Bakish Lays Out Plan To Fix Ailing Viacom
Bob Bakish, who next week takes his turn running Viacom, said his work building the company’s international business provides a guide for how he plans to rebuild the company’s trouble U.S. cable networks and film studio.
Bakish takes over for interim CEO Tom Dooley, but some question how much will get done until Viacom gets combined with CBS—a deal that will likely make CBS CEO Les Moonves the decision maker.
Speaking on Viacom’s earnings call with investors Wednesday, Bakish acknowledged a combination is possible. But he added that “while the board and its special committee consider whether a CBS transaction makes sense they have asked me to maximize Viacom's potential as an independent Company and I'm committed to doing just that.
Related: Viacom Reports Lower Earnings in Fourth Quarter
Bakish said he’s already pulled together the senior team across the company. “We're at work identifying near-term opportunities to accelerate our evolution while building a long-term vision for the future. At the same time, I'm re-immersing myself in the domestic business with a focus on how we can strengthen MTV, Comedy Central and Paramount,” he said.
When Bakish joined Viacom’s international team in 2007, it was at a crossroads as well. “I believe a lot of our successful international approach can be brought home to the domestic market. I've seen it work and it's a big reason that I'm truly optimistic about Viacom,” he said.
That approach involves focusing on scale, brands, content and products. He said he focused on six core brands and the company created content that could be localized to work around the world. The final key was “redefining that it means to be a branded TV network across platform through product innovation.”
Related: PlayStation Vue Drops Viacom Channels
Viacom International grew via broadband on both fixed and mobile platform, doubling its distribution.
“I believe this is the single biggest opportunity for our business internationally. And while the economics of digital distribution still trail linear, we believe incremental expansion of our reach will pay big returns in the long run for our brands and businesses,” he said..
As CEO—and as head of a new unit comprised of Viacom’s domestic and international networks and Paramount—he said he will create “a structure that supports speed, sharing of resources and a global outlook. It's imperative that we operate more globally,” he said. And despite the company’s debt and falling earnings, he said he was confident the company had the wherewithal to invest enough to drive a turnaround at networks including MTV and Comedy Central.
Related: Moonves—Viacom Talks Still in Early Stages
Bakish has his work cut for him.
During the call, CFO Wade Davis said that programming and other expenses at the media networks will be higher in the first half of the next fiscal year, creating difficult bottom-line comparisons.
Bakish said he was confident that domestic affiliate revenue will return to growth after a fourth-quarter decline and shrinking pool of pay-TV subscribers. “Our guidance for fiscal Q1 of mid-single-digit 3%-ish growth assumes a 3% decline in the universe,” he said. “So we will still grow even if there is a universe decline and then internationally, again, we see significant growth and you saw the numbers in the quarter.”
Related: CBS-Viacom Combo Looks Better to Analyst
Viacom’s push to reduce the high ad loads on some shows on some of its networks resulted in 4% of an 8% decline in ad revenues in the fourth quarter.
“On a macro level the advertising marketplace is very good right now leading to high demand for inventory across all of our networks. Our upfront was strong and scatter in the December quarter continues to look good. We're seeing spending come out of digital and back into the TV marketplace which is absorbing inventory and driving price improvements,” Dooley said.
“All of these factors give us confidence in our Q1 results. And we expect to deliver an approximate 500 basis points improvement over the year-over-year decline in Q4,” Dooley said.
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.