Viacom ousts CEO Tom Freston

VIACOM OUSTS CEO TOM FRESTON
[SOURCE: Reuters, AUTHOR: Kenneth Li]
Viacom Inc. Chairman Sumner Redstone on Tuesday ousted Chief Executive Tom Freston, in a surprise move to exert more control over the company amid a lagging stock price and a perception it has fallen behind on the Internet. "We think this move is likely to be regarded as an attempt by Mr. Redstone to reassert himself in an operating role, a development that is not likely to be warmly received in the investment community," Merrill Lynch analyst Jessica Reif Cohen wrote in a research note, downgrading her recommendation on the stock to "neutral" from "buy." Redstone told analysts on a conference call, "The board felt not enough was being done. We were not moving ahead as entrepreneurially and as aggressively as we should. The communication with Wall Street had been deficient." Freston, one of the founding executives of MTV, had been praised for his creative prowess but criticized by Wall Street for Viacom's lackluster stock performance since it split from broadcast division CBS Corp. in January. Viacom named Philippe Dauman as the new CEO and Thomas Dooley to a newly created post of chief administrative officer. Both are board members and close associates of Redstone, and were at Viacom when its stock price tripled between 1996 and 2000. They left Viacom in 2000, after the company bought CBS, and founded DND Capital Partners LLC, a private equity firm specializing in media and telecommunication investments.
http://today.reuters.com/news/newsArticle.aspx?type=industryNews&storyID...
* Freston Ousted at Viacom
http://www.broadcastingcable.com/article/CA6368501.html
* Street Shrugs at Freston's Departure
[SOURCE: Multichannel News, AUTHOR: R. Thomas Umstead & Steve Donohue]
Viacom's stock dropped about 5% after news of Tom Freston’s exit. Investment company Citigroup Investment Research dubbed the change “mildly positive” for the stock. It cited uncertainty surrounding the management change on the various Viacom-owned cable networks where “employees identify strongly with Mr. Freston.”
http://www.multichannel.com/article/CA6368477.html?display=Breaking+News