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Viacom unveiled a long-awaited turnaround plan on Thursday, saying it would shift focus and investment to its top six television channels in an effort to revive growth and improve relationships with distributors.
The new strategy comes after a tumultuous year for the owner of Nickelodeon, MTV and the Paramount film studio, which has been hit by declining audiences and advertising revenues for its cable networks.
It spent much of 2016 embroiled in legal battles between Sumner and Shari Redstone, the controlling shareholders, and Philippe Dauman, the long-time chief executive. That culminated in Mr Dauman’s departure and replacement by Bob Bakish, the former head of Viacom’s international media networks.
Late last year the Redstones scrapped a potential merger between Viacom and CBS, the television company in which they also own a controlling stake.
Under Mr Bakish’s new strategy, Viacom will concentrate its business around six “flagship brands”: BET, Comedy Central, MTV, Nickelodeon, Nick Jr. and Spike, which will be renamed the Paramount Network. Mr Bakish said the plan would “enable Viacom to realize the full potential of its premier global portfolio of entertainment brands.”
The plan was announced as Viacom reported mixed results in the final three months of 2016.
Revenue rose 5 per cent to $3.3bn, beating analysts’ estimates of $3.18bn, boosted by sales growth at Paramount and an increase in affiliate fees charged to carry its cable channels. Media networks revenue edged up 1 per cent to $2.59bn, as affiliate growth offset a 3 per cent fall in domestic advertising sales.
Paramount revenues jumped 24 per cent to $758m, as box office sales for the studio’s films doubled. Viacom recently struck a $1bn deal to co-finance its slate of films for the next three years with China’s Shanghai Film Group and Huahua Media.
However, net income attributable to the company dropped 12 per cent to $396m, or $1 a share, from $449m, or $1.13 a share, a year ago, hit by costs related to executive severance. Adjusted earnings of $1.04 per share came in ahead of forecasts of 84 cents.
Viacom shares rose as much as 8 per cent in pre-market trading in New York, after closing on Wednesday at $42.07.