CBS has agreed to pay $1.25 million to settle a shareholder lawsuit which accused the company of paying millions to former chairman Sumner Redstone after he was incapacitated by illness.The suit was filed in Delaware Chancery Court in July 2016 on behalf of shareholder R.A. Feuer. It accused the CBS board of directors of improperly paying Redstone $13.5 million in salary and bonuses since 2014.At the time, Redstone's health had badly deteriorated, and he was barely able to communicate. Redstone,...
Sumner Redstone turned a small chain of drive-in theaters in New England into one of the largest collections of media assets in the world through his vision, his drive a brash and pugnacious approach to managing his empire.
Redstone retains iron-clad control of Viacom and CBS Corporation through the preferred shares he acquired during his long run as a savvy media investor. In 2016, at the age of 94, he shifted to chairman emeritus status at both companies amid a storm of litigation over his mental competency amid his advancing years and failing health.
The legal battles also encompassed a war between Redstone’s daughter, Shari Redstone, and one of his longtime corporate lieutenants, former Viacom CEO Philippe Dauman, for control of the family trust that will govern Viacom and CBS after Sumner Redstone’s death. Shari Redstone prevailed in reshaping the governance of the Redstone Family Trust and the board of Viacom. Sumner Redstone’s net worth is estimated by Forbes at $5 billion.
The legal fights revealed initimate details of Redstone’s private life in recent years, including the tug-of-war for control of his affairs between Shari Redstone and two of her father’s former girlfriends. Reports of the billionaire’s incapacity stand in sharp contrast to the Redstone who became one of the most prominent business figures in America in the 1980s and ‘90s through his aggressive pursuit of acquisitions targets, notably Viacom, Blockbuster Video, Paramout Pictures and CBS Corporation.
Redstone’s investment strategy favored content-focused assets over distribution vehicles on the theory that distribution pipes are only as valuable as the content that flow through them — hence his famous maxim “content is king.”
Redstone earned a reputation for being tough on his CEOs and watching Viacom’s stock price like a hawk. Six years after Viacom acquired CBS in 2000, Redstone split them in two again on the conviction that both would be more highly valued as separate entities.
In his prime, Redstone was a tall, imposing presence with a shock of red hair and a Boston accent that made him stand out all the more in the New York-Los Angeles nexus of the entertainment industry. His exploits and derring-do could have been the stuff of a Paramount movie. As a student at Harvard during World War II, he was recruited to help military intelligence crack Japan’s diplomatic codes. In 1979, he famously survived a fire at Boston’s Copley Plaza high-rise hotel through sheer force of will as he hung precariously from a window ledge.
Redstone earned a law degree from Harvard in 1947 and began his career as a law secretary with the U.S. Court of Appeals. He became a special assistant to the U.S. Attorney General and a partner in a prominent Washington, D.C. law firm. In 1954 he took over National Amusements, the exhibition company founded by his father.
Redstone first rose to prominence in business as an exhibitor, expanding National Amusements’ holdings and becoming a leader of the National Association of Theater Owners and its predecessor, Theater Owners of America. During this period he made investments in 20th Century Fox and Columbia Pictures. In 1986 he began to buy up shares of Viacom, which set him on the course of amassing the industry’s largest portfolio of cable channels, including MTV, VH1, Showtime, Nickelodeon, Comedy Central, BET, TV Land. In 1993, Viacom won a hard-fought battle to acquire Paramount Pictures.
Even as his media holdings grew, Redstone remained a champion of legal education. In 1982 he joined the faculty of Boston University Law School and created one of the first programs in the country to focus on entertainment law. In recent years, Redstone has been active as a philanthropist, committing more than $100 million to medical research and educational causes.