End Of The Drama: Sumner Redstone’s Death Leaves Only One Intrigue For ViacomCBS

When Forbes last published an extensive profile about Sumner Redstone, the takeaway was that the billionaire media mogul, who didn’t rise to prominence until he was in his 60s, was running out of time. That was in 1994, when Redstone was 71 and had just closed a deal to acquire Paramount Studios that made Viacom VIAB one of the world’s entertainment giants. “He doesn’t have forever,”  the story titled “Late Bloomer” said. “He turns 80 in 2003.” 

As it turned out, we were wrong by almost two decades. Redstone, the famously combative former attorney who operated under the guiding principle that “content is king” died Tuesday at the age of 97.

In between the profile and his passing, Redstone’s storied ascent offered no shortage of tales to tell, including salacious details of of his sexual pursuits with younger women, a successful hostile takeover bid for Viacom, multiple high-profile executive firings, an ambitious $37 billion acquisition of CBS VIAC that at the time was the largest media deal in U.S. history, and a family battle over succession and control that pitted father against his children.

Redstone’s once-estranged daughter, Shari, outmaneuvered two of her father’s lieutenants and assumed control of the business last year in a $12 billion deal that reunited two halves of the family’s media empire that had been separated 13 years earlier. 

Shari Redstone’s reconciliation with her father, who in 2007 wrote a letter to Forbes publicly blasting her for making an effort to succeed him as chair of Viacom and CBS, put to rest one long chapter of intrigue that has marked the history of the company for decades. Sumner Redstone’s controlling interest in the company is held through National Amusements, an investment vehicle that began as a chain of drive-in movie theaters founded by Sumner’s father. A seven-member family trust, whose members include Shari Redstone, her son, Tyler Korff, and others with connections to the Redstone family, will have voting control over the elder Redstone’s holdings on behalf of his grandchildren and their descendants.

Sumner Redstone joined National Amusements in 1954 when it was a 14-screen regional theater chain, expanding the footprint ninefold over the following two decades before he began buying up shares in media companies, including cable’s youth-culture bastion, Viacom. He took control of the business in 1987 through a $3.4 billion hostile takeover, claiming its buzzy properties like MTV and Nickelodeon. He served as chairman from 1996 to 2005, overseeing hits on MTV, Comedy Central and Nickelodeon that included iconic (and lucrative) shows like Spongebob Squarepants, The Daily Show and South Park. 

The same pugnaciousness that propelled Sumner Redstone to create a media juggernaut also drove wedges between him and his kids. After a brutal legal battle that started in 2006, his son Brent walked away from the family company with $240 million. Sumner Redstone’s battles with his daughter were also public. She joined National Amusements in 1994, triggering years of disputes over investments, corporate governance and, most of all, succession. Tensions reached a fever pitch in 2007, when Redstone sent a letter for Forbes making clear he did not want Shari to take over as chair of Viacom and CBS.

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

Today attention has shifted to Shari Redstone’s ability to build on her father’s legacy and show that the conglomerate, the smallest of the world’s major media giants, can thrive in an industry landscape being driven by far more dominant companies. ViacomCBS, with a market capitalization of $16.4 billion, is dwarfed by competitors that include Walt Disney ($237.5 billion), Netflix NFLX ($211.7 billion), WarnerMedia, which is controlled by AT&T T ($213.4 billion), NBCUniversal, a unit of Comcast CMCSA ($195.5 billion), as well as Apple AAPL ($2 trillion) and Amazon AMZN ($1.6 trillion).

“Viacom’s too small. It needs to be sold or combined with a larger company,” says Needham & Co. senior analyst Laura Martin, in response to speculation about the company’s future. 

Wells Fargo WFC analyst Steven Cahall wrote a note Tuesday that speculation about a deal is likely to boost the share price, which is down 38% this year. Though Shari Redstone’s immediate challenge is to sort out the company’s place in the media landscape and prove its value, which has decreased by $10 billion since she announced the merger last August. 

For now, those who know Redstone say she’s singularly focused on realizing the value of the combined companies and furthering Sumner’s ambitions: “My father led an extraordinary life that not only shaped entertainment as we know it today, but created an incredible family legacy,” Shari Redstone said in a statement. “I am so proud to be his daughter and I will miss him always.”