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Sumner Redstone, the chairman and controlling shareholder of Viacom and CBS says he loves his daughter Shari, but he doesn't want her to succeed him in his role.
"The reason she won't succeed me is not she, that she isn't qualified," Sumner told CNBC's David Faber in an exclusive interview. "But I have made it clear that good governance requires — these are two public companies, they're not private like national, that two companies, these private companies — the boards should decide who succeeds me. I'm not worried about it 'cause it's gonna be another 20, 30 years."
(Correction: An earlier version of this story incorrectly indicated above that Sumner felt his daughter was not qualified to succeed him and that a deal had been reached to buy out Sumner's daughter's interest in CBS and Viacom.)
The 85-year-old Redstone gave his daughter high marks for her stewardship of the privately held movie theaters she runs, but made it clear that succession is not in the cards. (See video below for more on this. For a full profile of the media mogul, see the videos at right).
Shari Redstone, 54, currently runs the Theater Circuit National Amusements, but for some time was widely considered her father's heir apparent in the role of chairman of CBS [CBS
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] and Viacom [VIA
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]. She currently sits on the baord of both companies and controls 20 percent of the holding company, also called National Amusements, that owns the controlling stake in Viacom and CBS.
"As far as operating the circuit, I believe she's number one," Redstone said. "She's in a fabulous job. I think she's done a better job than — every head of any circuit. And that is generally known."
Told of Mr. Redstone’s comments, Nancy Sterling, a spokeswoman for Ms. Redstone, told The New York Times the comments were “absolutely inaccurate.” Sterling said that “there is no final agreement” and as a result, “this calls into question the veracity of anything else he might say.” (Click here to read the New York Times story).
She acknowledged that the father and daughter were in negotiations — which included a confidentiality agreement — and said she was “only speaking because he broke it first.”
In a separate e-mail statement to CNBC, Sterling said that Redstone would not publicly comment on her father’s characterization of the talks:
"Ongoing discussions between Ms. Redstone and Mr. Redstone were, by mutual agreement, supposed to be confidential and Ms. Redstone will not publicly comment on Mr. Redstone’s characterization of them. Ms. Redstone will say that these discussions have not resulted in any final agreement and that, as President of National Amusements and its co-owner with Mr. Redstone, she is committed to fully protect the best interests of National Amusements, including its subsidiaries Viacom and CBS, and to ensure that any successor to Mr. Redstone as Viacom and CBS Chair has the full support of the companies’ shareholders and directors."
The family holding company, National Amusements, holds the family’s stakes in CBS and Viacom, as well as a 1,500-screen movie theater chain. Redstone, owns 80 percent of National Amusements, while Shari Redstone, 54, owns 20 percent. National, in turn, controls 79 percent of the vote in Viacom, and 76 percent of the vote in CBS. National owns 11 percent of the equity of each media company.
As part of the deal, Shari Redstone would leave the boards of both CBS and Viacom, effectively ending her hopes of succeeding her father at the helm of the companies.
“I really am doing this to accommodate Shari,” he said, adding that she “has done a great job running the circuit, operating it.”
Mr. Redstone’s falling out with his daughter, which spilled into public view last summer, is one of several conflicts he has had over the years with executives, family members and even movie stars.
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