Turning around Viacom (VIAB - Get Report) won't be easy given the enormous number of hours that consumers, especially young consumers, are spending on Alphabet's (GOOGL - Get Report) YouTube, Netflix (NFLX - Get Report) and Amazon (AMZN - Get Report) Prime's video offerings.
But CEO Bob Bakish is having some success winning over investors and employees with that rarest of qualities among corporate executives: a willingness to talk frankly about his company's health and recent history.
"Viacom had become a confederation of independent businesses," Bakish said on Wednesday at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco. "Very siloed."
As for the state of Viacom's media networks business, which includes MTV, Bakish pulled no punches: "It's fair to say there were a number of issues, which I would summarize as leadership and having the right person in the right job -- and resource mix."
In other words, Viacom had become a mess.
Bakish officially was given the CEO job in December after being promoted to interim CEO a month earlier following 10 years running the company's international unit, a rare company bright spot, along with Nickelodeon. Bakish's promotion followed controlling shareholder Shari Redstone's long and bitter effort to remove Philippe Dauman as both chairman and CEO. Dauman, who had fostered a close relationship with Shari's father, Sumner Redstone, was removed in September though he received a severance package worth $93 million.
But while Bakish may actually be downplaying the internal chaos caused by the Redstone-Dauman battle, his actions since taking over as CEO have been anything but timid. In just three months, he's replaced leadership at MTV's U.S. operations, installed new executives at TVLand and created a new position of chief operating officer for global entertainment.
Changing leadership at MTV, he said, was "something that was long overdue, in my mind."
MTV, once the go-to channels for young people, made a wrong turn about five years ago, Bakish said, when it decided to lean on scripted programs rather than reality TV and music. Not only did scripted cost more, the quality of MTV's shows paled in comparison with those being produced elsewhere. Bakish, though, stayed with reality-TV and music at MTV's non-U.s. networks, leading to market share growth in 2015 and 2016, said Wells Fargo media analyst Marci Ryvicker.
Though Bakish didn't cite Dauman by name, he did say that Viacom badly needs to improve its standing among pay-TV operators, whose so-called affiliate fees account for the largest source of Viacom's revenue. "One of the real issues that was apparent was that we had some frayed relationships with distributors," he said.
Bakish also hired an outsider for the post of chief revenue officer at Paramount Pictures, which lost $445 million in 2016, and on Feb. 22, he ended Brad Grey's 12-year reign as the studio's chairman and CEO. Naming a replacement for Grey, Bakish said on Wednesday, is "actionable in the near term," adding that he recently had met with some "exciting candidates."
One of those candidates is Scott Stuber, who produced Patriots Day, Ted and Battleship, according to a report in The Hollywood Reporter. The trade publication noted Stuber also is under consideration to run Netflix's film production effort.
Unmentioned at the Morgan Stanley event was Paramount's costly slate sequels that busted at the box office last year: Teenage Mutant Ninja Turtles: Out of the Shadows, Star Trek Beyond, Jack Reacher: Never Go Back and Zoolander 2. All were financial disappointments that offset critical acclaim and Oscars for Fences and Arrival.
As for Paramount, which has sat in last place among the six major Hollywood studios in recent years, it "was run like an island. It didn't benefit in any way from our network portfolio and its brands."
Viacom's film financing deal signed in January with the Shanghai Film Group Corp and Beijing-based Huahua Media is worth about $300 million per year, Bakish said, and will fund about 25% of the studio's film slate for the next three years.
To address Viacom's lack of sharing ideas and resources, Bakish last month announced a sweeping reorganization of Viacom's cable TV business. Going forward, Viacom will concentrate its energy and investments on six of its more than 16 cable TV channels: BET, Comedy Central, MTV, Nickelodeon, Nick Jr. and Spike TV, which will change its name in early 2018 to the Paramount Network to better brand the company and expand its offerings to general entertainment.
Smaller networks such as TVLand and CMT will get fewer resources from Viacom as it looks for partnerships to finance the network's programming and operations, he said. But much of Bakish's attention, he said, will be focused on the company's cable TV networks.
"We weren't necessarily exercising our brands in a way that we could maximize them," Bakish said. "It's about a return to growth, it's about leveraging places where we have strength."