Viacom Acquires BET
N E W Y O R K, Oct 4 -- Viacom Inc.’s $2.3 billion purchase of the black-owned parent of the nation’s biggest cable television channel aimed at blacks was seen as a sign that Corporate America is waking up to the value of minority-owned businesses.
But the deal announced Friday for the privately owned BETHoldings II Inc. also raised worries because the black executiveswho have agreed to stay on to continue running the business will nolonger have absolute control.
“There will not be African-American ownership at the very top,and I think that makes a difference,” said James Winston,executive director of Washington-based National Association ofBlack Owned Broadcasters.
Viacom Inc., the media powerhouse that owns CBS and the MTV andNickelodeon cable TV channels, is paying about $2.3 billion instock for BET Holdings and will assume $570 million in debt. It wasbelieved to be one of the biggest buyouts ever of a black-ownedbusiness, although the prices for some sales have never beendisclosed.
Viacom said it will provide the resources BET needs to continuegrowing while keeping top managers running the business who knowhow to reach the black audience. In exchange, it expects to benefitfrom owning a business widely recognized by a group that is growingfaster in numbers and income than the general population.
“Truly great brands don’t become available every day,” SumnerM. Redstone, chairman and chief executive of Viacom, told analystsin a conference call.
A Known Brand
BET, based in Washington, D.C., owns the cable channel BlackEntertainment Television as well as a jazz music cable channel, andpublishes books, creates radio programming, makes movies andoperates an Internet-based service aimed at blacks.
The company ranked sixth in the latest rankings by BlackEnterprise magazine of the largest black-owned industrial andservice companies in the U.S. with an estimated $225 million inrevenue in 1999.
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