Viacom CEO Tom Freston Resigns

Earlier today Viacom announced that CEO Tom Freston has resigned his position with the company. In another surprise, Philippe Dauman, a longtime friend of Viacom chairman Sumner Redstone, has been named new chief executive.

While no official reason for the resignation has yet to be given by Viacom, rumors are that even though Freston was well respected at the company Redstone was very angry that Freston allowed the MySpace.com Internet company to slip out of his fingers. MySpace ended up in Rupert Murdoch’s News Corp. pocket.

Redstone, in a statement about the shift in upper management said the board had been sorely disappointed by Viacom’s stock price and by its poor communication with Wall Street, which, he thinks, may have dimmed faith in the company’s prospects.

Redstone said Freston’s exit had nothing to do with the recent Tom Cruise incident, where Redstone surprised Viacom execs by slamming the actor publicly as Paramount severed its relationship with Cruise.

Company-Man Thomas Dooley will also move into a newly created position tagged “senior executive VP and chief administrative officer.” This will rejoin the dynamic management duo of Dauman and Dooley who had served as deputy chairmen of Viacom but were pushed out of day-to-day operations when the company merged with CBS in 2000.

The new pecking order will have Dauman reporting to Redstone and Dooley will report to Dauman. The men have agreed to invest, respectively, $50 million and $40 million, of their own money to buy Viacom stock. Interesting…nothing like buying your way to the top of the corporate ladder.

“I have worked closely with Philippe Dauman for many years, and I have a comfort level with him and high regard for his leadership abilities, strong financial and operational skills, and superb judgment,” Redstone said in a statement. [We] “are confident he has the strategic and creative vision to take the company forward and the drive and energy to execute relentlessly on our strategy,” Redstone added.

Concerning Tom Freston, the man behind MTV Networks, Redstone said: “I have great respect for Tom Freston and want to personally thank him for his tremendous contributions to Viacom over the past 20 years. Tom successfully built MTV Networks into an unmatched force in the entertainment industry and assembled a best-in-class operational team to build on that foundation. Tom has been a friend and a colleague for many years and we wish him well as he moves on to the next stage of his career.”

Freston went out thanking his co-workers, “I have every confidence that Viacom is well positioned to prosper under Philippe’s leadership. I will do all I can to insure a smooth transition. I particularly want to thank my colleagues from all over the company who have been inspiring to work with and have been so instrumental in the great success we’ve had.”