Thursday, August 4, 2016

Who Wants MTV?

Viacom was part of the birth of cable networks.  It created MTV and its first music video was from the Buggles, "Video Killed the Radio Star".  Many have worried that digital streaming has done the same to cable.   Radio has survived but has certainly changed if not weakened.  IHeartRadio, a major radio player faces the prospect of bankruptcy.  But back to MTV and the question on everyone's mind, do people still want their MTV? (Sorry Dire Straits).

Can MTV and its owner Viacom keep their eye on the business while facing so much scrutiny around the competency of its founder and controlling owner, Sumner Redstone.  If quarterly financials are an indication, then not likely.  Per the NY Times, "Viacom reported a 29 percent decline in profit in the latest fiscal quarter, putting its management in the hot seat as it continues to wage a brutal fight for control of the entertainment company."  Not just double digit but more than a quarter percent drop in profitability.  The noise coming from ownership control seems to have created quite a distraction to the running of the business.  A shame given the once powerful brands like MTV, Comedy Central and Paramount.

Given that Redstone needs to be ruled competent or incompetent while he currently owns a significant block of shares likely means the inability for an outside company to come in with an acquisition offer.  The courts must first decide whether Redstone, his daughter, or someone else has voting authority to those shares.  Any offer for Viacom would have to take a backseat until that is first decided.  But the media market is changing quickly and the value of MTV et al may no longer be there.  Does anybody want their MTV anymore?