Viacom's MTV Networks to Acquire Harmonix Music Systems, Inc. for MTV

Viacom's MTV Networks to Acquire Harmonix Music Systems, Inc. for MTV

MTV to Expand Music-Based Offerings by Adding Creator of PS2 Hit Guitar Hero and other Top-Selling Music Gaming Franchises

NEW YORK, and CAMBRIDGE, Mass., Sept. 22 /PRNewswire/ -- MTV Networks (MTVN), a division of Viacom Inc. (NYSE:VIA)(NYSE:VIA.B), today announced a definitive agreement to acquire Harmonix Music Systems, Inc., developer of the PlayStation 2 hit Guitar Hero and other music gaming titles, on behalf of MTV. Under the terms of the transaction, MTV Networks will acquire all of the outstanding stock of Harmonix for $175 million in cash. In addition, Harmonix shareholders may be eligible for incremental earn-out payments through 2008, to the extent that financial results exceed specific targets.

The acquisition of Harmonix demonstrates MTV's commitment to music and furthers its strategy of engaging passionate music fans through a deep and immersive multi-platform entertainment experience. With the addition of Harmonix's strong music gaming titles, MTV will enhance its music-based universe of entertainment, news, gaming, and interactive content offerings, and increase audience engagement and time spent with the brand across all screens.

The announcement follows MTV Games' successful partnership, initiated in November 2005, to feature Harmonix's Guitar Hero franchise in original programming, creative promotions and competitions across a number of MTV's multi-platform properties. Guitar Hero, published by RedOctane/Activision, is among the top-selling PlayStation 2 games this year and has been honored with several accolades at the Interactive Achievement Awards, Game Developer Choice Awards, and other industry events. Guitar Hero 2 is scheduled for release this fall.

"The acquisition of Harmonix will deepen MTV's connection to its audience via on-line, mobile and console music gaming, and expand the relationship with both labels and artists through the creation of games based on classic songs as well as future album releases," said Christina Norman, President, MTV. "Harmonix's technology allows everyone to pursue their rock and roll fantasies, even people like me, with more musical ambition than actual talent."

"Harmonix is a wonderful addition to Viacom's tremendous collection of digital assets, and is precisely the type of transaction that will help us aggressively grow our digital business while maintaining strong fiscal discipline," said Philippe Dauman, President and CEO, Viacom Inc. "We're committed to a swift integration and look forward to helping Harmonix become even stronger with the support of the incredible marketing and creative power at MTV Networks."

"The acquisition of Harmonix advances MTV Networks' strategy of connecting with target audiences by creating immersive, multi-platform environments that extend to every device they use," said Judy McGrath, Chairman and CEO, MTV Networks. "Harmonix is an innovator in giving audiences new and dynamic ways to interact with music, and I couldn't be more excited to welcome the company into MTV Networks' strong portfolio of multi-platform brands."

Harmonix pioneered music and rhythm gaming with the introduction of Frequency in 2001 and Amplitude in 2003. These games won numerous accolades including one of Rolling Stone's "Best Console Games of 2003" and IGN's "Reader Top 10". The company also developed the Karaoke Revolution franchise, which turned singing into a competitive game. This title was named by TIME Magazine as the "#1 Video Game of 2003" and won Electronic Gaming Monthly's 2003 "Gaming Innovation of the Year" award.

"We are very excited to combine our unique assets in the music and gaming space with one of the most recognized brands in the music world. We look forward to continuing to create innovative ways for people to enjoy music," said Alex Rigopulos, Harmonix's CEO.

Mr. Rigopulos and other key employees will continue in their roles following the completion of the acquisition. Harmonix will join MTV Networks' Music and LOGO Enterprises unit, led by Jeff Yapp, Executive Vice President.

"Harmonix's talented team will be a powerful and important addition to MTV that brings enormous talent and expertise. All of us are excited to begin working with them to develop meaningful and creative ways to deliver music to our audience," said Mr. Yapp.

The transaction is expected to close in the 4th quarter of 2006, and is subject to certain customary conditions.

About MTV Networks:

MTV Networks, a unit of Viacom (NYSE:VIA)(NYSE:VIA.B), is one of the world's leading creators of programming and content across all media platforms. MTV Networks, with more than 130 channels worldwide, owns and operates the following television programming services - MTV: MUSIC TELEVISION, MTV2, VH1, mtvU, NICKELODEON, NICK at NITE, COMEDY CENTRAL, TV LAND, SPIKE TV, CMT, NOGGIN, VH1 CLASSIC, LOGO, MTVN INTERNATIONAL and THE DIGITAL SUITE FROM MTV NETWORKS, a package of 13 digital services, with all of these networks trademarks of MTV Networks. MTV Networks connects with its audiences through its robust consumer products businesses and its more than 100 interactive properties worldwide, including GameTrailers.com, IFILM, Neopets, Xfire, Y2M, and online, broadband, wireless and interactive television services. MTV Networks also has licensing agreements, joint ventures, and syndication deals whereby all of its programming services can be seen worldwide.

About Harmonix Music Systems, Inc.:

Harmonix is a videogame development company based in Cambridge, MA. The company specializes in music-based games and is renowned for groundbreaking design innovation. Harmonix was founded in 1995 by Alex Rigopulos (CEO) and Eran Egozy (CTO), who met while working in the computer music group at the MIT Media Laboratory. Alex and Eran formed Harmonix initially not to develop videogames, but rather to invent new ways for non-musicians to experience the unique joy that comes from making music. (http://www.harmonixmusic.com/)

Cautionary Statement Concerning Forward-looking Statements

This news release contains both historical and forward-looking statements. All statements which are not statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are not based on historical facts, but rather reflect Viacom's current expectations concerning future results and events. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause our actual results, performance or achievements to be different from any future results, performance and achievements expressed or implied by these statements. These risks, uncertainties and other factors include factors described in Viacom's news releases and filings with the Securities and Exchange Commission, including but not limited to our 2005 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q for the three months ended March 31, 2006 and the six months ended June 30, 2006. The forward-looking statements included in this news release are made only as of the date of this release, and, under Section 27A of the Securities Act and Section 21E of the Exchange Act, we do not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

All brand or product names are or may be trademarks of, and are used to identify products or services of, their respective owners.

Source: MTV Networks

CONTACT: Marnie Black, MTV, +1-212-846-7004; Mark Jafar, MTV Networks,
+1-212-846-8961

Web site: http://www.mtv.com/
http://www.harmonixmusic.com/

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