The mission is nearly complete.
It’s taken almost four years, but Shari Redstone has doggedly removed every obstacle that stood in the way of implementing her vision for the media empire assembled by her father, Sumner Redstone, 96, over the last half-century.
The long-simmering deal to reunite CBS Corp. and Viacom under the same corporate umbrella has been the elusive last step that is finally believed to be in Redstone’s grasp. Negotiations between the boards accelerated late last week, paving the way for a formal announcement expected this week. Shari Redstone, 65, is poised to become chairman of the combined company, the throne once occupied by her father. Her ascent would make her the only woman among the elite ranks of media moguls with iron-clad control of an entertainment-focused conglomerate. She joins Mary Pickford, a co-founder of United Artists, and Lucille Ball, whose Desilu banner bought RKO in 1957, on the short list of women who have had ownership stakes in major Hollywood studios.
Redstone has proven herself a formidable strategist, regardless of gender.
She may have been born to privilege as Sumner Redstone’s daughter, but no one can say that she didn’t have to fight her way to the top.
“She will be a powerful leader who isn’t afraid to use her power,” predicts Erik Gordon, a professor at University of Michigan’s Ross School of Business. “This is a person who is willing to fight with boxing gloves or with bare knuckles.” Gordon adds that Redstone’s triumph in bringing CBS and Viacom together makes her a potent symbol for a different era of leadership. Redstone previously served as vice chair of the CBS and Viacom boards and remains president of National Amusements, the holding company for the Redstone family’s 80% controlling interest in Viacom and CBS Corp.
“I think she will be as tough and as calculating as any male chairman we have seen,” Gordon says. “Nobody should underestimate what she’s capable of.”
Shari Redstone’s quest to realign the family business began in earnest in October 2015, when she took charge of her ailing father’s affairs. She spearheaded a coordinated strike with lawyers and Sumner Redstone’s household staff to eject her father’s former girlfriend turned live-in companion, Manuela Herzer, from his home in the ritzy Beverly Park estates.
Shari Redstone has maintained in legal filings that Herzer sought to manipulate her father, at the expense of his health, into giving her money and assets. Herzer countered that Sumner Redstone had made it clear that he did not want his daughter calling the shots in his personal life or at his companies.
Shari Redstone’s move sparked a lawsuit from Herzer that opened a Pandora’s box for all those in the Redstone orbit. In the storm of litigation that followed, Shari Redstone was not spared as details of her strained family relationships emerged, along with tabloid-worthy details of her father’s unconventional life as a lion in winter.
The lawsuit from Herzer led to pressure to have Sumner Redstone’s mental competency evaluated by professionals. Those questions, in turn, reached the boardrooms at CBS Corp. and Viacom, where Sumner Redstone still served as chairman at the time. He was ousted by shareholders of the two companies in 2006.
Sumner Redstone bought CBS Corp. in 2000 and merged it with Viacom, the owner of MTV, Nickelodeon and other cable channels, which National Amusements acquired in 1987. But when Viacom’s share price slumped in 2005, Redstone decided the answer was to split the companies into separate entities again, albeit still under his control. The reunion of Viacom and CBS will likely be completed on a much speedier timeline than typical media megamergers because the companies are viewed by the Securities and Exchange Commission and other regulators as already having common ownership.
Shari Redstone’s litigation with Herzer presaged bitter public legal battles with former Viacom CEO Philippe Dauman and another longtime Sumner Redstone confidant, attorney George Abrams over control of her father’s estate. Within months, Dauman and Abrams were out of their positions of power on the Redstone trust and the National Amusements board. Dauman was also forced to resign as CEO of Viacom, and the board that had staunchly backed Dauman despite the company’s poor performance was overhauled.
In 2018, CBS Corp. went to war with Shari Redstone, accusing her of breaching her fiduciary duty to shareholders by trying to force a merger with Viacom. The CBS regime, then led by CEO Leslie Moonves, saw the re-merger scenario as an attempted rescue mission that would hurt CBS in the long run. But once again, after a few months of battle, Moonves was the one to blink, when his position was undermined by sexual misconduct allegations from his past that surfaced in a New Yorker exposé. Moonves was ultimately fired, and the CBS board was reconstituted last September.
Getting CBS and Viacom back to the altar has been an epic journey for Shari Redstone. But now that she is getting ready to take on the chairman role, the next chapter has already started. The enlarged company, to be led by Viacom CEO Bob Bakish, still has to do battle in an unpredictable marketplace against larger rivals.