×

Viacom, CBS Shares See Gains Amid Sumner Redstone Resignation Drama

Sumner Redstone’s resignation as chairman of CBS and Viacom sent the stocks of both media companies rising in pre-market trading Thursday although shares settled into more modest gains later in the day.

Shares of CBS closed Wednesday up 4% to $48.26 and were up 3.5% to $49.96 in pre-market trading on Thursday; Viacom’s stock closed 2% higher at $44.67 and were up 5.8% to $47.25 in pre-market trading on Thursday. CBS was up 3.7% to $49.98 as trading began Thursday, while Viacom spiked 5.5% to $47.12.

On an up and down day for the major indexes, CBS hovered between a 2%-3% gain to a slight decline. Viacom shares were up more than 3% but eased off later in the day to a less than 1% gain.

At CBS, Leslie Moonves was named chairman Wednesday and will continue to serve as the company’s president and CEO. Following Moonves’ appointment, Shari Redstone. Sumner’s daughter and a member of the Redstone family trust, released a statement that suggested she does not want to see Viacom CEO Philippe Dauman elevated to the chairman post. Dauman was voted chairman by the Viacom board Thursday morning — with Shari Redstone as the only dissenting vote from the 11-member board.

“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.

Dauman is a member of the family trust. The Viacom chief has been criticized in investment circles for his stewardship of the company. Viacom television properties such as MTV and Nickelodeon have struggled in the ratings and its film studio Paramount has ceded market share while making fewer pictures.

The 92-year old Redstone is known to be in failing health. He is embroiled in a legal case with a former companion, Manuela Herzer, who has criticized the way that his healthcare decisions are being made and raised questions about his mental capacity.

Analysts struggled to make sense of what the shift in leadership will mean for both CBS and Viacom and the broader media landscape.

Todd Juenger at Bernstein Research viewed the changes at CBS positively, but was pessimistic about Viacom’s longterm prospects, writing, “Regardless of who’s running the company, we don’t think anything can be done anymore to fend off inevitable decline of [Viacom’s] key businesses.”

But in a note entitled “change we can believe in,” Michael Nathanson of MoffettNathanson, saw the shift atop Viacom and CBS triggering a new era of mergers and marriages among the companies who control movie studios and television networks.

“Thinking about what this change for CBS and Viacom could mean for the broader media landscape, we believe that changes for the Redstone controlled empires could be the trigger for media company consolidation as each company will be forced to figure out if they are a buyer or seller in the coming months,” he wrote.

More TV

  • John Malone

    Liberty Global and Vodafone's $21.5 Billion Cable Deal Cleared by European Authorities

    The European Commission has approved Vodafone’s $21.5 billion deal for a raft of Liberty Global assets in Europe, with conditions attached. The commission had investigated the deal on the grounds that it could reduce competition and lead to higher prices for consumers. It concluded, however, that the deal could go ahead with conditions. These include [...]

  • Harlots

    ITV Takes Majority Stake in ‘Harlots’ Producer Monumental Television

    ITV Studios now has a controlling stake in Monumental Television, the production company that makes Hulu series “Harlots” and that was founded by Oscar-nominated film producers Alison Owen and Debra Hayward. ITV first bought into the company in 2015 and has upped its stake from 26% to 51%. Julian Bellamy, managing director of ITV Studios, [...]

  • Fremantle Owner RTL Group Forms New

    Fremantle Owner RTL Group Forms New Unscripted Formats Unit

    RTL has created a new unit that will work up unscripted formats exclusively for broadcasters and streaming services in the group. Fremantle, which is a major force in unscripted, is part of the RTL Group, and makes shows for RTL and third parties. The new Format Creation Group will develop ideas exclusively for in-house outlets. [...]

  • Pennyworth

    TV Review: 'Pennyworth'

    Is there a law that says there must always be a certain number of Batman properties on air at all times? Just as Christopher Nolan’s “Dark Knight” films germinated a fandom that seemed to demand not merely a Ben Affleck Batman but also two different Joker-based franchise, so too did the conclusion of Fox’s “Gotham” [...]

  • She's Gotta Have It Review

    'She's Gotta Have It' Canceled After Two Seasons at Netflix

    Netflix has canceled Spike Lee’s series adaptation of “She’s Gotta Have It.” The show ran for two seasons at the streamer. Lee is expected to shop the series to other outlets. The news comes less than two months after the release of Season 2 back in May. “Spike Lee is one of the greatest filmmakers [...]

  • David Benioff and D.B. Weiss

    'Game of Thrones' Showrunners Will No Longer Attend Comic-Con Panel

    “Game of Thrones” showrunners David Benioff and D.B. Weiss, along with some beloved “Thrones” actors, have canceled their scheduled appearances at San Diego International Comic-Con. Actors Iain Glen (Jorah Mormont), Nathalie Emmanuel (Missandei of Naath), director Miguel Sapochnik, and dual writer-producers Benioff and Weiss are no longer attending, HBO revealed in a revised panel lineup [...]

More From Our Brands

Access exclusive content