Viacom Chief Executive Philippe Dauman said a planned sale of a stake in Paramount Pictures has been delayed because of corporate infighting between the media giant and its controlling shareholder Sumner Redstone, who has signaled his objections to a sale of the movie and television studio.
Earlier this week, National Amusements Inc., the holding company that oversees Mr. Redstone’s almost 80% voting stakes in Viacom and CBS Corp., amended Viacom’s bylaws to require a unanimous board vote on any transaction involving Paramount. Mr. Redstone, who is 93 years old, and his daughter, Vice Chairman Shari Redstone, each have a vote on the board.
“Recent events have slowed down the process,” Mr. Dauman, who is also Viacom’s chairman, said at an investor conference Thursday morning.
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Viacom had originally said it expected to close a sale of a minority stake in Paramount by the end of June. Mr. Dauman again defended the move, saying the sale of a 49% stake in the studio would create value for the Redstone family and unlock $ 10 or more in value in Viacom’s stock price. Mr. Redstone has criticized the plan through his attorneys, who say he doesn’t want the company to sell what he considers to be Viacom’s crown jewel.
“It is strategically important to look at what is the best way to enhance and accelerate the growth of Paramount into the future,” Mr. Dauman said at the conference, which was hosted by Gabelli Co., the second-largest shareholder of Viacom.
Viacom shares are down 2% to $ 43.69 in midday trading Thursday. The stock has fallen 35% from a year ago.
Mr. Dauman and Viacom board member George Abrams are in a legal battle with Mr. Redstone and Ms. Redstone over their dismissal from the trust that will oversee the mogul’s media empire after he dies or is declared incapacitated. Messrs. Dauman and Abrams have said Mr. Redstone lacks the capacity to be making these decisions and that his daughter is behind the moves. Both Redstones have denied that charge.
Mr. Dauman declined to offer any specifics on potential suitors for Paramount, saying only that initially over 40 entities expressed interest in a deal and now the company is having “detailed discussions” with a “more limited group” of strategic global partners.
The studio has been struggling as of late, losing $ 282 million in the six months ended March 31 and revenue was down 9% to $ 1.27 billion. Recent movies including “Whiskey Tango Foxtrot” and “Teenage Mutant Ninja Turtles: Out of the Shadows” were disappointments at the box office.
“Paramount has had a tough year, it’s no secret,” Mr. Dauman said. The company has been “working to ensure that going forward Paramount will have a vibrant pipeline” and “many franchises that will play in the international marketplace,” including a new “Transformers” movie for the next three years, he said. Mr. Dauman also said there will also be a greater focus on animation and increasing television production.
Despite the soap opera surrounding Viacom’s future, Mr. Dauman wasn’t asked about his legal battle with Mr. Redstone and Ms. Redstone during the session, nor did the CEO offer any insights into how things are playing out and what it means potentially for the company and its shareholders. Mr. Redstone was quoted by his doctor last week criticizing Mr. Dauman’s performance as CEO.
All Mr. Dauman would say of the current corporate drama is, “the one takeaway I have is it is a lot more fun creating the content than being the content.”
Write to Joe Flint at [email protected]