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Viacom on Monday named acting CEO Bob Bakish its permanent CEO.
“The board of directors of Viacom Inc. announced today that it has discontinued the exploration of a potential combination with CBS following receipt of National Amusements’ letter and request, and dissolved the special committee that was formed to evaluate a potential transaction. It has appointed Bob Bakish as president and chief executive officer and as a member of the board, effective immediately,” the company said in a statement.
The news followed the decision by Viacom and CBS Corp. controlling shareholder National Amusements to withdraw its call on the two companies to explore a recombination.
Viacom interim CEO Tom Dooley had announced in late September that he would depart in mid-November, leading the company to name longtime Viacom International Media Networks CEO Bakish acting CEO of all of Viacom.
Some on Wall Street have argued that Viacom should be recombined with CBS, saying that CBS chairman and CEO Leslie Moonves‘ reputation as one of the best operators in the business could only benefit Viacom.
But Wall Street analysts said on Monday that investors have taken to Bakish and his pro-active approach and focus on turning Viacom’s U.S. cable networks and its Paramount Pictures studio around. Bakish also has made an impression on Viacom employees. At a recent company advertising sales offsite meeting, Bakish took the bus between the conference site and the team dinner venue along with the rest of the staff. One source familiar with the situation said that caused staff to be positively surprised as predecessor Philippe Dauman had typically chosen to be driven to such occasions in a separate car.
Shari Redstone, who also has expressed confidence in Bakish, has been working with the rest of the board to improve Viacom’s performance. The company has faced ratings and advertising challenges at its cable networks, while its Paramount Pictures has had several disappointments in the past couple of years.
Viacom’s board met on Monday to confirm Bakish as the long-term choice as CEO. Viacom chairman Tom May said: “In Bob’s short time as acting President and CEO, he has impressed the board of directors with the decisive steps he has taken. He has moved quickly to deliver upon the mandate given to him — to maximize Viacom’s potential as a strong, growing and independent company. We have great confidence in Bob’s strategic vision and his ability to move forward aggressively to position Viacom for the future.”
Vice chair Shari Redstone said: “I am very excited by the strategy Viacom is pursuing under Bob’s leadership, as well as the relentless hard work and passion he has demonstrated not only in his fast start at the helm but in his many years at the company. While there is much work to do, I firmly believe that Viacom has a bright future, and that confidence is underpinned by senior management’s commitment to innovation and a more coordinated, global approach to managing our brands.”
Bakish himself said: “I am honored to be chosen by the board to lead Viacom, its world-class brands and exceedingly talented people. I believe unequivocally in this company and its potential to create new opportunities and drive greater value as our business evolves and our industry transforms. We’ve been working very quickly to mobilize the organization, re-energize our culture and address our areas of greatest need. I look forward to continuing to work closely with the board and our team to build on this momentum, and will share more on our plan and path forward in the New Year.”
“The focus will now turn to … Robert Bakish’s strategy to turn around the company’s assets and brands,” Guggenheim Partners analyst Michael Morris said just before his confirmation from the Viacom board. “Mr. Bakish began to lay out his vision on the company’s fiscal fourth-quarter earnings call and has given us further insight at a recent conference.”
He added: “We believe investors (and analysts) will be open-minded as Mr. Bakish comes to market with an updated plan. The potential success of Viacom will continue to hinge on the popular acceptance of the company’s television and film programming. To that end, while we are incrementally optimistic on new programming leadership at media, it is early in the process, and we remain cautious on the unchanged leadership at Paramount.
Viacom shares, which had been higher amid the deal talk, closed the day down 9.4 percent at $34.99.
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