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Viacom To Buy Comedy Central: Reports Record 1st Quarter

Viacom has reached an agreement with AOL Time Warner to buy AOL's 50% interest in Comedy Central, the only all-comedy network in the U.S., for a total of $1.225 billion. The transaction is expected in the second quarter of 2003, whereby Comedy Central will be wholly owned by Viacom and join MTV Network's line-up of basic cable channels. Viacom is well positioned to do so, having just announced a 26% increase in net earnings in the first quarter of 2003. Viacom posted net income of $443M, or 25 cents a share, compared with a loss of $1.11 billion in 2002, or 63 cents a share. The company's key measure of cash flow, EBITDA (operating income before depreciation and amortisation), of $241M increased 12% to $1.23 billion from $1.09 billion.

Comedy Central president Larry Diveny will remain as president according to the release issued by Comedy Central and Viacom. AOL has been looking for $1.5 billion to help pay off debts.

Comedy Central was born in 1990 when Time Warner merged its struggling Comedy Channel, which had been a part of HBO, with Viacom's struggling Ha!: The TV Comedy Network. Warner Communications originally launched MTV Networks but then sold the cable nets to Viacom in 1986. Comedy Central performs best among men 18-34 with such shows as SOUTH PARK, THE DAILY SHOW WITH JON STEWART and THE MAN SHOW. Recently the cablenet has launched a line of made-for-TV movies and new series.

Mel Karmazin, president/coo of Viacom, said, "We are confident that Comedy Central will benefit immediately from the financial and creative support of MTV Networks and from Viacom's proven success in seamlessly integrating businesses and significantly improving their results. Comedy Central is a perfect fit with our existing cable networks and strengthens and reinforces our already prominent role with younger demographics that are increasingly attractive to advertisers. This transaction is not only accretive but also allows Viacom shareholders to get the full impact of Comedy Central's growth and its significantly enhanced long-term potential as a member of the Viacom family."

Viacom's well-known brands include CBS, MTV, Nickelodeon, VH1, BET, Paramount Pictures, Viacom Outdoor, Infinity, UPN, TNN (to be renamed Spike TV in June), TV Land, CMT: Country Music Television, Showtime, Blockbuster, and Simon & Schuster. More information about Viacom and its businesses is available at www.viacom.com.

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