Viacom CEO Philippe Dauman will replace Sumner Redstone as the company’s executive chairman, the latest in a string of revelations that demonstrate how Redstone’s media empire will be governed as scrutiny of his health and well-being continues to swirl.
Viacom said Thursday that its board had elected Dauman, a longtime Redstone advisor, to the chairman role, while Redstone, whose involvement with the company has waned in recent months, would stand as chairman emeritus. A similar arrangement was made Wednesday at CBS, which Redstone also controls through his family’s stakes in a movie-exhibition chain, National Amusements.
The maneuvers lend more ballast to the notion that Redstone’s time at the helm of both Viacom and CBS is on the wane. And there is some sense that there is tension behind the decisions. Shari Redstone, Sumner Redstone’s daughter and a vice chair of both companies, said Wednesday that she supported Moonves as chairman but had concerns about elevating Dauman to the same post at Viacom. Dauman is a longtime adviser to her father and would be a member of a trust that governs his stake in National Amusements after his death. along with Shari Redstone.
While Sumner Redstone voted in favor of Dauman’s elevation at a board meeting held Thursday, Shari Redstone did not, according to a person familiar with the situation. She was the only dissenting member of the board, this person said.
The elder Redstone has long expressed a desire for the companies to be governed by professional managers, though he and his daughter have grown closer in recent months and she has been very involved in this week’s matters.
“It is my firm belief that whoever may succeed my father as Chair at each company should be someone who is not a Trustee of my father’s trust or otherwise intertwined in Redstone family matters, but rather a leader with an independent voice,” Shari Redstone said in a statement Wednesday.
Shari Redstone “is going to continue to advocate for what she believes to be in the best interests of Viacom shareholders,” a spokeswoman for Redstone said Thursday.
Viacom has been in investors’ cross-hairs for months, owing to struggles at its operations, which include cable networks like MTV, Nickelodeon and Comedy Central as well as the Paramount movie studio. The New York company has grappled with ratings declines at many of its top holdings, prompting Dauman to streamline and restructure the company while vowing to do more deals with advertisers based on metrics surrounding new viewing behaviors having to do with streaming video and mobile devices.
Viacom put through a $784 million restructuring last year that combined two different divisions of cable networks and prompted an exodus of many veteran executives. In recent months, Viacom has seen improved results at some operations, like Nickelodeon, and has unveiled a bevy of new programming initiatives, including scripted fare at CMT and the revival of popular Nickelodeon animated properties.
“I am gratified by the continued confidence and support of the Board of Directors and all of my colleagues at Viacom whose creativity and unrelenting hard work is evident in our recent successes across the Company,” Dauman said in a statement.
Dauman “has laid out a strategic long-term vision for the company that we fully endorse,” said William Schwartz, chairman of the Viacom board’s governance and nominating committees. “We have complete confidence that his dedication to Viacom, his global experience and his determination to further our culture of creativity and innovation will continue to serve the interests of all shareholders and build long-term value.”
Viacom’s challenges are likely to continue, suggested one Wall Street analyst who follows the company, no matter who serves as chairman. “We don’t believe there is anything that any new management team can do to get kids and teens to put down their iPads and go back to watching old-fashioned, ad-supported TV,” said Todd Juenger of Bernstein Research. “We don’t think there is anything that can be done at this point to fend off the inevitable decline in Viacom’s key businesses,” he added.