Viacom (VIAB) - Get Report is expected to promote the head of its international operations to serve as interim CEO as the company seeks to reverse declining financials while following the wishes of its owners, Sumner and Shari Redstone, to merge withCBS (CBS) - Get Report .
Robert 'Bob' Bakish, head of Viacom International Media Networks, will be named interim CEO in the coming days, Bloomberg reported, taking over from Tom Dooely, its longtime chief operating office who also served in an interim capacity after the Redstones ousted Philippe Dauman in September following a bitter and protracted fight in courts and in the press.
Bakish would take over a company whose largest TV networks -- MTV, Nickelodeon and Comedy Central -- have struggled in recent years as its core audience of young people has turned away from cable-TV and toward websites led by Facebook (FB) - Get Report and Alphabet's (GOOGL) - Get Report YouTube and subscription-based platforms like Netflix (NFLX) - Get Report , Amazon (AMZN) - Get Report Prime and Hulu.
Yet in a company that has had more than its shares of troubles, international has been an area of growth. Arguably, the MTV brand has more cache outside of the U.S. than within.
While U.S. advertising revenue at Viacom fell 4% in the third quarter, international ad-sales jumped 13%, largely as a result of its European operations. Similarly, revenue from so-called affiliate fees, the money pay-TV operators pay to carry Viacom's networks, grew 9% in the quarter where as they fell 10% domestically. Viacom's international growth has also been bolstered by its Indian joint venture Viacom18, and the acquisition of Channel 5 in the United Kingdom, deals for which Bakish played a lead role.
Before joining Viacom in 1997, Bakish was a partner with Booz Allen & Hamilton in its media and entertainment practice, working in television, film and new media in the U.S., Europe, Latin America and Asia.
A new interim CEO, though, will be tasked with more than just network operations. Bakish will be faced with trying to bring stability to a corporate culture that has been rocked in recent years by the seemingly interminable battles for control of the company between the Redstones and Dauman. As those fights escalated, oversight of the company waned. In the past there months, shares of Viacom have tumbled 18%; over the past two years, Viacom's stock has lost 48%.
Meanwhile, Viacom's board will be looking to consummate a merger with CBS, from which it was split in 2006. The Redstones, through their holding company National Amusements Inc., hold a nearly 80% stake in the voting shares of both Viacom and CBS. The boards of both companies were asked by the Redstones September to consider a merger, and have since hired outside bankers and legal team to assess a possible re-combination.
But turning around Viacom won't be easy, either for Bakish or CBS Leslie Moonves, if he and his board agree to merger terms. Viacom's profit tumbled 27% in its fiscal third quarter, ended in July, a reflection of weakness at its cable-TV networks which had suffered a brain drain of key executives in recent years, frustrated by the company's direction under Dauman. U.S. advertising sales dropped 4% in the quarter, its eighth-straight quarterly decline.
Paramount suffered an operating loss of $26 million in the third quarter compared to a profit of $48 million a year earlier as Teenage Mutant Ninja Turtles: Out of the Shadows failed at the box-office. The film, according to Box Office Mojo, has brought in just $245.6 million worldwide after costing $135 million to produce. Studios split admission revenue with theaters.
Viacom reports the result from the September quarter on Nov. 9.
Over the coming months, the two companies will try to put together a deal that must satisfy a variety of interests. Among those will be their respective special committees, which of course have a fiduciary responsibility to protect the interests of all its shareholders, not just the Redstones.
Viacom's special committee comprises six independent Viacom board members, five of whom were added to the board by Shari Redstone as part of a far-reaching legal settlement that led to Dauman ouster. Thomas May and Nicole Seligman are co-chairs and are joined by Kenneth Lerer, Judith McHale, Ronald Nelson and Charles Phillips.