MUMBAI: Barely eight months after Viacom chairman Summer Redstone split the global media powerhouse into two units -- CBS Corp and Viacom Inc -- one of his anointed CEOs has announced his resignation.
Viacom CEO Tom Freston's decision, which was sudden and unexpected, comes at a time when the company's stock price was falling (down 20 per cent since January when the split from CBS became effective). The key properties under Freston's charge were MTV Networks, which he literally created and built, as well as Paramount Pictures.
Viacom announced today that the 60-year-old Freston was being replaced as president and CEO by Philippe P. Dauman. The Viacom board also named Thomas E Dooley to the newly created position of senior executive vice president and chief administrative officer. Dauman will report to Redstone, while Dooley will report to Dauman.
Both Dauman, 52, and Dooley, 49, have previously held a number of executive positions at the company, and both currently serve on Viacom's board.
The official release quoted Freston as saying: "I've spent over 26 years at Viacom, 18 of them with Summer. With my exceptional colleagues, we built a worldwide powerhouse of brands and businesses, literally from scratch. I leave many good friends knowing that they have an unmatched track record, a great plan going forward and incredible abilities to execute on it in this digital age."
Official comments apart, it is clear that Freston was forced out by Redstone. Newswire service Associated Press quoted Redstone as telling analysts on a conference call that the board wanted a more entrepreneurial and aggressive management team that would have a closer relationship with investors. Investors didn't seem too thrilled by the news though, sending the company stock down nearly 6 per cent in early trading.
But far more than the slip-sliding stock price, what probably had the biggest hand to play in Redstone's dumping a loyal lieutenant who built MTV into a global entertainment powerhouse was over Freston's failure to aggressively chase MySpace, the youth social networking phenomenon that has taken the world by storm.
It irks Redstone no end that a site that was a perfect fit as far as MTV's youth demographic is concerned was snapped up from right under Viacom's nose by Rupert Murdoch's News Corporation for what in hindsight has turned out to be a steal at $ 580 million.
"We bought a lot of little things and you can add it all up, but it's not MySpace," Redstone has been quoted as saying of the start-up that had been "sitting out there for a long time" before News Corp bought it out.
Freston's departure comes less than two weeks after Viacom announced it was parting ways with Hollywood superstar Tom Cruise's production company, ending a 14-year relationship. Redstone's stated reason for dumping Cruise was that his "erratic" behaviour made the association an unviable one.
Viacom's brands include MTV Networks (MTV, VH1, Nickelodeon, Nick at Nite, Comedy Central, CMT: Country Music Television, Spike TV, TV Land, Logo and more than 120 networks around the world), BET Networks, Paramount Pictures, Paramount Home Entertainment, DreamWorks and Famous Music.
