Just 48 hours ago, Sumner Redstone was the executive chairman of both CBS Corp. and Viacom. But now, he has been replaced at both companies.
Today, Viacom announced that its president and CEO Philippe Dauman had been named executive chairman, replacing the ailing Redstone, who is 92. Yesterday, CBS Corp. appointed Les Moonves as its chairman, after Redstone had resigned on Feb. 2.
Redstone, who vowed never to retire (even going as far to declare that he would never die), is now chairman emeritus at both companies.
The news comes two weeks after Viacom and CBS were sued by a shareholder, who questioned Redstone's mental competence—which led investors to wonder whether Redstone should continue running both companies.
"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. "We believe his becoming executive chairman is in the best interests of the company and all shareholders."
Dauman's appointment had been challenged by Redstone's daughter, Shari, who is vice chair of CBS and Viacom. She said in a statement yesterday that while she fully supported Moonves as CBS chairman, "it is my firm belief that whoever may succeed my father as chair at each company should be someone who is not a trustee of my father's trust or otherwise intertwined in Redstone family matters, but rather a leader with an independent voice." That was a slap at Dauman, who was given authority last October to make healthcare decisions for Redstone if he should become incapacitated.
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.
Shari was more muted in her comments today, releasing only a terse statement after the board made its decision. "Shari is going to continue to advocate for what she believes to be in the best interests of Viacom shareholders," her rep said.
"I am honored to succeed my friend and long-time colleague Sumner in the role of executive chairman. His steadfast belief in our company and the power of entertainment will always be an inspiration for me and I look forward to carrying forward his leadership role as a champion for all shareholders. I am gratified by the continued confidence and support of the board of directors and all of my colleagues at Viacom whose creativity and unrelenting hard work is evident in our recent successes across the company," Dauman said in a statement.
Dauman, who joined Viacom in 1993, was named president and CEO of the company in 2006. He joined Viacom's board in 1987.
While CBS has enjoyed a lengthy period of success, and is preparing to air Super Bowl 50 to potentially the largest TV audience ever, Viacom is in a more precarious position, as the company attempts to reverse declines at its cable networks, which include MTV, Nickelodeon and TV Land.
It's likely the corporate changes are the first of many for the companies, Michael Nathanson of MoffettNathanson Research said in a report late Wednesday. "Thinking about what this change for CBS and Viacom could mean for the broader media landscape, we believe that changes for the Redstone controlled empires could be the trigger for media company consolidation as each company will be forced to figure out if they are a buyer or seller in the coming months," Nathanson wrote.