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Viacom CEO Seeks to Reassure Employees Amid Turmoil (EXCLUSIVE)

Viacom CEO Philippe Dauman sent an email late Tuesday to all employees seeking to reassure them about the state of the company. The email, obtained exclusively by Variety, addresses the bitter succession feud that broke out over the weekend, when Sumner Redstone removed Dauman and his ally from the board of National Amusements Inc., which owns 80% of Viacom’s voting shares.

“We understand that this is a distraction and it can create speculation and concern,” Dauman wrote to employees. “We want you to know that we are keeping our focus squarely on what matters most to all of us — moving our company rapidly and successfully into the future.”

Dauman filed a complaint on Monday seeking to be reinstated to the board of National Amusements Inc. and the trust that will inherit Redstone’s controlling interest in CBS and Viacom upon his death or incapacity. Dauman alleges that Redstone’s daughter, Shari, took advantage of her father’s ailing health to seize control of his affairs.

Shari Redstone has been at odds with Dauman for years. She cast the lone dissenting vote when Dauman was named chairman of Viacom in February.

In statements over the weekend, Dauman alleged that he had been barred from seeing Redstone, and that Shari Redstone had his house “on lockdown.” Sumner Redstone, 92, issued his own statement questioning Dauman’s plan to seek a new investor for Paramount.

In his memo to employees, Dauman reiterated his intention to pursue sale of a minority stake in Viacom’s Paramount Pictures.

“We continue to explore a strategic partnership in Paramount that we believe will accelerate the studio’s growth well into the future and generate significant value for Viacom,” he wrote.

Read the email:

Dear Colleagues,
There has been a lot of unusual news about our company over the last few days. We understand that this is a distraction and it can create speculation and concern. We want you to know that we are keeping our focus squarely on what matters most to all of us – moving our company rapidly and successfully into the future. The passion and commitment you bring to your work continues to inspire us and drives our progress every day.
The media business is transforming rapidly and so are we. At last week’s strategic presentation for Viacom’s Board of Directors, we had the opportunity to discuss our industry’s transformation, as well as the initiatives under way at Viacom. Briefly stated, here are some of the highlights:
As you know, over the last year we have strengthened our domestic media networks, which now consist of three groups led by experienced media executives: Cyma Zarghami at Kids & Family, Doug Herzog at Music & Entertainment, and Debra Lee at BET Networks. Collectively, our family of networks is the leader in the cable world in many key demographic targets with a 21% share in the under-49 age group.
At Kids & Family, we are proud that Nickelodeon has been the uninterrupted leader in kids 2-11 and preschoolers 2-5 over the last 18 months. They have fueled that success with multiple hits, old and new, such as SpongeBob SquarePants and Game Shakers. TV Land and CMT have been revitalized with a slew of new programs, including Younger and I Love Kellie Pickler.
In the Music & Entertainment Group, we have reinvigorated our management with a new leadership team – Chris McCarthy at VH1, Sean Atkins at MTV, and Kent Alterman at Comedy Central. We have already seen extraordinarily strong results at VH1, and are bringing the music back to MTV with a lot of exciting programming in development. Comedy Central is doubling down on original productions to add to its existing hits such as Broad City, Inside Amy Schumer, and The Daily Show with Trevor Noah. At Spike, under Kevin Kay’s leadership, we continue to succeed with a number of hits, including the global sensation, Lip Sync Battle.
BET Networks will again present the fan favorite BET Experience, which includes cable’s leading award show, The BET Awards. BET continues to produce more and more distinctive original programming, making it by far the top channel targeting African American audiences.
On the Content Distribution side, we are very pleased about our renewal with DISH Network last month. Our fans spoke loudly and clearly to the distribution community and let them know they can’t live without our popular networks. We have no significant affiliate renewals in the near future. Meanwhile, our content and brands continue to thrive on a growing array of platforms, including Snapchat, Hulu, Amazon, Netflix, Sony PlayStation Vue, as well as DISH Network’s Sling.
On the advertising front, we have had a challenging year, but we are well positioned as we head into our next fiscal year. We have established our leadership in data-driven marketing solutions through Viacom Vantage and other related efforts. These products are very attractive and in great demand by ad partners who want to participate with our brands and take advantage of the advanced opportunities we can provide. We go into the ad Upfront market with a lot of upside opportunity.
At Viacom International Media Networks, led by Bob Bakish, our brands continue to grow worldwide, with great ratings success. We are well established in major international markets, including two very significant markets – the UK and India. We have a wealth of opportunity to launch new networks around the world and distribute our brands through advanced technologies and platforms. In the US and abroad, the opportunity in mobile is also significant. Our international networks business will be a very material contributor to Viacom’s success for many years to come.
It is no secret that Paramount has had a difficult year so far. In the short term, we look forward to our summer tent pole films, including Teenage Mutant Ninja Turtles: Out of the Shadows and Star Trek Beyond. More importantly, Paramount, led by Brad Grey, has ramped up production to ensure a robust slate, with a target of 15 motion pictures a year, including major franchise films every single year. Our animation initiative will also consistently produce one or two animated features annually. In addition, Paramount Television has launched very successfully with a number of new series in the pipeline, and will over time become a material contributor to Paramount’s success. We continue to explore a strategic partnership in Paramount that we believe will accelerate the studio’s growth well into the future and generate significant value for Viacom.
Finally, I want to take this opportunity to thank all of you for once again showing your commitment to giving back with record participation in Viacommunity Day last Friday. I am so proud of your continuing contribution to the communities we serve. It is among the many things that make Viacom unique and such a great place to work.
I know you are all working hard to keep us in the lead in this evolving world of entertainment. Those contributions, in every part of our company and in every country and territory we operate, are crucial to Viacom’s future success. Tom and I, and our entire leadership team—as well as all of the fans of our brands and programming—appreciate what you do every day.
Thanks and keep up the great work.
Warm regards,
Philippe

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