Despite recent media speculation, Sumner Redstone is still Viacom's chairman, and Mel Karmazin is still its president. But another high-ranking Viacom exec did step down last week.
Farid Suleman, who headed Viacom's Infinity Broadcasting radio group and its outdoor advertising unit, will become CEO of radio group Citadel Communications. He also accepted a limited partnership with Citadel's owner, leveraged-buyout firm Forstmann Little & Co.
Insiders say Suleman, who worked at Infinity for 16 years, was growing restless at Viacom and may also have been anxious about the possibility that Karmazin, his longtime associate, could be forced out. The two first worked together at Infinity, which was acquired by CBS's then-parent Westinghouse Electric Corp. in 1996 and, as part of CBS, by Viacom in '99.
Yet another possible explanation: Through the partnership, Suleman stands to make a financial windfall from his new Forstmann venture.
Suleman had been Infinity's CEO for only about a year but was chief financial officer for 15 years. That experience helped him build strong relationships on Wall Street.
Analysts say his move to Citadel, a group of about 200 stations in mostly mid-size markets, seems smart and well thought-out. They expect that he'll help drive more acquisitions of both mid- and large-market stations.
"Farid's always had large, beachfront station properties," said Morgan Stanley analyst Michael Russell. "His modus operandi has been to grow."
Forstmann Little plunked down $1 billion to acquire Citadel last June and is eager to grow its radio portfolio.
Suleman's new bosses also found his Wall Street reputation attractive. "He's well-known on Wall Street, and we ultimately want to take the company public," said Citadel Chairman Larry Wilson. Forstmann took Citadel private after the acquisition last year.
Wilson says he'll hand over day-to-day CEO duties to Suleman and focus on long-term strategy.
Infinity should stay its course, insiders say, even after Suleman leaves. "It bears Karmazin's imprint enough that it won't feel like it's under new management," said one analyst.
A Merrill Lynch report concurs. "Although it is unsettling to have management turnover within Viacom's divisional CEO level," wrote media analyst Jessica Reif Cohen, "we do not believe this implies any deep management 'issues' nor any operational concerns at Infinity."
Karmazin, who served as Infinity's top executive for about 20 years, will take over as interim CEO. Sources say Infinity Radio President Dan Mason could be Suleman's likely successor, although others expect Karmazin to look outside Viacom.