Sumner Redstone

Sumner Redstone
Born Sumner Murray Rothstein
(1923-05-27) May 27, 1923
Boston, Massachusetts, U.S.
Residence Beverly Park, California, U.S.
Nationality American
Occupation Chairman of National Amusements
Chairman Emeritus of Viacom and CBS Corporation
Net worth Decrease US$5 billion (September 2015)[1]
Spouse(s) Phyllis Gloria Raphael (1944–1999; divorced)
Paula Fortunato (2002–2009; divorced)
Children Shari Redstone
Brent Redstone
Parent(s) Belle Ostrovsky
Michael Rothstein
Relatives Kimberlee Korff
Brandon Korff
Tyler Korff

Sumner Murray Redstone (born Sumner Murray Rothstein; May 27, 1923) is an American businessman and media magnate. He is the majority owner and chairman of the board of the National Amusements theater chain. Through National Amusements, Redstone and his family are majority owners of CBS Corporation and Viacom (itself the parent company of Viacom Media Networks, BET Networks, and the film studio Paramount Pictures). According to Forbes, as of September 2015, he was worth US$5 billion.[1]

Redstone was formerly the executive chairman of both CBS and Viacom. In February 2016, at the age of 92, a week after a court-ordered examination by a geriatric psychiatrist, Redstone resigned both chairmanships, replaced by Leslie Moonves at CBS and Philippe Dauman at Viacom. Redstone then became chairman emeritus.

Early life and education

Sumner was born to a Jewish family[2] in Boston, Massachusetts, to Belle (née Ostrovsky) and Michael Rothstein. In 1940, at Sumner's behest his father agreed to change the family surname from "Rothstein" to "Redstone"[3] ("Red stone" is a literal translation of the German-Jewish name, "Rothstein").[4] Michael Rothstein owned Northeast Theater Corporation in Dedham, Massachusetts—the forerunner of National Amusements[5]—and the Boston branch of the Latin Quarter Nightclub.[6]

Redstone attended the Boston Latin School, from which he graduated first in his class. In 1944, he graduated from Harvard College,[3] where he completed the studies for his baccalaureate in three years. Later, Redstone served as First Lieutenant in the United States Army during World War II[3] with a team that decoded Japanese messages.[7] After this military service, he worked in Washington, D.C., and attended Georgetown University Law School. He transferred to Harvard Law School and received his LL.B. in 1947.[3]

After completing law school, Redstone served as special assistant to U.S. Attorney General Tom C. Clark (who later served as Associate Justice of the Supreme Court of the United States from 1949 to 1967)[3] and then worked for the United States Department of Justice Tax Division in Washington, D.C. and San Francisco, and thereafter entered private practice. In 1954, he joined his father's theater chain, National Amusements and in 1967, he became CEO of the company.[3] As the company grew, Redstone came to believe that content would become more important than distribution mechanisms: channels of distribution (in varied forms) would always exist, but content would always be essential (Redstone coined the phrase, "Content is king!"[8]). He invested in Columbia Pictures, Twentieth Century Fox, Orion Pictures, and Paramount Pictures (Redstone's Viacom would buy Paramount in the 1990s), all of which turned over huge profits when he chose to sell their stock in the early 1980s.

In 1979, he suffered severe burns in a fire at the Copley Plaza hotel, in Boston, but survived after thirty hours of extensive surgery at Massachusetts General Hospital. Though he was warned that he might never be able to live a normal life, eight years later he was fit enough to insist on playing tennis nearly every day and to launch a hostile takeover of Viacom.[9] Redstone has discussed the story of surviving the fire as a reflection of his strong determination and will to live.[10]

Career

Viacom

Looking for a new business venture, he set his sights on Viacom International, a company which he had already been buying stock in as an investment and was a spin-off of CBS in 1971 after the FCC ruled that television networks could not syndicate programs following their network run. Viacom syndicated most of CBS's in-house productions (such as Hawaii Five-O and Gunsmoke, as well as the pre-1960 Desilu Productions library which CBS acquired in 1960, I Love Lucy being among the acquired programs), but also made a lot of money from syndicating other programs, including most of Carsey-Werner Productions' shows (The Cosby Show, Roseanne, and A Different World), as well as syndicating shows for other companies (Columbia Pictures Television's All in the Family was one notable example, as was MTM Enterprises' The Mary Tyler Moore Show), and cable channels (Nickelodeon's Double Dare and Finders Keepers (co-syndicated with 20th Television) were two examples).

Viacom also owned MTV Networks (formerly known as Warner-AMEX Satellite Entertainment), which owned MTV and Nickelodeon. In addition, other properties included Showtime Networks (a pay-television network similar to HBO and Cinemax) and The Movie Channel. Viacom acquired MTV Networks in 1985 for $550 million from Steve Ross' Warner Communications. (WCI bought American Express' share and then sold the entire entity to Viacom, as they felt that they could not make a lot of money from the venture and the bias of a studio owning cable channels would be a conflict of interest. The studio's stance changed in 1995, when as Time Warner it bought Turner Broadcasting.)

After a four-month hostile takeover in 1987,[11][12] Redstone won voting control of Viacom and led a series of acquisitions to make Viacom one of the top players in modern media along with Bertelsmann, News Corporation, Time Warner, Sony, Disney, and NBC Universal (owned by Comcast).

Paramount Pictures

Redstone's next acquisition was the purchase of Paramount Communications (previously Gulf+Western), parent of Paramount Pictures in 1993. He engaged in a bidding war with Barry Diller (former board member of Vivendi Universal and CEO of IAC/InterActiveCorp) and John Malone (president of TCI/Liberty Media), and had to raise his bid three times. Some say that Redstone overpaid, but after he shed certain assets — the Madison Square Garden properties (which included the NBA's NY Knicks and the NHL's NY Rangers) to Charles Dolan's Cablevision and Simon & Schuster's educational publishing units to Pearson PLC — for almost $4 billion, Redstone turned Viacom's expenditure into a substantial profit. Under Redstone's leadership, Paramount went on an almost ten-year streak of record performance, producing such films as Saving Private Ryan, Titanic (one of the highest grossing film of all time and Best Picture Academy Award winner),[13] Braveheart (Best Picture Academy Award),[14] and Forrest Gump (also a Best Picture winner)[15] and the creation of the hugely successful Mission: Impossible[16] series of pictures.

Redstone replaced the team of Jonathan Dolgen and Sherry Lansing in 2004 after their nine-year winning streak ended.[17] Along with the strong slate of films they oversaw, Dolgen and Lansing’s accomplishments included: doubling the size of Paramount's music publishing division, Famous Music; expanding UCI Cinemas into 13 foreign countries; creating the Digital Cinema Initiatives standards body for the new digital film technology; and launching the UPN Network (later part of CBS and now called the CW). The current Paramount Pictures consists only of the movie studio, the other groups having been sold or parceled out to other divisions.

Since arriving at Paramount in 2005, Chairman and Chief Executive Officer Brad Grey has led a return to fortune at the box office.[18][19] He has overseen the creation or revitalization of several major franchises, including Transformers, Star Trek and Paranormal Activity.[20] Paramount has also forged productive relationships with top-tier filmmakers and talent including J.J. Abrams,[21] Michael Bay[22] and Martin Scorsese.[23] The 2010 Paramount slate achieved much success with Shutter Island and a True Grit remake, reaching the biggest box office totals in the storied careers of Martin Scorsese and the Coen Brothers, respectively.[24][25] In addition, during Grey’s tenure, Paramount launched its own worldwide releasing arm, Paramount Pictures International, and has released acclaimed films such as An Inconvenient Truth, Up in the Air, and There Will Be Blood.[26]

The Paramount acquisition was only the tip of the iceberg. He purchased Blockbuster Entertainment, which included Aaron Spelling's production company and a huge library of films, much of which has been merged into Paramount Pictures. Blockbuster has now been spun off into its own independent entity. Redstone acquired CBS Corporation in 2000 and then spun it off as a separate company in 2005, taking with it all of Paramount's television shows and catalog. Following the CBS and Blockbuster Spinoffs, Viacom consists of MTV Networks (MTV, Nickelodeon, VH1, Noggin etc.), music publishing (Famous Music) and Paramount Pictures.

In December 2005, Redstone announced that Paramount had agreed to buy DreamWorks SKG for an estimated $1.6 billion. The acquisition was completed on February 1, 2006. A subsequent financing brought Viacom's investment down to $700 million. The animation studio, DreamWorks Animation, was not included in the deal as it has been its own company since late 2004. However, Paramount now has the rights to distribute films by DreamWorks Animation.

On June 1, 2012, Paramount Pictures renamed the Administration Building on the studio lot the Sumner Redstone Building in a dedication ceremony attended by employees of Paramount Pictures and Viacom.

CBS

One of Redstone's largest acquisitions came in the form of Viacom's former parent, CBS. Former Viacom President and COO Mel Karmazin (who was then the President of CBS) proposed a merger to Redstone on favorable terms and after the merger completed in 2000, Viacom had some of the most diversified businesses imaginable. Viacom had assets in the form of broadcast networks (CBS and UPN), cable television networks (MTV, VH1, Nickelodeon, MTV2, Comedy Central, BET, Nick at Nite, Noggin/The N, TV Land, CMT, and Spike TV), pay television (Showtime and The Movie Channel), radio (Infinity Broadcasting, which produced the immensely popular Howard Stern' radio shows), outdoor advertising, motion pictures (Paramount Pictures), and television production (Spelling Entertainment, Paramount Television, and Big Ticket Entertainment), and King World Productions (a syndication unit, which notably syndicates the runaway daytime hit, The Oprah Winfrey Show, as well as Dr. Phil, Wheel of Fortune, and Jeopardy!), among others.

After CBS and Viacom split in late 2005, Redstone remained chairman of both companies.

Succession

Redstone's trusts made it clear that his daughter, Shari Redstone (Vice-Chairwoman of the Board of Viacom and CBS as well as President of National Amusements), was set to assume his role upon his death. However, a November 22, 2006, New York Times article indicated that Redstone was reconsidering his daughter's role. In 2007, they feuded publicly over issues of corporate governance and the future of the cinema chain.[27]

Documents were made public which verify that, as part of a settlement from Sumner's first divorce, all of Sumner's stock is in irrevocable trusts that will be left for his grandchildren.[28] On March 1, 2010, Sumner publicly confirmed that all of his stock would be left for his grandchildren (Kimberlee, Brandon, and Tyler Korff).[29]

Redstone made arrangements to step down as CEO of Viacom in 2006. After Mel Karmazin resigned in 2004, two heirs apparent were named: Co-President and Co-COO Leslie Moonves (who was number 2 to Karmazin at CBS; he was the former head of Warner Bros. Television and before that, Lorimar Television) and Co-President and Co-COO Tom Freston (who had been President and CEO of MTV Networks since 1987 and had been with the company since the formation of MTV Networks' precursor company, Warner-AMEX Satellite Entertainment). After the Viacom split was approved by the board on June 14, 2005, Moonves headed CBS, and Freston headed the new Viacom, Inc.

On September 5, 2006, Redstone removed Freston as President and CEO of Viacom and replaced him with director and former Viacom counsel Philippe Dauman. Redstone also brought back former CFO Tom Dooley. This was surprising to many, as Freston had been seen by many as Redstone's heir apparent, and Redstone had touted that Freston would run the company after he retired. Redstone publicly stated that he let Freston go because of Viacom's lack of aggressiveness in the digital/online arena, lack of contact with investors, and a lackluster upfront (coupled with falling viewership) at MTV Networks.[30][31]

In February 2016, at age 92, after a court-ordered examination by a geriatric psychiatrist whose findings were not publicly disclosed, Redstone relinquished the chairmanship of CBS to Moonves and the chairmanship of Viacom to Dauman.[32][33][34] A legal trial began on May 6, 2016, to judge Redstone's mental capacity.[35]

Holdings

Currently, Redstone owns over seventy percent of the voting interest of Viacom. Viacom and CBS Corporation are both controlled by Redstone through National Amusements. Redstone sold his holdings of Midway Games, of over 89%, in December 2008.[36]

Books

Redstone's autobiography, A Passion to Win[37] (co-written with author Peter Knobler), was published in 2001 by Viacom's Simon & Schuster. This book details everything from Redstone's life as a young boy in Boston to the difficult takeover of Viacom and the problems he overcame in purchasing and managing both Blockbuster Video and Paramount Pictures. The book also recounts the legendary CBS merger (Viacom was a spin-off company of CBS to syndicate its programs, and the subsidiary bought the parent almost 30 years later).

Viacom's broadcasting properties at the time of A Passion to Win's release included several radio stations and two TV stations: WBZ CBS 4, which had just become a CBS O&O through a merger with Westinghouse four years before Viacom and CBS merged, and WSBK UPN 38 in Redstone's hometown, Boston.

Political views

A longtime Democratic supporter, with a history of donating to many Democratic campaigns, including regular donations to the late Ted Kennedy, John Kerry, and former Senate Majority Leader Tom Daschle,[38] Redstone endorsed Republican George W. Bush over Kerry in the 2004 Presidential election, allegedly because he argued that Bush would be better for his company and the economy.[39] Despite this public endorsement, he donated money to Kerry during the primaries.

Philanthropy

Sumner Redstone has contributed over $150 million to various philanthropic causes.[40]

Personal life

In 1947, he married Phyllis Gloria Raphael.[51] In 1999, they divorced. They had two children: Shari Redstone and Brent Redstone. Three years after his divorce, he married Paula Fortunato, a former primary school teacher 39 years his junior. Sumner Redstone filed for divorce from her on October 17, 2008.[52] Their divorce was finalized on January 22, 2009. Redstone owns a house in the Beverly Park area of Beverly Hills, California, which he purchased in 2002 for $14,500,000.[53]

In July 2010, Redstone was caught on tape, trying to find the source of an apparently embarrassing leak within his own MTV. Redstone offered money and protection to a journalist if he would give up his source. Redstone had been pushing the MTV management to give more airtime to the band the Electric Barbarellas. On the message, Redstone tells the reporter that "we're not going to kill" the source, adding "We just want to talk to him". The 87-year-old Redstone also tells the reporter he will be "well rewarded and well protected" if he would reveal the source.[54] Peter Lauria told NBC's Today show he wouldn't do it. Viacom Inc. spokesman, Carl Folta confirmed to Today that it was Redstone's voice on the message and said the mogul had made a mistake.[55] A Viacom source told the Post, "Sumner wants to be consequential. Sumner is really proud of what he did. This guy is loving it … He likes people to know he's still alive".[56]

References

  1. 1 2 "Sumner Redstone". Forbes. 2015-09-29. Retrieved 2016-02-04.
  2. ↑ "Top 50 most influential Jews 2013: Places 21-30". Jerusalem Post. Retrieved 19 October 2013.
  3. 1 2 3 4 5 6 "Sumner Redstone Fast Facts". CNN.com. 2015-05-16. Retrieved 2015-12-13.
  4. ↑ "Sumner Redstone Biography (1923–)". Filmreference.com. Retrieved 2013-03-08.
  5. ↑ Weddings/Celebrations: Paula Fortunato, Sumner M. Redstone, The New York Times, April 6, 2003
  6. ↑ Archived March 28, 2015, at the Wayback Machine.
  7. ↑ Cf. "The Highwaymen" by Ken Auletta. Auletta also wrote that Redstone finished his Harvard undergraduate degree in two and a half years.
  8. ↑ "A Conversation with Sumner Redstone". BU.edu.
  9. ↑ Fabrikant, Geraldine (15 March 1987). "His Toughest Challenge Yet". The New York Times. Retrieved 7 December 2015.
  10. ↑ Redstone, Sumner (2001). "Book Excerpt: Sumner Redstone". ABC News. Retrieved 7 December 2015.
  11. ↑ Richter, Paul (1987-03-05). "Viacom Accepts Redstone's $3.4-Billion Takeover Bid, Ending Four-Month Battle - Los Angeles Times". Articles.latimes.com. Retrieved 2012-02-10.
  12. ↑ Kaplan, Karen (1996-01-18). "SHAKE-UP AT VIACOM : PROFILE: A SURVIVOR : With Each Ouster, Biondi Bounces Back - Los Angeles Times". Articles.latimes.com. Retrieved 2012-02-10.
  13. ↑ "Titanic (1997)". Box Office Mojo. 1998-03-15. Retrieved 2012-02-10.
  14. ↑ "Braveheart - 1995 Academy Awards Profile". Boxofficemojo.com. 1995-05-24. Retrieved 2012-02-10.
  15. ↑ "Forrest Gump - 1994 Academy Awards Profile". Boxofficemojo.com. 1994-07-06. Retrieved 2012-02-10.
  16. ↑ "Mission: Impossible (1996)". Box Office Mojo. Retrieved 2012-02-10.
  17. ↑ Eller, Claudia (2004-11-02). "Hollywood Pioneer Lansing Is Poised to Exit Paramount - Los Angeles Times". Articles.latimes.com. Retrieved 2012-02-10.
  18. ↑ Cieply, Michael (2009-12-13). "Paramount Pictures Finds Long-Sought Balance". NYTimes.com. Retrieved 2012-02-10.
  19. ↑ "2012 Market Share and Box Office Results by Movie Studio". Boxofficemojo.com. Retrieved 2012-02-10.
  20. ↑ Lauria, Peter (2010-02-12). "Paramount Pictures' $298M fourth-quarter earnings boosts Viacom". NYPOST.com. Retrieved 2012-02-10.
  21. ↑ Fleming, Michael (2009-03-26). "Paramount extends deal with Abrams - Entertainment News, Los Angeles, Media". Variety. Retrieved 2012-02-10.
  22. ↑ Archived January 3, 2011, at the Wayback Machine.
  23. ↑ New, The (2006-11-08). "A Scorsese Tie-In With Paramount in Films and TV - New York Times". Nytimes.com. Retrieved 2012-02-10.
  24. ↑ "'Shutter Island' Is Scorsese's Top Movie Worldwide". Box Office Mojo. 2010-05-20. Retrieved 2012-02-10.
  25. ↑ "Coen Brothers Show 'True Grit' With First $100 Million Film". CineMovie.tv. Retrieved 2012-02-10.
  26. ↑ "PARAMOUNT PICTURES AND UNIVERSAL PICTURES TO BEGIN SELF-DISTRIBUTION OF FILMS IN 15 KEY COUNTRIES BEGINNING IN JANUARY 2007". Prnewswire.co.uk. Retrieved 2012-02-10.
  27. ↑ Abelson, Jenn (2007-09-19). "Redstone says he relies on his instinct". The Boston Globe.
  28. ↑ Eller, Claudia (2007-10-01). "Redstone family rift may not be healed". Los Angeles Times.
  29. ↑ "Faber Exclusive: Sumner's Successor". CNBC. 2009-02-26. Retrieved 2012-02-10.
  30. ↑
  31. ↑ Arango, Tim (7 September 2006). "Sumner's Fall: Freston's Firing Costs Him $113M". New York Post. Retrieved 7 December 2015.
  32. ↑ Harrison, Crayton (2016-02-03). "CBS Chairman Redstone Resigns, to Be Replaced by CEO Moonves". Bloomberg News. Retrieved 2016-02-03.
  33. ↑ Steel, Emily (February 3, 2016). "Sumner Redstone Steps Down as CBS Chairman, Replaced by Leslie Moonves". The New York Times.
  34. ↑ Palmeri, Christopher; Shaw, Lucas (February 4, 2016). "Viacom's Board Names Dauman Chairman, Replacing Aging Redstone".
  35. ↑ "Redstone Says He Kicked Out Ex-Girlfriend Over Theft, Deceit". Bloomberg News. May 6, 2016.
  36. ↑ "Redstone to Sell Control of Midway Games". TheStreet. Retrieved 2016-03-21.
  37. ↑ "''A Passion to Win'' by Sumner Redstone with Peter Knobler (2001)". Books.simonandschuster.com. Retrieved 2013-03-08.
  38. ↑ "NEWSMEAT ▷ Sumner Redstone's Federal Campaign Contribution Report". Newsmeat.com. Retrieved 2012-07-25.
  39. ↑ Archived October 1, 2009, at the Wayback Machine.
  40. 1 2 Rawitt, Tamara (2012-10-27). "Viacom and CBS' Sumner Redstone and Fox's Dana Walden Honored by Big Brothers Big Sisters". The Hollywood Reporter. Retrieved 2013-03-08.
  41. ↑ "Sumner M. Redstone Commits $105 Million To Fund Cancer And Burn Recovery Research And Patient Care". MedicalNewsToday.com. Retrieved 2013-03-08.
  42. ↑ Gilstrap, Peter (2007-06-03). "Redstone to help Cambodian kids". Variety.
  43. ↑ Carl DiOrio, Redstone donates $1 mil to Autism Speaks, Associated Press (February 24, 2010).
  44. ↑ Sumner M. Redstone Donates $500,000 to Autism Speaks, Autism Speaks (press release) (March 14, 2011).
  45. ↑ "Keck School Receives $24 Million Gift". University of Southern California. Retrieved 2013-03-08.
  46. ↑ Colin A. Young (2012-09-14). "Redstone donates $18 million to BU Law School - Business". The Boston Globe. Retrieved 2013-03-08.
  47. ↑ "Sumner M. Redstone Donates $100,000 to GO Campaign" (Press release). November 29, 2012.
  48. ↑ "The Sumner M. Redstone Charitable Foundation Donates $1 Million to Literacy, Inc." (Press release). May 6, 2013.
  49. ↑ "Media mogul donates $10M for Harvard law fellowships". ABA Journal. January 10, 2014.
  50. ↑ Sumner Redstone donates $10 million to Harvard Law School to support public service, Harvard Law School (press release) (January 9, 2014).
  51. ↑ New York Post: "VIACOM MOGUL COULD BE SUMNER $QUASHED" By Jeane MacIntosh September 19, 1999
  52. ↑ "Sumner Redstone Pulls Trigger on Marriage". TMZ.com. 2008-10-21. Retrieved 2012-02-10.
  53. ↑ "$76M mansion goes on the market near San Diego, just after Vanna White's ex puts a Beverly Hills, CA estate on the block for $50M". BergProperties.com. 2007-08-21. Retrieved 2012-02-10.
  54. ↑ Lauria, Peter (2010-07-20). "Sumner Redstone Offers Reward to Get the Electric Barbarellas Leak". The Daily Beast. Retrieved 2012-02-10.
  55. ↑ "Entertainment: World and national breaking news". mail.com. Retrieved 2012-07-25.
  56. ↑ Brown, Lane. "Sumner Redstone Delighted to Be Accused of Bribery". NYMag.com. Retrieved 2012-07-25.

Further reading

External links

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