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Viacom & National Amusements Agree to Leadership Changes
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Viacom Inc. has finally reached an agreement with National Amusements Inc. (NAI), the company which holds majority of the controlling shares in Viacom.
Terms of the Agreement
Per the agreement, the current Chief Executive Officer (CEO) and President, Philippe Dauman will resign with immediate effect. For an interim period upto Sep 30, 2016, Dauman will be succeeded by Thomas Dooley, the current Chief Operating Officer of Viacom. Meanwhile, the board of directors will finalize the company’s future leadership structure. The board will also be expanded to include five additional directors who were elected by NAI in June this year. Additionally, all lawsuits between NAI and Viacom will be terminated.
Dauman will continue as a Non-Executive Chairman at Viacom till Sep 13 this year, post which a new Chairman will be appointed. Meanwhile, Sumner Redstone and his daughter Shari Redstone will continue to hold the positions of Chairman Emeritus and Non-execute vice chair, respectively. After the departure of Dauman, the board will comprise 15 directors.
Before leaving Viacom, Dauman will be presenting a proposal to the expanded board to consider selling a minority stake in the company’s Paramount Pictures film unit. This proposal would require to be unanimously approved by the Board for any decision. Paramount has been struggling with to remain profitable and after media reports of Ben Hur being a box-office flop, the unit’s revenues are expected to take a further hit.
Why was the Change Imperative?
The current board of directors unanimously approved the leadership change after months of indecisiveness. The differences mainly arose with the President of NAI, Sumner Redstone and Shari Redstone, calling for a change in the company’s leadership along with a change in the company’s board. Viacom has been consistently underperforming and as per some media reports, the company has also seen top level management exits due to Dauman. The company also posted unflattering third-quarter 2016 results following which NAI called for Dauman to step down due to concerns over the company’s future prospects.
Now that Viacom, a Zacks Rank #5 (Strong Sell) stock, has finally reached an agreement over its corporate management issue, investors can breathe a sigh of relief. Meanwhile, the company has been facing strong competition from media giants like The Walt Disney Co. (DIS - Free Report) , Discovery Communications Inc. and Time Warner Inc. . As the media industry goes through rapid changes with the increasing popularity of web-based content, it is to be seen how the new leadership structure helps the company brave the challenging environment.
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Viacom & National Amusements Agree to Leadership Changes
Viacom Inc. has finally reached an agreement with National Amusements Inc. (NAI), the company which holds majority of the controlling shares in Viacom.
Terms of the Agreement
Per the agreement, the current Chief Executive Officer (CEO) and President, Philippe Dauman will resign with immediate effect. For an interim period upto Sep 30, 2016, Dauman will be succeeded by Thomas Dooley, the current Chief Operating Officer of Viacom. Meanwhile, the board of directors will finalize the company’s future leadership structure. The board will also be expanded to include five additional directors who were elected by NAI in June this year. Additionally, all lawsuits between NAI and Viacom will be terminated.
Dauman will continue as a Non-Executive Chairman at Viacom till Sep 13 this year, post which a new Chairman will be appointed. Meanwhile, Sumner Redstone and his daughter Shari Redstone will continue to hold the positions of Chairman Emeritus and Non-execute vice chair, respectively. After the departure of Dauman, the board will comprise 15 directors.
Before leaving Viacom, Dauman will be presenting a proposal to the expanded board to consider selling a minority stake in the company’s Paramount Pictures film unit. This proposal would require to be unanimously approved by the Board for any decision. Paramount has been struggling with to remain profitable and after media reports of Ben Hur being a box-office flop, the unit’s revenues are expected to take a further hit.
Why was the Change Imperative?
The current board of directors unanimously approved the leadership change after months of indecisiveness. The differences mainly arose with the President of NAI, Sumner Redstone and Shari Redstone, calling for a change in the company’s leadership along with a change in the company’s board. Viacom has been consistently underperforming and as per some media reports, the company has also seen top level management exits due to Dauman. The company also posted unflattering third-quarter 2016 results following which NAI called for Dauman to step down due to concerns over the company’s future prospects.
Now that Viacom, a Zacks Rank #5 (Strong Sell) stock, has finally reached an agreement over its corporate management issue, investors can breathe a sigh of relief. Meanwhile, the company has been facing strong competition from media giants like The Walt Disney Co. (DIS - Free Report) , Discovery Communications Inc. and Time Warner Inc. . As the media industry goes through rapid changes with the increasing popularity of web-based content, it is to be seen how the new leadership structure helps the company brave the challenging environment.
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