One of the media world’s most closely-watched soap operas could soon be coming to an end. Viacom’s controlling shareholder, Sumner Redstone, is close to reaching a settlement that would see chairman and CEO Philippe Dauman leave the entertainment giant for good, according to anonymous sources,
The Los Angeles Times and the Wall Street Journal are reporting that the two sides are close to reaching an agreement that would see Dauman step down and receive a settlement estimated at $85 million. But there are apparently still a number of snags to address before that can happen.
Redstone and daughter Shari have been trying to get rid of Dauman for months, arguing that he has failed to build value at the company and has presided over a huge drop in the share price (VIAB). But their attempt to remove him and several members of Viacom’s board has been tied up in court, with Dauman arguing that Redstone is mentally unfit to make such decisions, and is being manipulated by his daughter.
Dauman and the 93-year-old billionaire media mogul used to be almost inseparable. Sumner Redstone often referred to the Viacom chairman and CEO—who has been chief executive since 2006—as “the wisest man I’ve ever known,” and Dauman called Redstone a mentor.
The closeness between the two men changed earlier this year, however, at about the same time that Redstone started to become closer to his daughter Shari, who had been estranged from her father for a number of years. The billionaire’s former girlfriend was also pushed out of Redstone’s home at around the same time, something that led to another lawsuit over his mental state.
In June, the Redstone family holding company, National Amusements Inc., sent a letter to Viacom saying it had decided to replace five members of the board, including Dauman.
National Amusements controls the voting shares in both Viacom and CBS, with Sumner owning 80% and Shari owning 20%, a stake that is estimated to be worth as much as $40 billion. Viacom’s share price has fallen by more than 45% in the past two years, as many of its core properties such as MTV and the Comedy Network have lost much of their audience.
Dauman was also removed earlier this year as a director of the Redstone family trust, which will take control of the billionaire’s holdings in Viacom and CBS upon his death.
According to the LA Times, one of the sticking points in the discussions between Dauman and the Redstones is whether Viacom will decide to sell a stake in its Paramount movie studio. Dauman announced such a move in June, and that was reportedly one of the things that helped to turn Sumner Redstone against him, since the billionaire is said to be emotionally attached to the studio.
If the settlement talks go through, current Viacom chief operating officer Tom Dooley would become CEO, according to the reports.