Exclusive: Top Viacom investor Gabelli says CEO's exit is inevitable

Thu Jul 7, 2016 4:54pm EDT
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By Jessica Toonkel

(Reuters) - Mario Gabelli, Viacom Inc's (VIAB.O: Quote) second-largest holder of voting shares behind majority owner Sumner Redstone, believes that Chief Executive Philippe Dauman can do nothing to save his job because he cannot win his battle with the Redstone family over control of the media company.

His comments come as the legal battle over the 93-year-old Redstone's $40 billion media empire heats up. Some investors unhappy with the pace of improvement at Viacom hope that change at the top is imminent.

Gabelli had shown more patience, saying as recently as May that Dauman had six months to turn the company around. But the billionaire investor's latest comments, to Reuters on Wednesday, mark the first time he has said the CEO is out of options.

"He has to leave," Gabelli said of Dauman in an interview. "It's a matter of when, not if."

Since the Redstones own 80 percent of the voting shares of Viacom and CBS through their privately owned National Amusements Inc, Gabelli said, Dauman is fighting a battle he is unlikely to win.

Dauman contends in a Massachusetts lawsuit that Redstone is being manipulated by his daughter, Shari Redstone, and through a Viacom spokesman said: "The truth about Mr. Redstone’s wishes remain very much in dispute.”

In the litigation, Dauman is contesting the removal of him and Viacom director George Abrams from the Sumner M Redstone National Amusements Inc Trust, which eventually will control the fate of Viacom and CBS Corp (CBS.N: Quote). The lawsuit says Redstone is incompetent and being manipulated by Shari Redstone.

A spokesman for Redstone declined to comment.   Continued...

Philippe Dauman, president and CEO of Viacom, speaks at the Reuters Global Media Summit in New York, United States on December 2, 2010.   REUTERS/Brendan McDermid/File Photo