It looks like Viacom’s management is finally giving in to investors’ demands.
The mass media company, which is in charge of the MTV and Nickelodeon channels, has been under a hailstorm of investor criticism in the past few months, with many stakeholders suggesting the company sell some assets or take itself private.
On Tuesday, Viacom (VIAB) CEO Philippe Dauman relented, announcing plans to sell a minority stake in Paramount Pictures.
“We have received indications of interest from potential partners seeking a strategic investment in Paramount Pictures, and I have decided to pursue discussions with a select group of potential investors,” he said in a statement.
Viacom’s stock jumped as much as 8% before settling back to a modest gain.
The company’s second-largest shareholder, activist investor Mario Gabelli, had previously suggested that Viacom sell a stake of Paramount to Chinese media titan Alibaba (BABA), saying the sale would leave the company with enough revenue to reinvest in other moneymaking ventures.
His criticism stemmed from Viacom’s falling revenues, which were down 4% for the year ending Sept. 30 to $13.3 billion. Viacom has been in a revenue slump for over three years. In the quarter ending Dec. 31, revenues fell 6% to $3.15 billion. Paramount was purchased in 1994 for $10 billion, but now the movie studio is worth is less than half of that.
Gabelli signaled his approval of Dauman’s plan Tuesday.
Viacom (VIA) …announced logical first step …monetize Paramount Via JV ….have partner bring in cash and digital distribution know how
— Mario Gabelli (@MarioGabelli) February 23, 2016
Dauman did not give specific names of the potential buyers.