Redstone axes long-serving Viacom chief after row over Cruise
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Your support makes all the difference.Sumner Redstone, the octogenarian media mogul, has ousted one of his longest-serving lieutenants, saying that Viacom, the MTV-to-Paramount Pictures conglomerate, needs more entrepreneurial leadership.
The outspoken 83-year-old made little attempt to hide his frustration at the progress of Viacom under Tom Freston, who has worked for Mr Redstone for 26 years and was one of the founders of MTV 25 years ago. Wall Street responded by sending Viacom's poorly performing shares even lower, worried about ongoing turmoil at the top.
Mr Freston's departure comes a fortnight after he was undermined by Mr Redstone over the firing of Tom Cruise. While Mr Freston had been planning an amicable exit for the star after 14 years with Paramount, Mr Redstone launched a tirade against Cruise's bizarre behaviour that has set the studio on a collision course with Cruise's actors' union.
Viacom was meant to be the fast-growing half of Mr Sumner's media empire, which he split into two companies at the start of this year. Paramount has faced criticism in Hollywood over weak decision-making by inexperienced managers, while MTV has been slow to adapt to internet-based entertainment for youngsters.
Even before Viacom shares fell 5 per cent in early trading yesterday, they were down 10 per cent since the split. CBS, the other half of the Redstone empire, had gained 10 per cent.
Mr Redstone has always said it would take a year to judge the success or otherwise of the split but he has been increasingly focused on securing his legacy and ensuring a robust inheritance for his daughter, Shari, who he wants to take over control of the companies. He moved swiftly to remove Mr Freston after deciding he had lost the confidence of Wall Street - ending a relationship that goes back 26 years.
Mr Sumner said that his decision was unrelated to the debacle over Tom Cruise.
The new chief executive, Philippe Dauman, is another 20-year associate of Mr Redstone, but his most recent job as a private equity fund manager suggests that the company may embark on an acquisition spree.
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