After Years of Fighting, Shari Redstone Stands Alone Atop Empire
Shari Redstone moved decisively to secure her father Sumner’s media empire when infirmity struck the nonagenarian. With his death this week, she’ll have a free hand to leadViacomCBS Inc. or dismantle it.
Sumner Redstone’s passing at age 97 hands his 80% voting interest inNational Amusements Inc. — the family holding company — to a trust with seven trustees. Sumner and his ex-wife Phyllis leave their positions atop the trust, and Shari and her son Tyler Korff replace them. Shari, 66, also controls the remaining 20% of National Amusements.
The mogul’s death doesn’t signal a change in direction at ViacomCBS, according to a representative for the family. But that won’t stop investment bankers and others from pushing deals, such as a sale of the company’s Paramount Pictures studio.
“Sumner had historically said he would not part with Paramount or give up control of major assets,” Wells Fargo & Co. analyst Steven Cahall said in a note. Any would-be suitor for some of all of ViacomCBS “now deals with the trustees, and likely primarily with Ms. Redstone,” he said.
That puts Shari at a crossroads. In addition to her role at National Amusements, she is chairwoman of ViacomCBS — the media conglomerate created when she recombined Viacom and CBS at the end of last year.
Gaining control has taken her years. She battled her father’s former girlfriends as well as Viacom’s chief executive officer at the time, Philippe Dauman. She butted heads with CBS Corp. CEO Les Moonves into last year over his severance. He was ousted after numerous allegations of sexual harassment in 2018.
In a lawsuit during that fight, Shari revealed that she’d discussed merging the two companies and then finding a buyer for the combined entity.
When Viacom and CBS ultimately merged, her preferred candidate, Bob Bakish, took the reins. That meant she already had plenty of sway over what happens at the company and support from the trustees, said Rich Greenfield, a media analyst at LightShed Partners.
“The reality is that ViacomCBS has been very much led by Shari for the last few years,” he said.
Shares of ViacomCBS climbed in premarket hours after Sumner’s death was announced by National Amusements. But they slipped in regular trading, falling as much as 2.3% to $25.90.
That suggests investors aren’t betting on a takeover. But ViacomCBS is under pressure to make hard choices. And Cahall believes shareholders ultimately want Shari to be a dealmaker — not a company builder: “We’d say most investors believe her legacy might be one of divestiture or exit.”
With the pandemic ravaging advertising and the movie business — and cord cutting already hurting ViacomCBS’s cable networks — the company has been trimming it portfolio. It plans to unload its Simon & Schuster publishing division as part of its consolidation. It’s also selling an office building in New York, though that process has been delayed by Covid-19.
And the company has been shedding hundreds of jobs as it combines the operations of Viacom and CBS. The shares are down 38% this year.
“Whether she wants to sell or not is currently of less import than the immediate challenges,” said Cahall, who has the equivalent of a sell rating on ViacomCBS. “It’s not an easy road to navigate.”
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