Sumner Redstone plans to step down from Viacom’s board of directors in two months, retaining a non-voting role as chairman emeritus.
The action takes effect after Viacom’s annual meeting February 6, 2017, the company said in a proxy statement filed Friday. Daughter Shari Redstone will remain on the board and officially take control of National Amusements, the Redstones’ company that owns 80% of the voting stock of Viacom and CBS Corp.
The moves bring to a close a volatile year for the Redstones and management of the large media companies.
Earlier this year, Redstone stepped down as chairman of Viacom and CBS. Then in the summer, he and his daughter orchestrated a management turnover at Viacom with the addition of several new board members and the departure of then-CEO Phillipe Dauman, who had waged a legal battle against Redstone to remain at the helm.
Dauman had proposed a sale of a 49% stake in Paramount to raise money for the struggling parent company. He and other board members had filed lawsuits over Sumner Redstone’s capacity to make business decisions, alleging that Shari Redstone was unduly influencing her father.
Media analyst Tuna Amobi with CFRA Research considered Sumner Redstone’s departure from the board “more or less symbolic, given the fact that … Shari Redstone has really taken effective, presumptive control (of National Amusements) partly because of Sumner’s health condition and age.”
The billionaire media mogul, who is 93, bought Viacom in 1987 and expanded the content company, adding Paramount and merging with CBS in 1999. The two companies split again in 2005. Until this week, Redstone and his daughter had sought to re-unite them as a way to stimulate growth at Viacom.
Honorees Megyn Kelly, Shari Redstone and Sherry Lansing attend The Hollywood Reporter’s Annual Women in Entertainment Breakfast in Los Angeles Dec. 7, 2016 in Hollywood, California. (Photo: Kevin Winter, Getty Images for The Hollywood Reporter)
But earlier this week, the Redstones sent a letter to the boards of Viacom and CBS asking them to abandon merger plans, that they had proposed in September, after seeing improvements at Viacom, which had been operating under acting CEO Bob Bakish.
Viacom named Bakish official President and CEO this week. "I am very excited by the strategy Viacom is pursuing under Bob's leadership, as well as the relentless hard work and passion he has demonstrated not only in his fast start at the helm but in his many years at the company,” said Shari Redstone, who is the vice chair of Viacom’s board, in a statement.
Viacom (VIAB) shares were up 3.5% Friday to $ 36.14.
With this situation resolved, a larger question remains for Viacom, says Amobi, who has a hold on Viacom shares. With the CBS merger nixed, it “really raises the question as to how Viacom can survive as an independent company,” he said.
Many of Viacom’s networks such as Comedy Central and MTV, target a younger audience that is increasingly fragmented with online and mobile video cutting into traditional pay-TV distribution. “Ultimately, it falls on the shoulder of new CEO to articulate a strategy that the Wall Street community can buy into,” Amobi said.
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.
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