The new top executive at embattled Viacom Inc. is gearing up to work with a new board and explain to investors how the big entertainment conglomerate will move forward, according to a person familiar with the company’s plans.
Thomas E. Dooley has worked at Viacom for about three decades, but never as the company’s public face. He is expected to be named the company’s interim chief executive, as part of a deal that will hasten the departure of Philippe Dauman, the current executive chairman and CEO. He is leaving in the wake of a battle between Dauman and the company’s controlling shareholders, Sumner and Shari Redstone, each of whom has publicly expressed displeasure with the way Dauman has handled the company, which has had to contend with ratings declines at MTV and Comedy Central, the departure of several senior executives and a lackluster slate of films at its venerable Paramount unit.
“I have agreed to become interim President and CEO until the end of our fiscal year on September 30, by which time the Board, working with me, will make a decision on succession plan,” said Dooley in a memo sent to employees late Friday afternoon.
Even though there’s a new chief, Viacom’s old problems aren’t going away. Dooley is expected to start his tenure as CEO by consulting with a new board of directors that will grow to add five candidates desired by the Redstones. Dooley is said to be among the candidates for the permanent CEO position. Dauman would not leave until September 13, and would be given a chance to present plans to the board about a proposal he has supported to sell part of Paramount. Thomas May, chairman of Eversource Energy, could be named chairman after Dauman steps down from that role, and three current Viacom directors would leave the company after its next annual meeting, according to some terms of the deal, which has yet to be announced officially.
“Tom Dooley has great institutional knowledge and is a solid citizen and a great utility infielder,” said Mario Gabelli, who controls a large chunk of Viacom stocks through his company, Gamco Investors. “Some members of the board will stay on, new board members will come on, and then we will figure out what we are going to do,” said Gabelli, in an interview.
Dooley was named Viacom’s chief operating officer in 2010, but has also been the company’s CFO and served in other roles. He and Dauman have been longtime advisors to Sumner Redstone. They left the company in 2000 to start a private-equity firm after Viacom and CBS merged, but then returned in 2006 after the companies split apart.
“As many of you know, Viacom has been my work home for more than 35 years. I care deeply about our company and everyone here. I have worked with so many of you to launch powerful brands, create cultural touchstones and build a global entertainment content engine that is second to none,” Dooley said in the memo. “But I truly believe that Viacom’s greatest accomplishments are still ahead. It is a privilege and honor to be your CEO and I pledge to do everything I can to build on all your hard work and success.”
Dooley is known for his interests in the future of TV advertising, which has become so entwined with digital media due to consumers growing use of mobile devices and streaming video. He has been known to take meetings with some of Madison Avenue’s most influential media-buying executives, part of an effort to find new ways to sell Viacom’s ad inventory to big marketers.
Some Wall Streeters were skeptical that Dooley would be able to get much done. His interim term is expected to lapse in September, and there are no guarantees a new board will grant its full support. “It seems like Tom Dooley will be given an interim job as CEO, but we wonder how much of an agent of change can he be?” asked Michael Nathanson, an independent media-industry analyst, in a research note issued Friday. ” And how long will he stay in this seat?”
At the same time, said investors and analysts, Viacom’s woes need to be mopped up and the task is not one that can be accomplished in a few weeks. The company specializes in programming for young audiences, the very consumers most prone to testing out new technologies that lure viewers away from the traditional TV screen. “It was hit by the wave first. It’s an industry beachhead,” said Sal Muoio, an independent investor who runs SM Investors and owns what he estimated was between 250,000 and 300,000 shares of Viacom across two different classes of stock. “They were hit harder and faster than anybody else.” Muoio said he’d like to see Viacom follow through on some of its recent initiatives, which include investing in new programming, the creation of new kinds of ad packages that take digital viewing into account and paying more attention to Paramount’s pipeline of films.
“I’d personally like to see what he can do,” he said of Dooley, “and understand his own decision making.”