Viacom chairman-CEO Philippe Dauman told investors Thursday that plans to sell a minority stake in Paramount Pictures are on track with an agreement expected by the end of June.
Dauman reiterated that Viacom’s focus is finding a partner that can benefit Paramount on the international front or with technological innovation. Such a deal “will provide important benefits for Viacom,” he said during Viacom’s quarterly earnings conference call.
But he also acknowledged that results at Paramount for Viacom’s fiscal second quarter were “disappointing” based on the under-performance at the box office of “Zoolander 2” and “Whiskey Tango Foxtrot.”
Viacom previously announced it would seek a strategic partner for Paramount in February. But amid the larger drama surrounding Viacom controlling shareholder Sumner Redstone’s physical and mental status, reports emerged that Redstone was against the plan to sale a stake in the studio that his empire acquired in 1994. The move to bring in an investor in Paramount came after pressure from shareholders, who called publicly on Dauman to take steps to re-invigorate the studio.
Paramount has been valued at about $4 billion. Dauman said proceeds from the sale would be used to pay down debt, “to bring our leverage ratio about to where we want it to be for investment grade purposes.”
Dauman also touted the growth of Paramount’s TV production arm, which he called a “start-up” operation. The unit has more than a dozen series heading for various outlets, some in the Viacom family (Spike TV, TV Land, Epix) and outside nets including Netflix, HBO, TNT and Fox. The expansion of TV production asset is a plus as the company seeks investors in Paramount, he said.
“We’re very happy with the rapid liftoff,” Dauman said. “We think as series get on the air and into multiple seasons it will be a great leg and an important driver of long-term performance for Paramount.”