Sumner Redstone Fires Viacom CEO Tom Freston
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On Monday, Sumner Redstone Viacom 'infornato; s CEO, Tom Frestón. Yesterday, Viacom announced that its board of directors had appointed the Chairman and CEO Philippe Dauman and Thomas Dooley senior executive VP and chief administrative officer (a newly created position). Mr. Dooley 's role is thought to be similar to that of a major operation Officer.Both Dauman and Dooley are members of Viacom' board of directors of s. I served in key positions within the Incarnation previous Viacom, which was cut into two companies, Viacom (VIA) and CBS separated (CBS), about eight months ago. Sumner Redstone is the chairman of each company. Viacom 'the s new CEO, Philippe Dauman, will report to Mr. Redstone. Thomas Dooley will report to Mr. Dauman.Although that The Financial Times went with the title of no nonsense; Frestón was removed as head of Viacom, "I fear that Wall Street Journal may have the most accurate title:" The exclusion of the head of Viacom reflects Redstone 's impatience for Results ". In fact, I couldn 't said it better myself. Of course, I was planning on writing more than a personal opinion that a front page article (the story made the front page of both the FT and the WSJ). Yet, I can 't fault of Wall Street Journal for putting the painfully obvious in big print. The article (which is a good profile of the whole affair) won 't encourage faith in Sumner Redstone of Viacom' s shareholders It begins by quoting Mr. Redstone 's insurance (the first date just six weeks) could imagine that the "no circumstance" under which Mr dismiss. Frestón. Cut to Monday, a Sumner 's ownership, in which Tom Frestón, a veteran of 26 years, has said he could lose his job, just eight months after being given the helm again (CBS-less) Viacom.The most obvious objection to Mr. Frestón 's of the infornamento is simply that he wasn' t given enough time. There are billions of people on this planet and took more than eight months to produce their majority, so, I imagine doing something truly remarkable, as the leadership of the media through the water rather disturbed and transition, a little more revenue long. The other objection is that Frestón already had demonstrated a capable executive. Power can not respond to the application; What have you done for me lately? ". But, had developed quite a reputation at MTV. The recent results have taken some of the luster off the golden boy (the channel, not Frestón, which is golden boy age 60). Real, MTV is more than a golden boy, it 's Viacom' jewel of the top of s – representing about 70% of the company 'income if almost all its profits. The article concerned the aforementioned "Mr. Frestón 's departure could lead to un'agitazione larger the company, particularly within MTV networks, much of which has been with the company for years and is intensely loyal to Mr . Frestón. "Those fears are rational. Any time an executive this connected to a particular division is lost there is the danger that others may follow – especially when so unceremonious exit is forced on a check of the powers – that – be. In this case, the reasons (perceived) of those powers is also a topic of concern. There 's no doubt many hours at Viacom sees the long, decrepit arm of Sumner Redstone reaching out from its ownership of the Beverley Hills and reaffirms its socket on the properties of cord who were once buried deep in all 'inside of his corporate colossus. At the time of the CBS / Viacom to split, I heard that Viacom would have sold at a price that would have maintained good out of my investment radar. If anything, I thought that CBS was the most likely occasion. Now, I 'm not in the least tempted by one or other action. But I was much more interested in Viacom as trade. One really exciting feature of the CBS / Viacom to split was the idea that a native of MTV was directing the new company. Viacom 's properties are very different from those owned by CBS. There was (and still is) an opportunity here so that Viacom will turn company.CBS put into the fire to meet really isn 't meet focused – and it shouldn' t be. That company 'the greatest competitive advantage of possessing s is a U.S. network TV. There is only a handful of such networks and each is a concession (although declining). Simply check a network, without regard to the quality of its current programming, has value. The situation is similar to owning a team of Major League Baseball, which currently has some value without regard to the quality of players in the contact. The transmission networks are in a very different position from cable properties, where excluding a handful of properties (for example, ESPN, Discovery and the food network) that the competitors do not have real nell'attrazione advantage of good programming. Many big media companies have developed around the delivery (though they are able to mistake in thinking the contrary). Content and delivery are two very different businesses that need their union to the ego of most media magnates and capital investors who buy their securities (both equity that debt) rather than to all the natural economic synergy. The source is always good to meet a coil of arrest, the delivery of that meeting is almost never. It takes only two buyers being competition to a market. I 'not convinced the VE ever that serve thousands of small customers is really a more secure and more profitable to serve some large (except in margin trading in large quantities and where a low score that plays great determination may force it to eat your unused capacity). In cases where the product is unique and the right to use the product is exclusive (as is often in trade in vehicles), the number of different owners of various delivery systems becomes a point unimportant. The transmission networks are an exception – a living relic of an era past. Have a competitive advantage that isn 't derived only from satisfying control. They established a network, which behaves much like a large installed base by providing a beachhead of access and familiarity from which an offensive of solid programming can be launched into millions of American homes. Ownership can 'cable; t emulate the networks. But, they can develop competitive advantages through limited points of the meeting of goods that can be milked for some time. Changes in technology does not eliminate the never Coil point of arrest to accompany a good meet. There online and offline just as it existed in print and in pictures. Perhaps Viacom 'the new administration s will focus on the supply of ready-to-good – but I doubt that. I feel suspicious in some way that will be more interested in doing business and selling of Wall Street on Viacom 's future prospects Such actions would be consistent with both their own areas of origin and with Sumner Redstone 's gave the trends. An article in Financial Times has authorized the arrest of Jack jump: Killings of Digitahi Video Star "ends with a quotation from Mr. Redstone: "We will try every reasonable deal – whether in the digital space or otherwise … and … we are determined not to let them go out of our hands." Those words are scary for investors who have entrusted their capital to Viacom. When a company public is convinced it can 't can not do a deal, usually gets the deal – and shareholders pay the price. There are real problems at MTV – and real challenges at Viacom. The Financial Times is that Wall Street Journal noted that ratings for video music awards MTV were down 30% this year. That 's on top of a decline in ratings the year before. The Internet also presents challenges (and opportunities) for Viacom. But, are Dauman and Dooley really far better equipped to address these problems that Tom was Frestón? It 's hard to imagine anyone better suited to run the new Viacom that Tom Frestón era. This is a big backwards for Viacom. The benefits of autonomy that may be drawn under Mr. Frestón are unlikely to flourish under Dauman and Dooley, who is, by all customers, legates president of Redstone. The leash was tight.
Geoff Gannon
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