Freston Out As Viacom CEO
Viacom Chairman Sumner Redstone has shaken up his executive ranks again, with Tom Freston ousted as CEO and replaced with Philippe Dauman, a former exec and longtime board member.
Freston, a founder of MTV Networks, had only been on the job since Viacom spun off from CBS Corp. at the beginning of the year.
Dauman’s business partner, Viacom board member Thomas Dooley, is also assuming an active role with the newly created title of chief administrative officer.
Redstone said September 5th he hopes the new team will be more aggressive and entrepreneurial.
Redstone reportedly blamed Freston for losing a bid to acquire MySpace, which went to Rupert Murdoch’s News Corp.
“When Phil and Tom were at the company, no important deal ever got away from them,” Redstone told Variety.
Investors apparently didn’t take the news of Freston’s sudden departure well, as the company’s shares dropped $2, or 5.4 percent, to $34.97 in heavy trading September 5th on the New York Stock Exchange.
“We think that it was too early for the board to replace Mr. Freston, who is a seasoned media executive,” Citygroup analyst Jason Bazinet wrote in a note to clients.
Redstone told analysts during a conference call that the decision was a difficult one given Freston’s deep roots at the company, but said the board wanted a more aggressive management team that would have a closer relationship with investors.
“On the one hand we love Tom,” Redstone said. “On the other hand, the board felt that not enough was being done … that the communication with Wall Street had been deficient, and the stock price reflected that.”
In addition to being Viacom’s chairman, Redstone, who is 83, is also its controlling shareholder. His daughter Shari, 52, also serves on the board and is Viacom’s non-executive vice chair. She has been tapped to eventually succeed her father, though Redstone said her role at the company was still evolving.