If Shakespeare wrote about corporate boards instead of royal families, the ongoing Viacom saga would deliver all the backstabbing and treachery he needed.
In the latest act, 93-year-old Sumner Redstone moved to boot his former protégé, Viacom CEO Philippe Dauman, from the company’s board, along with four other board members. National Amusements, the holding company controlled by Redstone and the owner of the controlling shares in Viacom and CBS, has asked a Delaware court to rule that the removals are legal.
If Redstone expects a challenge in court, he has reason to. Dauman already has contested Redstone’s mental capacity in a Massachussett’s court, after Redstone ousted him from the board of National Amusement in May. Dauman has argued that Redstone is being manipulated by his daughter, Shari Redstone, whom he alleges is seeking control of the media empire.
At stake is control of a once-mighty media company that owns MTV, Nickelodeon, and Paramount Pictures. Dauman has been CEO of Viacom since 2006, and under his watch, Viacom’s shares have fallen 50% in the last two years. Redstone’s next step is likely firing Dauman as CEO, although a statement from National Amusements indicates he will leave that decision up to Viacom’s directors.
“It will be the responsibility of the newly-constituted Board to evaluate the current management team and take whatever steps it deems appropriate to ensure that Viacom has in place strong, independent and effective leadership,” the statement reads.
The stock shot up more than 6% on the boardroom shakeup, with one investor, SpringOwl Asset Management, applauding the developments in a press release. “We think all the Viacom shareholders and employees got rewarded today with this move. The board has been significantly upgraded,” it said.
The new board members include Ken Lerer, the former chairman of the Huffington Post, and Nicole Seligman, the former president of Sony Entertainment. None of the new directors has ties to Redstone’s family or businesses.