Viacom tries out a new heir style

Redstone won't have it easy

About a year ago, entertainment analyst Dennis McAlpine went to the movies in White Plains at one of tony Westchester County’s nicest theaters. It belongs to National Amusements, the large chain owned by Sumner Redstone and run by his daughter Shari.

“There were 20 people in line and four concession people were standing around talking. I wrote to Shari. About two weeks later, I got a phone call at 8:30 Sunday night. Shari Redstone wanted to talk about the letter,” McAlpine says. “She said, ‘That’s my favorite theater. Tell me what happened.’ ”

He’s a fan.

Shari Redstone is, in fact, said to be a great listener — smart, knowledgeable, a good manager; a tough negotiator. She’s credited with successfully steering National Amusements through a near collapse of the exhibition industry five years ago.

“She’s been a quiet and effective power behind the throne. And the throne hasn’t moved,” says one analyst.

The question is how she’ll stack up against Sumner when she eventually assumes the chairman title and inherits majority control of her family’s media assets. It’s a role assigned to her by genetics, and, increasingly, by inclination.

The 50-year-old former criminal defense attorney turned stay-at-home mom turned exhibition powerhouse, with a thick-as-gravy Boston accent, won’t have it easy. Dynastic succession at public companies, to put it politely, tends to make investors barf all over their balance sheets.

It’s one reason Rupert Murdoch’s News Corp. has traditionally been cheaper than other media stocks. It’s why Wall Street struggles to find a comfort zone with Cablevision. It’s in part why Edgar Bronfman Jr. took so much heat running Seagram.

Some Wall Streeters feel Shari’s most compelling attribute is that she won’t be CEO in charge of daily operations. That job seems sure to pass to media execs Tom Freston and Leslie Moonves.

Chairman-CEO Sumner, 81, has promised to relinquish the chief exec title in the next two years. Plan is for Freston and Moonves to each run basically half of the current Viacom after the conglom completes a controversial split.

Sumner will hold onto the chairman title indefinitely.

That’s left Shari in the awkward position of sitting in on management meetings, shadowing her father, or Freston or Moonves, at investor conferences — setting off a low murmur of “Did you see — Shari’s here.”

“I think it’s an unusual transition time where everyone has to be pretty careful,” says media analyst and author Hal Vogel.

What she really needs now, is a title, like vice chairman, to align her profile and growing interest in the overall business with an official function.

Apparently, she may be handed that moniker sooner rather than later.

Clearly, getting to know her, hearing her speak, would let Wall Street develop a more informed opinion.

For now, it’s guesswork.

“I don’t think Shari will be a tinkerer like Sumner. He likes to play with his toys. Shari will be more advice and counsel type of thing,” McAlpine says.

“If they want to decide who’s going to make a musicvideo or a new show, she’s not going to be involved. If they are making a major hire or a major corporate split, a refinancing or share repurchase, or a brand new business, she’s going to have a hand in it,” agrees Vogel.

“If there’s a problem, she will feel the heat more than anyone else” — both in the wallet and the media, he notes.

Others aren’t sure.

“Some people think she’ll be more hands-on than Sumner,” says another Wall Streeter. “People who think she’ll be quiet might be fooling themselves.”

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