Viacom Drops With Freston Ouster
By: David Utter
CEO Tom Freston appears to have failed to meet Sumner Redstone's Internet vision for Viacom, resulting in Freston's departure from the company.
When Viacom (VIA.B) separated its online and broadcast properties into Viacom and CBS, it looked like plodding Old Media CBS (CBS.A) and its CEO, Leslie Moonves, would be inhaling the dust left in Freston's and Viacom's wake. Instead, it's Moonves and CBS garnering headlines, and Freston quitting his president and CEO duties at Viacom.
Freston's rapid unseating and replacement by Philippe Dauman, who has close ties to Redstone, knocked down shares of Viacom. The stock fell as low as 33.88 yesterday before closing at 34.14.
Reuters noted that Viacom has been underperforming its industry peers. The appointment of Dauman and another confederate, Thomas Dooley, to a newly-created position as chief administrative officer, look like efforts to stem the losses.
Whatever Freston was doing, or had in mind, was not happening fast enough to suit Viacom. Reuters cited Dauman as saying "Viacom should focus more on digital media by investing in projects internally and seeking out start-up companies at an early stage for partnerships or deals."
That mention of finding start-ups before they become the new hot thing online probably reflects the impatience the Wall Street Journal cited in its story about Freston's fall.
The report noted Redstone's affirmation six weeks ago that "he could envision "no circumstance" under which he would dismiss the media company's chief executive, Tom Freston." Redstone had further claimed once he would give Viacom a year to prove itself after the split with CBS.
A year isn't quite as long in the entertainment industry as it is anywhere else, is it? Not in the age of the Internet, it isn't.
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