Viacom Chairman Sumner Redstone said this morning that discussions at the board level about replacing Tom Freston as CEO have been going on for a long time. The last straw appears to have been the stock’s failure to budge after a good earnings report. During a brief conference call to explain the moves, Redstone said: “The board felt not enough was being done; that we weren’t moving ahead as entrepreneurially and as aggressively as we should, that the communication with Wall Street had been deficient. The fact the stock didn’t move after good earnings suggested that the board may not have confidence in that management team.” Dauman was selected for his relationship with Wall Street and his understanding of digital distribution as well as a sense that he will be more aggressive with acquisitions. Translation for that last one: The loss of MySpace continues to rankle. Webcast | Transcript (WSJ sub. req.)
Listening to the full call, it’s clear that Redstone sees this as a chance to return to Viacom’s pre-CBS glory days when the stock price tripled and all was right with the world, back when Dauman and Tom Dooley were on board. (Of course, that Viacom had Tom Freston, too.) That six-year exile to private equity added a sheen to the pair. More from the call:
Keeping key execs: Dauman said he has already spoken with Judy McGrath, who heads MTV Networks, Brad Grey at Paramount and Deborah Lee at BET. He said he hopes “to build a focused team with that team going forward. … I think they are great executives, leading important businesses for us. I think we have a
great future ahead of us, and we will work very well together.” Would not answer direct questions about the future of CFO Michael Dolan; said he had talked with him and he hoped the entire team would move forward together.
Why now? Redstone has said all along that he wanted everyone to give the split a year to work. So why give Freston less than a year? In part, it’s the comparison with CBS, which, as we’ve written before, has been thriving since the split. Nothing Freston did — even success — was working with the Street and all Redstone and “the board” could focus on was he wasn’t doing.
Acquisitions: Redstone wouldn’t talk specifics but said “I don’t think it appropriate to suggest that Tom Freston missed any particular deal.” Looking forward, he said, “we — Phillipe, Tom Dooley and I — will seek out every sensible deal, whether it be in the digital space or otherwise…. We are determined not to let it get out of our hands.” Redstone said his talk about being more aggressive and entrepreneurial isn’t meant “to denigrate” Freston, “who did a really good job, particularly in building the MTV Networks.”
Dauman spoke of being plugged into start-up companies. but said he had no major acquisitions in mind: “Obviously, in the years ahead we will have to keep our eyes open. That is not what I am looking for. I am looking for smart, financially prudent deals that will complement what we’re doing. I think we will do just fine, just having the proper drive internally…”
Dauman on compensation: Packages are “very shareholder friendly” … taking lower cash compensation than has been the
Subscriber content
?
Subscriber content comes from Gigaom Research, bridging the gap between breaking news and long-tail research. Visit any of our reports to learn more and subscribe.
Advertisement
Advertisement
Advertisement
Comments have been disabled for this post