Viacom’s stock was sharply down 5.1% in early trading to $41.31.
Over the weekend, the company said Philippe Dauman, president/CEO would be departing the company with COO Tom Dooley taking over as interim president/chief executive officer starting September 30.
Also over the weekend, Viacom’s somewhat troubled theatrical film unit, Paramount Pictures, got dinged: The expensive new update of “Ben-Hur,” costing over $100 million, opened its weekend with a paltry $11.5 million in U.S. box office results. Helping out Viacom: The movie was a co-produced with Metro-Goldwyn-Mayer Pictures, with MGM picking up about 80% of the budget.
One major bone of contention with National Amusements, Viacom’s majority owner, has been Dauman desired to sell on a 49% minority stake in Paramount Pictures. New CEO Dooley will continue pursue that plan, according to reports.
Media analysts have long anticipated a senior executive change, due to a highly public battle between Viacom’s leadership and National Amusements.
Dauman has been at the helm when Viacom has seen its stock drop by nearly 50% over the last two years -- a period that has seen lackluster results among its TV networks, including under-performing advertising revenue.
Barton Crockett, media analyst for FBR & Co., believes major changes are still coming to Viacom: “We, in particular, see potential for Viacom to be acquired and/or broken up, and costs cut. The probability of this happening near term will swing to a large degree, we believe, on resolution of the leadership vacuum created by this transition.”
Crockett muses CBS, another company controlled by National Amusements, could be player here: “CBS, we think, could be a buyer, keeping some assets, divesting others, and cutting costs -- and putting a proven talent at picking TV shows in charge of the combined entity.”