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When Bob Bakish was named acting CEO of Viacom last October, most media reporters and sell-side analysts saw him as a caretaker. They thought it was a signal that Viacom's owner, Shari Redstone through National Amusements' controlling stake, was gearing up to merge the company into CBS and let Les Moonves run it.
Nine months later, Bakish is not in fact selling Viacom off for parts. He actually had Viacom in the bidding to acquire Scripps Networks — with an enterprise value of $13 billion. According to The Wall Street Journal, Bakish made a late major push to acquire the set of networks controlling HGTV, the Food Network and the Cooking Channel. (Reuters first reported last week that Viacom was interested.)
Even though Discovery's David Zaslav prevailed to win Scripps, just to see Viacom in the mix was a bit of a media shocker.
How did Viacom go from being a laughingstock in the media world to being on the hunt for other acquisitions in nine months?
First, Redstone stepped up and pushed for changes at Viacom's board level. She brought in Nicole Seligman, former president of Sony Entertainment, and Ken Lerer, the VC behind Huffington Post and Buzzfeed. These changes, in turn, led to the departure of former Viacom CEO Philippe Dauman.
Enter Bakish. The former head of Viacom International was not well-known outside the company but had built up a bunch of fast-growing and profitable international networks. Even today, few investors give Viacom full credit for its investments in India, the U.K.'s Channel 5 and a recent push into Latin America.
While media watchers sat back and waited for Moonves to ride in on a horse, Bakish got down to work on a turnaround strategy.
The rumor mill last fall said Moonves would consider taking on Viacom only if it came at a steep discount — and, perhaps, a meaningful bump to the CBS management team's compensation.
While Redstone could have forced a merger to give National Amusements control of both CBS and Viacom, she found Bakish's turnaround plan more appealing.
Since getting the training wheels removed and taking over as permanent CEO, Bakish has gone back to his international playbook and made several other big changes.
A skeptic will say: What's Bakish really done so far? He's made a bunch of hires, as anyone would in his shoes. Viacom's stock price is trading at levels it was at the start of 2017 after it became clear Moonves wasn't riding in on a white knight. Where's the beef?
But who would have seen Robbins leave the company he founded building YouTube-directed millennial content to come back to Viacom? Who saw Perry leaving Oprah? Who saw Viacom going toe-to-toe with Discovery to buy Scripps?
Viacom's gone from being a laughingstock to competent. While it's true that Bakish isn't a shoe-in to be a first-ballot CEO Hall Of Fame candidate, few saw Viacom coming back from the dead. It still has to put some numbers on the board in the second half of the year and show that its new strategy of not shooting itself in the foot is paying off.
Give Redstone some credit as well. She's not just attending Sun Valley for the photo ops. As she made clear in her Recode interview back in May, she deeply understands the media business and Bakish wouldn't be getting a crack at his turnaround plan if it didn't pass her sniff test.
The bottom line here is that Viacom is back on the offensive and Bakish is planting all the right seeds.
Nick is on a winning streak led by "Paw Patrol." MTV is trying to follow the VH1 playbook. BET has Perry coming. Trevor Noah has found his footing at Comedy Central. Paramount will take longer to turn around but Gianopulos and Robbins seem the right ones to do it.
They say the key to investing success is to protect your downside and the upside will take care of itself. The last nine months at Viacom have seen a lot of plugging gaping holes. Bakish hopes the upside is soon to arrive.
P.S.: I did a debate with Rich Greenfield last week about whether Disney/ESPN is a buy versus a sell. Take a listen and see who you agree with.