Shareholders are accustomed to raking in cash from Viacom’s prodigious stock repurchases and dividends. So this morning’s news that it will spend £450M ($757M) to buy the UK broadcaster has many wondering whether the party’s over. But execs told analysts in a conference call not to worry: “It will not impact the buy back program at all,” COO Tom Dooley says. The funds to buy Channel 5 were already parked overseas (that means no U.S. taxes) so “it’s not cash that would have been available for the stock buyback program” in the U.S. What’s more, the investment “will yield a very high return” — he says low to mid teen percentages, comparable to other company operations — and includes £125M of net losses that can be used to lower Viacom’s taxes. CEO Philippe Dauman added that the deal will boost operating income in the first year after it closes and will enable Viacom to increase spending for programming that can be used on “existing and future networks around the world.”
We’ll see whether investors are persuaded. Viacom shares are down slightly in early trading, despite this AM’s disclosure of stronger than expected earnings for the first three months of this year. Bernstein Research’s Todd Juenger, a frequent Viacom critic, says that … Read More »
CEO Philippe Dauman just disclosed his plan to add Spike to Viacom‘s overseas pay TV offerings, joining a portfolio that includes MTV, Nickelodeon, Comedy Central, and the Paramount Channel. “We’re doing a little bit of proof of concept,” he said today at the Deutsche Bank Annual Media, Internet & Telecom Conference. He’s optimistic because “we have been creating a lot of original programming on Spike itself,” and much of it — especially scripted shows — is “able to travel.” Overseas expansion is “a big, big opportunity” for Viacom and he sees distribution deals in countries including Brazil, Italy, and Russia helping to “fuel long-term growth” for the cable operation. In addition, “we look at India and think of our company a quarter century ago. It’s a great value creation opportunity.” Dauman also is taking a global view for Paramount. Read More »
UPDATE: 7:01 PM: Michelle Obama could have turned to the guy seated next to her at the head table during tonight’s White House State Dinner and asked if he’s heard any good jokes lately. That would be none other than The Colbert Report host Stephen Colbert. Could it be that French-sounding surname earned him some juice with the protocol folks? Meanwhile, according to the White House pool report, Bradley Cooper was seen chatting with Secretary of State John Kerry, and Julia Louis-Dreyfus was asked her what her favorite part of the dinner was. “Look who I’m sitting next to,” she said, pointing to Vice President Joe Biden. The real veep swiftly jumped in with: “Hey, stop screwin’ around, she’s my date!” He promptly burst out laughing and said, “Just kidding.” Meanwhile, Mindy Kaling was tweeting and Instagraming her evening.
PREVIOUSLY: We knew a good grasp of French would come in handy for Bradley Cooper one day. The American Hustle actor will be one of the many Hollywood guests attending the State Dinner tonight at the White House that President Obama and the First Lady are hosting for French President Francois Hollande. Among the cabinet members and government officials joining the sparkling gathering on the South Lawn will also be CNN chief Jeff Zucker, HBO’s Veep star Julia Louis-Dreyfus, HBO CEO Richard Plepler, Viacom CEO Philippe Dauman, and Star Wars director JJ Abrams and … Read More »
That would be huge if Viacom CEO Philippe Dauman’s prediction is accurate — although he declined to elaborate in his presentation today at the UBS Global Media and Commmunications Conference. Viacom reportedly has talked with Sony about teaming up to offer an online service that would include the same kind of channels that now are only available to cable and satellite TV subscribers. Many programmers fear that a national online service could undermine their ability to sell their channels in bundles that require people to pay for services that they don’t watch. Intel met stiff resistance from cable networks when it proposed to introduce what’s known as an over-the-top service, and now wants to sell its technology. Read More »
Paramount will continue to ride movie franchises Mission Impossible, Star Trek, GI Joe, and World War Z and roll out animated films for SpongeBob SquarePants and Monster Trucks, the company told analysts this morning as execs offered a rosy picture of Viacom’s growth prospects. CEO Philippe Dauman also crowed about the attention that Miley Cyrus’ sexually charged dancing brought to MTV’s Video Music Awards in August, calling it a “moment that is still reverberating across the pop culture landscape.” But some investors likely will be more concerned about the company’s acknowledgement that the original programming planned for its pay TV networks will drive costs up by a high single digit rate in 2014. “Original programming gives us the ability to build our brand better,” Dauman says. “It creates a lot of value for us.” In addition, Viacom says that its stock repurchases — which accelerated to $2.7B in the September quarter — will come closer to $850M in the three months ending in December. Read More »
That doesn’t necessarily mean Viacom will skimp on spending where needed, CEO Philippe Dauman told investors at the Goldman Sachs Communacopia Conference. For example, Paramount has a new Transformers film planned for next year that has “a very high budget but very low risk. Same with Mission: Impossible and some of the other franchises.” With new versions of its latest franchise, World War Z, “we will alleviate the risk by bringing in co-financing.” Broadly speaking, though, “we have a history even in tough times of maintaining or growing margins” and that means keeping “a tight lid on expenses, including in programming.” At the movie studio Dauman expects to distribute about 15 films a year including three animated titles in 2015. But he adds that he’s “excited” about next month’s Jackass Presents: Bad Grandpa with Johnny Knoxville, which Dauman calls “a fun movie, and a profitable one.” He’s also optimistic about Paramount’s revived television production operation. Read More »
Philippe Dauman jumped on the bandwagon of media execs lamenting the oversupply of big-budget films competing with each other this summer. Although he told analysts this morning that Viacom will see “significant profitability” in the current quarter from its recent films which include Star Trek Into Darkness and World War Z, the numbers will be lower than execs expected. “This summer had a particularly high volume of tentpole pictures from all the studios combined,” he said. That’s a problem: “We hope to drive the viewing of tentpoles for a longer period of time, and the crowded schedule limited a lot of pictures — ours included.” He assured analysts that it’s “not going to happen every year.” DreamWorks Animation CEO Jeffrey Katzenberg made a similar point this week to explain the disappointing performance of his film Turbo. This summer included 50% more tentpole releases than in the same period last year, he said. What’s more, “we’ve seen more animation this summer by about 100% than we’ve ever seen before.”
Viacom Earnings Rise With Help From ‘Star Trek’ As It Doubles Share Repurchase Plan
Fleming Rants On Why Studios Can’t Launch … Read More »
The devil’s going to be in the details for investors who want to see from the latest earnings report how basic operations performed in the June quarter without help from two successful tentpole films (Star Trek Into Darkness and World War Z), and a streaming deal with Amazon. But many likely will start and stop with Viacom‘s announcement this morning that it will double its share repurchase commitment to $20B. It “highlights the confidence we have in our business and the value of Viacom stock,” CEO Philippe Dauman says. “We will continue to focus on maintaining a strong and flexible balance sheet, which supports robust investments in our brands and franchises as well as substantial capital return to shareholders.” As for the basic fiscal Q3 numbers: Viacom generated $643M in net income, +20.4% vs the period last year, on revenues of $3.69B, +14%. The revenue number beat the $3.58B that analysts expected. Adjusted earnings from continuing operations, at $1.29 a share, were a penny shy of forecasts. At the main TV networks business revenues were +13% to $2.57B with operating income +24% to $1.16B. It benefited from a rise in affiliate fees, +28% domestically and +26% worldwide, although without the streaming deals the number would have been up “in the high single digits,” Viacom says. Domestic ad sales increased 5%. Over at Filmed Entertainment, which includes Paramount, revenues were +15% to $1.16B including worldwide theatrical … Read More »
Rest easy, Sumner Redstone, Philippe Dauman and Thomas Dooley: You won’t have to give up millions of your bucks after all. Eleven months after a Viacom shareholder sued the company to get back $36.6M he believed was overpaid in bonuses to the media behemoth’s three top execs, a federal judge in Delaware has dismissed the suit. Robert Freedman’s complaint (read it here) sought reparation for compensation to Chairman Redstone, CEO Dauman and COO Dooley, plus legal fees, and to quash future incentive payouts. U.S. District Judge Sue Robinson filled 26 pages with opinion as to why she sent Freedman home empty-handed, saying he failed to prove his claim that the trio were incorrectly awarded millions by the Viacom board’s compensation committee between 2008 and 2011 in violation of the company’s 2007 executive pay plan. The judge agreed with Viacom’s October request to have the suit tossed.
Viacom CEO Philippe Dauman had better hope he doesn’t have to testify at a congressional hearing where Sen. John McCain’s asking the questions. The entertainment exec gave the back of his hand today to the Arizona Republican’s new campaign to promote a la carte pay TV pricing. McCain “got a lot of publicity for his solo sponsored bill which he’s been doing for 15 years now,” Dauman told investors at the Nomura Global Media & Telecom Summit. The proposal has “no co-sponsors, [and is] going nowhere.” One big reason, Dauman says: The current pay TV bundles are “great for consumers. Consumers are enjoying what many call the golden age of television because we have a number of networks….come from nothing and know that they have distribution.” But he says “the opposite would be true” with a la carte pricing. “Consumers would get fewer channels without saving any money.” Although some analysts wonder whether online video will promote cord cutting, Dauman still sees the businesses as complementary. MTV will introduce an app for streaming programming “very soon,” following Nickelodeon’s which the CEO says has been “very successful.” Indeed, he says that channel apps “can be the method by which you get TV Everywhere” as opposed to apps from pay TV distributors. Viacom’s program carriage deal with Netflix expires at the end of this week… Read More »
Shares opened up more than 4% this morning after Philippe Dauman reassured investors that Viacom will continue to generate lots of cash from deals with streaming services — even if its program licensing pact with Netflix expires at the end of this month. “We’re still in discussions with Netflix…and with others,” he told analysts in a conference call. “We’re open to licensing content, some of it on an exclusive basis.” Netflix CEO Reed Hastings raised some fears last week when he said that his company would let its current deal with Viacom expire. Netflix is shifting its focus to “exclusive and curated content” as opposed to “non-exclusive, bulk content deals,” he said. The streaming service would be fine without Nickelodeon shows because “with all the recently added fresh programming from Disney, Cartoon Network, Hasbro’s The Hub and DreamWorks Animation, we have a great kids offering.” But Dauman also says that Viacom has little to fear without Netflix — and has “enough visibility” to know that the entertainment company can realize its forecast to see streaming revenues grow 10% this fiscal year. Read More »
UPDATE, 11:36 AM: Cablevision’s returning fire following Dauman’s comments today. “The tactics employed by Viacom are illegal, anti-consumer, and wrong, and force Cablevision’s customers to take and pay for more than a dozen channels they don’t want in order to receive the Viacom channels they want,” the cable company says. “Viacom’s abuse of its market power prevents Cablevision from delivering more programming choice, particularly among networks that compete with Viacom’s less popular channels.”
PREVIOUS, 10:14 AM: The Viacom chief just provided his company’s most vigorous response so far to Cablevision’s suit last week charging that the programmer violates antitrust laws by pricing channels so it’s uneconomical to buy them individually. “You won’t be surprised to hear me say that the lawsuit Cablevision filed was ill-advised and frivolous,” Philippe Dauman told the Deutsche Bank Media, Internet and Telecom conference. Two months ago Viacom negotiated a new multi-year carriage deal with Cablevision. “We lowered the price from the ask, and offered additional terms related to TV Everywhere to help drive its business,” Dauman says. “We even gave them more term…On this deal they said they don’t like, they wanted a longer term.” And Cablevision ended up carrying the same networks it previously picked up. “I guess their theory would be – ‘We got the discount, we got three suits for the price of two. Now we just want one suit for the same price.’” Dauman also took … Read More »
The drop reflects a decline in one-time stock awards and non-equity incentives — and isn’t a reflection of the company’s view of the CEO’s performance — according to the proxy statement Viacom just filed at the SEC. Viacom shares appreciated 31.7% in the fiscal year that ended in September while the S&P 500 was up 26.8%; the company pegs the total shareholder return at 41.5%. Still, Philippe Dauman‘s compensation package is the lowest it has been since 2008. The total breaks down into $3.5M in salary, $10.27M in annual stock awards, $1.85M in one-time stock, $6M in annual option awards, $11.5M in non-equity incentives, $54,720 change in pension value, and $269,363 in other compensation. Nearly all of the “other” payment comes from Dauman’s personal use of the Viacom aircraft, which the company says is needed “for security reasons.” The package comes to about 2.5 times the median for the other top Viacom executives, which is in a range that corporate governance watchdogs consider to be acceptable. But the numbers are lopsided: They include Chairman Sumner Redstone’s $20.42M (-2.8%) and COO Tom Dooley’s $26.3M (-22.8%) — with a sharp drop to General Counsel Michael Fricklas’ $6.78M (-13.8%), and CFO James Barge’s $2.68M (-12.0%) for the work he did before leaving in November. The proxy says that shareholders haven’t submitted any resolutions to be voted on at the annual meeting, to be held March 21 at Paramount Pictures in … Read More »
Just over a month after it debuted, MTV announced today that Catfish: The TV Show will be coming back for a second season in 2013. Based on the 2010 documentary Catfish, the show debuted on November 12. Last month Viacom CEO Philippe Dauman singled out the 11 PM premiere of Catfish: The TV Show as having had ”the highest-rated launch in MTV history.” With Nev Schulman, whose own online love drama was the basis of the 2010 doc, and filmmaker Max Joseph as hosts, Catfish: The TV Show “aims to tackle “the mystery and complexities of dating in a digital world,” according to MTV. New episodes of the show will start airing on January 7, 2013.
The Viacom CEO told an investor conference this morning that his company has “a small investment” in the Broadway musical hit from South Park creators Matt Stone and Trey Parker. And although he didn’t directly address a question about whether Paramount might turn The Book Of Mormon into a film, he seemed to indicate that it’s a possibility: “We love working with the two of them,” he said, adding that “we always look for opportunities to work with them.” He made the comments at the Gabelli Best Ideas Conference where, in reviewing Viacom’s operations, he touted recent changes at Paramount. With a strategy designed to minimize risk, he says, “you’ll never see us with a John Carter” — a reference to Disney’s big-budget disappointment this year. He supported the effort to slash Paramount’s production slate from as many as 30 releases a year to about 15 “concentrating on franchise films and our brands…We have been reducing the overhead at Paramount year after year.” He added that “the film business is one where you have to control the cost.” Read More »
This is part of the Viacom chief’s no-worries pitch to Wall Street, where many investors have been freaked out by the ratings woes at Nickelodeon and MTV. “We’re looking to expand everywhere in the world” Viacom CEO Philippe Dauman said in a lunch presentation at the UBS Global Media and Communications Conference. The company’s strongest in Europe, especially the UK. But it’s looking everywhere to add overseas channels for Nickelodeon and Nick Jr, Comedy Central, and the relatively new Paramount Channel. Viacom “will announce several launches over the next year,” Dauman says. Over time “I expect the Paramount Channel to be one of our global channels and present on every continent.” He acknowledged that “there are difficult economic conditions” in parts of Europe including Greece and Portugal. But he says that “we’re reaching a point of bottoming out” and “outside of Europe there are pockets of strength” including in Mexico. Viacom already has a strong foothold in India where it’s one of the top four media groups “and will be forever.” Meanwhile Dauman is looking at other opportunities in Asia. He’s encouraged to see that as a result of changes in trade rules with China, there have been 34 western movies released there this year vs 20 the previous year. Titanic 3D, which Paramount co-distributed with Fox, generated more than $10M at box offices there. Dauman also sees fertile ground abroad for his effort to promote sales of merchandise built around … Read More »
Investor concerns about the channel’s 31% drop in primetime ratings this season vs last year have contributed to the 13% decline in Viacom‘s stock price since early October. But CEO Philippe Dauman assured analysts this morning that MTV is “not broken.” Indeed he says the channel for teens and young adults is “highly successful” and he has “no concerns about MTV’s vitality going forward.” As evidence he noted that Catfish: The TV Show — a reality program that helps people to connect with their online romances — on Monday became ”the highest-rated launch in MTV history.” He adds that the network has a “great development platform.” Dauman also talked up the decision this week to hire former WB and Lifetime programming chief Susanne Daniels to take charge of MTV’s programming, replacing David Janollari. “We’ve had our eye on her for a long time,” Dauman says, adding that she will help to “turbocharge” development of both reality and scripted shows for MTV. Viacom shares are up 3.4% in early trading after it reported fiscal Q4 earnings that were better than many feared, and execs reassured investors that it will repurchase at least $2.5B of its stock in the current fiscal year.
Related: Viacom Fiscal Q4 Revenues Fall On Weak Ad Sales And Drop In Filmed Entertainment
It had long been thought that after a falling out with his daughter years ago that Viacom and CBS Corp chairman Sumner Redstone would hand over the keys to his empire to Viacom CEO Philippe Dauman. But the 89-year-old Redstone told the Wall Street Journal that he’s still deciding on who will replace him to oversee his controlling interest in both companies, and that “my family will ultimately inherit the business”. “It hasn’t been decided yet who will be my successor. And Philippe knows it”, the mogul told the WSJ in an interview published today. “He knows that Shari might be my successor and it’s not a competitive race between them. We have to see what happens.” Shari Redstone, 58, controls 20% of National Amusements, the holding company that controls Viacom and CBS Corp, with her father holding the rest of the stake. Combined, their holdings in Viacom and CBS are worth about $3.5 billion, the paper says. “Philippe understands that my family is important and it could be Shari. I don’t say it will be. It could be either one or both,” Redstone said, adding later that it is likely Dauman would inherit his chairman role at Viacom and that CBS CEO Les Moonves would become chairman of CBS (though after the WSJ interview, Redstone emailed the paper to say that the boards of the companies will “ultimately decide who becomes chairman of each company”). Read More »