Mergers Might Be Harmful

Business leaders and average citizens alike must be alert to the potential threat that corporate mergers pose in America's free marketplace, the chair of VIACOM International said yesterday in a speech at Harvard Law School.

Summer M. Redstone '44, speaking to an audience of approximately 100 law students and professors, addressed anti-trust and First Amendment concerns arising from the current wave of consolidation in the entertainment industry.

"Mergermania is a fact of modern life," said Redstone, whose VIACOM International, Inc. recently merged with Paramount Pictures and Blockbuster Video. "There are advantages and disadvantages to mergers, but they are not simply about economics. They affect the core values of our life."

Redstone said merger activity in the U.S. has increased at a rapid pace in the early 1980s, with favorable regulations approved by the Reagan administration. Mergers this year affected $347 billion of American business.

Yet Redstone cautioned that some mergers were pursued for the wrong reasons, as corporate managers often seek favorable headlines over bottom lines.

He also said that media mergers can be particularly troubling because they have the potential to create "media gatekeepers" with dangerously high amounts of control over access to the media.

"Concentration in the media can undermine the very principles on which the First Amendment was built," Redstone said. "Mergermania is expanding the power of the gatekeepers. Media mergers must be scrutinized carefully [to ensure] no free speech problems."

Redstone, a member of the Law School Class of 1947, spoke to students in classes taught by professors Paul C. Weiler and Arthur R. Miller. His visit was sponsored by the Harvard Law School Committee on Sports and Entertainment Law.

"The disciplines which I developed here [at Harvard Law School] gave me an edge in every aspect of my career," Redstone said. "While I'm perceived as a businessman, I have never stopped and will never stop practicing law."

Dean of the Law School Robert C. Clark, in a brief introduction, called Redstone an "extraordinary symbol of the value of law training for the business world."

Clark said that former Law School dean Erwin N. Griswold recalled Redstone as "the only student in [his] tax class who got an A. And that's about the highest complement he'd give a student.