Viacom’s Earnings Plunge After Battle for Control


Viacom named Robert M. Bakish its new interim chief executive last week.

Jeon Heon-Kyun/European Pressphoto Agency

After months of tumult in Viacom’s leadership, it came as little surprise that the company had a bad year.

The entertainment company reported on Wednesday a 25 percent plunge in profit and a 6 percent drop in revenue for its fiscal year, which ended Sept. 30.

The results put stark numbers on what was a difficult period for Viacom, which included a fierce fight for control that led to the ousting of the company’s chief executive. Now, the company’s board is considering a proposal from the Redstone family to reunite with CBS.

The ailing 93-year-old media mogul Sumner M. Redstone and his daughter, Shari Redstone, control about 80 percent of the voting shares in Viacom and CBS through National Amusements, the private theater chain company.

In a conference call on Wednesday, Viacom executives said that the company was continuing to operate for the long term, even as its board continued to work with its advisers to explore a combination with CBS.

“With new leadership across the company, continued investments in new content, technologies and targeted acquisitions, and an expanded board of directors, I have great confidence in Viacom’s next phase, as the company explores the exciting possibilities ahead,” Thomas E. Dooley, Viacom’s outgoing interim chief, said in a statement.

Net earnings from continuing operations attributable to Viacom were $1.4 billion in the fiscal year, down from $1.9 billion the previous year. In the most recent quarter, Viacom’s profit declined 71 percent to $252 million.

Inside the Battle for Sumner Redstone’s $40 Billion Media Empire

War has spread across the empire of Sumner Redstone, one of the entertainment industry’s most tenacious titans. At stake are the fortunes of his family and confidants, as well as the fate of Viacom and CBS.

Viacom is the owner of networks including MTV, Comedy Central and Nickelodeon, as well as the Paramount Pictures film and TV studio. The TV and film sides of the business both returned dismal results; total revenue for the year was down to $12.5 billion, from $13.3 billion the previous year. That trend accelerated in the most recent quarter, when total revenue tumbled 15 percent.

In the conference call, Viacom executives did not address the results of the presidential election or how they would affect the business.

“If Viacom purposely scheduled their E.P.S. report the morning after the election, hoping their financial results would get lost in other news, they got their wish,” Todd Juenger, an analyst with Sanford C. Bernstein & Company, said in a research note. “Given the dislocations across the markets that will begin today and last into the future, we doubt many of you are in the mood to read about Viacom results, any more than we are in a mood to write about them.”

The results included a pretax charge of $206 million for the quarter related to exit packages for Viacom’s ousted leadership team. That included $138 million for separation payments and $68 million for the acceleration of equity-based compensation.

Philippe P. Dauman, Viacom’s former chief executive, left the company this summer with a total severance package valued at about $72 million. Mr. Dooley, a longstanding partner to Mr. Dauman who stepped in to lead the company after his ouster, is leaving the company next week. He stands to receive $62.4 million upon his departure.

Last week, the company named Robert M. Bakish as its new interim chief executive. Mr. Bakish, who started at Viacom in 1997, most recently served as chief executive of the company’s international unit.

Mr. Bakish introduced himself to investors on Wednesday, outlining how his unit had delivered strong results even as the rest of Viacom had faced challenges.

Viacom’s international business has more than 200 TV channels that reach a total of 3.9 billion subscribers. During his tenure, the company’s international sales have doubled.

Correction: November 9, 2016

An earlier version of this article misstated the year Robert M. Bakish started at Viacom. It was 1997, not 1987.

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9 November 2016 | 9:50 pm – Source:


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