Redstone: No current plans for any transaction
NEW YORK — Viacom chairman-CEO Sumner Redstone dismissed reports Wednesday that he and Mel Karmazin are at odds about doing a big deal — that he wants to but Mel doesn’t — and said neither of them would remotely consider a major acquisition with the conglom’s stock in the doldrums.
“While we’re always interested in adding to core areas, we have no current plans for any transaction. We would never use our stock at this price. … Mel and I are exactly in the same place,” Redstone told an auditorium full of Viacom shareholders at the company’s annual meeting in Gotham.
“I’m tired of talking about it,” he said of the relations between himself and his No 2. “We have never disagreed on any major strategic issue.”
On the two other issues of concern to shareholders — Viacom’s succession plans and its weak stock — Redstone said the former would be addressed soon by the board’s governance committee, composed of three independent directors. “I believe succession is a critical issue,” he said. “I would suspect and hope that in the very near future, Viacom will let you have a clearer picture of succession plans.”
Daughter Shari Redstone, who runs the successful National Amusements theater chain, is said to be taking a more active interest in Viacom’s operations. “My family is very important to me,” Redstone noted, “but everyone in my family is committed to the principle that Viacom comes first.”
The lagging shares, he said, may have to wait for relief until “the market gets efficient” and realizes Viacom’s potential in a rebounding ad market. Nearly half of Viacom’s revenue comes from advertising. Conglom has been an aggressive buyer of its own shares, purchasing $1 billion in stock last year.
One shareholder suggested that since massive share buybacks and even upbeat financial results haven’t been able to goose the stock, the company should consider attracting investors by hiking the dividend.
Redstone said the company will consider it.
Viacom announced Wednesday a regular quarterly dividend of 6¢.
The stock dipped 0.29% to $37.81.
“We can manage our business — but it’s hard for us to manage our stock. We’re going to do all we can to be better communicators with the Street,” he added.
In any case, Redstone said Viacom will continue to buy back stock aggressively, although it has to stop for a few months ahead of the planned split-off of video giant Blockbuster this summer. Execs promised more details of that operation over the next few weeks.
Redstone and Karmazin also took some heat from shareholders on indecency — they denied that any Viacom program contained it — and on raunchy nighttime programming at BET. “We want more news and programming that speaks to our higher aspirations, not pornographic hip-hop,” griped one shareholder.
She also noted that Viacom has no minorities on its board.
“Diversity is one of the foremost agendas at Viacom,” Redstone said.
Karmazin described Viacom largely as a television company, with two-thirds of cash flow coming from TV. He added that Viacom has 26% of the audience in primetime — compared with 16% at closest competitor NBC Universal. “We’re the biggest, and growing,” he said, the idea being that heft means leverage with distribution outlets like cable and satellite.
Karmazin also said Viacom was actively mining its film and TV library for the lucrative DVD market and other outlets. “We have people working on how we are going to provide content to your cell phone, to all devices — to your toaster oven,” he joked.