Viacom narrows down bidders for Paramount stake to handful: CEO
By Jessica Toonkel and Sai Sachin R
(Reuters) - Viacom Inc (VIAB.O: Quote) has narrowed the number of bidders for a minority stake in its Paramount Pictures movie studio from more than 40 to a handful and expects to begin negotiations late next month, Chief Executive Officer Philippe Dauman told analysts on Thursday morning.
"There is strong interest from all around the world," Dauman said on the company's quarterly earnings call. He said he still expected to announce a deal by the end of June, and Viacom will use the proceeds to reduce its debt.
Ahead of the call, Viacom reported a higher-than-expected quarterly profit, but a drop in domestic ad revenue disappointed investors, who pushed the company's shares down as much as 7 percent. The stock recovered somewhat and was down 2 percent at $42.92 by late morning.
The owner of networks including Comedy Central, MTV and Nickelodeon said domestic ad revenue fell 5 percent in the second quarter ended March 31, more than the 3 percent that analysts expected. This was the seventh straight quarter of declines.
Viacom executives attributed the drop to a reduction in the number of TV advertisements the company airs to boost ratings, a strategy it announced in November..
If Viacom had not reduced the number of ads, the decline would have been around analysts' expectations at 3 percent, Chief Operating Officer Tom Dooley said on the call.
Viacom also said affiliate fee revenue fell 2 percent.
The company, like its peers, has struggled with ratings for its television networks as younger viewers, a key demographic for networks such as MTV, increasingly view content online or on smartphones. Continued...