Anyone who has followed the saga of Sumner Redstone knows that the media baron likes the ladies. And the ladies like him. And they like his money, a fortune put at roughly $6 billion.
But no one could have guessed this time last year that one of Redstone’s seemingly less dangerous liaisons — with Argentinian-born socialite Manuela Herzer, 52, whom he had known for years — would fuel domestic discord, explode familial ties, reanimate the seemingly deathly corporate magnate and stoke a restructuring of one of America’s biggest media empires, encompassing Viacom and CBS Corp.
But that’s just what happened. One year ago Wednesday, Redstone made an abrupt split with Herzer after becoming convinced that she had been lying to him, including spreading falsehoods about other former paramours. Herzer went to court, attempting to force her way back into Redstone’s life even though their romantic relationship had ended long before.
Herzer painted her quest as an effort to protect Redstone’s health and ensure that his wishes were not subverted by his daughter, Shari, and others in his inner circle. Redstone’s lawyers depicted Herzer as a gold-digger who was upset about being written out of Redstone’s estate after being promised $50 million in cash and the deed to his Beverly Park mansion, valued at $20 million.
A Los Angeles judge threw out Herzer’s suit three days after the trial began last May. But her allegations that the mogul had become “a living ghost,” no longer capable managing his own affairs, sparked new battles for Redstone on the corporate front. Investors demanded transparency about his health. The timing couldn’t have been worse for Viacom, as it prompted Wall Street and business journalists to scrutinize the health of the company and its management.
Redstone soon booted not only Herzer, but others he believed had begun to ignore him or take him for granted. At the top of that list was Viacom CEO Philippe Dauman, who Redstone tossed off the board and Redstone family trust that ultimately will control his empire. Dauman’s fatal mistake, according to those who have been in the trenches the past year, was pushing for Viacom to sell a stake in Paramount Pictures over Redstone’s objections.
Dauman waged a spirited counter-attack – both in court and with loyal members of the Viacom board. But it was too late. Redstone, the man who had said repeatedly in his younger days that he would never die, pulled off what is likely to be his final business coup.
After patching up his once-estranged relationship with Shari, Sumner Redstone’s maneuvers during the past few months have forced Viacom and CBS to consider a new merger, 10 years after Redstone split up his empire out of frustration that the stock was undervalued in their combined form. In this scenario, CBS Corp. chief Leslie Moonves emerges as the fair-haired son who is urged to save Viacom after exceeding all expectations during the past decade with his stewardship of CBS.
The drama surrounding the House of Redstone has been nothing less than Shakespearean, replete with ostentatious wealth, family discord and betrayals, shifting alliances, palace intrigue and lurid details about the personal life of one of the most influential media moguls of our times. Along the way, the seemingly endless string of headlines and uncertainty took a toll on Viacom’s share price at a time when it was already under pressure because of its performance and the broader industry issues buffetting all traditional media companies.
For now, Redstone, at 93, remains the billionaire who would not quit, who would not be denied and who, in the 11th hour, put family first. The empire he built from a small movie theater chain — which includes CBS, Showtime, Paramount Pictures, MTV, VH1, Nickelodeon and Comedy Central — is now Shari Redstone’s to oversee for the next generation.
Here’s a blow-by-blow look at all that has transpired in the past 12 months:
12: Manuela Herzer is ejected from Sumner Redstone’s Beverly Park home by his estate attorney, Leah Bishop. After a trip to run errands, Herzer returns to the house to find her passage blocked in a hallway by Redstone’s driver, Isileli Tuanaki, who tells her “Mr. Redstone doesn’t want you here,” according to Herzer’s lawsuit.
Herzer eventually confronts Bishop, who calls Redstone’s Boston attorney, David Andelman (also a CBS Corp. board member) and yells “you can’t be here.” Herzer is told Redstone is angry over a “lie” Herzer told him about Redstone granddaughter Keryn Redstone using his credit card, according to Herzer’s suit. Other court documents including Redstone’s deposition say the precipitating event was alleged lies told by Herzer to Redstone regarding his one-time girlfriends Sydney Holland and Terry Holbrook.
Viacom share price: $46.50
16: Viacom president-CEO Philippe Dauman is named health care agent for Redstone. Viacom COO Tom Dooley is named alternate. Redstone adjust the terms of his personal trust to eliminate Herzer from receiving a gift of $50 million in cash and the Beverly Park estate, valued at $20 million.
25: Herzer files a lawsuit in Los Angeles Superior Court challenging her removal as Redstone’s health care agent. The complaint describes Redstone as a “living ghost” and offers lurid details about the 92-year-old mogul’s personal life and accuses his daughter, Shari, of manipulating him to serve her own agenda. Herzer’s flamboyant lawyer, Pierce O’Donnell, insists she has only gone to court because of her deep personal bond with the mogul.
Viacom share price: $52.35
30: L.A. Superior Court Judge David Cowan denies Herzer’s request for a fast-track decision to restoring her as Redstone’s health care agent and for a speedy deposition of Redstone.
2: Investor Mario Gabelli, Viacom’s second-largest shareholder, calls for the management of Viacom and CBS Corp. to address the state of Sumner Redstone’s health and mental capacity.
7: At an investor conference, Dauman says Redstone has “incredible will to live and enjoyment of life.”
Viacom share price: $47.15
14: Herzer’s lawyers push a motion for a deposition of Redstone and claim his signature is forged on an agreement that allowed Herzer to return to his home to retrieve her belongings.
21: Judge Cowan rules that Dauman and two of Redstone’s doctors can be deposed as part of Herzer’s suit.
Viacom share price: $39.22
11: Herzer’s lawyers argue an appeal for the deposition of Sumner Redstone.
19: A shareholder lawsuit is filed against CBS and Viacom in Delaware Chancery Court by E.F. Greenberg, claiming the companies have demonstrated too much “loyalty” to Sumner Redstone in violation of fiduciary duties. Another activist shareholder, SpringOwl Asset Management, calls for Dauman’s ouster.
Viacom share price: $41.72
22: Judge Cowan rules that Sumner Redstone can be questioned on videotape as part of Herzer’s lawsuit.
3: Bowing to pressure from the investment community, Sumner Redstone resigns as chairman of CBS Corp. in a letter sent to the conglomerate’s president-CEO Leslie Moonves. The CBS board unanimously elects Moonves as his successor. Redstone becomes chairman emeritus.
4: Viacom board votes 10-1 to elect Dauman as chairman, shifting Redstone to chairman emeritus. Shari Redstone casts the dissenting vote against Dauman. Despite Sumner’s vote for Dauman, Viacom’s handling of the transition angers Redstone, in contrast to the process at CBS.
Viacom share price: $45.34
9: Viacom releases fiscal first quarter 2016 earnings showing a 6% decline in revenue and 9% drop in adjusted earnings. During the earnings conference call Dauman blasts “naysayers, self-interested critics and publicity seekers” as contributing to Viacom’s challenges.
Viacom share price: $32.86
23: At an investor conference, Dauman plans to “explore opportunities for a significant strategic minority equity investment in Paramount Pictures,” echoing calls by Gabelli and others for Viacom to monetize the asset.
25: Sumner Redstone meets with Dauman, instructs him not to sell an interest in Paramount, according to a source close to Redstone.
27: Sumner Redstone meets with Paramount Pictures chairman Brad Grey, reiterates his opposition to selling a stake in the studio Viacom acquired in 1994.
29: Judge Cowan rules that Herzer’s lawsuit can proceed, citing questions about raised about his mental capacity in reports from examinations by two physicians.
Viacom share price: $36.85
7: Dauman predicts Viacom will have a deal to sell a minority stake in Paramount by the end of June.
14: Sumner Redstone tells Viacom corporate executives via an attorney that he does not want to sell Paramount.
16: Viacom’s board of directors names Frederic Salerno, former vice chairman of Verizon and a Viacom board member since 1994, as its lead independent director.
Dauman visits Redstone at his Beverly Park home for 30 minutes, during which time Redstone has trouble staying awake.
17: Viacom sets a new employment agreement with COO Thomas Dooley that includes a severance clause that will pay him $63 million if he is not upped to CEO if Dauman departs.
Viacom share price: $41.48
28: Mediation in Herzer lawsuit begins.
3: Herzer and Redstone lawyers reach a settlement in principal that calls for her to receive $30 million.
7: Shari Redstone replaces Philippe Dauman as her father’s health care agent. Other changes to his estate are made.
Viacom share price: $38.27
9: Herzer and Redstone lawyers agree on final settlement terms. Herzer balks and pushes for several additions, including idemnifying her from claims Redstone’s relatives might bring against her, according to sources familiar with the talks. Sumner Redstone pulls the settlement off the table.
Dauman’s planned visit with Sumner Redstone is canceled at the last minute.
12: Sumner Redstone rejects Herzer’s attorneys effort to restart settlement talks.
19: Keryn Redstone files a motion seeking to join Herzer’s suit, citing Shari Redstone’s alleged undue influence over her grandfather. The motion is denied the following day.
21: After tense negotiations, Viacom and Dish Network set a long-term renewal agreement of Viacom channels, easing concerns that Viacom could lose significant distribution revenue if a deal could not be reached.
Viacom share price: $42.56
3: Salerno and Viacom director William Schwartz request a meeting with Sumner Redstone on May 16, which is rejected.
5: Sumner Redstone’s videotaped deposition is taken at his home.
6: The Herzer trial begins in Los Angeles Superior Court.
9: Judge Cowan dismisses the Herzer suit, citing Sumner Redstone’s deposition statement that he no longer wants her in his life. Herzer files a new lawsuit against Shari Redstone, accusing her and some staff members at Sumner Redstone’s home of interfering with her planned inheritance.
Viacom share price: $40.43
16: Redstone attorney Michael Tu requests briefing on Redstone’s behalf on the plan to sell minority stake in Paramount.
Redstone’s trust is amended to eliminate Keryn Redstone from receiving $3 million and a house from her grandfather.
17-18: Viacom board members hold a strategic review on Paramount sale and other matters. Shari Redstone and Sumner Redstone take part but remain silent.
20: Attorney Michael Tu sends a letter to Dauman and Viacom director George Abrams informing them they have been removed as board members of Redstone’s National Amusements Inc. (NAI) holding company and as trustees on the Redstone Family Trust that will inherit Redstone’s share after he dies or is deemed incapacitated.
Viacom share price: $39.05
23: Dauman and Abrams sue Redstone in Massachusetts probate court, alleging that Redstone does not have the mental capacity to remove them from NAI and the trust. The suit takes aim at Shari Redstone as manipulating her father for her own agenda. The suit seeks an expedited trial, citing Sumner Redstone’s health.
27: Sumner Redstone celebrates his 93rd birthday at a party thrown by Shari Redstone.
3: Sumner Redstone asks the Massachusetts court to dismiss the suit from Dauman and Abrams.
6: NAI implements a change in Viacom’s bylaws to require unanimous consent of the Viacom board for any transaction involving Paramount, and unanimous consent for any effort to amend the bylaws. That effectively blocks any deal from going forward without the votes of Sumner and Shari Redstone.
10: Sumner Redstone travels to Paramount Pictures in a van, where Grey comes out for a meeting with him in the vehicle.
14: Salerno writes an open letter to Redstone asking for a meeting and explaining the rationale of the Paramount sale. Redstone does not accept the meeting request.
Redstone travels to the CBS lot in Studio City, where CEO Leslie Moonves meets with him inside his vehicle.
16: NAI removes Abrams, Dauman, Salerno, Schwartz and Blythe McGarvie as Viacom directors. Kenneth Lerer, Thomas May, Judith McHale, Ron Nelson and Nicole Seligman are nominated as new directors.
Salerno files suit against NAI in Delaware Chancery Court challenging the validity of the Viacom board dismissals. NAI files in the same court seeking a legal affirmation of the board moves.
17: Viacom agrees to pay the legal bills of Dauman and Abrams in the litigation against Redstone and NAI.
Viacom share price: $45.05
18: Redstone attorneys offer to set meeting between Sumner Redstone and Viacom director Charles Phillips.
23: The discovery process in the Delaware case is put on hold while the Massachusetts probate court process unfolds.
The Viacom board rejects the proposed meeting of Phillips and Redstone.
28: NAI sends a letter to the Viacom board asserting Redstone’s right to eject the directors because the majority of NAI board approved. The letter blasts the “highly personal and vicious attacks on Sumner’s capacity and Shari’s honesty and integrity.”
Viacom share price: $40.03
25-28: Settlement discussions begin between NAI and lawyers for Dauman and the independent directors of Viacom.
28: Judge George Phelan of Massachusetts probate court allows the Dauman/Abrams suit to proceed but rules that Redstone does not need to undergo an immediate medical exam.
29: Delaware Chancery Court Judge Andre Bouchon denies Redstone’s request to dismiss the Salerno suit.
Viacom share price: $45.97
2: Keryn Redstone files a crossclaim in support of the Dauman/Abrams suit in Massachusetts.
8: Settlement discussions for the Dauman/Abrams and Salerno suits resume. Dauman is under pressure from some Viacom board members and investment community to end the legal standoff crippling the company.
Viacom share price: $42.52
9: Massachusetts Judge George Phelan sets Oct. 3 start date for Dauman/Abrams trial.
15-16: Settlement discussions intensify with agreement for Dauman to step down as CEO and five new board members to join.
17: Settlements approved by Viacom board.
20: Viacom announces settlement that calls for Dauman to step down after Sept. 13. Dooley promoted to interim CEO through Sept. 30. Viacom board expands to include five new members, with plan for the ousted board members to exit after the 2017 annual meeting.
22: Keryn Redstone files objection to dismissal of Dauman/Abrams suit.
Viacom share price: $41.70
26: After lengthy hearing in Massachusetts, Keryn Redstone drops her objection to Dauman/Abrams dismissal in exchange for a meeting with her grandfather and amendment to the Redstone trust ensuring that all beneficiaries will receive equal shares.
12: Keryn and Sumner Redstone have what is described as an “emotional” face-to-face reunion at his home.
14: Dooley takes over as interim CEO of Viacom. New board member Thomas May is elected non-executive chairman.
Viacom share price: $37.44
15: As speculation snowballs on Wall Street about Redstone pushing a reunification plan for Viacom and CBS, Moonves signals CBS’ wariness about merging with Viacom. “We are very happy with the position we are playing now. We think we have a great future as the CBS Corporation now,” Moonves says at an investor conference.
21: Viacom announces Dooley will step down on Nov. 15 after declining to accept permanent CEO position. Viacom cuts its quarterly dividend in half as it seeks to conserve cash to tackle debt refinancing needs.
29: NAI sends a letter to the boards of CBS Corp. and Viacom urging them to consider a merger.
30: The boards of CBS and Viacom both form special committees to explore merger options.
Viacom share price: $38.10
7: Massachusetts court finalizes dismissal of Dauman/Abrams suit, settlement of Keryn Redstone claim and enters NAI trust amendments.
Ronald Richards, another attorney for Herzer, discloses to Variety that Herzer has sued former attorney Pierce O’Donnell and filed a complaint against him with the California bar association. Herzer maintains she was persuaded to pay $500,000 in legal fees for Keryn Redstone without proper accounting or protection. Herzer has her appeal of Judge Cowan’s dismissal of her health care directive suit and she is continuing to pursue her suit against Shari Redstone for interfering with her planned inheritance.
Viacom share price: $35.73