Viacom to take $1.5 bil hit in 2nd quarter
CBS acquisition, new accounting rules add up
Included in the charge is $70 million in cash payments on the merger date, $230 million in accrued liabilities and $400 million for the estimated value of stock options. The payments include $34 million each to former deputy chairmen Philipe Dauman and Thomas Dooley. Viacom had reported the pair's severance package previously.
In addition, Viacom is expected to take another one-time hit in the neighborhood of $800 million, due to new accounting rules for film and television production. It will announce both charges with its quarterly earnings on Thursday.
The accounting changes require, among other things, that companies expense advertising and marketing costs as incurred. The non-cash charges have been hitting entertainment companies' earnings as they comply. Last week, Sony said a hefty charge of nearly $1 billion plunged it deeply into the red.
Viacom's SEC filing also revealed that it owns just over 14% of the World Wrestling Federation. It will start airing WWF programming this fall after winning the franchise away from USA Networks in a court battle.
