Viacom (VIA) Chairman Sumner Redstone said Monday evening he couldimagine buying a cable TV system, but he gave a thumbs-down to getting into the satellite TV business.Redstone also predicted that the company's local advertisingbusinesses, which disappointed investors last year, would rebound by the second quarter. Appearing at a Bear Stearns conference in Palm Beach, Fla., Redstonespoke bullishly about Viacom's prospects in China, saying that the companyhoped to have 24-hour MTV channels in both Beijing and Shanghai, and addingthat the prospects for Viacom's outdoor advertising business in China were"astronomical." If the right opportunity to buy a cable TV system arose, Redstone saidMonday, "we might own it." Such ownership would represent a majorturnaround for Viacom, which once was one of the largest operators of cableTV systems in the U.S., but sold off its systems several years back tofocus on programming (along with its TV and radio broadcast stations, amongother properties). Redstone said later, however, that he wasn't interested in buying EchoStar ( DISH) -- which, now that Rupert Murdoch has a controlling stake inDirecTV parent Hughes Electronics ( HS), is the only conceivable takeover candidatein the satellite TV business. While EchoStar Chief Charlie Ergen is a"smart guy," Redstone said, "I wouldn't want to be No. 2." Viacom and EchoStar are currently locked in a programming dispute overthe terms of EchoStar's carriage of CBS stations on EchoStar's DishNetwork. Suggesting that EchoStar had asked for terms Viacom could neveraccept, Redstone said, his voice rising, "There is no way Viacom can or willgive Charlie Ergen a better deal than it gives to Rupert Murdoch" or Comcast ( CMCSA). While speaking confidently about the recovery of the radio business andother local advertising, Redstone said the results would be surprisinglygood and that the local businesses would return to their historic growthrates. But he hedged his comments by saying, "It's very early. Please don'tchange your numbers."
Asked about the prospects for satellite radio -- spearheaded in theU.S. by XM Satellite Radio ( XMSR) and Sirius ( SIRI) -- Redstone said satellite radio was agreat stock, but not a good business. The problem, he said, is that mostradio advertising dollars are local, which doesn't fit in with the nationalbroadcasting. "If satellite radio were going to be a big dealbusinesswise ... we would have bought it," he said. Redstone said he would be in China March 16, and indicated he would bemeeting with retired Chinese president Jiang Zemin. In other company news, Redstone said it appeared that thepreviously announced spinoff of Blockbuster ( BBI) would take place in July. He also said he believed the Federal Communications Commissionunderstood that Viacom was a victim of, not a culprit behind, JanetJackson's wardrobe malfunction at the Super Bowl. Said Redstone, "I don't know about you guys -- to me a woman's breast is not such a big deal." Viacom's shares fell 80 cents Monday to close at $39.25.