National Amusements is again calling on Viacom directors to oust CEO Philippe Dauman and his allies, this time issuing a detailed statement outlining all the ways the conglomerate allegedly failed to deliver financially in its fiscal third quarter.
“It is time for Viacom’s current directors to stop supporting failed management,” said National Amusements,” which controls Viacom through the ownership of a majority of its voting stock.
The statement came shortly after Viacom disclosed earnings that beat the expectations of analysts but still fell 27 percent year over year.
National Amusements, controlled by 93-year-old Sumner Redstone, has been trying to get rid of Dauman for months, but Dauman and Viacom have responded by alleging Redstone is too feeble to make rational decisions. The issue goes to the courts in October.
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In the statement issued Thursday, National Amusements lists five specific ways Viacom has failed under Dauman’s leadership:
1. Viacom shares dropped 50 percent over a two-year period, compared to a median average drop of 12 percent for its peers in the entertainment industry.
2. From 2013-15 Viacom posted a compound annual growth rate in revenue of negative 3 percent compared to a positive 3 percent for its peers.
3. “Major Viacom networks have lost important creative talent and experienced substantial declines,” the statement reads, adding that ratings and advertising declined from 2013-15 while subscribers declined.
4. From 2011-15 Viacom spent $15 billion in stock buybacks at about $61 per share, while the stock was trading for $44 on Thursday. That money would have been better spent on mergers and acquisitions and digital initiatives, says National Amusements.
5. This week, Moody’s Investors Service warned that it might downgrade Viacom’s credit rating, which could make it more expensive for it to finance its debt.
“Notwithstanding management’s failures and Viacom’s declining performance, CEO Philippe Dauman’s contract was extended through 2018, he was promoted to chairman, and (as Viacom disclosed in January 2016) he was awarded $54.2 million in compensation for 2015, a 22 percent increase over 2014,” National Amusements wrote.
Later Thursday, Viacom responded with the following statement:
“Viacom continues to execute on its strategic plan, which is supported by a majority of its independent board. As discussed by management on this morning’s earnings call, we are looking to the future and executing on the significant growth opportunities we see around the world. In contrast, it is unfortunate that one of our directors feels the need to try to damage the company in response to losses in the courtroom.”
