Op-Ed: Sumner Redstone’s legal travails are a sideshow. The real question is what will become of Viacom?
Tout ça pour ça as they say in French — all this for this?
The hyperventilated drama over Sumner Redstone’s mental fitness boiled down to a video deposition last week. The media billionaire — however diminished at 92 years old — still had enough fight left in him to call his former girlfriend Manuela Herzer an unprintable slur.
Thus a few choice words ended a trial that had the media lined up in the hallway of Superior Court straining at the leash to learn the dirty details of Redstone’s life as his former girlfriend challenged his family for caretaking control. On Monday, Judge David Cowan dismissed the lawsuit with prejudice, meaning Herzer cannot refile with new evidence. Instead she filed an entirely new lawsuit seeking $70 million in damages against the Redstone family and medical team.
What is meaningful is how Viacom, a $16-billion company with 10,000 employees, is suffering as a result of all this.
It’s an open secret in Hollywood that Redstone is barely physically functional, often not conscious and unable to feed himself. Nonetheless, he is stubbornly holding on to the vestiges of his power at Viacom (and less so at CBS). Viacom is the world’s sixth-largest media company with leading cable channels including Comedy Central, MTV, Nickelodeon, TV Land, VH1, BET and on the movie side, Paramount Pictures.
It has been an instructive drama. So many American media empires have been built on the strength of a single powerful personality — whether Rupert Murdoch, Ted Turner, Steve Ross, Punch Sulzberger or Ralph Roberts. The test of these empires has often come at the moment of leadership succession, and in this case it’s clear that there are consequences when the founder won’t let go.
Herzer’s lawsuit gave the media a reason to dig deep into details of Redstone’s sex life (ugh, seriously) and who hates who in the family. Allegiances line up thus: One one side, Shari Redstone (formerly estranged daughter and current healthcare proxy) and her son Tyler Korff. On the other: grandaughter Keryn Redstone (daughter of still-estranged son Brent) who sided with Herzer and was prepared to testify against her family. It was juicy, I guess, but ultimately meaningless.
Redstone’s ego has made it this way. Having spent 30 years of his life building a remarkable media behemoth (he bought Viacom in 1986), he could not see beyond his own tenure. Redstone was famous for declaring that he intended never to die. I remember his saying exactly that at the Milken conference a few years back. He wasn’t joking.
The board is still packed with Redstone cronies. Two directors have been on the board for 29 years. The controlling share of stock is held by the family. Institutional Shareholder Services gives Viacom a 10 on its scale of flawed corporate governance, with 10 being the worst score. And a complicated seven-person trust, which includes Shari Redstone and Viacom Chief Executive Philippe Dauman, governs the fate of National Amusements, the controlling entity of Viacom. It’s a mess.
Within Viacom and the circles of former Viacom insiders, there is a Dauman camp and a Shari Redstone camp. Dauman won a round of infighting in February when the board added executive chairman to his title over Shari Redstone’s objections. But that didn’t calm the waters.
Right now, however, unease reigns among the top executives. Last year saw the departure of many veterans, among them the longtime MTV leader Van Toffler, and the exit of the most important talent on Comedy Central, Jon Stewart and Stephen Colbert. The buzziest MTV shows like “Jersey Shore” are in the rear view mirror, with no replacements on the horizon.
Meanwhile, streaming giants Netflix and Amazon are hacking away at the business model that underpins Viacom’s cable channels. In this environment, standing still is simply not an option. Uncertain leadership may prove fateful if not fatal.
This issue of who takes care of Sumner has been a sideshow. The main event is the fight for control of Viacom.
Sharon Waxman is the founder and editor in chief of TheWrap.com and the author of “Rebels on the Backlot: Six Maverick Directors and How They Conquered the Hollywood System.”
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