Wall Street is losing faith in Viacom.

Both the Wall Street Journal and the New York Times are questioning the inner workings of the media behemoth — which owns Paramount Studios, Comedy Central, MTV Networks, Nickelodeon, TV Land and continues to hold a piece of CBS Corp. — after Goldman Sachs downgraded the stock, saying that Viacom’s overall ratings have declined 20 percent since fourth quarter 2014, compared to a 7 percent decline for its competitors. As a result, Viacom’s overall value has decreased by $12.2 billion in 2014 alone.

In 2015, Viacom’s stock price has plunged by nearly 40 percent, far more than the S&P 500, which is down only 4 percent.

Viacom also seems to be missing out on the current wave of media consolidation, making it harder for its networks to claim the retransmission consent dollars that other companies with stronger bundles can demand. Last year, more than 60 small cable operators, accounting for nearly 2 million pay-TV subscribers, dropped Viacom’s channels, reported the NY Times. And much of Viacom’s programming is available on Amazon or Hulu, making it easy for cord-cutters to access without a cable subscription.

A huge outstanding question is who will succeed 92-year-old Sumner Redstone, owner of 80 percent of the company. Viacom brass continues to insist that all is well with the executive, who is vice chairman of both Viacom and CBS Corp., but he no longer speaks on investor calls and is rarely seen in public.

Sources told the Wall Street Journal that Redstone has suffered a series of mini-strokes that have left it difficult for him to talk, but that Redstone remains sharp. Viacom said in an email to the Journal that Redstone “set up a trust decades ago to ensure that his controlling interest in Viacom and CBS Corp. would be professional managed for the benefit of all shareholders.”

That’s not proving to be enough to many investors, however.

“There are significant questions pertaining to management, in light of business succession,” Michael Cuggino, CEO of Pacific Heights Asset Management, a Viacom shareholder, told the WSJ.

In a research note published in July, according to the Times, Bernstein Research analyst Todd Juenger went so far as to compare the company to Eastman Kodak, which filed for Chapter 11 bankruptcy in January 2012 after failing to recognize and react to photography’s radical shift to digital.

Both Redstone’s daughter, Shari, and Viacom’s current CEO Philippe Dauman, have claims to the company’s leadership after Redstone’s death. According to a statement from Redstone last May, his sizable interests in both Viacom and CBS will pass to his grandchildren and their descendants, while a seven-person trust manages the holdings by majority vote. That trust is to include Shari Redstone, her son Tyler Korff, Dauman, CBS board member David Andelman and three family attorneys, reports the Journal. Unsurprisingly, Shari Redstone and Dauman aren’t reported to get along.

These stories are just the latest in an ongoing examination of the struggling conglomerate, with its stock price hitting a low in August. The company also has laid off hundreds of employees and taken a $785 million write down this year.

Read more: The New York Times, The Wall Street Journal

Brief Take: The longer the uncertainty goes on at Viacom, the harder it will be to right the ship once succession does become clear.

Image courtesy of the Wall Street Journal

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