Viacom CEO Philippe Dauman has agreed to resign from his position in a settlement with controlling shareholder Sumner Redstone and his daughter Shari Redstone.
Paul Bond and Georg Szalai of The Hollywood Reporter had the news:
Philippe Dauman, the son of a famous Life magazine photographer who later climbed up the corporate ladder from his start as a financial lawyer, is out as chief executive of Viacom. He ruled over the media conglomerate behind MTV, Nickelodeon and Paramount Pictures since being named to the top post in 2006. He will continue as non-executive chairman until Sept. 13, according to the settlement reached Saturday.
As part of the settlement, Dauman will be succeeded by Thomas Dooley, who will serve as interim through Sept. 30, 2016. Viacom also created an expanded board of governors, which includes Kenneth Lerer, Thomas May, Judith McHale, Ron Nelson and Nicole Seligman.
The ouster, not unexpected in both Hollywood or Wall Street circles, still marks a dramatic turn of events for a powerhouse entertainment executive that Redstone once publicly called “the wisest man” he’s ever known. It also brings to fore how Viacom will slug its way through this regime change and get back on track to reinvigorating sagging ratings and winning back investors.
Anna Nicolaou of the Financial Times reports that issues remain for Viacom:
However, the turmoil is far from over for the Redstones. Ms Redstone, vice-chairman of CBS and Viacom, must turnround the Viacom fortunes after Mr Dauman oversaw a 50 per cent fall in Viacom shares over the past two years.
The change in leadership also renews questions about the possibility of Viacom combining with CBS after its split a decade ago. Some investors have pushed for a merger of the two companies to unlock cost synergies, although it’s unclear whether CBS would be keen to combine, analysts say.
Viacom had surfed the explosion of cable television and the rise of the MTV generation to become a media powerhouse in the 1990s. However ratings at its cable channels have plunged in recent years amid the industry-wide shift to digital streaming.
Along with revamping programming at its cable channels, Viacom’s new leadership must decide the fate of Paramount Pictures.
Meg James of the Los Angeles Times reports that the Redstones have settled their differences:
A confluence of factors gave Shari Redstone an opening to restore her relationship with her father and mount the battle to regain control of Viacom.
Nearly a year ago, after a dust-up with live-in girlfriend Sydney Holland, Sumner Redstone put another longtime companion, Manuela Herzer, in charge of his daily schedule.
In mid-October, Redstone decided to also have Herzer removed from his hilltop mansion in Beverly Park and cut her out of his will. According to court testimony, Redstone believed that Herzer stole money from him — a charge that Herzer denies.
Herzer sued in November, and lurid details about Redstone’s obsession with steak and sex, and his strained relationship with his daughter became front-page news. After Herzer left, Shari Redstone was able to return to her father’s life and home. Around that time, Sumner Redstone began watching his favorite channel, CNBC, again and began receiving frequent updates on Viacom and its struggles.
But the contentious lawsuit brought by Herzer weighed heavily on the ailing mogul, who can barely speak because his throat muscles have all but given out, a result, according to some doctors, of the damage he sustained when he was badly burned in a hotel fire in Boston in 1979. Herzer claimed that Redstone was incompetent and “a living ghost.” His lawyers tried for months to avoid having him testify in the case, but in the end it was Redstone’s forceful testimony that persuaded a Los Angeles judge to dismiss Herzer’s lawsuit.
