The battle over 93-year-old Sumner Redstone’s $40 billion media empire looks to be coming to an end.
Mr Redstone and the Viacom board are negotiating a settlement that would see chief executive Philippe Dauman step down, marking a victory for the Redstones after a fight lasting several months for control of the group that owns MTV and Paramount Pictures.
Mr Dauman will exit with a $72 million severance package, according to two people familiar with the talks, under a deal that is being finalised and is expected to be announced soon. As part of the deal, Thomas Dooley, Viacom’s chief operating officer, would become interim chief executive until the end of September as the board makes succession plans.
Mr Redstone recently removed Mr Dauman from the board of a family trust that will control his holdings when he dies, and replaced some directors on the Viacom board. Mr Dauman challenged the removal in court, accusing Shari Redstone, Mr Redstone’s daughter, of manipulating her ailing father. As part of the settlement, legal cases under way in Massachusetts, Delaware and California would be dropped.
Under Mr Dauman, Viacom’s shares have dipped as the group grappled with the shift to digital streaming that hit ratings at its cable channels including MTV, Nickelodeon and Comedy Central.
Mr Dauman has struggled to improve Viacom's performance, with the Redstones arguing that he has failed to adapt to changing viewer habits. This month, the company reported that profits dropped by 29 per cent in the third quarter, marred by the box-office flop of Paramount's latest Teenage Mutant Ninja Turtles film and lower advertising revenues at its cable channels.
The battle has created an “overhang” for the company, according to Mr Dauman. National Amusements, the Redstone-owned vehicle that holds a majority of Viacom voting shares, fired back, saying the company’s performance “continues to highlight the need for changes to leadership”.
Mr Dauman, who has served as chief executive since 2006, was a close friend and confidante of Mr Redstone for three decades.
Mr Redstone abruptly ousted him from the family trust in May, moving to drop him and four other directors from Viacom’s board a month later.
Mr Dauman has, along with Frederic Salerno, Viacom’s lead independent director, accused Ms Redstone of taking advantage of her father’s poor health in a bid to take control.
– (Copyright The Financial Times Limited 2016)
