- Group also seeks new board and greater focus on digital arena
- Says company erred by selling too much programming to Netflix
Viacom Inc. jumped 4.7 percent after activist investor SpringOwl Asset Management called on Chairman Sumner Redstone and Chief Executive Officer Philippe Dauman to step down from the New York-based media company.
Redstone, 92, has been the subject of investor speculation since he stopped speaking on earnings calls and appearing at company events last year. A former girlfriend alleges in a lawsuit that he was incompetent when she was removed as director of his health care. Dauman, the current health-care agent, has asked a New York judge to block a subpoena for his testimony in the case.
Viacom, owner of channels such as MTV, Nickelodeon and Comedy Central, has trailed rivals in stock-price performance over the past one, three and five years, SpringOwl said in a presentation posted online. New management and a greater focus on digital media could lift the stock, the group said. Any such changes would require the consent of Redstone, who controls 80 percent of the voting stock. He also controls CBS Corp.
“In order to allow a creative culture to sprout at Viacom again, it requires a new CEO,” SpringOwl said in the report.
Viacom Class B nonvoting shares rose to $41.72 at the close in New York and are up 1.4 percent this year. The stock slid 45 percent last year.
In an e-mailed statement, Viacom said it was encouraged by recent ratings gains at most of its networks, a strong start at the Paramount film studio in 2016 and the company’s leadership in ad technology.
“Viacom’s board and management team are completely focused on delivering long-term value to shareholders,” the company said. “We are looking to the future and the opportunities ahead.”
SpringOwl didn’t say how much Viacom stock it owns.
SpringOwl is a New York-based investment firm founded in 2013 by former casino analyst Jason Ader and former Cumberland Associates CEO Andrew Wallach. The group has pressed for changes at companies including Yahoo! Inc. and Bwin.Party Digital Entertainment Plc, which agreed to be bought last year for about $1.7 billion.
The firm also called on Viacom to explore an investment from Alibaba Group Holding Ltd. or Amazon.com Inc. in its Paramount Pictures film studio. SpringOwl said Viacom should consider a merger with AMC Networks Inc., cut costs more and push further into online offerings. The investment company cited strategic missteps, such as licensing too much content to Netflix Inc., suing YouTube and selling an investment in Vice Media for much less than other investors have paid since then.