Viacom, MGM and Lionsgate to take on HBO, Showtime
By Kenneth Li
NEW YORK (Reuters) - Sumner Redstone's Viacom Inc will launch a premium TV and movie channel with Lionsgate and Metro-Goldwyn-Mayer, aiming a direct volley at Time Warner Inc's HBO as well as Redstone's own Showtime networks owned by CBS Corp.
The new channel will have originally produced television series, as well as feature upcoming movies like "Iron Man" and "GI Joe" and classic hits such as MGM's "James Bond" franchise and Lionsgate's "Dirty Dancing." It is expected to launch in autumn 2009, the companies said in a statement on Sunday.
The venture, in which Viacom will take a lead role and own the biggest stake, is viewed as a challenge to CBS, which controls the Showtime Networks Inc premium movie and TV cable channels. Showtime currently holds contracts to show movies from MGM and Lionsgate.
"I have stated from the beginning that Viacom and CBS have the right to pursue their own strategic objectives in the best interest of their individual shareholders," Redstone said in an e-mailed statement. "Competition between the two companies hones their skills and their productivity."
Viacom, which owns the Paramount film studio and MTV Networks, was split from CBS in 2006 to appeal to different classes of shareholders. Both are controlled by Redstone.
Lionsgate and MGM are not expected to renew their contracts with Showtime when they expire at the end of 2008. Paramount's contract with Showtime ended in 2007 and has not been renewed.
A RARE OPPORTUNITY
"It's my job to create maximum shareholder value for Viacom. It's Leslie's job to create maximum value for his company," Viacom Chief Executive Philippe Dauman told Reuters in a phone interview, referring to CBS CEO Leslie Moonves. Continued...