Viacom CEO gives upbeat outlook
Touts recovering fortunes at annual meetingNEW YORK -- Viacom Inc. is experiencing a "creative renaissance," president and CEO Philippe Dauman argued here Thursday at the company's annual shareholder meeting.
He and chairman Sumner Redstone promised that being a hit factory and having streamlined operations in the recession will further boost Viacom's shares and fortunes as the economy recovers.
"Creating hits is the name of the game," Dauman said at the meeting that ended in less than an hour.
He touted that Viacom shares are up 19% since the start of the year, compared to a 3% gain in the S&P 500 stock index and a peer group increase of 15%.
The comments came as shareholders and analysts continue to lament how weakly the stock has performed longer-term and as they question whether the company can maintain its cable networks' recent ratings momentum and fully turn around its film studio.
In the only question of the meeting, a female shareholder said the video highlight reels Dauman showed were nice, but she asked what she is getting out of it since Viacom's stock is still low in historical comparison and the company pays no dividend.
She then pointed out that Viacom at least seems to be the only industry company so far to still serve breakfast at the annual meeting.
Dauman quipped that this is something to be happy about. But he also asked the shareholder for more time, saying his team is looking to create long-term value.
Overall, Dauman argued that despite recurring TV ratings challenges over the past couple of years, which have led to several changes in programming strategy of Viacom networks, and a need to rebuild the Paramount film unit, the firm has under his leadership already succeeded in new franchises and kept existing ones strong.
For example, he pointed to enduring programming such as "Sponge Bob Square Pants," which celebrates its 10th anniversary, and "South Park," plus the recently reinvented and rejuvenated "Star Trek" franchise and the MTV Movie Awards, whose ratings were up 92% from last year.
He also lauded BET for boosting ratings 10% year-to-date and 23% quarter-to-date with a new programming strategy.
Plus the CEO touted newer franchises, such as the "Rock Band" video game.
Overall, Dauman said Viacom's combined ratings rose 3% last year, the company was no. 2 in online video, and Paramount has created new hit franchises and is starting to turn around.
Viacom's annual meeting, attended by about 100 people, including employees, also brought out board member Shari Redstone, the daughter of controlling shareholder and chairman Sumner Redstone, MTV boss Judy McGrath and BET chief Debra Lee. Paramount boss Brad Grey was unable to attend, Dauman said. A source said Grey was simply sick and therefore couldn't come.
In his opening remarks, Sumner Redstone also tried to focus shareholders' attention from the recent economic challenges -- which he called "unquestionably the most severe" downturn in a long time -- to the future, promising: "The best days in our history are still to come."
Redstone also lauded Dauman, for whose removal some have called, as a great CEO. "As a shareholder, I appreciate the strategic and operating skills Philippe has brought to Viacom," Redstone said.
Dauman reiterated recent comments that the advertising market has stabilized, but cautioned: "Overall ad and retail markets remain soft, and visibility is still limited."