Sumner Leaves His Fishbowl; MTV to Cut 500 Jobs



There are wa-a-ay too many old media dinosaurs at MTV, quite frankly. Many, many years ago The Corsair auditioned for MTV's "The Real World (Please, please forgive us our youthful indiscretions)" at 1550 Broadway on an open casting call. In that room were hordes of MTV executives, shaking hands, involving themselves superficially in the whole taped interview process. None of them were younger than 45, it seemed. This wasn't Old Media; this was Paleolithic media. And these guys were presumably programming for the teen to college age demographic? One can imagine the Methuselan Sumner Redstone angrily yelling -- well, angrily wheezing in an crisp, authoritative but asthmatic squeal -- at the fish in his exotic aquarium about Viacom's executive top-heaviness. From the NYPost's Peter Lauria:

"Viacom could lay off as many as 500 people from its MTV Networks division next week as part of a $250 million cost-cutting move, according to three sources close to the company.

"The directive for the cuts is coming straight from Viacom's management triumvirate - Chairman Sumner Redstone, CEO Philippe Dauman and Chief Financial Officer Thomas Dooley - who sources said has run out of patience with the lagging performance of its most visible unit.

"Viacom brass have met with each of the business units within MTV over the past few weeks and asked them to identify where costs could be cut, said one of the sources, who ticked off programming, marketing, finance and business development as likely targets for cuts.

"...'MTV's management in general is very top-heavy,' said a source.

"And that's a big part of the problem. Sources said there are executives roaming MTV's halls who have been around as long as the channel has, which may be a reason why MTV got out-hipped in the digital revolution by YouTube, MySpace and others."

To be sure (Exaggerated cough suggesting feigned detachment). We still cannot -- for the life of us -- understand what is taking Viacom so long to purchase Facebook, which would be the logical pimp-move for MTV.

Douglas McIntyre of 247WallStreet cuts tro the chase:

"A look at media company shares over the last year puts Viacom in the cellar. The company's stock is down slightly over the last year. Time Warner (TWX), CBS (CBS), Disney (DIS), and News Corp (NWS) have all done much better.

"Viacom king of all media Sumner Redstone has done little to unlock any value at the firm.

"In the September 2006 quarter, Viacom's revenue barely moved from the year before, $2.66 billion compared to $2.478 billion in 05. Net income dropped from $423 million to $357 million.

"The company's 10-Q indicates that the cable networks business grew faster than the company as a whole, up 10%. Revenue at Viacom's film unit was up only 1%. And, while operating income at the networks rose 14%, the film unit had a loss.

"But, MTV appears to be bearing most of the company's cost cutting.

"The real problem with the picture at Viacom is that Redstone and his hand-picked CEO Philippe Dauman can take costs out, they appear to have not a single clue about increasing the topline. The firm's attempt to capture online revenue has been lame."

There you have it.

247WallStreet