Related: Viacom Cuts Dividend By 50% to 20 Cents
Viacom announced that interim CEO Tom Dooley will be leaving the company.
Dooley replaced Philippe Dauman, who was forced out of the company after a power struggle with the Redstone family—who controls a majority voting interest in the troubled media company—which owns MTV, Nickelodeon and other cable networks.
Dooley will serve through Nov. 15 to facilitate an “orderly transition,” the company said, but no successor was named.
The Redstones, led by Sumner Redstone and his daughter Shari Redstone, added members to the board, which met last week.
"I have been energized by the passion, commitment and ideas put forward by our newly-expanded board and members of Viacom's senior team,” said Shari Redstone, vice chair of the board. “While there is more work to do, the actions announced today are an important first step towards realizing the value of Viacom's exceptional assets and positioning the Company for the future. I also want to thank Tom Dooley for his service and his willingness to stay on through this transition period."
Viacom’s cable networks have been losing ratings and ad revenue as young viewers move online and use digital devices in search of entertainment. Viacom management under Dauman was criticized for an inability to retain talent needed to produce hit shows and for spending the company’s capital on stock buybacks and dividends for shareholders rather than invest in businesses that could grow in the new media environment.
When Dooley was named interim CEO, while he was familiar with the company, he was also seen as Dauman’s right hand man. It was also not clear if he could be the kind of inspirational leader the company needs.
"While this was a difficult decision for me, I have great admiration for our new Board and I feel that they will be best able to execute on their vision for the Company in the hands of a new President and CEO,” said Dooley. “I am certain that the Board will make the most of the Company's extraordinary potential. I want to thank Sumner, Shari and the members of the Board for the opportunities they have provided me. I look forward to working with them to deliver Viacom into the hands of new leadership in excellent shape and poised for a remarkable future."
The board also announced that:
- Viacom's quarterly dividend will be adjusted to 20 cents per share, and the company will shortly access debt markets in order to improve liquidity and financial flexibility;
- The company expects that adjusted diluted earnings per share for the fiscal fourth quarter will be in the range of $0.65 to $0.70. This revision accounts for a programming impairment charge of $115 million in its filmed entertainment segment in its fiscal fourth quarter related to the expected performance of an unreleased film; reported earnings per share are expected to be $0.55 to $0.60, primarily reflecting severance expenses incurred as a result of the settlement agreement.
- The company has ended the process of seeking a minority investor in Paramount Pictures at this time, in order to consider all options available to the company.
"The Board believes Viacom has a product strategy that is among the best in the industry. The steps we are taking will make the Company financially stronger and more flexible and will position Viacom to take advantage of future growth opportunities," said Tom May, chairman of the board. "I am pleased that Tom Dooley has agreed to stay on as Interim President and CEO through November 15 to allow the Board to conduct an orderly succession process.''
