Viacom Inc. Chief Executive Frank Biondi Jr. became the entertainment industry's latest executive casualty when he was fired from his post by Chairman Sumner Redstone, who said he would assume the day-to-day responsibilities for running the entertainment giant.
The abrupt ousting of Biondi, who was highly regarded on Wall Street, follows some recent disappointments at the company, including softer results at both its Blockbuster Entertainment and Paramount Pictures units as well as the departure of the highly regarded head of its Nickelodeon cable channel.
Viacom's operating units include some of the best-known brands in the entertainment business: Paramount, MTV music cable network, Nickelodeon and Blockbuster video stores. The entertainment product of Viacom--a company with $10 billion in annual revenue--includes such movies as "Braveheart," hit television shows such as "Frasier" and even TV's irreverent "Beavis and Butt-head."
Wall Street was clearly distressed by Redstone's move, and analysts expected the stock to take a drubbing when trading opened today.
"Biondi was the voice of reason and the referee," said Christopher Dixon, an analyst at PaineWebber Inc. "The risk now is that Daddy is sitting at the head of the table with all his children jumping up and down for attention without a mediator."
Biondi's firing marks the latest in an unprecedented string of executive upheavals and shake-ups over the last year in entertainment. Other top executives to lose their jobs recently include Sony Corp. of America President Michael Schulhof and Time Warner Inc. music chief Michael Fuchs.
Biondi's departure underscores that decisions at Viacom start and end with the 72-year-old Redstone, an impatient billionaire whose National Amusements Inc. owns two-thirds of Viacom's stock.
Redstone informed Biondi after receiving approval from Viacom's directors during a board meeting Wednesday. According to Biondi, Redstone approached him during the afternoon and said, " 'I don't feel comfortable getting into a lot of detail, I just want to make a change.' "
Biondi, 51, who was regarded as Redstone's heir apparent and had been with the company since 1987, said he accepted the decision, although he disagrees. "He owns the company," Biondi said.
