Bob Bakish on How Disney-Fox Helps Viacom and His Phone Call With CBS Corp.'s Acting CEO
The CEO discussed the company's strategy and turnaround, including the success of Paramount Pictures, and the battle for Sky during a London breakfast meeting with reporters.
Walt Disney's planned $71.3 billion acquisition of vast parts of 21st Century Fox is "a significant positive" for Viacom in multiple ways, Viacom CEO Bob Bakish said Wednesday.
Speaking during a breakfast meeting with reporters in London organized by the Broadcasting Press Guild, the exec also discussed the impact of the battle between Fox and Comcast for European pay TV giant Sky on Viacom, the phone call he got from acting CBS Corp. CEO Joe Ianniello, the progress of Viacom's turnaround efforts and how Paramount Pictures is "night and day from where it was."
The Disney-Fox deal "highlights the value of the Hollywood studio," Bakish emphasized during the event. "There aren’t many of them. And this really shows how valuable these assets are." That is particularly important for Viacom as Paramount got "very little value attribution" from Wall Street until recently. "This is an undervalued asset in the company and one that the Fox-Disney transaction certainly highlights," he said.
The mega-deal also provides a "very real opportunity" to hire executive and creative talent in front and behind the screen amid the “dislocation associated with change of ownership," the Viacom boss suggested.
With Disney also expected to keep more of its productions for its own planned streaming service, along with, possibly, AT&T-Time Warner, Viacom will also get a chance to fill the production void on various streaming and other services. "Who will supply all the others?" Bakish asked. “Viacom is very well positioned to do that as a truly global multiplatform content company. ... There are not that many people that can step in, and Viacom is certainly one of those companies." He highlighted the company's "studio capabilities across a variety of formats — film, episodic television and now digital native."
The CEO didn't comment on the benefits of a potential recombination with CBS Corp. down the line. Viacom and CBS controlling shareholder National Amusements, led by Shari Redstone, has promised not to push for a deal for a couple of years under a recent settlement with CBS. "There is not really anything to add at this point," Bakish said Wednesday.
What about Comcast and Fox's battle for European pay TV giant for Sky? "I’m not concerned about a change in ownership other than at some point some kind of management transition, but I’m very confident in the value that we provide here in the U.K.," he said. "We have a long-standing and growing and highly productive partnership with Sky." Bakish said he met with Sky COO and CFO Andrew Griffith on Monday and would meet with Sky CEO Jeremy Darroch on Wednesday.
Viacom also knows the two suitors Comcast and Fox, plus Disney, which has agreed to buy large chunks of Fox. "We do a lot of business with Comcast in the U.S.” and have "a lot of history" with chairman and CEO Brian Roberts and cable unit boss David Watson, Bakish said. “We have very productive relationships with Comcast.” On the Disney side, "we have less business like that," but Viacom does show some Disney-produced content, he added.
“I believe in scale, it’s valuable," the exec also said, mentioning the acquisition of Britain's Channel 5. “We have actually been manufacturing some scale in-house by leveraging our assets together in ways we hadn’t before."
Bakish highlighted that he and his team have been mostly making smaller acquisitions and investments to boost the company's digital and live event businesses and other growth areas though. Viacom this summer struck a deal to acquire youth media company Awesomeness for around $25 million plus some debt, and led a $15 million investment round in kids media startup pocket.watch.
Asked about Redstone's thinking and role, Bakish said, "She is a great board member. She loves our company. She continues to support the management team and be excited about the road ahead. As to things she is thinking about in her mind, she is a better person to talk to."
Asked if he has talked to acting CBS CEO Ianniello since Leslie Moonves was ousted from the company, Bakish said that he has. "It was great," he shared with the London press. "I mean, I have known Joe for a long time. He called me and we talked … he was in a new chair, and I had been put in that chair [at Viacom] two years earlier. And what is it like to be in that chair — that was the conversation we had." Bakish didn't share more specifics about the conversation.
As to whether Moonves, accused of sexual misconduct, deserves an exit package, Bakish declined to comment.
Much of Wednesday's focus was on Viacom's international strategy and how Britain's Channel 5 fits into it. The company had acquired the TV network in 2014 for $725 million and soon led it to record full-fiscal year financials. "We continue to be ahead of our plan despite the Brexit headwind," Bakish said Wednesday.
Channel 5 has been beefing up its original content and will use some of the money saved from the recent decision to not bring back Big Brother on original commissions, he said.
Viacom's cable network brands, including MTV, Nickelodeon, Comedy Central and BET, have been focusing on improving their ratings momentum, which has mostly worked since Bakish was named permanent CEO in late 2016. The company has also been cutting operating costs at its networks unit, focused on six core brands and improving its distribution relationships in the U.S.
Plus, the Paramount film unit has improved its performance amid a growing TV production business and a new slate planning approach under studio chairman and CEO Jim Gianopulos.
This year "was a pretty important year for our company, one where we began demonstrating there is in fact both a turnaround and an evolution," Bakish told the gathered reporters on Wednesday in summarizing where the company stands now, while 2019 "will be another year of that, probably it will tilt more toward demonstrating that evolution."
He also gave a particular shout-out to the studio unit again. Said Bakish: "Paramount is night and day from where it was, and it has a very exciting road ahead."