Viacom’s Tom Dooley and Shari Redstone voice confidence in Paramount CEO Brad Grey
Paramount Pictures Chairman and Chief Executive Brad Grey has been widely criticized for his stewardship of the storied but struggling movie studio.
But the leadership at Paramount’s parent company, Viacom Inc., including new interim CEO Tom Dooley and board member Shari Redstone, are voicing their confidence in the 58-year-old talent manager-turned-studio chief who has run the Los Angeles film company since 2005.
“Shari, Tom and the board remain fully supportive of Brad and his leadership of the studio,” the company said in a statement Friday. “Under Brad’s leadership, Paramount has taken significant, successful steps to broaden and strengthen its business, and we are confident that Brad and his team have the skills, relationships and resources necessary to return Paramount to success in its movie business and continue its rapid growth in television.”
The vote of support comes at a critical time for Paramount and for Viacom as a whole.
Viacom is under pressure to overhaul its struggling cable TV networks, transform the corporate culture into one that encourages creativity, and revive Paramount Pictures, which has suffered a number of box office misfires this year including “Teenage Mutant Ninja Turtles: Out of the Shadows” and “Zoolander 2.”
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Last weekend, Paramount released another dud: “Ben-Hur,” which opened to a weak $11.2 million in ticket sales in the U.S. and Canada against a $100-million production budget (co-produced by Metro-Goldwyn-Mayer).
Much of the blame for the struggles at Paramount has been laid at the feet of Grey and his leadership team.
In a blog post last week, media analyst Michael Nathanson of MoffettNathanson Research described Paramount’s financial performance as “truly shocking.”
“Short of firing the entire Paramount leadership team, there is little a new CEO could do quickly to improve its film pipeline,” he wrote.
As part of a legal settlement last week to end a messy boardroom fight with Sumner Redstone and his family, Viacom’s board elevated Dooley, the company’s second-in-command, to interim chief executive, replacing ousted CEO Philippe Dauman. Dooley’s new appointment lasts until Sept. 30.
Shari Redstone is the daughter of Sumner Redstone, Viacom’s ailing, 93-year-old, controlling shareholder. The Redstones successfully agitated for Dauman’s removal and a shake-up of the board.
Under the settlement, Dauman will have an opportunity to deliver on his plan to sell a stake in Paramount before he steps down from the board on Sept. 13. However, any sale requires a unanimous vote.
Paramount, and its business relationships, will be under greater scrutiny from Viacom’s new board. The studio could lose as much as $350 million this fiscal year, according to analysts.
The settlement requires the studio to provide regular updates and information about Paramount’s revenue sources and its business prospects, according to a regulatory filing.
Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder
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