Viacom Shareholders Want New Management

Shari Redstone Says Viacom Shareholders Want New Management

Shari Redstone. 

Shari Redstone, the daughter of media billionaire Sumner Redstone, said Viacom Inc. shareholders want new management -- the strongest indication yet that the family controlling the company may seek to oust Chief Executive Officer Philippe Dauman.

Shari Redstone, who is vice chair of Viacom, said in a statement issued Tuesday by a spokeswoman that she has no desire to manage the company or become chairman. Her remarks were in response to comments Monday from lead director Frederic Salerno, who said Viacom’s board members would fight any attempt to remove them.

National Amusements Inc., owned by Redstone and his daughter, holds an 80 percent voting interest in Viacom. Wielding that stake, Redstone, 93, could call a special meeting of the media company’s directors and replace the board, according to billionaire Mario Gabelli, the second-largest owner of Viacom voting shares. Any effort to do so is likely to be challenged in court by Viacom’s board, he said in an interview.

“This is basically legal entanglement,” Gabelli said.
Shares of Viacom had fallen 40 percent over the past year before rallying in recent days as Redstone began to reassert his control over the company, the owner of Comedy Central, Nickelodeon and Paramount Pictures. Redstone also controls CBS Corp.

“The shareholders whom Salerno and the other independent directors purport to represent have already spoken -- they want new management ‎at the top and strong directors with independent oversight on the board,” Shari Redstone said through her spokeswoman. “The board should spend less time focusing on Shari and how to maintain their own directorships, and more time on a long-term strategy to increase the value for shareholders and to develop a specific long-term plan to turn around the current state of Viacom.”
Gabelli reiterated comments he made earlier this year that Dauman had “six to nine months” to boost the stock price. Viacom’s CEO has achieved one milestone, renewing a programming with Dish Network Corp., one of the largest U.S. pay-TV companies, the investor said.
Next, Gabelli added, Dauman has got to “get cash in and get into the digital world,” likely through a joint venture between Paramount and a technology partner.
Salerno, in his statement Monday, said Viacom is still considering selling a minority stake in Paramount, yet acknowledged Redstone’s opposition to a deal could hinder those efforts.

“We hope that the fight over control does not impair or completely undermine this potential step with Paramount,” Salerno said.

source: Bloomberg