The parent company of Viacom has reacted furiously after the media giant revealed it would use corporate cash to finance legal and PR costs for under-fire CEO Philippe Dauman.
Last week, Viacom made an SEC filing that revealed Viacom would foot the bill for costs accrued as Dauman and the rest of the axed Viacom board directors fight to regain control of the company from Sumner Redstone’s camp at National Amusements.
Dauman is convinced Redstone, who is 93, is in ill health and being manipulated into the public fight for Viacom by his daughter, Viacom non-executive deputy chair Shari Redstone.
National Amusements’ statement claimed Dauman and board member George Abrams – who were among the five removed from the board last week – were “diverting valuable corporate resources” to their legal fight against Sumner Redstone, who controls Viacom through an 79.8% voting stake.
“There is no justification for Viacom to use company dollars to fund Dauman’s and George Abrams’ unfounded attack on Redstone’s lawful decision to remove them as trustees from Redstone’s trust, especially in light of Viacom’s announcement that its fiscal third-quarter earnings will fall short of estimates,” the statement read. “The need for strong, independent oversight of Viacom could not be more apparent.”
News of Dauman’s plan came after Viacom had released a statement warning that theatrical underperformance of Teenage Mutant Ninja Turtles: Out of the Shadows and a “delay in completing a significant SVOD agreement” meant its third quarter warnings were likely to suffer.
It also blamed the ongoing spat with National Amusements, which has been playing out in public since Sumner Redstone stepped down as Viacom chairman in February (at the time installing Dauman as executive chair, only to remove him last week).
“The recent and highly public governance controversy negatively impacted the timing and [Viacom’s] ability to achieve an optimal outcome with partners,” the note read, adding it expected an improved performance at for-sale film arm Paramount Pictures and had “substantially completed” its annual upfront sales process.
A further Viacom statement released after National Amusements’ latest salvo read once again blamed Shari Redstone for the current impasse.
“On the very day that Shari and her representatives acted to remove Mr Dauman and Mr Abrams, they made it obvious the issue is control of Viacom,” the statement read.
Dauman, Abrams and three other former board members are taking legal action to block National Amusements’ actions, which include removing Dauman from the board of trustees that oversee Sumner Redstone’s media empire.
“It is certainly in the interests of all of Viacom’s stockholders that the Massachusetts actions be pursued in order to preserve the independence of Viacom’s board,” the Viacom statement concluded.
Viacom’s shares spiked over the weekend following news Dauman had been removed from the board.