Tags: viacom | job cuts | Buybacks | Restructuring

Viacom Halts Buybacks, Sees $785 Million Restructuring Costs

Monday, 06 April 2015 06:32 PM


Viacom Inc., the media company controlled by billionaire Sumner Redstone, is suspending stock buybacks for as long as six months to pay for a restructuring and acquisitions.

The company will record a $785 million second-quarter charge to write down television shows and pay for job cuts, it said Monday in a statement.

New York-based Viacom expects to resume buybacks, which totaled $1.5 billion in the first half of the fiscal year, by the October start of its next fiscal year.

“This temporary pause reflects our history of sound financial management and our commitment to operating within Viacom’s target leverage ratio,” Chief Executive Officer Philippe Dauman said in the statement.

Viacom, owner of Comedy Central, Nickelodeon and MTV, is cutting jobs to save a targeted $350 million a year, while still investing in areas that can spur growth. The company, which is grappling with a drop in ratings and advertising, merged three of its U.S. network groups into two in February. It reiterated on Monday plans for as much as $400 million in acquisitions by September.

The restructuring is largely completed, the company said. Details of job cuts, including at Viacom’s Paramount Pictures studio, have trickled out over the past several months. Viacom had 9,900 employees at the end of fiscal 2014.

The restructuring was a reaction to “shifting consumer behavior and evolving measurement practices,” according to the statement. Resources are being reallocated to areas such as data analysis and technology development.

“We will transition rapidly into the future, generate substantial cost savings and continue to increase our investment in original programming,” Dauman said.

In February, Viacom merged its three domestic cable-network groups into two, Viacom Music and Entertainment Group and a Viacom Kids and Family Group.

The shift away from linear TV has lessened the value of acquired re-runs that air on cable networks owned by Viacom. Ratings for its kids’ channels, such as Nickelodeon, have been falling as consumers turn to Netflix Inc. and other online outlets.

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Viacom Inc., the media company controlled by billionaire Sumner Redstone, is suspending stock buybacks for as long as six months to pay for a restructuring and acquisitions.
viacom, job cuts, Buybacks, Restructuring
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2015-32-06
Monday, 06 April 2015 06:32 PM
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