Battle for Viacom escalates with Dauman suit


Details

Michelle Clancy

| 24 May 2016




The power struggle for control of Viacom has escalated with CEO Philippe Dauman and director George Abrams suing over their unexpected removal from the trust that will control the firm when 93-year-old Sumner Redstone dies.



sumner redstoneThe trust controls Redstone’s company National Amusements, which owns 80% of both Viacom and CBS. Redstone has named a current National Amusements executive, general counsel Ted Jankowski, and family friend Jill Krutick as their replacements.

In the complaint, Dauman called his removal “illegal” and alleged that Redstone is being manipulated by his daughter, Shari Redstone.

The move had been made “to accomplish her [Shari Redstone’s] long-held goal, which Mr Redstone has always opposed, of gaining control of National Amusements and Viacom”.

But Viacom is in trouble: it has lost more than a third of its stock value in the last 12 months, and Dauman has been shopping Paramount Pictures — a move Redstone is said to oppose.

The bad blood is a recent development. “Sumner and I have a more than 30-year history, side by side, building his media empire,” Dauman said in an earnings call in February. “He and the board of Viacom, believing in my ability and my character, have entrusted me with weighty responsibilities, none of which are inconsistent or incompatible.”

In a statement, Redstone said he “regrets that Mr Dauman has diverted resources to these baseless attacks and misrepresentations, rather than focusing on the continuing challenges that are faced by Viacom. Mr Redstone will continue to act in what he believes are the best interests of Viacom’s shareholders”.