Viacom Shakes Up Leadership at Nickelodeon

By Joe Flint and Keach Hagey 

Viacom Inc. is shaking up the leadership at its Nickelodeon Group children's television network, according to people familiar with the matter.

Currently overseen by Cyma Zarghami, Viacom President and Chief Executive Robert Bakish is adding Sarah Levy as a high ranking company executive to be involved in operations and strategy for Nickelodeon, the media giant's most successful unit.

The move will expand the already large territory of Ms. Levy and diminishes the role of Ms. Zarghami. Ms. Levy is currently the executive in charge of operations and strategy for Viacom's other domestic and international networks including MTV, VH1 and Comedy Central. Besides Nickelodeon, Ms. Levy will take on a similar role at BET as well.

Ms. Zarghami, who has been at Nickelodeon for more than three decades and was named president in 2006, is nearing the end of her contract and people close to her and Viacom aren't certain she will remain with the company. While Ms. Levy has a strong relationship with Mr. Bakish, Ms. Zarghami was closer to Philippe Dauman, the previous Viacom chief executive.

Initially, there were discussions about replacing Ms. Zarghami with Ms. Levy, who was a former senior executive at Nickelodeon under Ms. Zarghami for years. However, there were concerns as to whether Ms. Levy had enough creative experience for the position. Viacom also considered going outside its executive ranks and pursuing Brian Robbins, the co-founder of teen-focused digital media company AwesomenessTV who was recently tapped to make films for Viacom's Paramount film studio based on intellectual property channels like Nickelodeon.

Tensions are already high inside Viacom, which is trying to revitalize its struggling cable networks businesses. On Tuesday, the company laid off approximately 100 employees as part of an effort to save $100 million. Viacom reports quarterly earnings on Thursday.

The layoffs and restructuring come as Viacom is once again exploring a merger with CBS Corp. Both CBS and Viacom are controlled by National Amusements Inc., the holding company of media mogul Sumner Redstone and his daughter Shari, who is also a vice chairman of the two entertainment companies.

A force in children's TV with hit shows such as "SpongeBob SquarePants" and "Henry Danger," Nickelodeon is the most popular programming service among children 2-11. Nickelodeon is distributed in over 160 countries and has more than 1.1 billion subscribers world-wide. Besides Nickelodeon, there are several popular sister channels including Nick Toons and Nick Jr.

It is also a major revenue generator for Viacom. According to industry consulting firm SNL Kagan, Nickelodeon had about $2.1 billion revenue from advertising and distribution fees in 2017 and cash flow of more than $1 billion. The other Nickelodeon outlets had a combined revenue of $417.7 million and cash flow of $183 million.

Most of Viacom's other businesses, including its cable channels and the Paramount Pictures television and movie studio have been struggling, making Nickelodeon even more key to the company's bottom line.

Like all cable programmers, however, Nickelodeon has suffered ratings declines as viewing habits change and digital services become more popular. Its ratings are down 26% among children 2-11 so far this year compared with the same period a year ago, according to Nielsen.

The decision of Nickelodeon to sell reruns of hit shows to Netflix Inc. and later Amazon.com Inc., which allowed the streaming services to establish themselves as a place for children and a legitimate competitor. Walt Disney Co.'s Disney Channel and Disney Jr. compete for viewers. Disney also plans to launch a direct-to-consumer streaming service next year that will be aimed at children and families.

Write to Joe Flint at [e-mail] and Keach Hagey at [e-mail]

(END) Dow Jones Newswires

February 06, 2018 20:36 ET (01:36 GMT)

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