Viacom’s Embattled CEO Says Paramount Sale Will Proceed Despite War With Sumner Redstone

In his first public comments since his public battle with Viacom founder and chairman emeritus Sumner Redstone over the company's future, Viacom executive chairman and CEO Philippe Dauman said the company is staying focused on business and has already completed half of its upfront sales. Dauman, who spoke today at the Gabelli & Company Movie & Entertainment Conference in New York, said that he's not relishing his moment under the microscope. On May 20, the 92-year-old Redstone removed him and George Abrams from the seven-person trust that will control Viacom (and CBS Corp.) after his death, as well as from the board of National Amusements, which owns 80 percent of Viacom's shares. "I've been involved in company for 30 years, and this is certainly unique," said Dauman. "It's a lot more fun creating the content than being the content." Yet the company's business dealings continue despite the war. Dauman said Viacom's upfront sales are halfway done, and the company has secured price increases in the high single-digit range so far, with volume in the mid to high single digits. "We are well on our way to a strong upfront, which sets up a nice base for us," he said. "This upfront, our Viacom Vantage [data] product has been a very successful tool for us. That's why we have been able to write so much business early in the upfront. It bodes well for us." Dauman said Viacom is "doing everything in our power" to return to ad revenue growth for the next fiscal year and hopes that a robust marketplace and a ratings uptick among his networks "will combine to get us to a good place there." Of course, Viacom's advertising efforts are complicated by a report last week that Viacom ad sales chief Jeff Lucas will be headed to Snapchat. (Both companies said the report was inaccurate but stopped short of a issuing a full denial.) Days earlier, buyers told Adweek that as long as Lucas stayed in place, the public battle between Redstone and Dauman would not affect upfront negotiations. And while Redstone announced on Monday that he had changed Viacom's bylaws to require a unanimous vote by the board of directors to sell off all or part of Paramount, Dauman said he is proceeding with a deal to sell a 49 percent stake in the movie studio. "Paramount's had a tough year; it's no secret," he said. "It will bounce back over time." "Over 40 players" expressed interest in acquiring a Paramount stake, said Dauman, and talks have progressed to "more detailed discussions with a limited group." Dauman said he is looking for a "major global, strategic" partner to acquire 49 percent of Paramount. However, he said, "recent events have slowed down the process"—i.e., Redstone's actions— meaning that the original target of making a deal by the end of June "is going to slip." "We are going to proceed deliberately, thoughtfully and thoroughly with our board," said Dauman, who added that the sale would benefit the Redstone family—as well as Gabelli, who held the investor conference, and is Viacom's No. 2 shareholder—as it would unlock a value of more than $10 per Viacom share. The eventual investor will also be "an interesting partner" for the entire Viacom company over time, he added. Even as they are feuding publicly, Dauman praised Redstone, calling him "my great friend" and noting that they worked "side by side" for 30 years in every Viacom transaction. He has said previously that Redstone is being manipulated by his daughter, Shari, the vice chairman of Viacom and CBS Corp., and president of National Amusements. (Redstone and Shari both deny that allegation.) As the power struggle rages on, Viacom remains "very focused on the business," said Dauman. "We think we have a lot of opportunity ahead. We're optimistic about it."

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Viacom’s Embattled CEO Says Paramount Sale Will Proceed Despite War With Sumner Redstone

And that upfront sales are strong

Jason Lynch

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Jason Lynch