Viacom chair talks internal affairs
Viacom chairman Sumner Redstone says he had originally offered Tom Freston the job of sole CEO of Viacom — before it split — but Freston declined.
Redstone asked Leslie Moonves. “Naturally, being Les, he grabbed it. Then Tom came back and said he wanted it and that created problems,” Redstone said in an interview with Charlie Rose broadcast on PBS Wednesday.
The rest is history. Viacom split, with Freston and Moonves each getting their own company. Redstone fired Freston, his colleague of 20 years, last month.
He said he was close to tears when he did. He blamed the sagging stock price and the “humiliating” loss of MySpace to Rupert Murdoch.
“Before Rupert got into the action, MySpace was sitting there for the taking for $500 million,” he said. Now Redstone figures it’s worth $1.5 billion.
Some Viacom insiders dispute that losing MySpace was Freston’s fault.
Redstone said Viacom is out of the race for smaller social networking site Facebook, which Yahoo! is reportedly considering buying for $1 billion. “The price is too high; we’re not going to overpay,” Redstone said.
Freston is in Burma as the details of his severance package are being worked out. “He had a very good contract,” Redstone said. “More people have gotten rich saying goodbye to me than I have,” he joked.
That would include Freston’s successor Philippe Dauman, a former Viacom vice chairman who was pushed aside for Mel Karmazin when Viacom merged with CBS in 2001 but received a rich exit package.
Redstone said Dauman and Tom Dooley urged him then to pursue the merger. Dooley, also a former vice chairman, is Viacom’s new chief administrative officer.
Redstone said he renewed Karmazin’s contract against his better judgment on the advice of two Viacom board members, Verizon CEO Ivan Seidenberg and the late David McLaughlin. He said both men later agreed that they’d made a mistake.
He said Karmazin’s focus was on quarter to quarter vs. long term.
Also, Karmazin never asked him to lunch.
It’s a “family” company, he said. “Les wouldn’t sell a radio station first without asking my opinion. Philippe calls, gives me an analysis. I like it, but I would never ask for it.”
Redstone said he doesn’t expect any defections and that MTV chief Judy McGrath and Paramount topper Brad Grey are both firmly in place.
“It’s the first thing we did” after firing Tom. “I called Judy McGrath and she said she understood.”
“I called Brad. Didn’t reach him. He called me back the next day,” Redstone said.
“He waited a day to call you back?” Rose asked.
“It was late at night” when I called, Redstone said.
Redstone predicted “World Trade Center” would get a best picture nomination and called “Dreamgirls” “wonderful.”
Asked about the future of his daughter and presumed heir Shari, Redstone said her career path at Viacom depends on two factors: “If Shari really wants it. She has spent her life at National (Amusements).
And, “even though Viacom is a family-controlled company, “the board would have to approve it and agree she was the best person.”
“However, don’t count me out. It might be longer than you think,” said the 83-year-old mogul.
“I think I look and act like a 40-year-old.”