Crony Capitalism? Reactions to Ouster of Freston

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The Wall Street Journal is running a piece with reactions from various analysts to the announcement today that Tom Freston was being replaced as Viacom’s CEO. Only one analyst—J.P. Morgan credit analyst Kristina Sazama—gives it a positive gloss, saying the firm views “Viacom's leadership change [as] a modest positive for the credit.” And that’s a rather tepid endorsement. The other ten are generally negative. Top honors for the negatives goes to Rob Cox of Breakingviews.com, who writes:

“Dauman's elevation -- and the installation of another Redstone ally and former Viacom executive Tom Dooley -- may give great comfort to the chairman. But it's bad news for shareholders who, naturally, should want Viacom to attract the best managers in the industry. With Redstone's grip intensified and on full public exhibition in the Cruise affair, only his cronies would be silly enough to take the job.”

The biggest gripe seems to be the new management’s lack of experience in entertainment. Freston was seen as the guy who built MTV. The new team is looked at as finance guys who can run numbers but might not understand the industry all that well.
Analysts React to Viacom Shakeup
[Wall Street Journal]

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