Viacom Restructures Cable Networks, Layoffs Coming

Viacom's major structural changes have come as a result of recent challenges at its networks, including declining ratings and weak advertising results.

“We have been been in a negative growth situation with advertising domestically,” said Philippe Dauman, president/chief executive officer of Viacom, speaking on Monday at the Deutsche Bank Annual Media, Internet & Telecom conference.

For its cable networks, Viacom will now structure its major networks under two main network groups. One is for media and entertainment featuring MTV and Comedy Central, and a second for kids and family featuring Nickelodeon, TV Land, and Nick At Nite. BET will be run separately.

As part of that restructuring, reports say that Viacom will make major layoffs, including 9% of its MTV staff, according to one report. Dauman says this will mean $250 million in annualized saving at the company.

In discussions about the current TV advertising market, he adds that “the scatter market is strong. [But] we have a supply of ratings issue. I’m seeing signs of improvement in that.” Advertising categories that continue to be healthy include family movies; mobile phone services/devices, and youth-oriented automotives.

Dauman downplayed rumors of possible mergers: “We have no intention of buying CBS or buying any other other big company. We have lot to do to grow organically.” That said, should “there be big changes in the landscape,” Dauman said the company would review the situation.

Going forward, Dauman believes some of its recent ad efforts -- Viacom Velocity, where the company provides its creative teams for the marketers; and Viacom Echo, which providers advance data on viewership -- will add value to the company.

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