Fresh off of his victory in his battle with Tom Cruise, Sumner Redstone has exercised his authority once again by having longtime Viacom executive Tom Freston step down as CEO.
While I thought that Redstone made a necessary move with Tom Cruise, as far as sending a message that the outrageous demands and cost of employing stars was not going to continue on. It was a financial move that had to be made.
In this case though, I think he's making a mistake. The reason given for Freston's departure was that Viacom basically wasn't aggressive enough or entrepreneurial enough in its pursuit of the digital marketplace.
In reality, it was connected to only one thing: the stock price. While over the long-term this is a legitimate concern, in the short-term it's ridiculous.
Freston/AP
Only nine months ago, CBS Corp. and Viacom became separate entities; Redstone has gotten rid of Freston at Viacom.
Redstone said: "Viacom is extremely strong, and unique entertainment brands resonate with the audience that is defining the digital revolution, with the split we created a more focused, a more nimble company, poised to take advantage of all of these opportunities but now we need to do it. ... Now we need to be more aggressive in doing it."
To me this is an ignorant move. Every time you think Hollywood is starting to get it a little bit, they do dumb stuff like this. No company can be successful over the long haul when people are making decisions based upon a nine-month period of time. Especially when the companies were split and there was a transitional period that had to happen before things took off.
Redstone shouldn't gloat or think because he took on Tom Cruise and won that battle personally, and in the media, that he has some golden touch that can't be wrong. This is definitely a wrong move. To get rid of someone of this stature because there are a few people that only consider the price of a stock over a short period of time, shows that he still has a lot to learn about the long-term success of any business.
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