Viacom CEO Philippe Dauman should be replaced by “somebody who is turned on, attracted to, and somewhat knowledgeable about the creative community and popular culture,” former company chief Tom Freston said today on CNBC.
He added that he would “totally” agree with the characterization of Dauman as an “arrogant elitist.”
Breaking his public silence about the fight between Dauman and controlling shareholder Sumner Redstone, Freston says “it seems like both sides are paralyzed…It would be in the best interest of everybody, especially the employees, to have this over.”
Redstone fired Freston in 2006, and brought in Dauman to replace him.
But a decade later Freston says about his successor that “when the Redstones don’t want you, when Wall Street doesn’t seem to want you, and when — from what you can hear — there’s not a huge amount of support for him in the company, you have to wonder: What’s the game he’s playing? What’s the point?”
Although Freston’s friendly with Redstone’s daughter, Shari — who may win control of the company — he says he hasn’t been asked to come back as CEO, and wouldn’t do so.
“I’ve moved on in my life,” he says. “I think they can find someone who could do that job with more passion.”
CBS chief Les Moonves is one possibility. He’s “like the perfect entertainment executive,” Freston says. It’s “not for me to say” whether Viacom should recombine with CBS; the companies were split in 2006. “But that would be an interesting combination, an obvious one.”
Dauman has made “a pattern of pretty serious errors,” says Freston. For example, he says the company’s culture “was worn down gradually over time.” He faulted the CEO for spending $18 billion on stock buybacks.
Freston also says that “litigation became a key tool” — one that he believes backfired with Viacom’s $1 billion copyright infringement case against YouTube.
At a time when Viacom’s young viewers were turning on to digital media, “Rather than get engaged with YouTube, like NBC or other people are, and learn, they decided to sue them which froze Viacom for years on the sidelines, unable to make any digital moves. They suffered hugely in terms of their reputation.”
And the final “joke” was that “they didn’t get a nickle out of this. They spent tens of millions of dollars on this folly over several years.”
The result: “They moved from the center of pop culture to the sidelines.”
Viacom’s board was “complicit” in what he described as the company’s “fall from grace” as TV ratings, ad sales, and the stock price declined.
“There’s no one on that board who’s a digital person,” Freston says.
The ship can be righted, the former CEO adds: “They need to have a change in administration. Top management really needs to go.” Not just Dauman but “some of the management group around him….They came in as a team and can go out as a team.”
He’d also repopulate the board with “people who have some connection with the popular culture and can add something.”
Even so, it would be “difficult for them to organically grow out of this. They’re going to need to make some acquisitions, make some strategic partnerships….Nickelodeon, MTV, Comedy Central — those are all really good brands. By no means have they reached the point of no return. I think they can be rejuvenated. America loves a second act.”
Responding to the interview, Viacom issued this statement:
Viacom is significantly bigger, more global and generates far more profits today than when Philippe Dauman’s predecessor left office in 2006. Philippe has doubled the amount of investment in creative programming over his tenure to more than $6 billion annually, and has grown Viacom to be the #1 family of cable networks and the #1 destination on all of television for reaching younger audiences. Philippe has overseen substantial and consistent growth in the company’s international business, which is now on track to generate $1 billion in revenues by 2020. Viacom is making more global hits than ever before, exemplified by recent successes such as Lip Sync Battle now airing in 96 countries. Philippe has also brought in new creative leadership to reposition key networks, which is now driving ratings turnarounds, and has overseen an overhaul of the company’s advertising sales engine to deliver innovative data-driven products. The company has generated billions of dollars in new distribution revenues from emerging digital platforms while at the same time more than doubling affiliate revenues since 2006.