The future of Viacom may be decided in the next few hours.
The beleaguered company’s board of directors will meet on Thursday to consider naming a new chairman to succeed Sumner Redstone.
Redstone, whose deteriorating health has been a cause for Wall Street concern, gave up the chairmanship of his other company, CBS Corporation, on Tuesday. CBS CEO Les Moonves was named the new chair on Wednesday.
That was the easy part. The transition at Viacom — the owner of MTV, Nickelodeon, BET, Comedy Central, and Paramount Pictures — may prove to be much trickier, although specific details have been hard to glean from the parties involved.
On Wednesday evening Redstone’s daughter Shari suggested that she does not have confidence in Viacom CEO Philippe Dauman.
While Shari nominated Moonves to take the CBS chairman position, she is unlikely to nominate Dauman to replace her ailing father atop Viacom.
In a statement after the CBS change was announced, she said, “It is my firm belief that whoever may succeed my father as chair at each company should be someone who is not a trustee of my father’s trust or otherwise intertwined in Redstone family matters, but rather a leader with an independent voice.”
The statement seemed aimed at Dauman, who is both a trustee of the elder Redstone’s trust and Sumner’s personal health care agent.
However, it is unclear if Shari Redstone has the support she needs from other board members to install someone else as chairman.
If she does have the support, who might that other person be? She doesn’t want the job, but she might be willing to take it in an interim capacity.
The Hollywood Reporter suggested overnight that Moonves could be another possibility.
Viacom and CBS were the same company until a split back in 2005.
Viacom declined to comment on the uncertain situation.
But the company’s stock price soared in after hours trading when the CBS change was announced.
Springowl Asset Management, an activist fund, cited the market movements as support for its efforts to remove Dauman and Redstone.
“We strongly urge management and the board to appoint an independent director as executive chairman and that it not be Philippe Dauman,” Springowl said in a statement Wednesday night. “We hope management and the board will continue to act responsibly in addressing Viacom’s depressed stock price relative to its much higher asset value.”
Viacom has underperformed other major media companies, including CBS, during a period of rapid change and turnover in the television business.
Wednesday’s announcement from CBS symbolized the beginning of the end of the Redstone era.
Shari Redstone confirmed in her statement that “my father’s trust states his intention that I succeed him as (non-executive) Chair at CBS and Viacom, and also names me as a trustee after his death.”
She concluded, however, that Moonves was the right individual to “lead CBS into the digital future.”
She did not mention Dauman by name in the statement.
And Sumner himself had no comment on any of the maneuverings on Wednesday. He now holds the title of chairman emeritus at CBS.
Widely read media analyst Michael Nathanson called the Redstone news “change we can believe in.”
“Thinking about what this change for CBS and Viacom could mean for the broader media landscape, we believe that changes for the Redstone controlled empires could be the trigger for media company consolidation as each company will be forced to figure out if they are a buyer or seller in the coming months,” Nathanson wrote in a note to investors.
Redstone’s health is a matter of much speculation. In recent months his competency has been repeatedly challenged in court proceedings.
Court papers filed by an ex-girlfriend last fall described Redstone as a “living ghost” who is practically unable to make decisions for himself.
Manuela Herzer described him as “vacant, expressionless and out of touch.” She said he was basically unable to talk and “cannot walk or stand by himself.”
But Dauman has challenged many of her accusations.