Viacom Chair Sumner Redstone at Odds With Heir

by Kim Masters, NPR

Viacom Chairman Sumner Redstone is at odds with his heir-apparent, daughter Shari Redstone, and the rift is raising questions about future control of the media empire that includes television network CBS Corp.

So deep is their split, according to published reports, that Shari is expected to leave the board.

Shari has denied pulling out of the executive suite. But the reports are recurrent speculation about the future of a Viacom, an $11.5-billion entertainment powerhouse that also includes Paramount Pictures, Comedy Central, Nickelodeon, BET and MTV.

The quarrel apparently arises over the strategies that Shari has for the family owned movie-theater chain National Amusements, which she manages.

Sumner Redstone, 84, who is chairman of both Viacom and CBS, is the controlling stockholder of National Amusements, the parent company of both firms.

National Amusements operates Showcase Cinemas, Multiplex Cinemas, KinoStar, and Cinema de Lux with more than 1,500 screens across the U.S., U.K. Latin America and Russia. It additionally operates IMAX theatres in the U.S. and Argentina and is a partner in online ticketing service MovieTickets.com.

The family clash eked into the public as early as January during an interview Chairman Redstone had with former Disney Chairman Michael Eisner on financial cable network CNBC:

"(If) you want to give away what you have to your family be my guest," Redstone told Eisner during the interview.

"That's the way you're supposed to that," Eisner shot back.

"No you're not," interrupted Chairman Redstone. "I'm still very active. I work very hard. I travel the world for Viacom. I'm not about to give up control."

Shari, 53, has served as vice chairman of Viacom and CBS boards of directors for the past two years but its businesses do not report to her.

Entertainment industry analyst Harold Vogel doesn't expect the feud to have an immediate impact. But he said if it isn't resolved soon, investors could start to speculate about a sale or breakup of Viacom assets.

"The stocks of CBS and Viacom could actually rise with the tensions and the frictions," Vogel said.

Shares of Viacom were down $1.11, or 2.61 percent, at $41.39 in midday trade on the New York Stock Exchange Friday. CBS eased 22 cents, or 0.63 percent, to $34.70.

Given Sumner Redstone's tenacity, most observers expect him to hold the reins for some time.

Earlier this year Sumner Redstone bought out his son Brent's stake in the company in order to settle a lawsuit brought by the younger Redstone, claiming that he had been excluded from company affairs.

He dispatched Frank Biondi, Viacom's CEO in the 1990s while Mel Karmazin left three years ago to lead Sirius Satellite Radio. More recently MTV founder Tom Freston left.

Broadcast Dates

• Morning Edition, July 20, 2007