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I Am American Business

Sumner Redstone

Producer Notes

The freight entrance was notified. The service elevator was on call, waiting for us. The travel time between floors, from the studio, to the boardroom, to the Paramount screening room was all tightly scheduled. When the interview subject is Sumner Redstone, even the building staff pays attention. Sumner Redstone is the boss of everyone's boss. The view from his sky-high office is spectacular. But he's more likely to be watching the stock prices on the screen by his desk. During our interview, he went from guardedly skeptical, to tough, to completely charming all in the space of twenty minutes. Sumner Redstone bought Viacom at the age of 63, when most people are thinking about retirement. Now, more than 20 years later, he still rules the company with an extraordinary strength of will.

Video Interview

The "I Am" Q&A

What kind of car do you drive?
Lincoln Towncar. Actually, I have DirecTV in it. So I can watch CNBC in my car when I drive.

What’s your favorite place to go?
I love my home in Los Angeles. Although, I love New York, too. I go back and forth between New York and Los Angeles and I do travel internationally a great deal. I’ll be going back to Dubai, for the third time, to open some Pan regional Arabian channels for Viacom. And also to launch a Nickelodeon theme park.

What website do you like to visit?
I’m not in the website business. I generally watch linear programming.

What’s your favorite drink?
You want to know a really good drink? Here’s what you do. You get a tall glass. Put in some ice. Put in some Grey Goose vodka. Put in a little bit of cranberry juice and orange juice and it makes a great drink, but not too much!

What’s your favorite food?
I eat only, all day long, antioxidant foods. Which are very good for your health. They prevent all kinds of diseases and they keep you looking young.

What’s your idea of fun?
I enjoy traveling. I enjoy going out to a good restaurant. I enjoy staying in nice places. And I enjoy being here. And I enjoy being interviewed, I really do.

What’s the most fun for you at work?
Well, work is work. Work is also play, if you enjoy what you’re doing. And all my life I have enjoyed what I’ve been doing no matter how tough it’s been - and it has been at times. I’m turned on by the challenges and I really enjoy what I’m doing. Also, I enjoy the people around me who work at Viacom and CBS.

What movie star do you like?
You’re in dangerous territory right now! I’ll tell you what, I like all the stars who work for Paramount.

What personal weaknesses do you forgive in someone?
Well, one I cannot forgive is patience. Patience is a virtue that I do not respect. If you’re patient, you’ll never go anywhere. It takes impatience to drive you to succeed. So, I can’t forgive that. Other than that, I’m a very forgiving and loving person. You know what Mandela said? “Without forgiveness, there is no future.” People should remember that.

What personal qualities do you admire in business?
Competence. Commitment and character. However, without character, forget about competence and commitment.

Are you doing anything green? Anything for the environment?
Yes, I’m encouraging the ex-Vice President. I was President when the Paramount documentary won. I think all of us are concerned about the environment. And I hope the concern results in some action. I was watching today a very interesting program on electric cars. I drove one a long time ago, but they’re far more developed. They do help the environment and also relieve the strain on gasoline and oil. I’m afraid it’ll take a long time. If we keep working at all of these subjects, all of these areas, we will succeed.

What was your greatest moment in business?
I guess you’d have to say the acquisition of Viacom because without Viacom, there would have been no Paramount. And there would have been no CBS. So I guess the greatest moment would have to be the very difficult battle with and acquisition of Viacom.

What is your dream?
Keep living forever. Keep working forever.

What is your present state of mind?
Optimism. I’m hopeful. I’m confident in the long-term growth of both Viacom and CBS. I’m optimist about my personal life. And I believe that the only philosophy of life that’s compatible with sanity is optimism.

Transcript

CNBC:
What do you remember from your years at Boston Latin?

SUMNER REDSTONE:
At the Boston Latin School competition was fierce. But what I learned was that the only thing that really counts is competence. Commitment. Character. What doesn’t count is race, religion, gender, or where your family is. It’s competence, in the final analysis.

CNBC:
How did they instill that in you?

SUMNER REDSTONE:
They didn’t instill it in me. It was a clear observation. It was my experience in the competitive environment that was fiercer than anything I experienced in later life, including all the battles at Viacom and CBS.

CNBC:
You were in fierce competition from an early age?

SUMNER REDSTONE:
Yes, from an early age. I always wanted to be number one. You know, I wrote a book called The Passion to Win. I’ve always wanted to win. That doesn’t mean I always have, or I always will, but it’s been my objective throughout my life. Whether in school or in business.

CNBC:
What inspired you, at an age when a lot of people think their business career is ending, to take on something as big as Viacom?

SUMNER REDSTONE:
Well, first I never will think my business career is ending. I expect to live forever. And I do everything possible to bring that result about. Coming back to your question, I saw that television was a growth industry. That MTV and Nickelodeon would travel. People were saying MTV was a fad. That fad now reaches just a billion people. People were saying that Nickelodeon would never work because it was a kids’ channel. You have to follow your own instincts. Today, Nickelodeon’s the number one channel on television. So you have to do what your instincts tell you to do and what you intelligence tells you to do. But I saw it as growth. And I had reservations about whether the motion picture industry would be a growth industry. That was what led me to Viacom. Apart from the fact that the management was trying to buy it cheap.

CNBC:
You took on a huge financial risk. Can you tell us a little bit about that?

SUMNER REDSTONE:
Well, yes, we sold about everything we had. I had acquired a lot of media stocks. In those days, it meant a great deal, because they weren’t part of conglomerates. We made some money. We borrowed some money. As they say, we bet the ranch. Something like five to seven hundred million dollars, which is now worth about eight billion.

CNBC:
What was people’s reaction?

SUMNER REDSTONE:
They’re reaction was, I overpaid. MTV would fail, it was a fad. And who would think that a children’s channel like Nickelodeon would ever work. I pay a lot of attention to Wall Street, but there are times you have to follow your own judgement, and your own instincts. That is a time I did not follow Wall Street.

CNBC:
How do you feel about Wall Street today?

SUMNER REDSTONE:
I think Wall Street is generally on the ball. Wall Street generally has it right. However, if you’re talking about the long term growth of companies like Viacom and CBS, I have to factor in what I think will lead to the long term growth of both companies and the long term growth of the shareholder’s value. That’s where I am focused.

CNBC:
You have been running Viacom at a time of extraordinary growth. Do you think it’s still possible to have that kind of growth?

SUMNER REDSTONE:
Yeah, absolutely. I think both companies have the potential for great growth. And the reason I think is mostly this… Many years ago, I coined the phrase, “Content is king.” And both Viacom and CBS are major producers of great content. What attracted me about Nickelodeon, MTV, VH1, Comedy Central, BET and so on, are the great programs that CBS has, like CSI, CSI: Miami, CSI: New York, Two and Half Men, Survivor, the best news shows: 60 Minutes. They both are producers of great content and they both are producing new content, like in the case of CBS: Cain, which we expect great things from.

CNBC:
I know that both Viacom and CBS are acquiring new distribution outlets. How much of your energy is going into content, and how much do you have to pay attention to new distribution?

SUMNER REDSTONE:
Well, I think they go together, obviously. Although content is king, as I say, people don’t watch CBS, they watch CSI. They don’t watch Viacom, they watch MTV. So our job is to continue to create the most innovative creative consumer-friendly content, at both companies, and then see to it that it’s on every platform and at every place on the planet.

CNBC:
How do you feel about the dominance of iTunes, and some of these other distribution channels?

SUMNER REDSTONE:
They’re all good businesses. We have a role in every new business. We’ll go anywhere, as long as we get paid for it.

CNBC:
The advertising market’s changed a lot. Before, if you ran a program on one of your networks, you had a hundred percent of the advertising. But now if you’re running it through other distribution venues, you’re sharing the advertising. How does that affect your businesses?

SUMNER REDSTONE:
Well, it’s fine, as long as we get the most of the share and what we’re entitled to. Remember, take Viacom, we spent decades creating that programming. And we expect to get paid for it. We expect to get paid at a value that’s commensurate with the value of our content. If we do, we’re glad to see it anywhere.

CNBC:
How about the international market?

SUMNER REDSTONE:
It’s very important to us, particularly for the future. Right now, the fastest growing part of MTV is MTV International. In a hundred and sixty countries and territories, we reach a billion people. We intend to keep growing. I, as Philippe says, have been planting the Viacom flag all over the world, which means China, Europe, Germany. I’ve recently been to Germany and Turkey. I’ve also made my second trip to Kuwait and Dubai, and I’m going back to Dubai in the fall.

CNBC:
Can you talk about user-generated content?

SUMNER REDSTONE:
There is a lot of user-generated content, but companies like Google are not getting rich on user-generated content. They’re getting rich on the content of companies like Viacom. And we’re not going to put up with people taking our product and not paying for it. They want our product? They can have it at the right price.

CNBC:
You had a phrase once, “Success is built on failure.” Can you talk about that?

SUMNER REDSTONE:
What I said is that success is not built on success. Not great success. Great success is built on failure, frustration, even catastrophe. And how you deal with it and how you turn it around- that’s what creates success. That’s what proves your character.

CNBC:
And you’ve had tremendous success, but you are facing challenges.

SUMNER REDSTONE:
Always. Life is a challenge. Every time you make a strategic move, it’s a challenge. Every time you create new programming, it’s a challenge. But without challenges, there’s no place to go.

CNBC:
What would you want Wall Street to know about Viacom and CBS, right now?

SUMNER REDSTONE:
I’d want them to know a number of things. These are great companies. They have great assets, and most important, they have great management. There are no managers better than Philippe Dauman and Tom Dooley at Viacom, Les Moonves at CBS. And I’ve always said it’s what management brings to the assets of the company that separates the winners from the losers. So that’s why these two companies will be winners. We’re focused on creating long term growth, operational growth, and long term value, for the stockholders of both companies.

CNBC:
How does the stock price affect your daily outlook?

SUMNER REDSTONE:
Well, in a way, the stock price is a report card. However, the report card is not always accurate. The report card I’m interested in is not tomorrow’s, but the report card of a year from now. Two years from now, three years from now. In other words, I’m focused on the long term growth of both companies and the long term of operation of the stock.

CNBC:
What keeps you going? What does winning mean to you?

SUMNER REDSTONE:
I think it means what it means to everyone else. Winning is winning. Winning is coming out best. Winning is being in so many frays as I have been at Viacom. Barry Diller, Malone- in order to preserve the integrity of your company and the growth of your company you will be involved, time after time, in battles that you do not want, but that you have to win.

CNBC:
Not everyone has your drive. Not everybody has your energy…

SUMNER REDSTONE:
They’re unfortunate. I’ve always been driven, since I was six inches high. And I continue to be driven today, to the same extent.

CNBC:
You took a huge risk, when you risked everything…

SUMNER REDSTONE:
I believe in taking risks, but not in taking reckless risks. Not in taking irrational risks. One has to determine how important the risk is, the degree of the risk and how important the reward and the goal is. And I think I’ve been able to do that for the most part, successfully.

CNBC:
All media companies are under a kind of siege now from the Internet…

SUMNER REDSTONE:
I don’t see that at all. You have that wrong. The Internet probably, right now, accounts for 5/6 percent of the operational earnings of our companies. Now, it’s growing. But we know how to grow it. It’s just another source of revenue. Advertising revenue for our companies. We just have to be able to- and we are- moving our product to every platform. Whether it’s the Internet, whether it’s cell phones, whatever. And we’ve been successful in doing it. We don’t see that as a risk, we see it sincerely as an opportunity.

CNBC:
Is there any particular program you like?

SUMNER REDSTONE:
I like them all. I watch CBS and Viacom programming a lot. I think everybody watches shows like CSI and Two and a Half Men. And the right generations watch MTV, Nickelodeon, VH1, BET, and so on. So, I have to love them all.

CNBC:
When you talk to students, what do you talk to them about?

SUMNER REDSTONE:
I talk about the media industry. That’s what I’ll be talking about at BU Law School. I taught at BU Law School the law of the entertainment industries. And the students seemed very interested. I taught about the media industry generally, including digital, which you touched on. Many of the things we discussed today. I’m thrilled to be there. I always enjoy teaching and I always enjoy the interest that the students show.

CNBC:
What is the entrepreneurial spirit?

SUMNER REDSTONE:
You have to begin with a commitment to excellence. You have to begin with a philosophy that nothing is impossible. You have to have a lot of drive, a lot of commitment, a lot of competence, and maybe some good fortune along the way. It takes a lot of ingredients to create a success.

CNBC:
Young people today are interested in starting their own businesses, because it’s easier. It wasn’t that easy when you started a business, now you can really just start a website…

SUMNER REDSTONE:
That’s true, but I know from experience, starting a new business is not easy for anybody. It won’t be easy in the future, wasn’t easy in the past, and don’t expect it to be easy now. It’s a tough job.

CNBC:
Are you particularly concerned about the future?

SUMNER REDSTONE:
Well of course when you spend, as many years as I have been in the industry, there are times when you’re concerned about something that’s going on, like there was a time when Blockbuster was a problem. But we rescued it. And I went and made deals with the studios to share in the revenue. But there’s never been a time I was ready to give up. I look at everything that may be negative, as a challenge to be overcome. And that has succeeded so far.

CNBC:
Do you think this is a time of greater change?

SUMNER REDSTONE:
I think this industry is exciting because it’s evolutionary. It’s always changing. Sometimes it’s revolutionary, but if you stay with those principles you can succeed no matter what the status of the industry. Static. Changing fast. Stay with it.

CNBC:
When do you watch CNBC?

SUMNER REDSTONE:
From the moment I get up in the morning, before the market opens, I have CNBC on. I run a stock buyback program and it’s important that I watch the events that occur, as I buy stock.

CNBC:
Are there any particular programs that you watch the most?

SUMNER REDSTONE:
Well, if you have CNBC on you see it all, whether it’s Squawk Box, Power Lunch, you see I know what I’m talking about. I do watch.

CNBC:
Any anchors you particularly like?

SUMNER REDSTONE:
Well, I like David Faber, the Madman. I watch them all.

Related Links

http://www.viacom.com