Tom Freston, the one-time superstar TV executive who has faltered as CEO of Viacom, is being forced out of the the company.
Freston's departure -- described as a resignation but in fact the result of a decision by the board to replace him – follows clear friction with Viacom controlling shareholder and chairman Sumner Redstone over the company's sagging stock price and the messy dissolution of a partnership between Paramount Pictures and actor Tom Cruise.
Redstone said Tuesday in a call about the move that the board felt the company had not been aggressive or entrepreneurial enough, and that "maybe," Wall Street wasn't high on present management.
Freston will be replaced by Philippe Dauman, a onetime vice chairman of Viacom and longtime confidante of Redstone. Also returning to the company is Thomas Dooley, who once was Viacom CFO and later a vice chairman, and most recently was partnered with Dauman in a private equity fund.Dooley is now being named senior executive vice president and chief administrative officer and will report to Dauman.
Freston was at Viacom's MTV through its chaotic early days, first as a marketing executive, and eventually amassing a giant portfolio of networks that included Nickelodeon, Nick AT Nite, VH1 and Comedy Central. Under his leaderhip MTVN posted the highest, most consistent growth of any U.S. TV operation and was highly regarded inside Viacom, the industry and on Wall Street. He became CEO of Viacom when the company separated from CBS last January, a move intended to free MTV and Paramount from CBS' slow-growth TV network, broadcast stations and billboards. However, CBS has held its own and Freston's operation has faltered.
In a statement, Freston says : "With my exceptional colleagues, we built a worldwide powerhouse of brands and businesses, literally from scratch. I leave many good friends knowing that they have an unmatched track record, a great plan going forward and incredible abilities to execute on it in this digital age."
In a conference call with investors, Redstone carefully spoke of decisions by "the board," without saying much about what he believed Freston had done wrong.
"On the one hand, we love Tom, we truly do. We appreciate his great contribution to the company," he said. "On the other hand, being very realistic, the board felt that not enough was being done; that we were not moving ahead as entrepreneurially and as aggressively as we should; that the communication with Wall Street had been deficient; that the stock price reflected that, and suggested that maybe, maybe, Wall Street lacked confidence in that management."
He also pointedly said that Dauman and Dooley "were not going to let any deal pass that they wanted," an apparent reference to Viacom's decision not to outbid News Corp. for MySpace.