At Fortune, we’ve spent considerable time chronicling the Shakespearean drama surrounding the decline of Sumner Redstone. If you have missed our coverage, I’d recommend reading Peter Elkind’s three-part series, The Disturbing Decline of Sumner Redstone, as well as his follow up story for our Fortune 500 issue.
What we haven’t done, until now, is talk with Philippe Dauman, the one-time consigliere to Redstone who has been CEO of Viacom for the past decade and whom Redstone – and his daughter – are now trying to oust. Dauman has lain low during the drama, but invited me to his office at Time Square on Friday to make the case for why he should continue as CEO.
It’s not an easy case to make. In recent years, the company has badly underperformed its peers — Fox, CBS, Disney, Time Warner. Even as we talked on Friday, Viacom announced a gloomy outlook for the current quarter, based in part on the weak reception for its Teenage Mutant Ninja Turtles movie.
But Dauman argues — coolly and without emotion, as is his style – that better days are ahead. He says he has positioned the company for the future, and that “smart investors” will see through the current troubles. He also defends his compensation – reported at $54 million last year, one area where he has done better than his peers.
You can read the interview here and make your own judgement. Shareholders have yet to be convinced: Viacom’s stock price has been rising in recent weeks on the expectation that he will soon be gone.
More news below.
• Regulators Threaten Anthem-Cigna Deal
Antitrust concerns are threatening to block the proposed $48 billion merger between Anthem and Cigna, according to The Wall Street Journal. Concerns center on the market for company-funded healthcare schemes, given that the deal, along with the proposed Aetna/Humana merger would reduce the number of major players in that market segment from five to three (Aetna/Humana is seen as less exposed to that risk due to Humana’s lack of scale). However, another big concern is the potential impact on the state health exchanges at the head of the Affordable Care Act. However, if the regulators block consolidation here, the risk is that more companies will, like UnitedHealth recently, decide to withdraw from some exchanges where profitability is lagging expectations. Ironically, the WSJ’s story is running on the same day that Gallup said that the number of people without enough money to pay for necessary healthcare and/or medicines in the last 12 months has dropped to its lowest point since it started collecting data in 2008. Gallup’s measure of ‘Healthcare Insecurity’ fell to 15.5% in the first quarter from a peak of over 21% at the end of 2008. Gallup, WSJ, subscription required
• A Bremain Rally…
The week is starting with a vigorous rally in financial markets as opinion polls show the mood in the U.K. swinging back to remaining in the E.U.. Sterling is up by over 1.5% against the dollar, while European stock indices are all up by more than 2%, after the probability of a “Remain” vote, as measured by the bookmakers’ odds, rose to 72% from 65% on Friday. Opinion polls still put the two camps roughly equal, but the common assumption is that the bulk of those undecided will opt to vote ‘Remain’. The pollsters cite a revival in concern among voters about the economic effects of a ‘Brexit’ in recent days. However, the biggest change in the mood music has come from the shocking murder of a Labour Party lawmaker by an apparently mentally ill man with extremist and anti-immigrant leanings. At his arraignment on Friday, Thomas Mair had given his name as “Death to traitors, freedom for Britain.” Fortune
• …But the Wave of Protest Hasn’t Broken Yet
Any suggestion that European political life is returning to ‘normal’ is, however, probably premature. At local elections in Italy over the weekend, the protest Five Star Movement won the mayoralties of both Rome and Turin in a big embarrassment for the center-left Prime Minister Matteo Renzi. Virginia Raggi, a 37 year-old lawyer who campaigned largely on practical issues such as garbage collection and transport, will become the first female mayor of Rome, in what appears to be a reward for M5S moderating its wilder anti-establishment rhetoric. It’s a different story in Spain, which goes to the polls this weekend. There, the leftist Podemos has bolstered its support by uniting with a Communist-inspired smaller ally, and as a result may be in a position to lead a broad left-wing government after Sunday. Fortune
• Modi Loses an Anchor
Raghuram Rajan, India’s central bank governor, has turned down the chance of a second term and will leave the bank in September. An internationally-acclaimed IMF veteran, Rajan had come under fire from powerful business lobbies and Modi’s own nationalist BJP party, one of whose senior members denounced him recently as being “mentally not fully Indian.” The Financial Times reports that Rajan told his staff he would return to his “ultimate home in the realm of ideas” (at its University of Chicago branch). It generally isn’t a good sign when a consistently outspoken opponent of cronyism—with an excellent record in bringing inflation down–is replaced under visible political pressure, and Rajan’s departure will cast further doubt on Modi’s ability to deliver a fair playing field to the foreign investors he has courted so actively. The rupee fell 0.7% against the dollar in Asian trading Monday. FT, metered access
Around the Water Cooler
• Fish Are (Disney’s) Friends
Pixar’s ‘Finding Dory’ shattered box office records for animated movies, taking $136.2 million over its first weekend across the country. That’s nearly double what the original ‘Finding Nemo’ netted on opening in 2003. It’s testimony to the enduring appeal of the original, which has had over a decade to amass devotees, and (like ‘Frozen’, the previous record holder) a testimony to the power of strong female leads, especially when they’re as media-savvy as Ellen DeGeneres. The movie also racked up over $50 million in overseas box offices, meaning that it’s probably close to breaking even after less than 72 hours, before it has even opened in two-thirds of movie theaters outside the U.S.. The collective sigh of relief from parents who now have an alternative to endless home viewings of ‘Frozen’ was reportedly heard inside Pratt & Whitney’s aero-ending testing lab. Variety
• When You’re Not Supposed to Read Beyond the Headline
Dido Harding, the CEO who presided over one of the biggest data leaks in recent times at U.K. telecoms and broadband group TalkTalk, has donated her 220,000 pound ($330,000) bonus for 2015 to charity. However, that didn’t stop her pocketing over 2.5 million pounds, the bulk of which came as part of a long-term incentive plan. Her compensation under that was judged by performance up until March 31 2015, which was before the attack that halved group profit for the year. Harding’s warnings to customers after the data breach had erred on the side of caution by talking up the risks, leading to a sharp drop in subscriber numbers and a 50% drop in the share price. nvestors and customers alike will be keen to see next year’s pay package for the boss. FT, metered access
• Counting Down to the Next One
A week after the Orlando shooting, the Senate will vote Monday night on four new gun control measures — two sponsored by Republicans, two by Democrats. All are expected to fail. Democrats are expected to block two Republican amendments, arguing that they fall short in controlling the sales of guns. Republicans are expected to block two Democratic amendments, contending that they threaten the constitutional rights of gun owners. Fortune
• Good Morning, Cleveland!
And on a brighter (if briefer) note, a special good morning to anyone in Cleveland under 52 years of age, who’ll be waking up as a national champion for the first time thanks to LeBron James and his merry men after last night’s 93-89 victory in Game Seven of the NBA finals. James was fittingly named Most Valuable Player after his starring role in dragging the Cavaliers back from a 3-1 deficit, the first time in the history of the NBA finals. Sports Illustrated