Dauman Says Viacom Selling Minority Stake in Paramount
In a keynote appearance at the Jefferies Media & Communications Conference, highly scrutinized Viacom chairman and CEO Philippe Dauman said cable ratings have stabilized, but he broke the bigger news that the company has been “approached by several strategic investors” in Paramount Pictures.
After weighing the “great benefit strategically and financially to Viacom,” Dauman said the company has launched discussions with a “select group” of potential investors.
Terms for a potential stake or the net value of Paramount, a small but potent legacy part of Viacom’s overall financials, were not immediately disclosed. Revenue at Paramount hit $1 billion in 2015, compared with $13 billion overall.
The stakes remain high for Viacom, which finds itself grappling with a multi-pronged challenge of traditional ratings declines and a changing TV ecosystem plus the frailties of former chairman Sumner Redstone and uncertainty surrounding the future of the company.
While Paramount has proven capable of releasing both commercial powerhouses like the Transformers franchise, awards magnets like The Big Short and sometimes both (True Grit, The Wolf of Wall Street) the studio has slowed its output considerably in recent years. Dauman, during the recent, poorly received Viacom earnings call, underscored the plan to boost Paramount's output to 15 releases a year from the range of 8 to 10 where it has remained. In 2014, it did not release a single movie in the summer.
Selling all or part of Viacom has been an objective that many in media have advocated lately as the stock price has been cut in half and ratings have stagnated.
Beyond the big movie news, which sent the stock soaring in afternoon trading, Dauman addressed a range of topics, including cable ratings, measurement, advertising and distribution changes including SVOD and OTT.
Regarding measurement, he said, "the overall system is improving and provides greater visibility to advertisers." As to cable ratings, Dauman touted international reach and increased production, especially at Nickelodeon, plus the promotional might of the full portfolio of networks as individual shows roll out. Throughout the session, he stayed with traditional themes and staked out a decidedly more even-keeled tone than earlier this month, when his defensive posture, combined with a cascade of news about Redstone's health, his gaining of the chairman title and executive compensation combined to create a drag on shares and a surge in speculation in media circles.
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