FCC Approves $35.6 Billion Viacom-CBS Merger Despite Ownership Concentration Violations

The Federal Communications Commission approves Viacom’s $35.6 billion acquisition of CBS Corporation despite the merger violating FCC regulations prohibiting one company from owning television stations reaching more than 35% of the U.S. audience and prohibiting ownership of two networks if one is in the top four. The merger, announced September 7, 1999 by Viacom chairman Sumner Redstone and CBS CEO Mel Karmazin, creates the second-largest media company behind Time Warner and the biggest media merger of the twentieth century.

The FCC approval comes after Congressional hearings examine “growing consolidation of media outlets, maintaining diversity in viewpoint with less diversity in ownership, and the state of competition in the media market.” Despite these concerns about ownership concentration threatening media diversity, the FCC grants conditional approval, requiring Viacom and CBS to “meet whatever restrictions were required” - restrictions that prove minimal in practice. Media watchdog groups criticize the implications for diversity in media ownership.

The Viacom-CBS merger exemplifies how the 1996 Telecommunications Act transformed the FCC from enforcing ownership limits to facilitating their evasion. The combined entity controls MTV, Nickelodeon, VH1, BET, Paramount Pictures, CBS television network, UPN network, radio stations (Infinity Broadcasting), outdoor advertising (TDI), and Simon & Schuster publishing - unprecedented concentration of content creation and distribution. The FCC’s approval demonstrates regulatory capture: agencies tasked with preventing monopolization instead enable it, rubber-stamping mergers that violate the spirit and often the letter of existing regulations while claiming to protect competition and diversity.