Studio plans to revive TV prod'n biz
NEW YORK — New Viacom CEO Philippe Dauman said Thursday that he plans to revive Paramount’s TV production biz, which was absorbed by CBS when the two companies split early this year.
“We’re looking at the possibility of adding television production back into the mix at Paramount. Obviously, we have a lot of expertise under Brad (Grey) and Gail Berman,” Dauman said during a conference call to discuss Viacom’s quarterly results. Wall Street outing was his first since replacing fired CEO Tom Freston two months ago.
Viacom’s profit fell 16% to $357 million as Paramount swung to a $7 million loss — offsetting cable gains — and company took a $62 million hit from Freston’s payout.
Revenue rose 7% to $2.7 billion.
Viacom also announced that chief financial officer Michael Dolan is leaving, and Dauman’s No. 2, Tom Dooley, will assume that role.
Par has hinted at a beefed-up TV biz in recent pacts with J.J. Abrams and Martin Scorsese, both of which include a TV element. Studio chief Grey and production head Berman were highly successful TV execs before joining the studio.
“You can be sure we’ll do it in a smart, low-cost way,” Dauman said.
Par’s DreamWorks acquisition came with a TV group, but it consisted primarily of a sales staff. The only TV product Paramount inherited from that deal was “Las Vegas” and “Spin City.”
Execs attributed Par’s dip into the red — from a $108 million profit last year — to timing, particularly tough comps with “War of the Worlds” in 2005. That pic came out just as the quarter started, which means the studio booked all of its revenue and none of its costs.
Studio revenue was flat at $857 million, with about $280 million coming from DreamWorks.
Current-quarter releases included “World Trade Center,” “Barnyard,” “Jackass: Number Two” and DreamWorks’ “The Last Kiss.”
Par said theatrical revenue plunged 32% to $212 million; homevid grew 7% to $330 million; and TV license fees jumped 28% to $247 million.
“I am very pleased. The change in management under Brad Grey and (with) DreamWorks has resulted in a revitalized studio from top to bottom,” Dauman said.
He predicted the five current film divisions — MTV, Nickelodeon, Paramount Pictures, Vantage and DreamWorks — will be joined by a BET banner and, possibly, another two for Comedy Central and CMT.
Par also has long-term distribution deals with Marvel and DreamWorks Animation.
In cable, led by MTV Networks, profit rose 14% to $778 million and revenue grew 10% to $1.84 billion.
Total ad revenue was up 7% to $1.07 billion and affiliate fees grew 12% to $510 million. Ancillary revenue, mainly consumer products, rose 10% to $238 million.
Dauman said MTV Nets soon will unveil a set of new multiplatform networks aimed at adults.
He wouldn’t give details. But at a conference last summer, MTV Nets chief Judy McGrath discussed launching networks for baby boomers, a project likely overseen by MTVN development prexy John Sykes.
“We have kicked around some ideas in this company for a while on how to appeal to an adult demographic,” Dauman said.
“One of our most creative executives has been working on that notion and has created several very compelling ideas for digital networks with very interesting concepts that are not really out there yet that will serve this adult demographic.
“I don’t want to jump the gun on the specifics, because I want to leave MTV Networks Group the opportunity to tell you about it with full fanfare. But I think it’s an exciting initiative on our part that will expand our reach.”
Dauman said he plans to push cable brands more aggressively in selected overseas markets and onto all platforms, with more focus on where and how money gets spent — and on profitability.
Giving a sense of where he thought Viacom had been lacking, he said, “My goal is to provide additional resources and a better level of coordination … to see we are not missing any opportunities and that we are cross-pollinating.”
Some Wall Streeters, but not all, had nice things to say about Dauman, and about the numbers. The stock took a hit, falling 3.13% to close at $38.43.
“We would characterize the quarter as “eh!,” wrote Prudential analyst Kathy Styponias. She called the cable results somewhat disappointing. “And while Paramount is constantly being touted as being on its way to turning around, it is far from clear that is the case when looking at the results this quarter.”
Goldman Sachs analyst Anthony Noto described the quarter as “positive” for the company. And James Goss of Barrington Research called the stock selloff “shortsighted” and said Dauman had “crafted a credible outline of his intent to lead the company into the digital age.”