Gabelli did not criticize the Viacom board but praised Viacom vice chair Shari Redstone for the “very articulate” case she made regarding governance of CBS and Viacom. “We hope management and the board will continue to act responsibly in addressing Viacom’s depressed stock price relative to its much higher asset value”.
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Dauman’s elevation was approved despite an intimation from Redstone’s daughter, Shari Redstone, that the new chairman should be someone with “an independent voice” and not a trustee of Sumner Redstone’s family trust. He will become chairman emeritus of Viacom – the same position he took at CBS on Wednesday.
Investment adviser SpringOwl, which holds a stake of undisclosed size in Viacom, had also opposed Dauman’s bid for the chairmanship, calling instead for an independent director.
Following CBS’ lead yesterday, Viacom had initially offered Shari the position of non-executive chairman, but she declined and will remain in her current role.
Mr. Dauman said, “I am honored to succeed my friend and long-time colleague Sumner in the role of Executive Chairman”.
“In choosing a successor to Sumner, the board considered the need for seasoned leadership in this time of unprecedented change, Philippe’s business experience and unparalleled knowledge of Viacom and his long-term vision for the company”, said Viacom board member William Schwartz in a statement. But the moment it was announced that CEO Philippe Dauman was replacing Redstone, the gains were wiped out. Viacom’s media networks, including Nickelodeon, Comedy Central, MTV, VH1, Spike, BET, CMT, TV Land, Nick at Nite, Nick Jr., Channel 5 (UK), Logo, Nicktoons, TeenNick and Paramount Channel, reach over 3.5 billion cumulative television subscribers worldwide.
The elder Redstone has long expressed a desire for the companies to be governed by professional managers, though he and his daughter have grown closer in recent months and she has been very involved in this week’s matters.
Dauman has challenged many of her accusations.
Court papers filed by an ex-girlfriend last fall described Redstone as a “living ghost” who is practically unable to make decisions for himself.
Dauman is also in charge of Redstone’s healthcare decisions, which Redstone’s former companion, Manuela Herzer, has objected to.
For CBS and Viacom, the more things change, the more they may stay the same.
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“He can not converse, except for brief grunted responses to directed questions and, even then, he is almost impossible to understand”, she claimed in her filing. The New York company has grappled with ratings declines at many of its top holdings, prompting Dauman to streamline and restructure the company while vowing to do more deals with advertisers based on metrics surrounding new viewing behaviors having to do with streaming video and mobile devices.
