Viacom CEO Doubts Paramount Sale Deal to Happen This Month9 Jun, 2016 By: Erik Gruenwedel
Viacom’s attempt to sell a minority 49% stake in Paramount Pictures — including Paramount Home Media Distribution — likely won’t be completed by the end of the month as previously announced, CEO Philippe Dauman told an investor group.
Speaking carefully June 9 at the Gabelli 8th annual movie and entertainment confab in New York, Dauman, who has become ensnarled in a power struggle with 93-year-old Sumner Redstone and his family-owned National Amusements Inc., which owns a 80% stake in Viacom, last month was fired from the theater company’s board as well as chairmanship position at Viacom.
Redstone, who has been involved in litigation regarding his mental competency to oversee the media giant, has reportedly voiced opposition to any Paramount sale. Indeed, NAI, which is co-headed by Redstone’s daughter Shari, just amended its bylaws requiring unanimous board approval for any asset sale.
“I’ve been involved with the company for 30 years, and this is certainly [a] unique [situation]. It’s a lot more fun being involved creating the content, than being the content,” Dauman said.
The CEO contends a Paramount stake sale could generate a $10-per-share spike in Viacom’s stock price. He said management continues to be very focused running the business.
“Paramount’s had a tough year. It’s no secret,” said Dauman, adding the studio remains on track to release 15 feature films this year — primarily around franchises such as "Transformers" and "Mission: Impossible," in addition to animation.
The executive called Sumner Redstone “a great friend,” saying he has been side-by-side with Redstone over the years on every corporate transaction, including the creation of Viacom.
Dauman said the Paramount sale initially involved about 40 interested parties and has been whittled down to a select group of global players with strategic value to the studio and Viacom. He said recent events have slowed down consummating a transaction.
“Our original target of reaching an agreement by the end of June is going to slip somewhat,” he said.
He said going forward any final deal would happen only after careful, thoughtful, deliberate and thorough collaboration with the board.
“It will only be presented if it is the kind of value I’m talking about.”
Separately, Dauman said foreign distribution and alternative channels such as proprietary over-the-top video could lessen the company’s reliance on third-party subscription streaming, including license deals with Netflix, Hulu and Amazon Prime Video.
Indeed, Viacom is the fourth-largest media company in the U.K., including broadcast, operating 23 networks around brands such as Nickelodeon, MTV, Comedy Central, Paramount, Spike and Vh1.
“Maybe SVOD will be a less important strategic source of revenue for us, even though right now we’re examining and discussing what we ought to do in the SVOD space.”