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Father-daughter bond shattered

Times Staff Writer

Thirteen years ago, when Sumner Redstone was busy building Viacom Inc. into a media powerhouse and needed a helping hand to run the family’s theater chain, he turned to his daughter, Shari Redstone, who was home raising her three children.

When theater circuits began going belly up in the late 1990s, it was Shari who kept National Amusements Inc. on track. She expanded the company globally, taking National into Russia and Latin America. She helped pioneer the upscale cinema, bringing gourmet food, bar lounges and valet parking to theaters such as the Bridge in Los Angeles.

Her reward? Her father named Shari a vice chairwoman and director of Viacom and CBS Corp., the two companies he controls through National. A few years ago, he changed the family trust to suggest that Shari assume his titles as chairman of the three companies upon his death.

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Although Sumner’s son was older, it was his daughter who made him proud. “Your life is not complete until you have met Shari,” he told a reporter in 2005.

But the father-daughter relationship is now in shambles. The two, who once enjoyed sparring on the tennis court and playing gin rummy together on airplane trips, have been estranged for months because of disagreements about succession, corporate governance and the future of the theater business. Father and daughter are no longer speaking.

Even negotiations between their lawyers are at an impasse.

Shari, 53, is considering legal action against her 84-year-old father, who now says his successor must be chosen by the Viacom and CBS boards. He would like to extricate her from the companies, perhaps by transferring ownership of the theater circuit to Shari in exchange for her stock in Viacom and CBS, people close to him say.

That would leave the companies without a Redstone at the top when the patriarch dies. Such an ending should come as no surprise to anyone who knows Sumner, who has long insisted that he would control them even from the grave. “I am Viacom” is a favorite refrain of his.

Shari and Sumner declined to be interviewed. But one person close to him, who asked for anonymity for fear of offending the mogul, said he could not cede power despite his ripe age: “This is about Sumner not giving up control. It doesn’t matter if he’s related to you or not.”

At stake is control of one of the world’s largest entertainment giants. Worth an estimated $50 billion, the empire includes the CBS network, radio and TV stations, Paramount Pictures, MTV, Nickelodeon, Comedy Central, BET and Showtime. Sumner controls these assets through National, in which he holds an 80% stake. Shari owns the rest. Together their shares are worth a reported $8 billion.

A lawyer by training, Sumner has used the courts and his legal finesse as leverage against his adversaries. People who know him say he can be a tyrant and has a reputation for ousting top managers who threaten his power. Lawsuits against Sumner have been filed in recent years by his son, Brent Redstone, his brother, Edward Redstone, and his nephew Michael Redstone, who have alleged that he cheated them out of their stakes or their standings in the family business.

Brent’s lawsuit was recently settled and Michael’s was thrown out by a judge Friday because the statute of limitation had run out.

Now Shari is battling her father and could prove to be his biggest challenger yet. Like Brent, Shari is a lawyer. But she has a more intimate knowledge than her brother of her father’s business practices because of her roles in running National Amusements and as a board member of CBS and Viacom.

“She’s her father’s daughter,” said Tom Sherak, a veteran movie executive who knows both Redstones. “She’s very direct and doesn’t take crap from anybody.”

That should make a Viacom board meeting Wednesday at the company’s headquarters in New York’s Times Square plenty tense. It will be the first time father and daughter will see each other in nearly two months and comes on the heels of Sumner’s public dismissal of Shari in a recent letter to Forbes magazine in which he said she had made “little or no contribution” to the empire he had built.

For Shari, the knife cut deep.

Unlike her famously media-friendly father, Shari is exceptionally private and is pained by the public airing of her family’s dirty laundry.

“This is extremely uncomfortable for Shari,” her spokeswoman Nancy Sterling said. “She hoped never to find herself in this position.”

Petite and vivacious, Shari has a striking resemblance to her father, with fair skin, light hair and a thick Boston accent. Friends say she is devoted to her three children, all now in their 20s. She’s an ardent New England Patriots fan and a good cook. She is known for her cookies. Close pal Nikki Rocco, head of domestic distribution at Universal Pictures, said she made a mean stuffed cabbage.

She’s also unassuming, her friends say. “She’s instilled in her children that wealth is a privilege that must be earned,” said her friend and neighbor Roanne Sragow Licht, a district court judge in Cambridge, Mass.

Richard Parsons, chief executive of Time Warner Inc., who along with his wife, Laura, are close friends of Shari, concurs.

“She’s unaffected. She doesn’t flounce around like she’s a billionaire’s daughter. And she doesn’t lust after power.”

Although that’s the antithesis of her father, she’s every bit as driven and competitive as he is. Some say she’s also just as ruthless and has used what leverage she can muster against him to rise within the family empire.

Because National Amusements is private, it does not report financial results. The nation’s fifth-largest theater chain operates 1,528 screens in 120 locations worldwide.

“She’s been a very successful builder of that business in her own right,” Parsons said. “She’s taken the company to the next level. She’s the one who globalized it and came up with new concepts in high-end theaters.”

Like her father, Shari is mostly no-frills. Her office, in National’s drab, two-story headquarters in the Boston suburb of Dedham, overlooks a parking lot the company shares with one of its multiplexes.

She is one of a few women ever to run a major theater circuit. Another is Barry Loeks, former co-chairwoman and CEO of Loews Theatres.

“We had similar issues as very senior women trying to make our mark,” said Loeks, who now runs a Florida palm tree farm with her husband. “I always thought Shari was a wonderful heir for Sumner, but he has a pattern of falling out with his chief executives.”

Shari earned a reputation as a maverick because of innovations that helped National sustain success as falling ticket sales and overbuilding sent many competitors into bankruptcy. Rather than going on an expansion spree, Shari adhered to National’s strategy of dominating regional markets because it gave the company leverage in negotiating terms with studios.

“She’s definitely been part of the lead pack in making the moviegoing experience better and has been very focused and passionate,” said Peter Brown, chairman and CEO of AMC Theaters, one of National’s partners in online ticketing company Movietickets.com.

Shari also has been outspoken on the industry’s push for digital cinema and the preservation of the staggered timetable for release of movies that ensures that theaters can make money before films are available on DVD or TV.

In recent years, she and her father have sparred over the future of the theater business. Shari remains a true believer whereas Sumner wants to sell, viewing it as a no-growth business.

Shari never dreamed of joining the family business founded by her grandfather Mickey in the 1930s. Like her father, she practiced criminal and corporate law as her first career. After her third child was born, she stopped practicing full time. At one point, her father tried to persuade her to join National, but she turned him down.

But in 1994, while studying to be a social worker, her life shifted gears. Her 14-year marriage to Rabbi Ira Korff, who had been running National Amusements since 1987, ended. Sumner encouraged Shari to learn the business. He needed someone he trusted at a time when he was preoccupied with an acquisition drive at Viacom. She signed on as vice president of corporate planning and development.

“She surprised me how fast a learner she was,” said National Chief Financial Officer Jerry Magner, who has worked at the circuit for 38 years and was hired by Sumner, his father and his brother. “She’s a compassionate person -- much different than her father. She’s not an intimidator.... I don’t know anybody who doesn’t like Shari.”

Unlike Sumner, “who wouldn’t hesitate to call you at two o’clock in the morning,” he said, Shari “would not call you at odd hours unless it was absolutely necessary.”

Sumner named Shari president of National Amusements in 1999, but he has remained CEO even though she runs daily operations.

By 2004, Shari began immersing herself in the affairs of CBS and Viacom.

She bought a fancy apartment on Manhattan’s Upper East Side so she could spend more time learning those businesses. “Her troubles began when she came to New York at his request,” a friend said.

In 2005, Sumner named Shari vice chairwoman of Viacom and the following year, when he spun off CBS, she became vice chairwoman and a director of both companies.

Sumner empowered her to help set the agendas for the two boards and to recruit new directors. She pushed for more outside oversight of the company and to modernize corporate governance standards by bringing in additional independent directors and tying executive compensation to performance.

That push, say people with knowledge of the matter who would speak only on condition of anonymity because board affairs are confidential, created serious fissures in the father-daughter relationship.

The feud also may jeopardize one big thing that friends say Shari has always craved: the affection of her father.

For one of his recent birthdays, she hand-wrote a heartfelt, two-page poem for her father, a loving tribute to their relationship and her memories of growing up. Sumner hung the framed poem on the wall of his home office in the Beverly Hills mansion from where he has run his media empire in his sunset years.

claudia.eller@latimes.com

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(BEGIN TEXT OF INFOBOX)

Shari Ellin Redstone

Born

April 14, 1954; Washington

Education

B.S., Tufts University, 1977; J.D., Boston University, 1978; Masters in Law, Boston University, 1980

Family

Divorced; daughter Kimberlee, 25; son Brandon, 23; son Tyler, 21

Career highlights

1978-1993: Criminal and corporate lawyer, full- and part-time.

1994: Joined National Amusements theater circuit as vice president of corporate planning and development.

1994: Joined Viacom’s board.

1999: Named president of National Amusements.

2004: Named vice chairwoman of Midway Games, a public video game company in which National Amusements and Sumner Redstone own stakes.

2005: Named vice chairwoman of Viacom.

2006: Named vice chairwoman and director of CBS after it was spun off from Viacom.

Source: Times staff and wire reports

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(BEGIN TEXT OF INFOBOX)

National Amusements Inc.

Based in Dedham, Mass., the closely held cinema circuit is the parent company of both Viacom and CBS.

Ownership

Sumner Redstone: 80%

Shari Redstone: 20%

Assets

The nation’s fifth-largest theater chain, which was founded more than 70 years ago by the late Michael (Mickey) Redstone (Sumner’s father and Shari’s grandfather)

Number of screens: 1,528

Locations worldwide: 120

Countries: U.S., Britain, Latin America and Russia

Other holdings

Midway Games: 24.8%

CBS: 76.4% Class A shares;

5.5% Class B shares

Viacom: 79.1% Class A shares; 5.2% Class B shares

MovieTickets.com: a partner in the online ticketing company

Source: Times staff


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