Morale ‘The Pits’ at Viacom
September 5, 2006 4:25 PM
Sadly, Viacom president and CEO Tom Freston got his walking papers today and close colleagues and employees remain shellshocked. “Its like someone died over there,” said one headhunter whose phone has been ringing all day, answering calls from spooked Viacom employees.
Freston took the bullet because Viacom didn’t have the kind of Internet traction that News Corp. has enjoyed with its purchase of MySpace (An entity that Freston lost out on.) But one of Freston’s closest colleagues told me today that it was ironic because Viacom’s chairman Sumner Redstone wouldn’t give Freston the budget to pursue his online strategies, and that Redstone had set high and impossible financial goals to attain.
Another close college said that Freston might have been in over his head, particularly in overseeing the company’s Paramount movie studio. “He really didn’t know anything about output deals,” and that had ramifications for Showtime, which is now in the CBS family under the control of Les Moonves.
Nor did news of Freston’s departure sit well with investors today, with the stock dropping 5 percent shortly after the announcement was made. That doesn’t help, given that Viacom’s stock has been tumbling while its CBS sibling (which includes broadcast, Showtime and outdoor) is actually enjoying growth. It was expected that Viacom would grow more quickly than CBS. And that pretty much explains in a nutshell why Freston got the heave-ho.
Clearly Freston is a larger than life character. For months after 9/ll, he would still walk the halls asking employees from all departments how they were holding up and offering help, said one of his trusted colleagues. “He’s such a wonderful leader,” that source added, predicting that “his people would follow him anywhere.”
Eventually we’ll see where Freston lands, and he will. But for now, I guess it’s “golden liplock,” given that so far, at this posting, he’s not taking press calls.