Philippe Dauman Says Redstone Battles Have Slowed, But Not Killed Plan to Sell Paramount Stake
The Viacom chief addresses recent events at an investor conference in New York.
We interrupt this play of kings and princes, fathers and daughters, live-in companions and lawyers, to bring a soliloquy. One from Philippe Dauman, the reigning chairman and CEO of Viacom who finds himself embattled after being ousted from the shareholder force known as the National Amusements Trust, controlled by 93-year-old Sumner Redstone, or as Dauman would argue these days, the manipulative kin Shari Redstone.
Just days after a judge called for a short intermission on Dauman's lawsuit alleging rottenness in the state of the Redstone family, Dauman took the stage Thursday to share some thoughts at the Gabelli 8th Annual Movie & Entertainment Conference in New York. What would he say? Surely, the throngs of attending onlookers, including Mario Gabelli, whose investment fund is the second-largest Viacom shareholder to only Redstone, waited with bated breath. At least three joked about the "swan song" to come. To be or not to be at the mercy of the Redstone clan — that is the question these days for Dauman.
"I've been involved in the company for 30 years, and this is certainly unique," said Dauman. "It's a lot more fun creating the content than being the content."
So, William Shakespeare is dead and the writers of The Daily Show ain't writing Dauman's jokes, but nevertheless, the 62-year-old Viacom boss signaled no readiness just yet to walk away from a media kingdom that includes Paramount Pictures, Comedy Central and MTV, no inclination to take off into the wilderness of a nine-figure severance package. Rather than addressing the power struggle directly, Dauman preferred to discuss developments like a recent ratings bump for VH1 and Nickelodeon as well as renewals of distribution agreements. "I'm pleased to announce we've been active on the upfront market," he said to probably the dissatisfaction of anyone expecting high drama.
But that's not to say that Dauman didn't make his own big statement on Thursday. With the Redstones beginning the week by changing Viacom's bylaws to make it more difficult to sell Paramount, Dauman told the investor conference that he thinks, expects and hopes to move forward with a sale of a stake in the movie studio, which he acknowledged is experiencing a tough year.
"It is strategically important to look at what will enhance and accelerate the growth of Paramount into the future," he said. "So we had a process that began with over 40 players who expressed interest. We are now at a stage where we have had more limited discussions with a more limited group who would be strategic partners. Naturally, recent events have slowed down the process. But we are continuing to explore the potential of unlocking value with select partners."
Dauman predicted that a sale of 49 percent of Paramount would unlock about $10 of value per share and that proceeds would pay down Viacom debt and have tax advantages. He admitted, however, that it would not happen by his original mid-year timeline.
"We will move forward deliberatively with our board," he added, saying the sale would benefit both the Redstones as well as Gabelli and other shareholders.
Dauman didn't mention a price tag or likely deal partner. Management has repeatedly signaled that a company with international or technology expertise would be a logical buyer of the Paramount stake.
As of 11:20 a.m. ET, Viacom shares were down 1.8 percent at $43.78.