Viacom shake-up is a plus for shareholders: Analyst

The high-profile fight for control of Viacom (NASDAQ: VIAB) intensified Monday as founder Sumner Redstone removed CEO Philippe Dauman from a trust that will control it when Redstone dies or is declared incompetent. But Michael Morris, entertainment and media analyst at Guggenheim, says the shake-up in leadership could be a good thing.

"The only path for shareholder appreciation at this point is a change in management," Morris told CNBC's " Power Lunch " Monday. "The share price reflects it, it's been quite a laggard relative to the peer group."

Shares of Viacom are down more than 40 percent year over year, although the stock price had a 3 percent uptick following the news Monday.

"I'm a sports fan; I believe in batting average,"" Morris said, adding that Dauman has been at the helm of Viacom since 2006. "The current team has had long enough to establish a batting average; it's a poor batting average, at this point I think the company needs a new strategic direction."

The company's structure may be part of the issue, Morris said. It's comprised of two businesses: a cable network side with brands like Nickelodeon, MTV, and Comedy Central, and a film studio, tethered by Paramount. But Viacom needs to refocus on what's worked in the past, Morris said.

"The company needs to get back to its roots, and rally its content creation and investment around just a couple of core brands," Morris said.

The "sub-scale" amount of production at Paramount, according to Morris, is part of the problem.

"There needs to be an investment process to improve the production, or they should sell that business to a scale player and use those proceeds to reinvest into the networks," Morris said. But with Redstone in power, he added, it's unlikely that the business will be sold.

Viacom's dual-class stock structure gives founders like Redstone the lion share of voting power, which isn't great if you're a shareholder, Morris said.

"Shareholders who have made purchases to this point knew what the structure was when they got in," he said.

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