By many accounts, Viacom’s vice chair has been a big presence at the company’s Times Square headquarters since late August, after the ouster of Philippe Dauman as chairman-CEO was completed. Redstone led the charge in bringing in five new board members and instigating a comprehensive review of the company’s operations. Sources said as part of that process, she’s made a point of meeting with Viacom employees at all levels, acknowledging the recent upheavals and expressing her belief that the company is now back on track. She’s been spotted having friendly exchanges with the security team in the main lobby.
The drama that has enveloped Viacom during the past year has naturally boosted Redstone’s profile as the key player in guiding the empire of her 93-year-old father, Sumner Redstone, the controlling shareholder of Viacom and CBS Corp. Although she has done few media interviews amid the storm, Redstone is set for a high-profile speaking slot on Thursday at the New York Times’ DealBook: Playing for the Long Term daylong conference.
Redstone’s outreach at Viacom has coincided with the push by National Amusements, the Redstone family holding company, for CBS and Viacom to consider recombining in an all-stock merger. At National Amusements’ behest, the boards of Viacom and CBS created special committees in late September to study the possibility of a merger. (Viacom and CBS were brought together by Sumner Redstone in 2000 and split up again in 2006.) Shari Redstone has recused herself from both of those committees, given her 20% ownership stake in National Amusements.
Redstone has told colleagues and friends that she does not want to have an executive role at Viacom beyond her board duties. But her tour of the building and the depth of her involvement in the operations review has spurred speculation to the contrary. The urgency to shake up the status quo at Viacom was underscored by the company’s fiscal fourth quarter earnings, which laid bare the company’s weaknesses in the key metrics by which media companies are judged: domestic and international advertising and affiliate revenue. And Paramount Pictures posted a whopping $137 million loss for the quarter. The studio’s vice chairman, Rob Moore, was ousted in September and questions remain about the future of chairman Brad Grey, despite the recent vote of confidence from Shari Redstone and the Viacom board.
Sources close to the company say Redstone of late has been engaged with high-level decision-making related to Paramount, MTV, Nickelodeon, VH1, Comedy Central and the other cable channels that are the core of Viacom’s business. Sources say she has remarked at how much she’s enjoyed working closely with her father, who lives in Los Angeles, to help chart a new course for Viacom. As evidenced by its earnings this year, the company has felt the squeeze of a fast-changing business environment for Paramount and its cable channels. Viacom’s stock has been battered by all the corporate turmoil and the perception that the company under Dauman was slow to respond to the changing marketplace.
Shari Redstone’s immediate goal at Viacom was getting a strong CEO in place at Viacom following Dauman’s exit. She’s said to have high hopes that newly appointed acting president-CEO Bob Bakish will bring stability and a renewed effort to address structural problems within the company.
In the past week or so, the sentiment among CBS and Viacom insiders that the reunification is a fait accompli has shifted. There’s been more discussion internally, sources say, about the prospect of the company continuing in its current form for the foreseeable future. To wit, Viacom appears to be moving ahead with a big-ticket $400 million acquisition of Argentina’s Telefe broadcast network, an asset that fits with Bakish’s area of international expertise. Observers expressed some surprise at that move, given the potential for new management to be soon calling the shots on resources and priorities for the company which is already grappling with a heavy debt load.
When the CBS-Viacom merger was first publicly proposed by National Amusements in late September, there was talk that a deal would be done by Thanksgiving. But in his announcement as acting president, Bakish vowed that the company would not “stand still” while the merger considerations were studied. And CBS chief Leslie Moonves once again expressed caution about a deal coming together and emphasized that CBS’ internal discussions were still in the “very early stages.”
“While the timetable and outcome are unclear, our strategy is not,” Moonves said Nov. 3 during CBS’ third-quarter earnings call. “If it looks right and is structured properly, (a Viacom merger) could be an attractive opportunity. If not, we are very excited about our prospects.”
Sources close to Redstone say her primary focus remains on running her Advancit Capital private equity firm that invests in media, entertainment and technology startups. Her exposure to new business models and new thinking about media and entertainment has been instructive as Redstone works with the Viacom board to re-energize the company.
She is understood to have the right, per the terms of her father’s trust, to become chairman of Viacom and of CBS after Sumner Redstone’s death. Sumner Redstone gave up the chairman’s post at both companies in February under pressure from investors and as the legal fight flared over his mental competency.
Shari has already reached an agreement with Moonves ensuring that she will not exercise her right to the chairman’s post at CBS. At Viacom, new board member Thomas May was elected non-executive chairman in September. Shari Redstone’s long-term role is less clear, especially if Viacom and CBS remain separate entities. But there is no question that she has become a more prominent voice at the table, in the boardroom and beyond.