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CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S DAVID FABER INTERVIEWS VIACOM CEO PHILIPPE DAUMAN ON "STREET SIGNS" TODAY AT 2:35PM

Philippe Dauman
AP
Philippe Dauman

WHEN: Today, Monday, Dec. 8th at 2:35 PM ET

WHERE: CNBC's "STREET SIGNS"

Following is the unofficial transcript of an exclusive CNBC interview with Viacom CEO Philippe Dauman on CNBC'S "Street Signs" today.

All references must be sourced to CNBC.

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[on location at the UBS Media & Communications Conference in New York City]

DAVID FABER: HERE WITH PHILIPPE DAUMAN WHO JUST PRESENTED TO A LOT OF INVESTORS. PRETTY GOOD SHOWING ACTUALLY.

PHILIPPE DAUMAN: QUITE A SHOW.

FABER: I GUESS THEY CAN'T TRAVEL ANYMORE SO THEY'RE ALL HERE IN TOWN. I LISTENED TO YOU AND, IN LISTENING, IT SOUNDS LIKE EVERYTHING'S GREAT AT VIACOM. I WONDER, THINGS CAN'T BE THAT GOOD IF YOU HAD TO LAY OFF 7% OF YOUR STAFF LAST WEEK.

DAUMAN: NO, WHAT I SAID IN FACT, IS THAT WE ARE OPERATING IN A CHALLENGING ENVIRONMENT THAT WE ARE STRATEGICALLY WELL POSITIONED. WE ARE OPERATIONALLY DISCIPLINED. AND WE TOOK THE STEPS THAT WE NEEDED TO TAKE TO MAKE SURE THAT WE DO WELL, EVEN IN A TOUGH AND CHALLENGING ENVIRONMENT AND THAT WE CAN CONTINUE TO DRIVE OUR STRATEGIES, SO THAT WHEN THE ECONOMY PICKS UP WE'LL BE ABLE TO TAKE FULL ADVANTAGE OF OUR BRANDS.

FABER: IN MAKING A DECISION LIKE THAT, HOW DO YOU COME TO FIGURING OUT THE RIGHT NUMBER? IS IT A LOT OF GUESSWORK? AND OBVIOUSLY YOU'RE TALKING ABOUT TRYING TO FIGURE OUT WHAT THE FUTURE IS AND BEING THE RIGHT SIZE. HOW DO YOU COME TO 7% AS OPPOSED TO 10 OR 5?

DAUMAN: WE DIDN'T START WITH A NUMBER OR PERCENTAGE. WHAT WE HAVE DONE OVER THE LAST MANY WEEKS IS RWALLY DO A TOP TO BOTTOM ANALYSIS OF OUR WORKFORCE, OF OUR OPERATIONS, NOT JUST IN THE UNITED STATES BUT AROUND THE WORLD. AND LOOK TO SEE WHERE WE CAN OPERATE MORE EFFICIENTLY. LOOK AT WHAT BUSINESSES ARE PERFORMING WELL, EVEN IN THIS ENVIRONMENT AND WHICH BUSINESSES ARE MOST CHALLENGED. AND WHEN YOU HAVE PRESSURE ON CERTAIN CATEGORIES OF REVENUE, YOU HAVE TO ADJUST THE COST SIDE. IT'S --THESE ARE DIFFICULT DECISIONS TO MAKE. WE HAVE MADE THEM IN A HUMANE WAY. WE'RE TREATING OUR PEOPLE WELL, BECAUSE IT'S IMPORTANT TO TREAT THE PEOPLE WHO HAVE WORKED WITH YOU WELL SO THAT THEY CAN THRIVE IN WHATEVER THEY DO GOING FORWARD AND PEOPLE THAT ARE LEFT ARE HAPPY TO BE WORKING FOR US.

FABER: ONE OF THE MAIN QUESTIONS EXECUTIVES HAVE BEEN GETTING TODAY OF COURSE, WHAT'S GOING TO HAPPEN IN THE ADVERTISING ENVIRONMENT. YOU'RE A COMPANY WITH A LOT OF CABLE NETWORKS THAT RELY ON AFFILIATE FEES BUT ADVERTISING IS, WHAT, 50%? HOW MUCH?

DAUMAN: NO, NO, IF YOU LOOK AT OUR OVERALL REVENUES AT THE COMPANY, ADVERTISING REPRESENTS AROUND 30%.

FABER: 30%. TELL ME, WHAT ARE YOUR EXPECTATIONS FOR 2009 IN TERMS OF THAT, AT PROPERTIES LIKE NICKELODEON WHERE THERE MAY BE A SLOWDOWN IN SPENDING FROM RETAILERS FOR CHILDREN'S TOYS AND THINGS LIKE THAT? ARE YOU SEEING A SIGNIFICANT SLOWDOWN?

DAUMAN: WELL, FORTUNATELY, WE ARE THE NATIONAL AD SALES CATEGORY WHICH IS A CATEGORY THAT IS PERFORMING AND IS EXPECTED TO CONTINUE TO PERFORM AT A BETTER LEVEL THN LOCAL AD SALES. NICKELODEON SPECIFICALLY IS PERFORMING QUITE WELL. THE UPFRONT SALES WE MADE EARLIER THIS YEAR ARE HOLDING UP VERY WELL WITHIN TRADITIONAL RANGES. THE BIG ISSUE IS VOLUME IN THE SCATTER MARKET, AS WE GO FORWARD IN AN UNCERTAIN ECONOMY.

FABER: WHAT ARE YOU SEEING THERE?

DAUMAN: WELL, VOLUME CAN BE CHALLENGED. WE SAID AT THE TIME OF THE EARNINGS CALL THAT WE'LL SEE CONTINUED SOFTNESS IN THE ADVERTISING MARKET. BUT FOR US THUS FAR, THERE HAS NOT BEEN ANY SIGNIFICANT DETERIORATION FROM WHERE WE WERE BEFORE. SO FOR US, WE ARE FOCUSING ON CONTINUING TO KEEP BRANDS LIKE NICKELODEON, LIKE COMEDY CENTRAL, LIKE MTV, VIBRANT TO MAKE SURE WE HAVE GOOD PROGRAMMING ON AIR. AS PEOPLE SPEND MORE TIME VIEWING TELEVISION. AND JUST SERVE OUR CUSTOMERS BETTER.

FABER: ARE YOU WORRIED ABOUT NEXT YEAR? IS IT AS BAD AS YOU'VE EVER SEEN IT IN YOUR CAREER?

DAUMAN: THE GENERAL ECONOMIC ENVIRONMENT IS AS BAD AS WE'VE SEEN IN A LONG TIME. WE ARE FORTUNATE, AGAIN, THAT WE ARE BOTH STRATEGICALLY WELL POSITIONED AND FINANCIALLY STRONG. HAVING A FINANCIALLY STRONG POSITION TODAY IS VERY IMPORTANT. AND WE HAVE THE GOOD FORTUNE OF HAVING OPERATED PRUDENTLY AND THEREFORE HAVE THE ABILITY TO CONTINUE TO INVEST OUR BUSINESSES, BOTH FOR NEXT YEAR AND BEYOND. IT'S A CHALLENGING ENVIRONMENT. THAT'S WHY THERE IS A PREMIUM ON OPERATING EFFICIENTLY AND OPERATING IN A VERY THOUGHTFUL WAY.

FABER: LET ME END ON THE MOVIE STUDIO. ON PARAMOUNT. YOU'VE GOT A BUNCH OF FRANCHISE FILMS OF COURSE. BUT SOME INVESTORS SAY WE WISH THOSE GUYS WOULD MAKE A LITTLE MORE MONEY OUT OF THE STUDIO. IT HASN'T ULTIMATELY BEEN THAT PROFITABLE, EVEN THOUGHT THE NUMBERS ARE BIG BECAUSE OF THE EXPENSE SIDE. WHAT DO YOU SAY WHEN YOUR INVESTORS ASK YOU THAT?

DAUMAN: WELL ACTUALLY OUR STUDIO, PARAMOUNT, HAS BEEN GROWING VERY NICELY. WE EXPECT IT TO CONTINUE TO GROW. IT HAS REALLY HAD A CREATIVE RESURGENCE OVER THE LAST COUPLE OF YEARS. WE HAVE A GREAT PIPELINE OF FRANCHISES AND VERY HIGH QUALITY PICTURES WITH "CURIOUS CASE OF BENJAMIN BUTTON" OPENING NEXT WEEK, A STRONG OSCAR CONTENDER, AND "TRANSFORMERS II" NEXT YEAR.

FABER: ARE YOU GOING TO MAKE REAL MONEY OUT OF THEM?

DAUMAN:WE ARE GROWING THAT BUSINESS. THAT'S A GROWTH BUSINESS FOR US, AS WE LOOK FORWARD. THANKS TO THE FACT THAT WE HAVE GREAT FRANCHISES, AND WE'RE OPERATING WITH GREAT DISCIPLINE. SO WE HAVE INTRODUCED OPERATING EFFICIENCIES OVER THE COURSE OF THE LAST YEAR OR TWO, INCLUDING SOME OF THE ACTIONS WE TOOK LAST WEEK TO CONTINUE TO REFINE THE OPERATING MODEL SO THAT WE CAN TAKE FULL ADVANTAGE OF THE GROWTH WE EXPECT TO SEE IN THAT BUSINESS.

FABER: WE HAVE TO LEAVE IT THERE. THANK YOU FOR BEING WITH US. PHILIPPE DAUMAN, CEO OF VIACOM.




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