Embattled Viacom CEO Philippe Dauman Takes His Case to the Company's Employees

Philippe Dauman - H 2016
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Philippe Dauman - H 2016

Urging the company not to be distracted by his current battle with Sumner Redstone, Viacom's top executive makes his argument for how Viacom's various businesses are moving "rapidly and successfully into the future."

Amid the high-stakes battle for control of Viacom, CEO Philippe Dauman sent out an email Tuesday to all of the company's employees admitting that the succession feud “is a distraction and it can create speculation and concern” even as he set out to make the case for why he believes “our company [is moving] rapidly and successfully into the future.”

Earlier Tuesday, Sumner Redstone appointed two new trustees to the trust and named two new board members to National Amusements, the company through which he controls Viacom and CBS Corp. Redstone’s latest move came in the wake of his removal of Dauman and attorney George Abrams as trustees and board members on May 20 via fax. In a statement, Redstone said, “This is my trust and my decision. I have picked those who are loyal to me and removed those who are not.”

The embattled Dauman and Abrams have filed a lawsuit challenging their removal from the trust. Dauman has argued that Shari Redstone has been manipulating her father, who turns 93 on Friday.

In his email, Dauman not only sought to reassure employees, be he also put forth an update on Viacom’s various business. While he said Viacom has “strengthened our domestic media networks,” he acknowledged that “on the advertising front, we have had a challenging year, but we are well positioned as we head into our next fiscal year.”

In the case of Viacom’s Paramount Pictures, Dauman conceded that “Paramount has had a difficult year so far,” but he held out hope for summer tentpoles Teenage Mutant Ninja Turtles: Out of the Shadows and Star Trek Beyond. Noting that under chairman and CEO Brad Grey, the studio is ramping up production with a target of turning out 15 motion pictures a year, Dauman said that “we continue to explore a strategic partnership in Paramount that we believe will accelerate the studio’s growth well into the future and generate significant value for Viacom.”

The full text of Dauman’s email is below.

Dear Colleagues,

There has been a lot of unusual news about our company over the last few days. We understand that this is a distraction and it can create speculation and concern. We want you to know that we are keeping our focus squarely on what matters most to all of us — moving our company rapidly and successfully into the future. The passion and commitment you bring to your work continues to inspire us and drives our progress every day. 

The media business is transforming rapidly and so are we. At last week’s strategic presentation for Viacom’s Board of Directors, we had the opportunity to discuss our industry’s transformation, as well as the initiatives under way at Viacom. Briefly stated, here are some of the highlights:

As you know, over the last year we have strengthened our domestic media networks, which now consist of three groups led by experienced media executives: Cyma Zarghami at Kids & Family, Doug Herzog at Music & Entertainment, and Debra Lee at BET Networks. Collectively, our family of networks is the leader in the cable world in many key demographic targets with a 21% share in the under-49 age group.

At Kids & Family, we are proud that Nickelodeon has been the uninterrupted leader in kids 2-11 and preschoolers 2-5 over the last 18 months. They have fueled that success with multiple hits, old and new, such as SpongeBob SquarePants and Game Shakers. TV Land and CMT have been revitalized with a slew of new programs, including Younger and I Love Kellie Pickler.

In the Music & Entertainment Group, we have reinvigorated our management with a new leadership team — Chris McCarthy at VH1, Sean Atkins at MTV, and Kent Alterman at Comedy Central. We have already seen extraordinarily strong results at VH1, and are bringing the music back to MTV with a lot of exciting programming in development. Comedy Central is doubling down on original productions to add to its existing hits such as Broad City, Inside Amy Schumer, and The Daily Show with Trevor Noah. At Spike, under Kevin Kay’s leadership, we continue to succeed with a number of hits, including the global sensation, Lip Sync Battle.

BET Networks will again present the fan favorite BET Experience, which includes cable’s leading award show, The BET Awards. BET continues to produce more and more distinctive original programming, making it by far the top channel targeting African American audiences.

On the Content Distribution side, we are very pleased about our renewal with DISH Network last month. Our fans spoke loudly and clearly to the distribution community and let them know they can’t live without our popular networks. We have no significant affiliate renewals in the near future. Meanwhile, our content and brands continue to thrive on a growing array of platforms, including Snapchat, Hulu, Amazon, Netflix, Sony PlayStation Vue, as well as DISH Network’s Sling. 

On the advertising front, we have had a challenging year, but we are well positioned as we head into our next fiscal year. We have established our leadership in data-driven marketing solutions through Viacom Vantage and other related efforts. These products are very attractive and in great demand by ad partners who want to participate with our brands and take advantage of the advanced opportunities we can provide. We go into the ad Upfront market with a lot of upside opportunity. 

At Viacom International Media Networks, led by Bob Bakish, our brands continue to grow worldwide, with great ratings success. We are well established in major international markets, including two very significant markets — the UK and India. We have a wealth of opportunity to launch new networks around the world and distribute our brands through advanced technologies and platforms. In the US and abroad, the opportunity in mobile is also significant. Our international networks business will be a very material contributor to Viacom’s success for many years to come.

It is no secret that Paramount has had a difficult year so far. In the short term, we look forward to our summer tentpole films, including Teenage Mutant Ninja Turtles: Out of the Shadows and Star Trek Beyond. More importantly, Paramount, led by Brad Grey, has ramped up production to ensure a robust slate, with a target of 15 motion pictures a year, including major franchise films every single year. Our animation initiative will also consistently produce one or two animated features annually. In addition, Paramount Television has launched very successfully with a number of new series in the pipeline, and will over time become a material contributor to Paramount’s success. We continue to explore a strategic partnership in Paramount that we believe will accelerate the studio’s growth well into the future and generate significant value for Viacom.

Finally, I want to take this opportunity to thank all of you for once again showing your commitment to giving back with record participation in Viacommunity Day last Friday. I am so proud of your continuing contribution to the communities we serve. It is among the many things that make Viacom unique and such a great place to work.

I know you are all working hard to keep us in the lead in this evolving world of entertainment. Those contributions, in every part of our company and in every country and territory we operate, are crucial to Viacom’s future success. Tom and I, and our entire leadership team — as well as all of the fans of our brands and programming — appreciate what you do every day. 

Thanks and keep up the great work.

Warm regards,