“This Continues to Be an Extremely Undervalued Company” – Six Highlights from Bob Bakish’s UBS Global Media & Communications Q&A

by Stuart Winchester, Viacom

Viacom CEO Bob Bakish attends the Ribbon Cutting for the new Viacom Building on January 26, 2017 in Los Angeles, California. (Photo by Todd Williamson/Getty Images)

Viacom CEO Bob Bakish appeared onstage at the UBS Global Media and Communications Conference yesterday in New York City, where he spoke to media and telecommunications analyst John C. Hodulik.

Bakish discussed the financial improvements surfaced in Viacom’s recent earnings report, the strength of Paramount’s film and television studios, flagship network highlights, and his optimism about the growth opportunities available through multi-platform distribution, live events, and other streams.

In his remarks, Bakish crystalized several key points about Viacom’s operations. Six of the most important are pulled out below. Click here to listen to the full conversation.

1) Viacom is a global cross-platform content engine

“And as we pivot and look to 2018, what we’re really focused on – and people think about Viacom and they say, ‘you’re a pay-TV company.’ And it’s true that we have a substantial business base in pay television. But what Viacom really is, it’s a global content engine across television, across feature film and increasingly across digital-native.”

2) Partnerships are key to growth

“The interesting thing is outside the U.S., in most markets, still today, Viacom is a relatively small player. And so, how do we get the benefits of being a bigger player? And the route to that was through partnership, whether that was partnering with our distributors, on the advertising side. We participated in a whole set of ad sales houses through that time, some of them we run, some of them other people run, some of them were joint ventures but that was all about getting the benefits of scale.”

3) Viacom’s flagship brands remain the priority

“Well, flagships [Nickelodeon, Nick Jr., MTV, Comedy Central, BET and the soon-to-launch Paramount Network] are certainly Viacom’s priority because again we think there’s significant opportunity particularly to grow share there on the network side, as well as broader awareness. As we begin to implement that strategy we certainly remixed our programming investment and moved it towards the flagships, point one. And point two is within the flagships, a brand like MTV, which I’m continuing to be tremendously excited about, there was a place where we put a new team in place, we put a new strategy in place, that strategy was about shifting the programming mix. MTV had gone to a place where it was very invested in scripted programming, which is quite frankly something you can get from a variety of places and it was not really a core association of the brand, so we’ve moved it to a more of an unscripted place, more of a live place.”

4) Viacom is the market leader in advanced advertising

“And by the way, on the advanced advertising space, Viacom is clearly the market leader. We partnered with Fox and Turner to set up OpenAP and we did that so the category can continue to scale, which is a very important thing for us. But we were the leader and we, as far as I know, are the only people doing these type of multi-faceted distribution deals and you’ll see the benefit of those start to come online as we get into 2018 too, and we’re able to unlock some more of this addressable inventory. So I think that is a very exciting road ahead. And again, sets the stage for a much more productive partnership with the MVPDs here in the U.S. and frankly around the world.”

5) 2017 was about stabilization, 2018 is about acceleration

“But as we accomplished really the stabilization of the company and I think that’s the best word, 2017 was about stabilization, 2018 is about acceleration particularly in these newer areas.”

6) Viacom is an undervalued cash machine

“Well, Viacom if you look at 2017, $1.5 billion to $1.7 billion in cash flow, durable cash flow, it’s about a 15 percent yield. So, this thing is a significant cash machine. You look at 2017 and we eliminated the big overhang on the business, quite frankly, which was the uncertainty around distribution. We have distribution deals with mid-single digit annual escalators locked in through well past 2020. So we have a secured distribution base and we have these incremental opportunities that are not only ideas on the next-generation platforms and solutions, on incremental revenues beyond the core, they’re not only ideas, they’re businesses we are already in, in 2017 that we are, therefore, know how to operate and can accelerate. So there is a tremendous opportunity ahead. This continues to be an extremely undervalued company.”


Bakish also appeared on CNBC last week. Watch his conversation with Julia Boorstin here.

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