VIACOM INC CL B (VIA)
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Viacom (NYSE:VIA.B) B Series, are the non-voting shares of Viacom, an American media conglomerate with worldwide interests in television networks (MTV Networks and BET), and movie production and distribution (Paramount Pictures and DreamWorks studios). Philippe Dauman is President and CEO. Sumner Redstone is the Chairman and, through National Amusements, the controlling shareholder. The company was created on December 31, 2005 a split of corporate assets from a previous Viacom, that was, at that time, renamed CBS Corporation.[1][2]
The B series, non-voting shares, have historically been the most liquid public stock of Viacom. As of February 20, 2007, the one-year average daily trading volume of VIA.B share was in excess of 2.7 million shares.[3] During the same period, the average trading volume of the voting, VIA, shares was 90,900 shares.[4]
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Background
After the departure of then-CEO Mel Karmazin in 2004, Sumner Redstone, who served as Chairman and Chief Executive Officer, decided to split the offices of President and Chief Operating Officer between Leslie Moonves and Tom Freston, longtime heads of CBS and MTV Networks respectively. Redstone (born 1923) was being pressured by investors to clarify its sucession and was set to retire in the near future. The split would be a creative solution to the matter of replacing him.[1]
In March 2005, in order to deal with a stagnating stock price and also the growing rivalry between Moonves and Freston, the prior Viacom announced plans of splitting into two publicly traded companies. The split was approved by the Board on June 14, 2005, and took place on December 31, 2005. It effectively undid the Viacom/CBS merger of 1999. The original Viacom changed its name to CBS Corporation and was to be headed by Moonves. It included Viacom's "slow growth businesses", namely CBS, The CW (formerly The WB and UPN), CBS Radio, Simon & Schuster, CBS Outdoor, Showtime, CBS Records, CBS Paramount Television and most television production assets. These, according to some analysts, were suffocating the growth of the MTV Networks cable businesses. (The split was structured such that CBS Corporation became actually the company previously known as Viacom.) At the time of the split, CBS Corporation was also given control of Paramount Parks.[1]
A new company, the present Viacom, was also spun-off, at the same time, to be headed by Freston. It was comprised of MTV Networks, BET Networks, Paramount's movie studio, and Paramount Pictures' home entertainment operations. These businesses were understood to be the “high-growth businesses” (MTV Networks and BET Networks in particular). It was thought that, if they were split into a separate company, it would facilitate the infusion of investor capital to allow for future acquisitions and expansion. Sumner Redstone still controlled 71 percent of the voting stock of both companies and became the Chairman of both companies.[1] In accordance with the terms of the separation sgreement, on December 29, 2005 the the new company paid a preliminary special dividend to the former Viacom of US$ 5.4 billion. It was funded by borrowings under the company's term loan facility.[5]
In December 2005, Paramount announced it would acquire the assets of DreamWorks (for approximately $1.6 billion consisting of cash and the assumption of debt [5].) Some of those assets were later sold to a group led by George Soros in March 2006. The DreamWorks animated movies unit remained owned with Viacom.[1]
On September 4, 2006, Viacom annonced that president and CEO Freston had resigned, a move that Chairman Redstone said stemmed partly from frustration with Viacom's Internet strategy - and lagging stock price.[6]
Business units
Cable channels
The Cable channels group responded for 70%, 71% and 65% of combined revenues for 2005, 2004 and 2003, respectively:[5]
MTV Americas[1]: CMT | CMT Pure Country | Comedy Central | Logo | MHD | MTV | MTV2 | MTV Brasil (30%) | MTV (Canada) | MTV Chi | MTV Desi | MTV Hits | MTV Jams | MTV K | MTV Networks Latin America | MTV Tempo | MTV Tr3?s | mtvU | Nickelodeon/Nick at Nite/Nick Jr. | Nicktoons Network | Nick GAS | Noggin/The N | Spike TV | TV Land | VH1 | VH1 Brazil | VH1 Classic | VH1 Soul | VH1 Uno
MTV Europe[1]: MTV Adria | MTV Base | MTV Central | MTV Classic | MTV Dance | MTV Eesti | MTV Europe | MTV Flux (UK) | MTV Italy (49%) | MTV Latvija | MTV Lietuva | MTV Norge | MTV România | MTV Türkiye | MTV Russia | MTV UK and Ireland | MTV2 Europe | Nickelodeon UK(50%) | Nicktoons UK(50%) | Nick Jr. (UK)(50%) | Nick Jr. 2 | TMF Flanders | TMF Nederland | TMF NL | TMF Party | MTV Brand New | Box Comedy | TMF UK | VH1 UK | VH1 Classic UK | VIVA
MTV Asia Pacific[1]: MTV Australia | MTV India | MTV New Zealand | MTV Pakistan | MTV Philippines | Nickelodeon Australia | Nickelodeon Japan | Nickelodeon South East Asia | Nickelodeon New Zealand | Nick Jr. Australia | VH1 Australia
MTV Internet[1]: Atom Entertainment | College Publisher | GameTrailers | iFilm | MTV Overdrive | Neopets | Quizilla | ScrewAttack | Xfire
Other TV units[1]: CMT Films | Comedy Central Records | Harmonix Music Systems
BET Networks[1]: BET | BET J | BET Hip-Hop | BET Gospel
Paramount Motion Pictures Group
DreamWorks SKG | DreamWorks Home Entertainment | DreamWorks Television | Go Fish Pictures | MTV Films | Nickelodeon Movies | Paramount Home Entertainment | Paramount Pictures | Paramount Vantage | Republic Pictures | United International Pictures (50%, with NBC Universal's Universal Studios)[1]
Miscelaneous assets
Bubba Gump Shrimp Company | Famous Music | Paramount Comedy | Viacom Consumer Products | Viacom International[1]
Company Analysis
Competitive Strengths
The Company believes that it possesses a number of strengths that enable it to compete successfully:[5]
- One of the largest collections of cable programming assets in the world, with leading global brands that are attractive advertiser vehicles.
- A long-standing international presence with a global footprint.
- A strong connection with audiences, a proven ability to create global hits and a valuable entertainment library.
- A secure distribution platform and a strong track record of obtaining new carriage.
- An established and growing multiplatform presence.
- An attractive financial profile.
- An experienced management team with a proven creative and financial track record.
Business Strategy
The Company understands its mission a being the leading global, consumer-focused, branded entertainment company, with the most respected, most successful and best-in-class brands that live across television, motion pictures and digital media platforms.[5] More specifically, it plans to:[5]
- Enhance its position as a leading multiplatform, pure play content company, with the world's leading entertainment brands.
- Enlarge its established global footprint.
- Expand its growing multiplatform business and monetize the growth trend in digital media.
- Successfully execute the turnaround of Paramount Pictures, also with the acquisition of DreamWorks, a new management and key talent to be more closely aligned with the tastes of target movie-going audiences.
- Build on its reputation as a great place to work.
Facilities
Viacom's world headquarters are located at 1515 Broadway, New York, where it rents approximately 1.4 million square feet for executive offices. The lease for the majority of the space runs to 2010, with four renewal options for five years each thereafter. Viacom also leases the following major facilities: (a) approximately 548,000 square feet of office space at 1633 Broadway, New York, through 2010, and (b) approximately 225,000 square feet of office space at three facilities on 26th Street in Santa Monica, California, under leases which expire between 2011 and 2016. Paramount Pictures owns the Paramount Pictures studio at 5555 Melrose Avenue, Los Angeles, California, located on approximately 62 acres. BET's headquarters at BET Plaza in Washington, DC contains approximately 228,000 square feet of office and studio space, the majority of which is leased through 2013 and the balance of which is owned. Viacom also owns and leases office, studio and warehouse space, broadcast, antenna and satellite transmission facilities throughout the United States and several other countries around the world for its businesses.[5] On February 15, 2006, the New York Post reported that Viacom is planning to move the MTV Networks Entertainment Group into new premises in the Hudson Street are of Manhattan, as part of its cost-cutting efforts. The move would be the first of what sources said could be Viacom's complete relocation out of Times Square to downtown Manhattan.[7]
Performance and cost cuts
Shares in the new Viacom have underperformed its peers since the corporate separation. Management is reported to be looking into cost containment measures, including layoffs, premise relocations, and the closure of some overseas offices.[8]
YouTube controversy
In February 2007, Viacom has demanded from YouTube, a subsidiary of Google Inc., that it withdraws in excess of 100,000 videos that it deemed in breach of its copyrights. On February 18, 2007, the New York Times reported that VIA CEO Dauman was recently visited by the CEOs NBC Universal and News Corp. and was urged to rejoin the efforts to launch a competitor to "GoogTube." It also reported that Yahoo! has approached those companies about distributing their product on the Web."[9]
News Feed
| 10/10/08 10:10 am | Early Glance: Media companies (AP) |
| 10/10/08 6:10 am | Britney Spears Sets the Record Straight in a New Documentary 'Britney: for the Record' Airing Exclusively on MTV on Sunday, November 30th at 10pm ET/PT (PR Newswire) |
| 10/09/08 7:10 pm | Times Names Managers to New Posts (at The Wall Street Journal Online) |
| 10/09/08 5:10 pm | Start-ups seek the arms of old foes (at FT.com) |
| 10/09/08 5:10 pm | Final Glance: Media companies (AP) |
| 10/09/08 2:10 pm | BET Networks Hosts Two Powerful Panel Discussions at Clark Atlanta University in Support of the 2008 'BET HIP HOP AWARDS' on Saturday, October 18 (PR Newswire) |
| 10/09/08 12:10 pm | YouTube, the Moneymaker (at Motley Fool) |
| 10/09/08 12:10 pm | Midday Glance: Media companies (AP) |
| 10/09/08 10:10 am | VH1 Heads Back to Rehab with Dr. Drew Pinsky for a Second Season of 'Celebrity Rehab with Dr. Drew' (PR Newswire) |
| 10/09/08 9:10 am | Early Glance: Media companies (AP) |
Risks
According to the company, box office receipts and DVD sales have recently been declining. Several factors, including piracy, growing competition for consumer discretionary spending and low audience acceptance, may be contributing to a recent industry-wide decline in box office receipts and in declining or, in some cases, flattening DVD sales. According to Adams Media Research, domestic sales of DVDs increased by 5.4% in 2004 but decreased by 2.6% in 2005. Internationally, DVD sales increased by 16% in 2004 but showed no change in 2005, according to Screen Digest.[5]
Also, certain policymakers maintain that cable operators should be required to offer programming to subscribers on a network-by-network, or à la carte, basis or to provide "family friendly" program tiers. Certain distributors have recently launched "family-friendly" tiers to their customers that may or may not include some or all of Viacom's networks. In addition, the FCC recently issued a report finding consumers would benefit if cable operators were required to offer programming on an à la carte basis. The unbundling or tiering of program services could materially reduce distribution of certain of its channels, thereby leading to reduced viewership and increased marketing expenses, and could affect Viacom's ability to compete for or attract the same level of advertising dollars. Any decline in subscribers could lead to a loss in its advertising sales and affiliate fees and a reduction in payments by cable and DTH satellite operators.[5]
Research Links
- VIACOM INC CL A Snapshot
- Profile at Yahoo Finance
- Profile at MoneyCentral.com
- Company Events
- Earnings Estimates
- Competitors at Yahoo Finance
- VIACOM INC CL A Leadership
- Officers and Directors at Reuters
- Salaries and Compensation at Reuters
- Insider Trades at Money Central
- Insider Trades at TheStreet.com
- Institutional Ownership at Money Central
- VIACOM INC CL A Fundamentals
- Key Statistics Yahoo Finance
- Key Ratios at Reuters
- Dividends and Returns at Morningstar
- SEC Filings at Edgar Online
- Financial Statements Quickview at Morningstar
- Historical Prices at Yahoo Finance
- Analyst Estimates
- All Press Articles
- VIACOM INC CL A Technical Analysis
- VIACOM INC CL A Message Boards
Options
- Options Prices and Data at Yahoo Finance
- Options Prices and Data at IVolatility.com
- Call Options Data at OptionsBuddy.com
Notes
- ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 Wikipedia article
- ↑ Shareholder letter
- ↑ CNNMoney.com stock quote snapshot, Acessed on February 20, 2007.
- ↑ CNNMoney.com stock quote snapshot, Acessed on February 20, 2007.
- ↑ 5.0 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 SEC 10-K, March 2006
- ↑ Shakeup at the top at struggling Viacom, CNNMoney, Sep. 4, 2006.
- ↑ New York Post, Feb 15, 2006
- ↑ New York Post, Feb. 10,2006
- ↑ NY Times, Feb. 18, 2007
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