Viacom CEO Speaks Out About "Misinformation," "Hyperventilation" Surrounding Sumner Redstone
Philippe Dauman at the UBS Global Media and Communications Conference in New York calls for "decency" in talk about the executive chairman's health and says he talks to and meets with him regularly.
Viacom CEO Philippe Dauman on Monday at the UBS Global Media and Communications Conference in New York discussed the recent debate about executive chairman Sumner Redstone and his state of health, calling for "decency" in such discussions.
The topic of controlling shareholder Redstone, 92, came up before the start of a wide-ranging discussion of Viacom's businesses. Redstone won't immediately undergo examination in a healthcare legal fight brought by his ex-girlfriend that challenges the mogul's mental competency, and Viacom has said Redstone is mentally competent.
But the state of Redstone and the future of his companies have been hot topics on Wall Street in recent days. Mario Gabelli, whose GAMCO Investors and other funds control about 10 percent of Viacom's voting shares, or the second-largest holding of voting shares, last week asked Dauman to provide more disclosures about the mental health of Redstone. Gabelli was among the investors attending Monday's UBS session with Dauman.
"There has been a lot misinformation in the face of a lot of facts that are actually out there," Dauman said at the Wall Street event about Redstone's situation and company governance set-ups for the time when he isn't in charge anymore, adding he wanted to get away from "some of the hyperventilation that has occurred over the last week or so."
He said about Redstone: "He is fully in charge of his own healthcare decisions today," but has "physical illness." Redstone has an "incredible will to live" despite some physical disability like other people have, he added. "It is not a big secret that he’s 92 years old and his physical ailments require him to be under medical supervision." Dauman emphasized that he is in charge of carrying out Redstone’s healthcare directive if the media pioneer becomes unable to make decisions himself.
Dauman added that "nothing has changed" about his health that would change anything.
Added Dauman: "I talk to Sumner frequently — several times a week. I meet with him frequently." He said some of the things that have been said about the media pioneer have been "disturbing" to him. He said those writing or talking about Redstone should look at themselves in the mirror and check whether they are acting or speaking “with humanity and decency about someone who has accomplished a lot.” Concluded Dauman: "We should just maintain a sense of decency here."
Dauman reiterated that theme at the conference and said Redstone planned for continuity in case he becomes uncapable of running the company or dies. There has been no change to governance set-ups at the company since Redstone put in place an estate mechanism in case he isn't capable to run the company anymore, he said.
While he declined to comment on the lawsuit, he reiterated that a seven-member trust, whose members include him and Redstone daughter Shari, will be in charge of Redstone’s National Amusements, which controls 80 percent voting stakes in Viacom and CBS Corp. Emphasized Dauman: "No individual will control the trust," which will operate via majority votes.
Gabelli last week also tweeted about his concerns. Redstone controls voting stakes of about 80 percent each in Viacom and CBS Corp. Gabelli, whose funds have been investors in the two companies for a long time, told THR that he would want Viacom to "tell everybody what's going on."
On Monday after the Dauman appearance at the UBS conference, Gabelli told THR when asked if the CEO comments made him feel better or would do away with investor worries: "I never felt bad. I knew all the details, I just wanted the company to tell them ... There are no worries. He basically disclosed to a lot of people what everyone could do by just picking up the phone and calling. There's nothing going to happen. Even when Sumner dies, it's all set. The point is they should have laid it out before Manuela Herzer did."
"When he passes, Redstone has placed his Viacom stake in a trust that requires trustees, including Viacom CEO Philippe Dauman, to maximize value for his grandchildren," FBR analyst Barton Crockett said in a recent report. "We believe ignoring a premium-priced merger or breakup offer could prompt litigation from a family that understands the value of lawsuits. So the bear thesis that Dauman could force the trust to resist a sale to protect his job looks implausible."
Dauman has promised improving financials at Paramount over the coming years, helped by a return to a bigger annual slate of 15 films this fiscal year and a ramp-up in the studio's animation and TV production, among other things. He recently promised "significantly improved financial performance in the years ahead" at Paramount. He reiterated that theme on Monday.
The big year-end UBS investor conference features the CEOs and other top executives from big industry players. It is widely seen as the final event of the year where big-name executives provide an outlook for the new year and sound off on hot-button issues.