NEW YORK: Tom Freston has been unceremoniously dumped as ceo of media giant Viacom as the company struggles to finds a profitable niche in the digital age.
The end for Freston comes at the hands of veteran chairman and largest shareholder Sumner Redstone (83) and the board who have replaced him with Philippe Dauman. The latter was Viacom's deputy chairman from 1996 to 2000, and currently leads a private equity firm.
Freston's abrupt departure follows Redstone's decision two weeks ago to sever ties between mega movie star Tom Cruise and Viacom's Paramount Pictures unit, a move seen as a slight to the erstwhile ceo and company execs.
Redstone says the management change has been brewing for some months. He has been unhappy at the sagging share price and Viacom's inability to keep up with corporate sibling CBS.
The old Viacom conglomerate, where Freston built MTV into a global entertainment powerhouse, was split into two entities at the start of the year in a bid to steer it out of prolonged stockmarket doldrums [WAMN: 03-Jan-06].
But while CBS has prospered under the leadership of Leslie Moonves, Viacom has struggled to make its mark. Since the split CBS's stock has gone up 9.2% while Viacom's has slipped 16%.
It appears Redstone, who had ostensibly loosened the reins of power, has finally lost patience: "Viacom was supposed to be the growth company and CBS was supposed to be the slow-growth company. So something was astray." He is now expected to take up a higher profile in the new regime.
Freston has not commented save to say he has "every confidence" that Viacom will prosper under Dauman and to thank his former colleagues.
Data sourced from Financial Times online; additional content by WARC staff