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Redstone Objects to Viacom Paying Dauman Legal Bills - Broadcasting & Cable

Redstone Objects to Viacom Paying Dauman Legal Bills

Notes company’s earnings will fall short of estimates
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Sumner Redstone’s family holding company said it objects to Viacom paying for a lawsuit brought against Redstone by Viacom CEO Philippe Dauman.

The Redstones are in a battle for control of Viacom with Dauman and some of its directors. Dauman sued after Redstone moved to remove him from the National Amusements board and the trust that will control it after Redstone dies.

National Amusements owns Redstone’s voting share in Viacom and CBS, which give him a controlling interest in the media companies.

“Viacom’s disclosures reveal that, under Philippe Dauman’s leadership, Viacom is diverting valuable corporate resources to mount a legal and PR campaign against Sumner Redstone, despite the fact that Redstone is Viacom’s Founder, Chairman Emeritus and controlling shareholder,” National Amusements said in a statement Friday. “ There is no justification for Viacom to use company dollars to fund Dauman’s and George Abrams’  unfounded attack on Redstone’s lawful decision to remove them as trustees from Redstone’s trust, especially in light of Viacom’s announcement that its fiscal third-quarter earnings will fall short of estimates. The need for strong, independent oversight of Viacom could not be more apparent.”

National Amusements has also moved to remove five Viacom directors including Dauman. Redstone has sent an email saying he no longer trusts Dauman, a long-time friend and business associate.

Earlier Friday, Viacom announced that fiscal third quarter earnings would fall short of a year ago and most Wall Street analysts. The company blamed disappointing box office for the latest Teenage Mutant Ninja Turtles film, a drop in ad sales and an incomplete subscription video on demand deal for the shortfall.

Viacom said it was acting in shareholders' interest.

“It is clear  that Shari Redstone's actions are impeding Viacom. On the very day that Shari and her representatives acted to remove Mr. Dauman and Mr. Abrams, they made it obvious the issue is control of Viacom.  It is certainly in the interests of all of Viacom’s stockholders that the Massachusetts actions be pursued in order to preserve the independence of Viacom’s board." the company said in a statement.

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