UPDATED: Viacom released a statement Wednesday afternoon from William Schwartz, chairman of its governance and nominating committee: “As has been widely and publicly disclosed, Mr. Redstone’s physicians have publicly attested that he is mentally capable, and this information is consistent with other medical and other information available to me.”
Mario Gabelli, founder of an investment firm that holds around 10% of voting shares in Viacom, said Wednesday that the media conglomerate and it sister outlet, CBS Corp., should provide shareholders with more information about the health of the companies’ chairman, Sumner Redstone.
Redstone has become the subject of gossip lately after a former romantic interest, Manuela Herzer, filed a lawsuit in Los Angeles probate court suggesting the media mogul is impaired. Redstone controls both Viacom and CBS Corp. through ownership stakes held via National Amusements, a private movie-exhibition company. His attorneys have dismissed Herzer’s claims, and a judge had postponed an investigation into Redstone’s mental competence until early next year.
“I didn’t like the fact that the company hasn’t responded to the discussion,” Gabelli told Variety. “I felt it was just unfair for all of the shareholders not to have a public statement one way or the other.” Gabelli said he represented about 2000 clients, some of whom have been investors in Viacom and/or CBS for more than two decades. Gabelli’s GAMCO Investors Inc. is believed to be the second-largest holder of voting shares in Viacom. He previously made remarks to Reuters.
He thinks the companies are becoming weighted down by press speculation about Redstone’s health. Gabelli said he reached out to Philippe Dauman, Viacom’s chief executive officer, Wednesday, as well as other Viacom executives to gain greater clarity on the matter.
A spokesman for CBS Corp. declined to comment. A Viacom spokesman could not be reached for immediate comment.
Gabelli’s comments – he also took to Twitter to express his dissatisfaction – suggest the controversy surrounding Redstone’s health is gaining more notice on Wall Street. Redstone, once the face of Viacom to Wall Street and the media, has had a diminished presence in recent months. He no longer speaks on investor calls for CBS and Viacom and has largely retreated from public view.
Redstone does not manage either company on a day-to-day basis. That task is left to Viacom CEO Philippe Dauman and CBS Corp. CEO Leslie Moonves. But he does deal with each company’s board of directors, and corporate-governance experts suggest the two media concerns would be obligated to make public any health issues that could materially impair Redstone’s ability to make decisions.
Gabelli said he was less concerned about the future of both Viacom and CBS in the event of the 92-year-old Redstone’s passing. A change of control among the Redstone family would be “a non-event” for Viacom and CBS, Gabelli said, as Sumner Redstone’s holdings in both companies would automatically go into a trust governed by Redstone family associates as well as Shari Redstone, Sumner Redstone’s daughter, and Tyler Korff, a grandson.
Gabelli said he has no greater insight into Redstone’s condition than anyone else. He was invited to Redstone’s 90th birthday a few years ago, he said, but “I could not make it.”