A showdown is set for Thursday, one day after Sumner Redstone handed over the chairmanship of CBS to Les Moonves
Leslie Moonves’ ascendance to the head of CBS’ board Wednesday was typical CBS — tightly game-planned and, timing aside, not that surprising.
What happens Thursday at CBS’ corporate sibling Viacom will likewise be typical Viacom. It will be a chaotic chessgame, one whose outcome is anyone’s guess.
Here’s what is known. The Viacom board will meet Thursday, one day after CBS revealed that nonagenarian Sumner Redstone — who owns 80 percent of CBS and Viacom through his family’s holding company, National Amusements — had stepped down as chairman and would be succeeded by CEO Moonves. The rise of Moonves was facilitated by Redstone’s daughter Shari Redstone, who later in the day came out swinging against Moonves’ Viacom counterpart, Philippe Dauman.
“It is my firm belief that whoever may succeed my father as chair at each company should be someone who is not a trustee of my father’s trust or otherwise intertwined in Redstone family matters, but rather a leader with an independent voice,” Redstone said in a statement issued just before Viacom announced its board meeting.
That would preclude Dauman, one of seven trustees set to take over the elder Redstone’s National Amusements stake when the 92-year-old mogul dies. It also sets the stage for a boardroom battle at Viacom.
Stock in Viacom shot up in after-hours trading Wednesday on the presumption that Sumner Redstone would soon step down at Viacom. The mogul’s health is the subject of a lawsuit by his ex-girlfriend, Manuela Herzer, who alleges that he is incapacitated. Dauman, who was given charge of Redstone’s healthcare after Herzer was thrown out of Redstone’s house in October, has claimed that the mogul is in control of his faculties and makes his own decisions.
Wall Street isn’t buying it, and the same chorus insisting that Redstone step away from Viacom has begun to call for Dauman’s head as well.
“We believe the potential for new board leadership at Viacom will be well received by investors given broad dissatisfaction with the company’s strategy, execution and long-term potential,” analysts at Guggenheim Partners said in a statement Wednesday. “We see the election of a respected Chairman as the first of several steps along the path to regaining shareholder confidence. Appointing similarly respected company management and providing a detailed strategic plan (even if accompanied by near-term negative financial impact) would be additional critical milestones on that path.”
“Appointing similarly respected company management” is code for “hiring a new CEO.” That could happen. One potential outcome Thursday is that the board would reject Dauman as chairman and oust him as CEO in the process. It is unclear who would emerge to lead Viacom in such a scenario, but Shari Redstone would likely not find herself head of the board. She, like Dauman, will be a National Amusement trustee after he father’s death. Her own criteria for the job would seem to rule her out.
The board could, in that case, appoint one of its six independent members chairman — Blythe McGarvie, “Inside Edition” anchor Deborah Norville, former Oracle president Charles Phillips, Frederic Salerno, William Schwartz or Cristiana Falcone Sorrell.
But although Dauman’s ejection from Viacom is possible, it’s not the most likely outcome. Dauman controls the board. He could be elected chairman with Shari Redstone and her allies abstaining or voting against him. Such a move would set up another battle to take place after the elder Redstone’s death.
And when that will be is anyone’s guess. It’s still not even known whether Redstone has or will resign as chairman of Viacom. So another possible outcome Thursday is the continuation of the status quo at Viacom.