Sumner Redstone Fires Five Viacom Board Members, Including CEO Philippe Dauman16 Jun, 2016 By: Erik Gruenwedel
Power struggles at Viacom resurfaced June 16 when 93-year-old chairman Sumner Redstone and his vice chairwoman daughter, Shari Redstone, moved to oust five board members, including CEO Philippe Dauman.
The father-daughter duo, whose family-owned National Amusements Inc. holds majority stakes in Viacom and CBS Corp., replaced the ousted members with executives not related to the Redstone family or National Amusements.
They include Kenneth Lerer with Lerer Hippeau Ventures and BuzzFeed; Thomas May, chairman of Eversource Energy; Judith McHale, CEO of Cane Investments; Ronald Nelson, executive chairman of Avis Budget Group; and Nicole Seligman, former president of Sony Entertainment.
“The newly elected directors have deep experience in corporate governance of public companies and will provide valuable expertise to Viacom in the areas of media, entertainment and technology,” Viacom said in a statement as reported by the Los Angeles Times.
Dauman, who is attempting to sell a minority stake in Paramount Pictures, which includes Paramount Home Media Distribution, was removed, along with ousted Viacom board member George Abrams, from the board of National Amusements earlier this year.
Six of Viacom’s other original board members remain, including COO Tom Dooley, who could become CEO.
BTIG Research analyst Richard Greenfield hailed the move.
“We believe investors have lost confidence in Philippe Dauman and the board, as fundamentals and the company’s strategic positioning/outlook darkened,” Greenfield wrote in a note. “Unsurprisingly, in the last few weeks investor sentiment surrounding Viacom has begun to improve modestly as the Sumner Redstone saga has investors hopeful that change to the board and management could happen.”
Indeed, Dauman and Abrams didn’t help their cause when they filed a lawsuit to block their ouster from National Amusements’ board. Sumner Redstone last month indicated a desire to terminate Dauman.
Greenfield contends Viacom’s “precarious distribution situation” in light of emerging over-the-top video distributors mandate bring back together Viacom and CBS — the latter headed by Les Moonves.
Viacom and CBS split into separate publicly traded companies in 2006.
Greenfield expects the consolidation could trigger third-party acquisition interest, which could be a win for shareholders.
“Barring a great bid for the whole of Viacom, we believe National Amusements knows its best strategic [tactic] is to move quickly to recombine Viacom and CBS.”
Regardless, Eric Jackson, managing director of SpringOwl Asset Management, said today’s action underscores Sumner Redstone’s enduring dominant shareholder status at Viacom.
“The controlling shareholder can make changes to management and the board of directors as he or she sees fit,” Jackson told the Times.