Shari Redstone, Viacom Voice Support for Paramount CEO Greyby
Studio will lose money this year because of box-office bombs
Viacom departing chairman is pitching sale of stake in studio
Paramount Pictures Chief Executive Officer Brad Grey, in last place at the box office, got a public vote of support Friday from Viacom Inc.’s board, quelling for now doubts about his future amid major changes at the company.
Vice Chairman Shari Redstone, interim CEO Tom Dooley and the media company’s board said in a statement they remain “fully supportive” of Grey. “Under Brad’s leadership, Paramount has taken significant, successful steps to broaden and strengthen its business, and we are confident that Brad and his team have the skills, relationships and resources necessary to return Paramount to success in its movie business and continue its rapid growth in television,” they said.
The move suggests Viacom’s reconstituted board isn’t going to make drastic changes at the studio right away. The board, which added five new members last week, met with Grey Thursday to discuss the division’s poor performance. The owner of MTV and Comedy Central is also grappling with shrinking ad sales and viewer losses in its much larger cable-TV business.
Paramount has struggled at the box office this year, with some of its biggest films faltering, including the recent remake of “Ben-Hur,” a co-production with MGM, and “Teenage Mutant Ninja Turtles.” The studio ranks sixth in domestic ticket sales, last among the biggest film companies, according to researcher Box Office Mojo.
Paramount could lose more than $350 million this year, according to Michael Nathanson, senior analyst at MoffettNathanson LLC in New York, a performance he called “truly shocking.” Viacom should sell the whole studio to the highest bidder, he said in an interview this week.
“Given the uncertainty around long-term growth, it makes sense to sell an asset that has been really badly managed,” Nathanson said.
Chairman Philippe Dauman is exploring a sale of a minority stake in the studio to help fund its turnaround and pay down debt before he steps down next month. The Redstone family changed the bylaws to require unanimous approval for any transaction involving Paramount. Dauman has been trying to sell a stake for much of the year.
Viacom fell 0.9 percent to $41.02 Friday in New York. The stock was little changed for the year through Thursday.