Viacom Faces Activist Call for Sumner Redstone to Resign

Investor SpringOwl also advocates replacement of CEO Philippe Dauman and total gutting of Viacom boardroom

An activist investor has added Viacom to his hit list, and he’s seeking nothing less than a complete overhaul of every position of power.

A small investor in Viacom, Eric Jackson of New York hedge fund SpringOwl Asset Management, called for the resignations of Viacom’s chairman Sumner Redstone, President and CEO Philippe Dauman and the entirety of Viacom’s board, in a 99-slide presentation Tuesday.

He also advocated for the entertainment giant to push into digital subscription channels, cut $400 million in operating costs, investigate a merger with cable rival AMC Networks and consider alternatives for movie studio Paramount, be that a partnership with the likes of Amazon or Alibaba or an outright sale of the studio.

Viacom said in a statement that its board and management team are “completely focused on delivering long-term value to shareholders.”

“We are encouraged by the growth in our strong international business, the ratings upswings at most of our networks, Paramount’s strong start in 2016, our leadership position in advertising technology and other positive recent developments,” the company said.

Jackson, a small shareholder whose stake is far below the 5 percent level that requires regulatory disclosure, has previously put companies like Yahoo in his crosshairs. Last month, he called for CEO Marissa Mayer’s ouster and 9,000 job cuts.

However, Viacom’s stock structure gives its 92-year-old billionaire chairman, Redstone, majority voting power through his holding company, National Amusements. That removes the possibility of an activist like Jackson building a coalition that could ever overcome that concentration of control.

Calling Redstone an “absent chair for too long,” Jackson said that the chairman should step down and that all of Viacom’s directors should be replaced with new members who have as much technology experience as media know-how. Jackson specifically proposed another Viacom activist investor, Mario Gabelli, as a director who would increase shareholder perspective on the board, and he applauded previous suggestions from Gabelli, like a combination with AMC.