Redstone’s letter takes public slap at daughter

The conflict between media mogul Sumner Redstone and his daughter, Shari, broke into open warfare Friday when he publicly disparaged her as having made “little or no contribution” to the entertainment empire he built, which includes Viacom Inc. and CBS Corp.

Redstone’s comments, in a letter to Forbes magazine, and a subsequent statement issued on behalf of his daughter provide new insights into the mounting family feud over control of the media empire.

Sumner Redstone, the 84-year-old chairman of Viacom and CBS, is battling his 54-year-old daughter over succession plans at those companies. Redstone controls the two publicly traded companies through National Amusements Inc., a closely held entity that operates a chain of movie theaters.

Shari Redstone, the president of National Amusements, has been considered the heir apparent to her father for several years. Her main job has been operating National’s theater circuit of more than 1,000 screens with a home base outside of Boston.

More recently, however, she has taken on additional duties as a vice chairwoman and board member of Viacom and CBS. In that role, Shari Redstone helped recruit several new directors to Viacom and CBS after they were cleaved into two publicly traded entities in January 2006.

In his letter to Forbes, Sumner Redstone seemed eager to portray himself as a champion of corporate governance standards that had been called into question in recent days as the father-daughter dispute unfolded in the press.

For her part, Shari Redstone seemed determined Friday to dispel any notion that she was power hungry or on a mission to land a bigger title as chairman when her father dies or otherwise relinquishes power.

Shari conceded in her statement that she would consider selling her 20% stake in National Amusement at market value, or $1.6 billion, to resolve the conflict.

“It is unfortunate that Sumner has chosen to publicize” what Shari “had hoped would remain a private family matter,” the statement said.

One central issue in the dispute is whether Shari should automatically become chairman of CBS and Viacom upon her father’s death, as is reportedly stipulated in the Redstone family trust that holds National Amusement shares.

Her father maintains the provision is conditional and is a matter for the boards to determine.

“While my daughter talks of good governance,” he wrote in the letter to Forbes, “she apparently ignores the cardinal rule of good governance that the boards of the two public companies, Viacom and CBS, should select my successor.”

The comment seemed to be a swipe at his daughter, who was portrayed in some press reports Friday as adhering to higher corporate governance standards than her father. The Times reported, for example, that two CBS directors Shari Redstone had recruited in an effort to expand the independence of the board left after less than a year largely because of conflicts between daughter and father over corporate governance issues.

In his letter, Sumner Redstone also undercut any contribution that his daughter had made to the company.

“It must be remembered that I gave my children their stock,” he wrote, referring to Shari and her brother, Brent, 57. “It is I, with little or no contribution on their part, who built these great media companies with the help of the boards of both companies.”

In her statement, Shari said she received her first shares in National Amusements in 1959 from Sumner’s father, Mickey, her grandfather, who founded the family theater chain.

Her statement also took issue with the implication that she was motivated by power and took a dig at her father, who loves the limelight and takes every opportunity to remind the world that he alone controls Viacom and CBS.

Said the statement: “Anyone who knows Shari Redstone knows she is one Redstone family member who does not aspire to power or covet titles.”

Sumner Redstone’s broadside against his daughter came in sharp contrast to the praise he lavished on her publicly in recent years, when he was openly grooming her to take his place as the companies’ lead shareholder.

In an interview published by Newsweek in April 2006, Redstone said of Shari: “She has played a major role in forming the boards of both CBS and Viacom, a major role in setting the agendas for the companies.... She’s doing a great job. As much as she’s doing, she’ll do more and be more involved.”

For a profile of her in Forbes orchestrated by her father in 2002, he said that “nobody in the entertainment industry is rising as fast as Shari.... It’s like father, like daughter: She has no major weakness. She is a great businesswoman.”

Shari Redstone cited those quotes in her own statement Friday, noting, “Until recently Sumner touted Shari’s achievements at CBS and Viacom.”

Sumner Redstone did say in the Forbes profile, however, that he did not expect her to become CEO of the companies after his death because he believed in “professional management.”

By then, however, Shari Redstone, who lives and works in the Boston area, was spending several days a week in New York, getting to know Viacom’s operations and executives.

Her increased presence, however, evidently began to irk her father, who is known for turning on executives who have been close to him, including former Viacom CEOs Mel Karmazin, Frank Biondi and, most recently, Tom Freston.

In addition, relations between Sumner Redstone and other family members, including his brother, Edward, and son, Brent, have broken out in litigation. The latest disagreement is “just the tip of the iceberg,” said one source familiar with the situation.

claudia.eller@latimes.com

michael.hiltzik@latimes.com