The New York owner of MTV, Comedy Central and Nickelodeon made that very suggestion in a Friday announcement stating that a mix of under-performance at its film and TV operations and recent efforts by its controlling shareholder to shake up its executive structure has dampened its financial outlook.
Viacom said ad sales in its fiscal quarter expected to end June 30 were expected to be down 4%, and noted its third-quarter performance would be hurt by its poor results for “Teenage Mutant Ninja Turtles: Out of the Shadows,” a release from its Paramount studio, as well as a delay in completing what it said would have been a “significant” agreement with a subscription-video-on-demand company.
The company said it expects to report adjusted diluted earnings per share of between $1.00 to $1.05 for its 2016 third quarter. Analysts has expected earnings to come in at around $1.38 a share. Shares were off 1.15% in pre-market trading.
Viacom “previously expected to complete a significant SVOD agreement in the quarter, but said the recent and highly public governance controversy negatively impacted the timing and its ability to achieve an optimal outcome with partners,” according to a Friday-morning statement.
In making the announcement, Viacom is suggesting that recent efforts by Sumner Redstone and Shari Redstone to oust Viacom CEO Philippe Dauman and other members of its board of directors is crimping its ability to navigate out of the tough spot in which it has found itself. Viacom has suffered from ratings shortfalls at Comedy Central and MTV, and has put in new senior executives at both units to attempt to execute better performance.
The action that has really taken up investors’ bandwidth, however, are a series of back-and-forth announcements that pit Sumner Redstone and his daughter Shari against Viacom management. Sumner Redstone has said in press releases that he no longer trusts Dauman and is angry about an attempt Viacom is making to sell a piece of the Paramount studio to an outside investor. Viacom executives have countered that they think Redstone, said to be in frail health, is being manipulated by his daughter, who denies that charge.
Dauman and George Abrams, another board member, have been removed from the trust that would govern National Amusements Inc, the company through which the Redstones control Viacom Inc. and CBS Corp., in the event of the elder Redstone’s death or if he becomes incapacitated.