Time For A New Leader At Viacom, Former CEO Tom Freston Says The fight for control of Viacom is playing out like a soap opera. Ex-Viacom CEO Tom Freston says current CEO Philippe Dauman is running the company aground in an effort to prop up stock value.

Time For A New Leader At Viacom, Former CEO Tom Freston Says

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STEVE INSKEEP, HOST:

And I'm Steve Inskeep, with the battle for Viacom as it looks to an insider. Tom Freston was CEO of the media company. It controls everything from MTV to Paramount Pictures. Freston spoke with NPR's David Folkenflik about the fight over who leads Viacom next.

DAVID FOLKENFLIK, BYLINE: Tom Freston is one of the founders of MTV. He helped build a cable TV empire for Viacom, including Nickelodeon and Comedy Central and ultimately became the company's CEO. Freston says the story of Viacom in recent years, by contrast, has been one of decline.

TOM FRESTON: Well, it went from really being number one in its class as a cable network or as a creative enterprise to pretty much the bottom of the barrel.

FOLKENFLIK: He was fired by Sumner Redstone in 2006 for failing to acquire MySpace. Freston probably saved Redstone more than a half-billion dollars by doing so. He was succeeded as CEO by Philippe Dauman, a longtime Redstone lawyer, protege and advisor. Now Sheri Redstone, Sumner's daughter, is battling Dauman in courtrooms and in boardrooms. I asked Freston, who knows all three players in this drama, why he thought it came to this.

FRESTON: I guess the problem was not perfect succession planning and a chairman's claiming he never would die.

FOLKENFLIK: Redstone just marked his 93rd birthday at the end of last month. He's been celebrating by trying to dislodge Dauman from the board of the trust that will run Redstone's holdings after his death. Dauman filed suit in a Massachusetts probate court to stay on the trust's board. Dauman claims that Sumner Redstone suffers from a neurological disorder characterized by dementia.

FRESTON: It's hard to understand what the game is here for Felipe.

FOLKENFLIK: Freston says there's a good shot for Viacom to rebuild if Dauman departs.

FRESTON: After all, the Redstones don't seem to be in favor of the management. Wall Street has not indicated that they are, quite to the contrary. And by many calculations, there's not a lot of support for Philippe within the company.

FOLKENFLIK: Dauman declined to respond to Freston's critique but has said Redstone is being manipulated by his daughter.

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PHILIPPE DAUMAN: I've been side-by-side with Sumner, who is my great friend, for over 30 years.

FOLKENFLIK: Dauman spoke just yesterday to a group of Wall Street investors.

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DAUMAN: And we were side-by-side in every major transaction that has occurred, starting with acquisition of Viacom itself.

FOLKENFLIK: Viacom officials say Dauman gets insufficient credit for recent initiatives. Yet Viacom has performed poorly compared to its peers, such as Disney and Time Warner. Yesterday Dauman told investors he would proceed with plans to sell 49 percent of Paramount despite Redstone's objections. Freston contends Dauman has destroyed the creative spark at Viacom.

FRESTON: For a company that's spent $15 billion on stock buybacks, some of that money might have been deployed to bolster their existing businesses or buy things like Disney did. Spend $4 billion, you can buy Lucasfilm. Spend $4 billion, you could buy Marvel. The capital was utilized to buy back the stock to essentially artificially prop up the price.

FOLKENFLIK: Many of Comedy Central's biggest stars have left, as have executives responsible for some of the biggest shows at Nickelodeon and VH1.

FRESTON: They had world-class brands that were first in their category that have now since faltered. They have not really brought any new brands to market so the company has been in a form of stasis.

FOLKENFLIK: Freston argues that, under Dauman, history is passing Viacom by. David Folkenflik, NPR News, New York.

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