Carving up Viacom

The board of directors of media conglomerate Viacom on Tuesday approved a spin-off that would create two publicly traded entities. Retaining the Viacom name, the spin-off will comprise MTV Networks (including MTV, VH1, Nickelodeon, Nick at Nite, Comedy Central, Spike TV), Paramount Pictures and Paramount Home Entertainment, among other media brands. It will be run by Tom Freston.

CBS Corporation, the other company to be headed by Leslie Moonves, will combine CBS and UPN broadcast networks, Viacom Television Stations Group, Infinity Broadcasting, Viacom Outdoor, the CBS, Paramount and King World television production operations, as well as Showtime, Simon & Schuster and Paramount Parks.

The deal, which will be tax-free to shareholders, will be completed in the first quarter of 2006. Sumner Redstone will serve as chairman and will be the controlling shareholder of the companies, both to be New York-based.