Viacom to Unveil Turnaround Plan: "Change" at Paramount in Attempt to Mimic Disney
CEO Bob Bakish is likely to be “supportive” of studio chief Brad Grey on Thursday's earnings call while acknowledging that the studio needs major improvement amid tensions over his greenlight authority.
When Viacom CEO Bob Bakish speaks on the company’s quarterly earnings call Thursday morning, he is likely to be on-trend, announcing an attempt to execute a version of the strategy that the Walt Disney Co. has employed with such success: creating silos to provide branded entertainment that can be exploited across platforms.
But in Viacom’s case, those silos would consist of its faltering cable channels — Nickelodeon, MTV, BET and Comedy Central among them — rather than Disney's cornucopias of franchise material — Marvel, Disney Animation, Pixar and Lucasfilm. The challenges are clear.
What is likely to remain fraught with ambiguity and tension is the issue that has fascinated Hollywood for many weeks: Will film studio chief Brad Grey remain in command of Paramount?
For now, it seems Viacom will try to have things both ways, proclaiming support for Grey while exerting more oversight — without breaching his contract.
A Viacom insider says Bakish is likely to be “supportive” of Grey on the Thursday call while acknowledging that the studio needs major improvement. Grey operated with considerable independence under ousted CEO Philippe Dauman, this person continues, but “there will be change in terms of how closely the teams are going to be working together” going forward.
The Viacom insider denies rumors, which have been rampant in the industry, that Bakish and the board will create a greenlight committee to oversee film choices. Those committees have been employed at other studios. Paramount declined to comment, but with respect to Grey, another source close to the studio says, "The greenlight is with him. Bob is asking Brad to work with the networks and he is 100 percent on board with that." The insider continues: "The Nickelodeon brand is continuing to be a very successful relationship for Paramount. There is another SpongeBob movie coming and there will be more films from the animation division. There also is School of Rock on Nickelodeon. Bob said the studio can do this with other networks and should try to do it. But with the other networks, they have some work to do to generate strong content as well."
To execute its strategy, Viacom will want Paramount to ramp up its film output. At the same time, there are clear concerns about the studio’s performance. It finished 2016 in last place among the majors in market share and has suffered flops including Zoolander 2 and Teenage Mutant Ninja Turtles: Out of the Shadows. (It is in second place in terms of Oscar nominations, however, with a total of 18, including best-picture noms for the box-office hits Fences and Arrival.)
The situation with respect to Grey has been tense for months. A Viacom regulatory filing last August suggested that Grey, who has run Paramount since 2005, could be asked to give up some of the autonomy he had enjoyed. The filing said the board might require Paramount to seek its approval for "co-production, co-financing or other financing activities" and that Paramount also might need board approval for distribution agreements and first-look deals with certain talent.
That appeared to set up a potential breach-of-contract claim from Grey, whose deal is said to give him a certain amount of autonomy, including the right to greenlight films with budgets up to $125 million. At the time, the now-departed acting CEO Thomas Dooley told The Hollywood Reporter: "Brad Grey's contract has not been breached. He has the full authority he needs to run the studio." It is unclear whether any specific conflict has arisen to date as a result of the measures suggested in that filing.
Another source close to Paramount says, "Brad is on Bob Bakish's team. He thinks a closer relationship between Paramount and Viacom is a long-term, healthy, great benefit to the studio."
For his part, Grey has been running the studio as usual. On Wednesday, he was meeting a delegation from Shanghai Film Group and Huahua Media, which have agreed to invest up to $1 billion in Paramount's upcoming slate. The Chinese executives are touring the grounds and having lunch at the commissary. Huahua CEO Wang Kefei's favorite wine, Opus One, is being served.