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Viacom CEO Defends His Job Amid Redstone’s Increased Attacks

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Viacom CEO Philippe Dauman

On Thursday, July 4, the New York media giant Viacom reported insipid results for the most recent quarter as the fight for control escalates between Viacom CEO Philippe Dauman and Redstone’s National Amusements Inc.

According to The Post, “When asked whether the feud was distracting him from the company’s day-to-day performance, Dauman was quick to play down concerns.

‘Obviously, it is somewhat of a distraction,’ Dauman acknowledged during a call with analysts, but said he was not ‘deterred from pursuing strategic initiatives,’ including his plan to sell a 49 percent stake in the Paramount film studio.”

National Amusements Inc. (NAI) jumped on the chance to blame Viacom’s management for the company’s unimpressive performance.

In a statement, NAI said, “Viacom’s overall performance continues to highlight the need for changes to leadership at the company. In recent years, the company’s senior management has overseen a steep erosion of revenue growth, earnings, operating performance, financial capacity and shareholder returns.”

Back in May, the feud began when Dauman was removed from the trust and the board of NAI, the de facto holding company for Viacom and CBS.

In June, the corporate drama heated up when NAI fired five Viacom directors, including Dauman, as lawsuits moved forward in three states.

Based on a decrease greater than 5o percent the company’s stock price over two-years compared to the industry median decline of 12 percent, NAI reasoned that Dauman should be ousted.

The Post reports, “The CEO is challenging NAI, arguing that 93-year-old Redstone lacked the mental capacity to orchestrate the boardroom coups at NAI and Viacom and that he’s being unduly influenced by his daughter, Shari Redstone. While Viacom’s profit tumbled 29 percent, the results weren’t as bad as some feared and the company managed to beat expectations for its top and bottom line.

Adjusted earnings per share of $1.05 topped the consensus estimate of $1.02. Revenue of $3.1 billion was up 2 percent from the year-earlier quarter, and exceeded the expects for $3 billion.”

However, according to Tony Wible, an analyst for Drexel Hamilton, the results are cold comfort.

In a note to investors, Wible wrote, “Any actions taken by Sumner Redstone (if upheld in court) would not quickly resolve Viacom’s secular headwinds unless Viacom was forced to merge with CBS.”

In its statement, NAI said, “Dauman is the third highest paid CEO in the United States and among the worst as measured by pay for performance. Including his pre‐negotiated `golden parachute,’ he stands to receive almost a half billion dollars for a tenure that has seen the marked decline of one of the nation’s greatest media companies.”

Mark Snyder

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