WEBVTT - Porter Bibb on Viacom: Dauman Is On The Down Escalator (Audio)

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<v Speaker 1>and that's a Bloomberg Business Flash. You're listening to Taking

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<v Speaker 1>Stop with Kathleen Hay and Pim Fox on Bloomberg Radio. Viacom,

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<v Speaker 1>Viacom and Sumner Redstone. While Viacom projecting poor results for

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<v Speaker 1>its quarter ending this month, but the company shares well,

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<v Speaker 1>they seem to be following the potential moves of the

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<v Speaker 1>chief executive, Philippe Dowmon. Is he closer to an exit? Well,

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<v Speaker 1>let's find out more from Porter Bib. He is managing

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<v Speaker 1>Partner Media Tech Capital Partners. You can be followed on

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<v Speaker 1>Twitter at Porter three. Al Right, Porter Bib, give us

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<v Speaker 1>your estimate of Philippe Dowmon. Will he be the chief

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<v Speaker 1>executive of Viacom come Labor Day? Absolutely not. He's on

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<v Speaker 1>the down escalator right now and they're holding the exit

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<v Speaker 1>doors wide open for him. He's his only hope right now, Frankly,

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<v Speaker 1>is the delays that the three or four legal actions

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<v Speaker 1>that are pending right now might take over the course

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<v Speaker 1>of a slow summer. But he's definitely out of the picture. Well,

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<v Speaker 1>why why did he do this? I mean, why did

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<v Speaker 1>why did uh revsone decided this was time for him

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<v Speaker 1>to go? Well, I'm not sure it was entirely Sumner's decision.

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<v Speaker 1>I think Sherry Redstone, who has made a rapprochement with

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<v Speaker 1>her father after many, many years of estrangement, she has

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<v Speaker 1>a very clear picture of the fact that over the

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<v Speaker 1>last five years Phil Dolman has lost almost half of

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<v Speaker 1>the share value, the market value of Vehicom, and he's

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<v Speaker 1>shown absolutely no inclination of being able to reverse that trend. Porter,

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<v Speaker 1>what if you could tell us about the actual businesses

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<v Speaker 1>and whether they will be combined if indeed Mr donmin

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<v Speaker 1>leaves Viacom. Well, there there's a lot of talk right

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<v Speaker 1>now on the street about putting CBS and Viacom together

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<v Speaker 1>when they were split. Um, when half a dozen years

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<v Speaker 1>ago Redstone thought he could take one and one and

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<v Speaker 1>create four or five out of separate entities. That hasn't happened.

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<v Speaker 1>One and one now equal about one and a half um,

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<v Speaker 1>not two and less. Moonviz is uh the real star

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<v Speaker 1>of this sort of tale because he's done miracles with

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<v Speaker 1>CBS with without any real global franchise, without a whole

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<v Speaker 1>lot of content creativity beyond the basic CBS network. UH,

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<v Speaker 1>and he's shown a very daring and leadership position in

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<v Speaker 1>terms of network chief executives in going over the top

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<v Speaker 1>before and separately from his competition. So you just said

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<v Speaker 1>that you didn't think that Sherry Redstone wants to run

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<v Speaker 1>the company. You have that, Well, that's that's her declared position.

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<v Speaker 1>She She has met frequently with Domin and with with

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<v Speaker 1>Moonves and is pretty articulate about the fact that she's

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<v Speaker 1>trying to preserve the value of the Redstone trust and

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<v Speaker 1>maximize the value that Domin is seeing dissipate every day

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<v Speaker 1>in Vehicom. So if that's the case, and with the

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<v Speaker 1>potential alst of these five Viacom directors, what do you

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<v Speaker 1>think is motivating Sherry Redstone value? She she wants to

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<v Speaker 1>get the best value she can for Vehcom. I don't

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<v Speaker 1>think she ever intends and never has intended to uh

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<v Speaker 1>get involved in direct management. She's vice chairman right now

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<v Speaker 1>of both companies and she's going to uh do whatever

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<v Speaker 1>she can to maximize the value of Vehicom. CBS is

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<v Speaker 1>probably fully valued right now with not a lot of

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<v Speaker 1>growth opportunity. The word on the street is that these

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<v Speaker 1>companies have to come back together. Um Les Mondos is

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<v Speaker 1>not particularly enamored at that idea, but I think that

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<v Speaker 1>it's very likely that there once the Dolman situation is

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<v Speaker 1>resolved and the new board that Redstone has nominated, UM, well,

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<v Speaker 1>it takes place, and that that's sometime late summer. Uh.

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<v Speaker 1>He's done a very judicious and and appropriate job of

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<v Speaker 1>getting approval of the Delaware Chancery Court, and that that

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<v Speaker 1>might take six or eight weeks. But once the new boy,

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<v Speaker 1>which is a highly competent independent board is in place,

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<v Speaker 1>Dolman's gone. The old board, which is heavily uh leaning

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<v Speaker 1>towards Mr Dolman, will also vacate. Then there will be

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<v Speaker 1>a move to put the companies together, and that will

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<v Speaker 1>probably trigger uh the interest of some white knight acquirers,

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<v Speaker 1>of which there is no limit. Well, there is this

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<v Speaker 1>the time to buy Vehicom. I think you're already seeing

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<v Speaker 1>the stock going went up a little bit better than

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<v Speaker 1>one percent today just on on the news of of uh,

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<v Speaker 1>the the change of board members at Redstone and announced yesterday.

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<v Speaker 1>I think it's you have to realize that this is

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<v Speaker 1>a content company. Vehicom has a terrific underperforming cable networks MTV, Nickelodeon,

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<v Speaker 1>b ET, Comedy Central. They are certainly terrific brands that

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<v Speaker 1>have seen better days, but they still have a great

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<v Speaker 1>value in terms of the archival content and the potential

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<v Speaker 1>under new management to become very, very prominent over the

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<v Speaker 1>top um distribution channels. Again, they also have Paramount Pictures,

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<v Speaker 1>which Dolman has tried to find a minority investor in

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<v Speaker 1>and somebody is going to see that is not only

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<v Speaker 1>a huge library of great product, but a potential global

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<v Speaker 1>motion picture company. Porter big thank you so much for

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<v Speaker 1>joining us managing partner Media Tech Capital Partners. Thank you

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<v Speaker 1>for joining us on taking stock right here on Bloomberg Radio.

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<v Speaker 1>Coming up on Bloomberg Law, a new hedge fund insider

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<v Speaker 1>trading case that is revealing the flow of information between

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<v Speaker 1>Wall Street and Washington d C. That's next,