The meetings are conducted with the secrecy of a national security briefing. Attendees pledge not to disclose deliberations. Attorneys steadfastly stonewall reporters who try to probe the proceedings. And no one ever alludes to the fact that there is a ghost in the room.
At stake is a $30 billion merger of two revered publicly held companies, CBS and Viacom – a deal that will likely trigger a new cycle of corporate mega-deals, perhaps reshaping the landscape of the media industry.
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And the ghost? It’s Sumner Redstone, age 97, the master dealmaker responsible for creating the teetering corporate edifice. His presence still hovers over the company, but his mental health is the subject of litigation, as is his potential influence over the deal. His secret trust documents may
impose inhibitions on future maneuverings, given that he and his daughter, Shari, still control by far the most shares in this public company.
Given his addiction to corporate intrigue, Redstone himself would doubtless yearn to inhabit a seat at the table. Instead he is confined to bed in his sprawling contemporary mansion that sits atop Beverly Hills, unable to talk or walk. Buried in his brain is the knowledge that he still could ignite what one attorney describes as “bombshells” buried in trust documents, possibly scuttling dealmaking prospects. Bankers cannot recall a parallel corporate drama in which a patriarch, while still alive, was rendered mute over key merger decisions.
When I visited with Redstone three months ago, his withered hand signaled a greeting, or the semblance of one. His eyes flickered weakly, but his effort at conversation was reduced to a grunt, mixed with an occasional scream of rage and frustration over his limitations. His fingers could peck out limited responses – a “yes” or “no” – on a specially rigged computer.
Fed intravenously, his cognitive skills are clearly impaired. Still, his attorneys argue that, with medical support, he retains lucidity and understanding. A team of nurses and conservators stand by for needed assistance.
Sumner Redstone always liked to tell friends, “I will live forever,” but, as one long-term friend confides, “is this really a life or a dim after-life?” Once a man who loudly demanded order and discipline, Redstone’s after-life has wallowed in sordid confusion. On a personal level, intrigues involving girlfriends have been settled through multimillion-dollar payoffs. One, Manuela Herzer, was ordered by the court to pay back $3.25 million. Yet displays of his art collection at museums still carry women’s names in “presentation credits,” as in a film.
On a corporate level, shareholder value has been compromised by management turnover and swerving strategies. Names of past executives lie in the dust — Philippe Dauman, Les Moonves, Mel Karmazin, Tom Freston and Brad Grey among them. Redstone’s mythic corporate conquests have long since faded into the mist. The famous mid-’80s battles for control of Paramount, pitting him against foes like Barry Diller and John Malone, were passionate and bitter. Wall Street felt he overpaid on the deal, but they arguably were proved wrong.
The Redstone heyday was one of sustained truculence. Business was conducted in a loud roar, but he also would sustain cordial conversations with friends, and loved making his rounds of favored restaurants, like Dan Tana’s or Spago – I was an occasional companion. He would bellow orders at waiters so loudly that some managers banned him, but $200 tips were welcomed.
Even in his early 90s he would still hold court about the foibles of his competitors – Rupert Murdoch was a favorite target – and pledge revenge on those who had failed him. He liked screening films for friends on Sunday afternoons and readily vented his criticisms, even on Paramount films (“My own company wants to bore me with crap like this,” he would declaim).
Would he favor a merger if he were now at the table? After all, this is the third time in four years that directors have explored that objective. After the last foray, a judge elicited a pledge that the two companies could unite only if two thirds of the CBS board favored it. Both companies were in stronger shape when the earlier merger initiatives were advanced.
Now both are in troubled waters – CBS lost a quarter of its value in 2018 and has yet to recover –and Sumner’s likely would have been the loudest voice reminding everyone of that reality.
That is, if ghosts could talk.