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Viacom Plans To Replace Interim CEO

September 21, 2016

(Reuters) – Viacom ‘s board plans to look both internally and externally for a new chief executive to replace interim CEO Tom Dooley, a source familiar with the situation told Reuters on Wednesday.

The board’s selection could indicate the company’s strategy following the resolution of a power struggle between controlling shareholder Sumner Redstone and the company’s board and then-CEO Philippe Dauman, and the search comes as Viacom seeks to grow ratings amid competition from streaming content.

Analysts have speculated that a change in Viacom’s management could result in a sale of the company or a merger back into CBS.

New York-based Viacom, whose networks include Comedy Central, MTV and Nickelodeon, on Wednesday said Dooley, a longtime senior executive who took over the interim CEO spot just last month, would be leaving on Nov. 15.

It was unclear if the board has tapped an executive recruiter to help with the search, the source said.

The Viacom board appointed Dooley interim CEO in August as part of a settlement ending the battle for control of the company between Redstone and Viacom’s board and former CEO Dauman. Under that settlement, Dauman departed and Dooley took over as interim CEO until Sept. 30, when the board had said it would decide whether he would remain in the role.

However, Dooley decided he did not want to stay on as CEO, the source said.

Dooley will remain in his role until Nov. 15 to help with the transition, Viacom said.

Viacom shares (VIAB) rose nearly 1.8% in mid-morning trading to $36.74 before reversing gains to trade 1% lower by late morning.

Possible external replacements for Dooley have been rumored to include Rob Marcus, the former head of Time Warner Cable; media mogul Peter Chernin, chairman and CEO of The Chernin Group and Jeffrey Katzenberg, CEO of DreamWorks Animation, recently purchased by Comcast (CMCSA).

Internally, chief financial officer Wade Davis and Robert Bakish, head of Viacom’s international business, have been rumored to be possible replacements for Dooley, according to sources familiar with the situation.

Marcus, Chernin and a spokesman for Katzenberg did not return requests for comment. A Viacom spokesman said Davis and Bakish were not available for comment.

Salvatore Muoio, whose firm is the ninth-largest owner of voting shares of Viacom, said he was disappointed to see Dooley leave because he was in the best position to help sell Viacom, which has been struggling to turn around weak ratings.

“I would like to see them sell the business and I think Dooley was in the best position to help see that through,” he said.

While there has been increasing speculation that Viacom may merge back into CBS (CBS), which it spun off from in 2006, Muoio said he would like to see an auction for the business.

Viacom on Wednesday also said it had ended the process of seeking a minority investor for Paramount Pictures as it considers all options available to the company. Dauman had led the plan to sell a stake in Paramount, which Sumner Redstone had opposed.

The media company also halved its dividend to 20 cents per share from 40 cents as it looks to pay down debt, and said it expects a fourth-quarter adjusted profit of 65-70 cents per share. Analysts on average were expecting 89 cents, according to Thomson Reuters I/B/E/S.

Viacom’s board has hired Morgan Stanley and LionTree Advisors to review its capital structure as it looks for ways to shore up finances in the face of falling advertising sales.