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In control.
THE LAST LAUGH

Who’s the real winner of the Viacom squabble? Hint: It’s not Sumner Redstone

Oliver Staley
By Oliver Staley

Culture & lifestyle editor

The long battle over control of Viacom appears over, and by all accounts, Sumner Redstone won.

Redstone, the 93-year-old media mogul, reached a settlement with his former protegé and present antagonist Philippe Dauman, the CEO of Viacom whom Redstone tried to oust from the trust that controls Viacom and CBS in May. Dauman tried to have Redstone declared mentally incompetent, but Redstone beat back the threat to his control and Dauman is out, albeit with a $72 million golden parachute. Thomas Dooley, another long-time Viacom executive, will be the new CEO. The terms of the settlement have been widely reported, although the company had no comment.

Dauman, who seemed willing to go to the wall for control of the company, may not feel like the winner. But under his tenure Viacom has been a slowly sinking ship. He’s been given a lifeboat.

Ad revenue at Viacom’s cable networks like Comedy Central, MTV and Nickelodeon are in decline, as viewers go online for their programming.  Paramount—the movie studio whose attempted sale by Dauman triggered the spat with Redstone—trails its major rivals for the fifth year in a row and may be in the middle of one of the worst years for any studio on recent memory.

And while other media companies like Verizon and Univision are buying up internet properties like Yahoo and Gawker, Viacom has been on the online sideline. (Redstone’s instincts for the internet may not be the sharpest. He fired Viacom CEO Tom Freston, Dauman’s predecessor, for not buying the ill-fated social network MySpace in 2005 which instead when to that other aging media mogul, Rupert Murdoch).

Dauman may also escape the increasingly messy personal life of Redstone, whose daughter, Shari,  is in a feud with his former girlfriends, and whose granddaughter is suing Shari. Redstone may have once treated Dauman like a son—in plans for his funeral, Redstone requested that he serve as a pall bearer and deliver a eulogy—but Dauman may now want to put as much distance as possible between himself and the Redstone clan.

The other winners may be Viacom’s shareholders, who are finally rid of Dauman. Viacom’s shares have fallen 40% over the last two years. The company recently forecast third-quarter earnings far below analysts’ estimates. Dauman, who made the mess, won’t have to clean it up. And according to Equilar, he’s received over $400 million in total compensation in the decade he ran Viacom.

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