Viacom sales, profit fall amid executive change

Feb 09, 2016, 12:55 PM EST
Source: Ryan Janek Wolowski/flickr

Viacom's sales and profit fell amid executive change, with the new CEO lashing out at critics.

Reuters reports:

Viacom Inc (VIAB.O), the owner of MTV, Comedy Central, Nickelodeon and movie studio Paramount, reported a steeper-than-expected drop in quarterly revenue, hurt by lower advertising sales in the United States and few hit movie releases in the period, sending its shares down 11.3 percent. Chief Executive Philippe Dauman, who replaced 92-year-old majority-owner Sumner Redstone as executive chairman last week, hit back at critics suggesting he may not be able to turn around the media company's fortunes. "Our outlook and the facts have been distorted and obscured by the naysayers, self-interested critics and publicity seekers," Dauman said on a call with analysts. He said Redstone and he were "in harmony" about the company's strategy. Redstone, who is now chairman emeritus, was on the call, according to Viacom, but did not speak. Redstone stepped aside as executive chairman at Viacom and his other large majority holding CBS Corp (CBS.N) last week, amid doubts about his mental fitness. Redstone's daughter Shari publicly opposed Dauman's appointment to her father's post. 

Last week, Mario Gabelli, the second-largest owner of voting shares in Viacom after the Redstone family, said Dauman has six to nine months to turn the company around. "Philippe has to deliver," Gabelli told Reuters last week, adding that he wants to see a more aggressive digital and mobile strategy from Viacom. In that direction, the company announced a deal with video messaging app provider Snapchat on Tuesday that gives Viacom exclusive rights to sell advertising around Snapchat's content.

CNN Money writes:

Investors remain concerned about whether Viacom will be able to strike a new deal with Dish Network, one of its biggest distributors. Dauman said Tuesday that the two companies have signed a short-term extension while they continue to negotiate. If Dish were to drop Viacom, deeming its channels unnecessary to have, it would send a chill through the TV business. Declining revenue and earnings have dogged Viacom for quite some time. Sales has fallen for the previous four years and profit has been down each of the last two years.

Other media conglomerates are facing similar challenges as consumers watch more and more TV online, but Viacom has generally underperformed its competitive set. Redstone also recently gave up his executive chairman title at CBS (CBS), a company he spun out of Viacom ten years ago. But CBS hasn't been struggling the way Viacom has. It has a diverse slate of hit shows and just televised the Super Bowl, which scored record $5 million prices for 30-second ads and was the third highest rated TV show in American history.