More on Viacom: Freston and Redstone

So much has happened in the business world that a few items almost slip into the cracks. Between Ford's new CEO, Intel's restructuring, and Chevron's new oil find, not to mention HP's board leak fracas, I almost forgot about Viacom's CEO, Tom Freston being fired, or retired, depending on technicalities, by his boss, Sumner Redstone.

In terms of total return performance, it would appear that Freston was giving the lie to Redstone's reason for the recent breakup of CBS and Viacom. As the Yahoo-sourced chart on the left illustrates, Viacom has plunged straight downward since its reincarnation in late 2005. It now has a -20% return, relative to the S&P500's single-digit positive gain, for the period.

Of course, with only a year's worth of separate performance, it's hard to tell if Freston really was failing at his task, or if Redstone was simply following up on reactions to his Tom Cruise dismissal, clearing out anyone who objected to his unilateral move over Freston's head.

From the details of yesterday's Wall Street Journal article, it's not clear what to expect of Viacom going forward. The two cronies that Redstone has re-installed at Viacom, CEO Phillipe Dauman and COO-like Tom Dooley, have a track record of tripling Vicacom's stock price when they last worked with him at the firm. Put that way, it's not clear Freston ever really had a chance. So I wasn't surprised to read that he had been reluctant to take the Viacom CEO job in the first place last year.

Reading further, it sounds unconvincing that Dauman is going to simply "foster innovation within the company," and stress aggressiveness with its "multiplatform" strategy. Couldn't Freston have done that? Wasn't he doing that? My sense has been that Viacom is simply another network whose assets have recently been rendered less valuable by the simple, inexpensive outflanking maneuvers of MySpace and YouTube.

Welcome to the truly "innovative" world, Mr. Dauman. Unlike the more formalized, corporate nature of old media, the new online media world seems to move much more quickly and decisively.

In the final analysis, I'm wondering now whether 82 year-old Sumner Redstone is the new Jack Welch. The cult celebrity Chairman for the decade. He is suddenly all over the papers, and even on a very flattering cable channel semi-bio a few days ago, hosted/narrated by director Brian Grazer, who has worked with Viacom and for Redstone before.

But, like Welch, he's now worried about his legacy. And this past year has apparently, at least in Redstone's mind, seriously jeopardized his image as the media mogul with the Midas touch.