Media giant Viacom slimmed down considerably at the beginning of 2006, spinning off a collection of its broadcast and radio assets into a separate company, now CBS Corporation, and thereby effectively undoing a mammoth merger it engineered in 1999. The remaining business is concentrated around the group's fast-growing cable networks, biggest of which is pioneering music broadcaster MTV, supported by Nickelodeon, Comedy Central and others. The new Viacom also kept control of movie studio Paramount and its busy home entertainment division. In 2014, Viacom became the first US broadcaster to own a UK terrestrial broadcaster following a deal to acquire Channel 5. Two years later Viacom became embroiled in an undignified series of court cases as various parties within elderly owner Sumner Redstone's inner circle battled for control of his media empire.
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Adbrands Weekly Update 22nd Dec 2016: Sumner Redstone will step down as a director of Viacom in Feb next year, though he will retain the title chairman emeritus. The ailing billionaire, whose physical and mental health has remained firmly in the spotlight this year, resigned his role as executive chairman of both Viacom and CBS earlier in 2016 following a series of court battles. He will now also surrender his vote as well, though according to a filing this week he "will continue to participate in meetings of the Board in a non-voting role". Further down the executive ranks, there was yet another upheaval at Viacom's struggling music & entertainment cable business - responsible for MTV and Comedy Central among others - with the resignation of divisional president Doug Herzog.
Adbrands Weekly Update 15th Dec 2016: In an unexpected turnaround, the Redstone family advised the boards of CBS and Viacom to suspend discussions regarding a merger. Their National Amusements investment umbrella, which controls around 80% of voting shares in both groups, issued a statement to the effect that, having considered the benefits of such a deal, it had reached the conclusion that "this is not the right time to merge the companies". The Redstones have asked the two companies to "focus instead on their independent paths forward". Apparently there had been little enthusiasm within either Viacom or CBS for a recombination of the two businesses, and Shari Redstone is said to have been impressed by Robert Bakish's first weeks as CEO of Viacom.
Adbrands Weekly Update 17th Nov 2016: Despite the multiple challenges it faces as well as pressure from investors to re-unite with former stablemate CBS Corporation, Viacom is also pressing ahead with further expansion in its own right. On his first day as CEO, Bob Bakish expanded the group's international footprint with a deal to acquire one of Argentina's biggest free-to-air TV channels, Telefe, for $345m. The vendor is Spanish telecoms giant Telefonica. In addition to its extensive cable portfolio, Viacom already has a footprint in international free-to-air networks. Among its other assets is the UK's Channel 5.
Adbrands Weekly Update 10th Nov 2016: Viacom reported a grim set of numbers for the final quarter of its fiscal year to September, with revenues down 15% and net earnings by a whopping 71%. Ironically, the profit figure was slightly better than analysts had feared, though the size of the fall in revenues was significantly worse. For the full year, group revenues slipped 6% to $12.5bn, while earnings shed 25% to $1.4bn. Media networks did slightly better than filmed entertainment, with revenues down 5% and operating income by 16% as a result of weak ratings and even weaker advertising revenues. Yet that was a good result compared to filmed entertainment, where poor box office for multiple releases and a huge write-off against not yet released Monster Truck resulted in a near-$500m operating loss. Talks are continuing regarding a much-anticipated re-merger with sister company CBS, though a deal is by no means certain. Yet chances are that if CBS doesn't buy Viacom, someone else will have to. Yet another blow for Viacom this week was the ejection of all its cable strands from Sony's Playstation Vue streaming service. That decision has only limited financial impact, but represents a significant blow to the group's reputation. It was the original network partner for Vue when that service launched in 2014.
Adbrands Weekly Update 3rd Nov 2016: The latest development at Viacom was the elevation of Robert Bakish, currently head of the group's international networks, to the role of acting president & CEO when incumbent Tom Dooley departs in two weeks' time. He will be the third CEO of Viacom in three months, and could himself be demoted in the not too distant future if the widely anticipated re- merger of Viacom with CBS materialises. Bakish also becomes chief executive of the newly created Viacom Global Entertainment Group which will oversee international networks as well as the music & entertainment group which houses MTV and Comedy Central. Viacom chairman Tom May said that the group is planning for a future either with or without CBS.
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