×
You will be redirected back to your article in seconds

When Bob Met Sumner: How a Crisis at Blockbuster Brought Viacom’s CEO Together With Redstone

Bob Bakish’s entre to Viacom came in the early 1990s when the company’s future CEO was hired as a consultant by what was then Paramount Communications to help restructure its Madison Square Garden division. 

Bakish worked with a range of media, publishing and consumer products clients during his years as a consultant with Booz Allen Hamilton. He once got stuck for nearly a year working on the overhaul of frozen food plant in Solon, Ohio, an assignment that made him appreciate the dynamism of the media biz all the more.

While Bakish’s Booz Allen group was working on the plan for MSG, Paramount Pictures was put up for sale in 1993. That initiated the fierce bidding war between Viacom owner Sumner Redstone and Barry Diller, the ABC, Paramount and 20th Century Fox veteran who at the time was fresh off of launching the fourth broadcast network for Rupert Murdoch.

Booz Allen was tapped to help Paramount Communications analyze its options. When Redstone finally emerged victorious the following year, Paramount Communications CEO Martin Davis urged the studio’s new owners to tap Bakish’s team for the Viacom-Paramount integration plan. That lengthy assignment led to commissions to help with strategic planning for the MTV Networks arm and for Showtime.

Given his many appearances in presentation to the board of directors and high-level management, Bakish was eventually sought out for a breakfast meeting by former Viacom COO Tom Dooley, who offered him a job as a strategic planning executive. Which Bakish turned down because he was about to be made partner at Booz Allen toward the end of 1996.

“Tom said to me ‘If you ever want to play the game on the field rather than calling it from the sidelines, come talk to me,’ ” Bakish recalled. “I said ‘Tom, that’s a good hook.’ I asked him to wait two months. I went and got elected partner and resigned two weeks later.”

Bakish got a quick tutorial in what it meant to work for Viacom chairman Sumner Redstone just as he started his new job in early 1997. His arrival at the company coincided with a big downturn at Viacom’s Blockbuster Entertainment home video retailer. Redstone, Dooley and Bakish spent a few months flying down for several days a week to Blockbuster’s headquarters in Dallas to help steer the company through its trials while it searched for a new CEO.

In an early meeting, a senior Blockbuster executive explained the company’s existential challenge as being in the business of “managed dissatisfaction,” Bakish recalls. The executive’s theory was that Blockbuster employees had to focus on guiding customers to their second- or third-choice movies because the hot title of the moment would inevitably be unavailable. The stores couldn’t afford to stock many copies of new home video releases because they cost about $80 apiece.

“When he said ‘managed dissatisfaction’ I thought Sumner was going to have a stroke and throw the guy through a window,” Bakish recalls. “He really went crazy.”

The incident led Redstone to launch a personal charm offensive with Paramount’s major studio rivals to re-write the rules of the home video business. Bakish never forgot how Redstone succeeded against all odds. He shifted Blockbuster’s business model from one of buying wholesale videos from studios to a revenue-sharing arrangement, which allowed the stores to stock many more copies of hit titles without having to shell out $80 apiece upfront. That shift shored up Blockbuster’s fortunes, for a while.

Having such close exposure to Redstone, who is now 95 and in failing health, in a challenging situation was a good introduction to the company, its quirks and its unique assets.

“Sumner used to say ‘I am Viacom and Viacom is me,’ ” Bakish recalls. It was legend throughout the company how many times a day Sumner called his CEOs to discuss the company’s stock price.

“He was very focused on the company continuing to move forward,” Bakish says of Redstone in that era. “He could get pretty intense.”

Read Variety’s Bob Bakish cover story here

Popular on Variety

More Biz

  • Patrick Whitesell and Ari Emanuel WME

    Endeavor Targets Sept. 27 for Stock Debut, IPO Video Tells Company's Origin Story

    After years of preparation, Endeavor is set to make its formal Wall Street debut on Sept. 27, when its stock will begin trading on the New York Stock Exchange. Endeavor has targeted Sept. 26 for the final pricing of its shares. The stock will trade publicly the following day. Earlier this week, Endeavor said its [...]

  • Netflix - Apple TV

    Netflix Stock Drops After CEO Acknowledges 'Tough Competition' Coming From Disney, Apple

    Netflix shares fell as much as 7% Friday to a nine-month low, coming after CEO Reed Hastings commented that the November launches of Disney Plus and Apple TV Plus will introduce a “whole new world” of competition. Hastings, speaking at the Royal Television Society conference Friday in Cambridge, England, said, “While we’ve been competing with [...]

  • Charlie Rose Sexual Harassment

    Charlie Rose Sued for Sexual Harassment by Longtime Makeup Artist

    A makeup artist who worked for Charlie Rose for 22 years has filed a sexual harassment lawsuit, accusing the former CBS and PBS host of years of unlawful behavior toward female employees. Gina Riggi alleges that Rose was verbally abusive with her and would often make derogatory comments about her weight. She also alleges that [...]

  • Rob Stringer

    Sony Music Chief Rob Stringer on Sustaining Growth and Recovering From the 'Dark Times'

    The Goldman Sachs Communacopia conference, now in its 28th year, gives top executives at major companies the opportunity to make their case to investors — and the Goldman analysts the opportunity to keep things on the up and up. While the analysts don’t necessarily grill the executives, they don’t lob softball questions either. That was [...]

  • Frank Grillo'Avengers: Endgame' Film Premiere, Arrivals,

    Matt Phelps Tapped as President of Joe Carnahan, Frank Grillo's Warparty

    Frank Grillo and Joe Carnahan’s Warparty productikon banner has appointed Matt Phelps president of the company. Phelps will head the Los Angeles office and be responsible for overseeing all film and television projects. “We searched long and hard to find the right fit for Warparty and felt that Matt embodied everything that we were looking [...]

  • Jack Gilardi, Longtime ICM Partners Agent,

    Jack Gilardi, Longtime ICM Partners Agent, Dies at 88

    Jack Gilardi, a longtime ICM Partners agent who represented such stars as Burt Reynolds, Sylvester Stallone, Jerry Lewis, Charlton Heston and Shirley MacLaine, died Thursday at his home in Los Angeles. He was 88. Gilardi was known for his gentlemanly style, love of the Los Angeles Dodgers and his skill at representing top actors. He [...]

  • Nexstar Completes Tribune Acquisition, Sean Compton

    Nexstar Completes Tribune Acquisition, Sean Compton to Head Programming

    Nexstar Media Group has become the nation’s largest owner of TV stations after completing its $4.1 billion acquisition of Tribune Media. The deal creates a broadcasting colossus with more than 200 stations serving more than 100 markets, although a number of stations will be divested to keep Nexstar in compliance with FCC ownership limits. Nexstar, [...]

More From Our Brands

Access exclusive content