable network brands--by then having expanded beyond MTV, Showtime, and Nickelodeon to VH1, MTV Europe, and MTV Asia--combined with the Paramount movie studio. This marriage reaffirmed Viacom's commitment to content and resulted in a strengthened and enhanced programming portfolio that now extends Viacom franchises into theatres and homes around the country and the world. For example, Paramount Pictures worked with Nickelodeon to produce The Rugrats Movie, and Paramount Parks feature Nickelodeon play centers. Globally, MTV can be viewed in over three hundred million households, Nickelodeon in over 135 million households and VH1 in over ninety million households, in some fourteen different languages and in more than one hundred countries around the world, from the People's Republic of China to Norway to Mexico. And as the world goes digital, Viacom is ready to supply content through its suite of digital channels that are accessed via television, and through its music and child-oriented sites that are accessed via that ubiquitous digital medium, the Internet.

   As Viacom has grown, it has never lost sight of the importance of funneling its profits back into the company to finance quality programming for diverse audiences and to meet the public service obligations owed to its viewers. Early this year, for example, Viacom, together with its nonprofit partner Children's Television Workshop, launched Noggin, the nation's first round-the-clock, commercial-free educational children's channel. Such a risky enterprise with such a kid-centric mission would have been impossible without Viacom's wherewithal to finance the creation and production of new quality educational programming for the channel, Nickelodeon's vast library of top-notch programming, and MTV Networks' expertise in obtaining distribution for program services across all platforms. Indeed, despite the financial losses that have accompanied the start-up for Noggin, Viacom has pledged the funds necessary to nurture this educational channel to success.

   As with its undertakings to children, since 1995 with the launch of broadcast television network UPN, Viacom, with partner Chris-Craft, has responded to the needs of the underserved segments of American viewers, particularly those with access only to free, over-the-air broadcast television. With programs written and produced by minorities and featuring minorities in the casts of almost all of its dramas and sitcoms, UPN has outperformed all other broadcast networks in attracting a disproportionately large African American audience. Yet, despite the substantial draw of the upstart network to black households, total viewer ship nationwide has lagged, resulting in UPN's loss of hundreds of millions of dollars in its short life of less than five years. Viacom's programming strength and size so far have allowed it to continue to underwrite UPN with its partner so that this alternative voice may still be heard.

   In addition to funding diverse and high-caliber programming, Viacom has dedicated funds to serving its largest segment of viewers--the youth of America. It has done so on-air and off through prosocial campaigns that address violence, tolerance, and helping others. One such campaign, MTV's Fight for Your Rights: Take a Stand Against Violence, which was unveiled even before the tragic incident at Littleton, includes several on-air specials, a free CD containing music and comments on violence from top recording artists, and an action guide produced in cooperation with the Departments of Justice and Education. Nickelodeon's The Big Help is a year-round campaign that encourages children ages six through fourteen to volunteer in their communities. Paramount Stations Group's The Teen Files campaign includes local outreach programs centered around Paramount produced quarterly specials on subjects important to teens, including the Emmy-award-winning The Truth About Drinking. And VH1's Save the Music has implemented 350 school music programs in thirty cities around the country through fundraising and instrument-donation drives.

   This is Viacom today--an entertainment, content-rich, largely cable-network and motion picture...