Viacom Has a Controversial New Chairman

Sumner Redstone takes another step back from media empire
By Newser Editors and Wire Services
Posted Feb 5, 2016 2:30 AM CST
Viacom Has a Controversial New Chairman
In this Oct. 3, 2011, photo, Sumner Redstone arrives at the premiere of "Footloose" in Los Angeles.   (Matt Sayles)

Aging media mogul Sumner Redstone stepped down as executive chairman of Viacom on Thursday and was replaced by CEO Philippe Dauman, a move that immediately disappointed investors. Although the decision mimicked a similar move at sister company CBS, Thursday's action has the potential to set off a future board fight. Redstone's daughter Shari said Wednesday she was against Dauman's promotion to the role because of his deep involvement in Redstone family affairs. Redstone is embroiled in a legal battle involving his ex-girlfriend and former caregiver Manuela Herzer over his health and mental capacity.

Mario Gabelli, whose Gabelli Asset Management Inc. owns 10% of Viacom's voting shares, told CNBC on Thursday that Dauman has "bought himself six more months or nine more months to indicate how he plays his cards." The comments reflect investor dissatisfaction with Viacom, whose shares have fallen by almost half since July 2014. Gabelli suggested putting the company or its movie studio, Paramount Pictures, up for sale. "What exactly is he doing in the mobile world and what is he doing to get into the hit business and what is he doing to get into the TV series, which are the hot areas?" Gabelli told CNBC. "Maybe now we'll get a different form of focus on what they're not doing." (More Viacom stories.)

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