Beth McCann, Divya Yeleswarapu, Hugh Sims

VIACOM, INC.

1515 Broadway, New York, NY 10036

(212) 258-6000

viacom.com

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ABOUT

American media conglomerate Viacom, Inc. is a media company home to television, cinema, online and mobile networks and brands in over 160 countries and territories, reaching approximately 700 million subscribers around the globe.

Their leading brands include MTV, VH1, CMT, BET, Nickelodeon and its various channels, Comedy Central, Spike, and Paramount Channel. Viacom owns Paramount Pictures as well, which is a major producer and distributor for movies [2].

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HISTORY

Viacom got its start in 1971. Viacom acquired its various networks over the course of 30 years, purchasing various channels including MTV, Nickelodeon, and BET. In the 1990s they entered a merger with CBS [4]. However, the two separated into two companies in 2005, now known as CBS Corporation and today’s Viacom Inc. The split was made to separate radio and television from the rest of the company [21]. Today, Viacom continues to create new shows for their various networks and launch new ideas.

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CURRENT AND FUTURE MEDIA

Recently, Viacom has been concerned with attracting younger viewers from children’s ages to young adults aged 18-25. They are trying to stay relevant in the developing world of streaming content but still trying to pull in viewers for live shows.

On Nickelodeon, Viacom is attempting to draw in new and old audiences alike with programming reminiscent of shows on in the 1990s. Viacom announced in August they would have an hour long special of the classic 90s Nickelodeon cartoon Rocko’s Modern Life [5].

In October they announced there would be a special of Double Dare, a game show from the 1980s and 1990s [6]. They later said they would be releasing Legends of the Hidden Temple: The Movie to come out based off of the popular 1990s Nickelodeon show [7]. They are attempting to appeal to a younger generation who has never seen this content as well as nostalgic young adults.

Legends of the Hidden Temple: The Movie-Official Trailer [8]

Viacom is also launching some of its networks on DirecTV Now, AT&T’s streaming service. They want to deliver more content to fans in more places and allow them to stream content at their own convenience [9].

However, Viacom is also developing tactics to aid in the live viewing experience for consumers. Viacom Labs created what they called a “breakthrough television format” that they hope to launch in 2017 on MTV Music. They have created a TV format that pulls livestreams of fans in a real time feed during the scheduled television show [10]. It creates an interactive and unique experience for fans and will help to motivate people to watch shows in real time rather than stream them days later.

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MANAGEMENT

Within the last few months, Viacom has gone through some major changes in management. As of August 20^th, Chief Executive Philippe Dauman resigned which ended the legal fight between members of the Viacom board and Redstone’s National Amusements Inc. This is a privately held company that holds 80% of the voting shares of Viacom and CBS Corp. Under the agreement, Dauman received about $72 million and was replaced by previous COO Thomas Dooley who served as interim CEO until the end of Viacom’s fiscal year [16].

Recently, Viacom declared that Robert Bakish will be acting chief executive replacing Tom Dooley. Bakish, a 19-year company veteran who headed the company’s international media networks, has also been named President and CEO of a newly created group called Viacom Global Entertainment Group [17]. The group will run Viacom’s most popular networks including MTV, Comedy Central, VH1, Spike and others [18].

 

 

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FUTURE OF THE COMPANY

In terms of Viacom’s future, there is a lot leaning on this merger with CBS. According to The Hollywood Reporter the Viacom special committee who is working exclusively on the merger hopes to wrap everything up by the year’s end [19]. It is planned that CBS Corp. President and CEO Leslie Moonves would eventually oversee the combined entity. However, the company is determined to move forward whether as a stand-alone company or in a potential combination with CBS. Newest interim CEO Bob Bakish has a lot of goals and wants to push the company forward in terms of speed, sharing, and a global outlook. He is planning to invest in new content and to deliver significant audiences on genres other than high-dollar programming. Bakish said, “We’re not going to stand still while the CBS merger is being evaluated. I believe there’s a lot of work we can do in the near-term to make us stronger, no matter what the next chapter of Viacom is. It’s time to move forward [20].”

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FINANCES

The first day of trading since the split between Viacom and CBS Corporation showed a 2.8 percent increase in the shares of CBS Corp. to $26.20, and a 1.1 percent increase in the shares of Viacom, to $41.59 [21]. In the current year 2016, they averaged out their most recent 50-day span at $41.47 per share. As of November 2016, Viacom has a 6.1% market share and is among the top 5 competitors in the cable and entertainment industry [24]. Due to the ongoing internal management battle, Viacom’s stock performance has gone down with -8.06% in the last 90 days, compared to the industry average of -0.22%. However, in comparison to CBS Corporation, Walt Disney Company, and Comcast Corporation, Viacom’s recent one day and five day stock performance, 3.58% and 1.4% respectively, has exceeded them all [22].

This major media company has had declining performance over the last 11 years, however, it has never made negative profits and instead managed to stay afloat, but the drop in total revenue has been alarming. Over the last year their 52 Week High was $47.17 and their 52 Week Low was $38.61 [23].

Their total revenue has capped off at 13.05 B which is not where they want to be, considering that their profit margin is 15.85% and the typical average for a media company is usually around 23% [22]. In 2012, revenue increased about 16.7% because NBC Universal merged with Comcast Corporation, which provided Viacom with unforeseen and extra production materials, allowing mega growth through 2013 and the year-end stock price to cap off at $87.34 [23].

The revenue has seen a sharp decrease over the last five years by dropping 3.74% and ending the year 2015 with a drop of 44.36% to a monetary outcome of $6.18B as their gross income. It was the lowest value over the defined period. That left them with a free financing cash flow of $2.17B, which was a 12.75% decrease from the previous year 2014. However, the little glimmer of hope that Viacom took from its bleak financials into the current year 2016 is that the net operating cash flow has only been seeing growth over the last five years, and capped at a 17.43% increase coming in [22][24]. Therefore, this media conglomerate has cash to grow and operate its company through the many bumps in the reel.

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OVERVIEW

Despite turmoil within the company and stress from the possible CBS, Viacom continues to move forward by creating new content for their networks and trying to reach as large an audience as possible.

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SOURCES

[1] Viacom-HoiTalent. Retrieved November 25, 2016. http://hoitalent.com/company/viacom/

[2] About Viacom. Retrieved November 14, 2016. http://www.viacom.com/about/pages/default.aspx

[3] Dampier, Phillip. April 1, 2014. Stop the Cap! Viacom Demands 100% Rate Increases for Hundreds of Small Cable Systems, Military Bases. Retrieved November 14, 2016. http://stopthecap.com/2014/04/01/viacom-demands-100-rate-increases-for-hundreds-of-small-cable-systems-military-bases/

[4] Viacom Timeline. Retrieved November 14, 2016. http://www.viacom.com/about/pages/history.aspx

[5] Acquire Media. August 11, 2016. Nickelodeon Brings Back Rocko’s Modern Life for Brand-New, Original One-Hour TV Special Based on the Classic ‘90s Hit Animated Series. Retrieved November 14, 2016. http://ir.viacom.com/releasedetail.cfm?ReleaseID=984177

[6] Acquire Media. October 6, 2016. Nickelodeon Announces Brand-New Double Dare Special Commemorating Iconic Game Show’s 30th Anniversary Year, Wednesday, Nov. 23, at 9 p.m. (ET/PT). Retrieved November 14, 2016. http://ir.viacom.com/releasedetail.cfm?ReleaseID=992484

[7] Acquire Media. October 6, 2016. Nickelodeon’s Original TV Movie Event, Legends of the Hidden Temple, Bows Saturday, Nov. 26, at 8 P.M. (ET/PT). Retrieved November 14, 2016. http://ir.viacom.com/releasedetail.cfm?ReleaseID=992490

[8] July 23, 2016. Legends of the Hidden Temple: The Movie l First Official Trailer I Nick – YouTube. Retrieved November 25, 2016. https://www.youtube.com/watch?v=U7eHPW7n7Ko

[9] Acquire Media. October 4, 2016. Viacom Networks to Launch on DIRECTV NOW. Retrieved November 14, 2016. http://ir.viacom.com/releasedetail.cfm?ReleaseID=992023

[10] Acquire Media. October 24, 2016. First Ever Livestream-to-TV Format Pioneered by Viacom Labs, Greenlit for On-Air Series. Retrieved November 14, 2016. http://ir.viacom.com/releasedetail.cfm?ReleaseID=995056

[11] January 15, 2015. Viacom Extends Employment Agreement with President and Chief Executive Officer Philippe Dauman Through 2018. Retrieved November 26, 2016. http://www.businesswire.com/news/home/20150115006254/en/Viacom-Extends-Employment-Agreement-President-Chief-Executive

[12] Senior Management. Retrieved November 26, 2016. http://www.viacom.com/about/pages/seniormanagement.aspx

[13] Salem, Yasir. November 19, 2015. What’s next for the TV industry? Find out from CBS CEO Les Moonves at IGNITION 2015. Retrieved November 24, 2016. http://www.businessinsider.com/cbs-ceo-les-moonves-to-speak-at-ignition-2015-7

[14] Viacom, Inc. Retrieved November 26, 2016. https://www.google.com/finance?cid=703770

[15] DirectTV Now Logo. Retrieved November 16, 2016. http://www.multichannel.com/sites/default/files/public/styles/blog_content/public/DirecTV%20Now%20400×300.jpg?itok=Mb9HjA3j

[16] Reuters. August 20, 2016. Viacom Says CEO Dauman to Resign Post Immediately; Dooley Steps In. Retrieved November 12, 2016. http://fortune.com/2016/08/20/viacom-ceo-to-resign-immediately/

[17] Reuters. October 31, 2016. Viacom names Bob Bakish acting CEO. Retrieved November 14, 2016. http://fortune.com/2016/10/31/viacom-has-a-new-acting-ceo/

[18] Yu, Roger. November 1, 2016. Viacom names Bakish as acting CEO. Retrieved November 14, 2016. http://www.usatoday.com/story/money/2016/10/31/viacom-names-bakish-acting-ceo/93083054/

[19] Masters, Kim. November 10, 2016. CBS-Viacom Merger Intrigue as Les Moonves Pushes for Clear Control. Retrieved November 14, 2016. http://www.hollywoodreporter.com/news/cbs-viacom-merger-intrigue-as-les-moonves-pushes-clear-control-945477

[20] Lieberman, David. November 9, 2016. Viacom’s Bob Bakish Vows To Accelerate Growth As It Weighs CBS Merger. Retrieved November 16, 2016. http://deadline.com/2016/11/viacom-bob-bakish-accelerate-growth-plans-consider-cbs-merger-1201851548/

[21] Alfano, Sean. January 3, 2006. CBS, Viacom Formally Split. Retrieved November 16, 2016. http://www.cbsnews.com/news/cbs-viacom-formally-split/

[22] List of VIA’s Competitors and Stock Performance. Retrieved November 16, 2016. http://csimarket.com/stocks/competitionNO2.php?code=VIA

[23]  Viacom Inc. – Stock Performance. Retrieved November 16, 2016. http://ir.viacom.com/stockquote.cfm

[24] IBISWorld US – Industry, Company and Business Research Reports and Information. Retrieved November 16, 2016. http://clients1.ibisworld.com/reports/us/industry/majorcompanies.aspx?entid=1245