The CBS-Viacom Merger: A Media Giant Pops Up

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Redstone believes Karmazin knew from the first week of August that he wanted to somehow put the two companies together. Redstone wasn't interested. "I canceled three appointments because I was so busy," he says. "I didn't think it could be anything this big. But he seduced me."

When Redstone shifted the talks to a hotel suite, a more appropriate setting for a seduction, Karmazin knew things were getting serious. He pointed out to Redstone that the two companies already had great working relationships among CBS's extensive radio network and Viacom's MTV and VH-1. "Sumner said to me, 'You've been stalking my company for a long time; come over and talk to me about CBS.'" Karmazin approached his talk with Redstone as if he were a prospective investor, highlighting CBS's strong network of affiliates and its prime radio stations and outdoor-advertising assets and reminding Redstone of talent such as Howard Stern, Don Imus and David Letterman.

The two men agreed that if any deal were to happen, it would be a merger of equals, although Viacom is clearly the acquiring party. "I had always thought of CBS as a network," says Redstone. "But it's much more than that." Redstone saw a good fit. CBS was strong domestically; Viacom was growing fast internationally. And shareholders had long expressed concerns that Redstone, who remains in fine fettle, had no clear successor. Karmazin, a darling on Wall Street for driving up the stock price of CBS, and of Infinity Broadcasting before that, would neatly resolve that issue.

During late-night negotiations at Karmazin's $11.4 million Trump Tower condo, the two men found common ground. Both were self-made entrepreneurs who prided themselves on rising from modest means to head powerful companies. "Sumner and I have parallel interests," says Karmazin. Says Redstone: "I insisted that Mel come along."

But will these two media chieftains get along? Karmazin, who went to CBS when his Infinity Broadcasting was acquired by that company in 1996, has been known to depose long-standing corporate kings, while Redstone has a scalp collection any corporate warrior would be proud to own. Recent additions include those of his top lieutenants, deputy chairmen Philippe Dauman and Thomas Dooley, who got the blade (and a pile of money) as soon as the CBS deal was concluded.

It took Karmazin less than two years after arriving at CBS to replace CEO Jordan and move into his office suite. Karmazin's business strategy has been bluntly effective: pay top dollar for what he calls "oceanfront property"--prime stations in major markets, celebrities like Stern and Imus, the rights to the NFL--and then look to recoup the money by slashing administrative and staffing costs and running the tightest of ships.

Karmazin and Redstone are kindred spirits, says Frank Biondi, who was Redstone's No. 2 before a controversial ouster in 1996 and who knows Karmazin. "They're both devoted to the business--it's about 99% of their lives. They're just going to have to work out the yins and yangs." Says Viacom Entertainment Group chairman Jonathan Dolgen: "They share the same basic work ethic, which is: There are only seven workdays in the week."