Interview Transcript: Sumner Redstone
BARTIROMO: So here you are, 82 years old, looking 65...
Mr. REDSTONE: We agreed on 67.
Mr. REDSTONE: You know, you're double-crossing me.
BARTIROMO: But you're controlling, basically, three publicly traded companies.
Mr. REDSTONE: Yes, I am.
BARTIROMO: OK. CBS, Viacom and Midway.
Mr. REDSTONE: Yes.
BARTIROMO: Do you have a transition and a successor plan?
Mr. REDSTONE: First thing is wake up. I'm not going anywhere. I'm going to be here for a long, long time, so I don't have to plan too intently. You know, my daughter is vice chairman of CBS and Viacom, president, and she's a very viable candidate, in my opinion. On the other hand, my feeling is that ultimately, the boards of the companies should decide who succeeds me.
BARTIROMO: Is it fair to say, though, that your daughter Sherry will take over the 80 percent boarding control of the stock?
Mr. REDSTONE: She does--in my...
BARTIROMO: Yes, yours.
Mr. REDSTONE: My stock? I can't say because that's determined by my will. So I can't really tell you the inside of my will. But Sherry already owns 20 percent of National, she's president of National, she's vice chairman of both companies. She is a credible candidate but I insist that good governance would require that the companies decide who they want to succeed me if I ever decide to go.
BARTIROMO: But the idea of voting power, I mean, we're watching this whole story play out now with Dow Jones and News Corp.
Mr. REDSTONE: Yes.
BARTIROMO: You know, from a shareholder perspective, is it a good thing that so much boarding control of the company is in the hands of one person? Wouldn't your stock go up if people thought you were open to a sale, if people thought you were going to lessen your control?
Mr. REDSTONE: No. Pardon me, pardon me. The interesting thing is that Viacom B, the non-voting stock, usually does better than the voting stock. Control is everything. You want to know why? Ask Ted Turner. Control is everything. I've used that control always for the benefit of the shareholders. I never put my interests ahead of--and I mean that. You know, I worked for the company for 13 years without even getting paid, you know? I don't seen any harm in control. The issue is how you utilize it. If you utilize it for selfish purposes, it's terrible. If you utilize it for the benefit of the stockholders, it's terrific.
BARTIROMO: Would you consider taking one of these companies private?
Mr. REDSTONE: You know, that has been suggested to me and to Philippe and to Les. At the present time, we really like the companies the way they are. As I said, they're doing very well. Their operations are great, the stock is doing well. Would we someday consider other alternatives? Yes, but certainly not on the immediate horizon.
BARTIROMO: So private equity clearly would like to take one of these companies?
Mr. REDSTONE: If we decided to take one of these companies private, there'd be so much private equity offered to us, we'd have trouble. Why? The companies are great, they really are. And the management is great. You know, I've often said it's what management brings to the assets of a company that separate the winners from the losers. And these companies are winners, a lot of times because of their management.
BARTIROMO: But don't you think that the stock would go up if, in fact, there was a feeling that you were considering this?
Mr. REDSTONE: Yeah, but I'm not going to do anything to move the stock. That's not my job. My job is to see that the companies operate at full power and that they do well for the stockholders. I'm not going to spread a story that something might or might not happen in order to enhance the stock. That would be inappropriate. But I say again, could it happen? Sure. We look at all alternatives. But on the immediate horizon, I don't see it because we all love the companies the way they are because they're doing well.
BARTIROMO: What do you think about News Corp trying to get Dow Jones right now?
Mr. REDSTONE: You know, I happen to be a great admirer of Rupert and I consider him a great friend. But I don't know enough--know really enough about the economic and political implications of that transaction to say whether it will happen or not. Money does speak, though, but then principle speaks, too.
BARTIROMO: Well, would you be interested in Dow Jones?
Mr. REDSTONE: No. The newspaper business, it's a great paper, I read it every day, but the news business is not a growing business. We only interested in businesses that can grow quickly, and that's not one. But for Murdoch, of course, he's been in that business all his life, so it's understandable why he would go for it.
BARTIROMO: What about doing some kind of a partnership with Rupert on MySpace? Wouldn't something digital make sense?
Mr. REDSTONE: In the first place, we once lost MySpace, as you know, to Rupert. I was very sad at the time. But there are a lot of new MySpaces in the market now and we're looking at all of them. MySpace is not the only MySpace in the world in which we live.
BARTIROMO: Prices are going up after that deal.
Mr. REDSTONE: Well, I know, but they might come down. We'll have to see how the deal actually works.
BARTIROMO: Is that the beauty of the Internet, in your view right now, the social spaces?
Mr. REDSTONE: I think that's a great part of the beauty. People want to interact, provide their own programming. It's all good. You know, one of the things I love about this industry in which I've lived so long, it's exciting, it's evolving. Sometimes it's revolutionary. Things are happening that are interesting. And in the area of do, well, we really don't know what it's going to look like in five years. We know it's growing, we know we're participating, we know we're doing everything we can. As I said, our revenues will double in 2007. But we don't know what the look of it will be five years from now, except that it will be bigger.
BARTIROMO: Do you think the investor base has changed for CBS and Viacom? I mean, people are now wondering, OK, where's the growth company? Eighteen months ago, when you set out on this plan, you said Viacom is the growth company. And then you're seeing all this buy back of stock, you're seeing CBS raise the dividend. Which is the growth company? Which is the value company?
Mr. REDSTONE: I never thought, never, that Les' company would be a non-growth company. Anyone who knows Les, who knows he has it, couldn't believe that. There may be more growth opportunities concerning the nature of the assets for Viacom, but both companies are doing well. Look, CBS raises its dividend every quarter. CBS just did an enormous--is doing an enormous buyback. CBS is, like Viacom, committed to enhancing the value of shareholders. I don't think there's any company in the world that works harder than Viacom and CBS to do what's right for their shareholders. That's always on our minds.
BARTIROMO: What are they going to do to accelerate growth?
Mr. REDSTONE: What are they going to do? Well, which one you talking about?
Mr. REDSTONE: You can see CBS right now. Do you know you get CBS 24 hours a day? They're also moving to all platforms. Look, Viacom is all over the world. And I have traveled all over the world for Viacom. Don't rule out CBS. CBS is successfully in China. CBS just did an underground railway deal in London. I went to Dubai, primarily to talk to an old friend, the crown prince. He is an old friend. You know, Dubai went from a desert to a construction site.
Mr. REDSTONE: You can't move. So he was talking about building six and eight-lane highways. And the possibility that CBS could do very well in the build...(unintelligible)...business in Dubai. So what? I talked to Les about. He has a team there. That's what we do. We try every way to enhance our business and our revenues.
BARTIROMO: So there's articles, you know, about you wanting to perhaps look at Les Moonves' contract now. I mean, is this partly tied to the fact that you didn't think CBS was a non-grower? You just said that yourself.
Mr. REDSTONE: No. I don't know where you're going with this one. I don't examine Les' contract. Les has a good contract, he's there for a long time, and he's told me that he will never leave as long as I'm alive, which is another reason I have to live forever. So Les is great. I don't examine his contract. I know what his contract is. I think he earns every dollar he gets.
BARTIROMO: Well, there was so much drama over...
Mr. REDSTONE: Well, no. The reason was that I changed the nature of my contract to take less cash and more equity. But every person's circumstance is different. Some people need the cash. I didn't.
BARTIROMO: There was so much drama over the firing of Tom Freston. Why did you only give him eight months on the job running Viacom? He was here for 20 years. Everyone was shocked by it.
Mr. REDSTONE: Now, first, I'd rather talk about the future than the past. I have great respect for Tom but he wasn't there eight months because he was doing the same thing for a long time before when he had the same assets under his control. So let's clear that up. He wasn't there for eight months.
BARTIROMO: Fair enough.
Mr. REDSTONE: Now, OK. Furthermore, did I like doing that? No. I have one commitment and that's to do what I know is best for Viacom. It had little to do with Tom. I determined, the board determined, the best people to lead Viacom were Philippe Dauman and Tom Dooley. When they were my deputies, was a most successful period in the history of Viacom. The stock tripled. I know them well, the board knew them, the board decided that we did the right thing. It is not a reflection on Tom, who did a great job. I like Tom. I cannot operate on who I like or dislike. I have to operate what is good for Viacom, and the decision was made that way.
BARTIROMO: Of course. What about the film studio, Paramount? A lot of people talking about the fact that you've added a lot of talent, and margins are still below...(unintelligible)
Mr. REDSTONE: Well, pardon me. Paramount is on a...(unintelligible). The acquisition of Dreamworks was one of the best deals we, I ever made in my life. The Dreamworks pictures, like "Dreamgirls," like "Blades of Glory," like this horror picture they have, all doing extremely well. And watch...
BARTIROMO: They've got "Transformers" coming out.
Mr. REDSTONE: Watch, watch. "Transformers" will be a giant. And watch this. We're only $40 million behind Sony in market share. While "Transformers" is playing, Paramount from near the bottom to the number one studio in market share. That's a prediction; bank on it.
BARTIROMO: OK, good. I'm going to bank on it. Let's...
Mr. REDSTONE: No, they're doing wonderfully at the studios. They really are.
BARTIROMO: Let's talk about what else you're doing. You've been traveling all around.
Mr. REDSTONE: Yes.
BARTIROMO: You're controlling these three companies. How do you do it, Sumner?
Mr. REDSTONE: I love--I love what I do. You know, I get--I came back from China recently, true story, I had a few people with me, younger than I am. They all went to sleep. I played tennis the day I got back. I have a lot of energy, I love what I do, I'm excited by what I do. That has a lot to do with my energy.
Mr. REDSTONE: And also, eat right foods and I exercise every day.
BARTIROMO: And you're really focused on that, taking care of yourself?
Mr. REDSTONE: I do. I think if I don't take care of myself, nobody else well.
BARTIROMO: Do you...
Mr. REDSTONE: And you remember that.
BARTIROMO: I do.
Mr. REDSTONE: I send you that, I won't mention it.
Mr. REDSTONE: (Unintelligible)...you can interview me every day or every month, every year.
BARTIROMO: Thank you. I would love that. People are saying, `Look, Sumner has to control everything.' You just said it yourself, control, control, control. Are you a control freak?
Mr. REDSTONE: I don't like the world freak.
BARTIROMO: Well, you know, are you so controlling that you have to dominate everything?
Mr. REDSTONE: No. I have to--no. See, there's a difference between control and dominate. Let me explain it to you. I control, let's say Viacom and CBS. But I do not intrude. Les calls me every day, whether he's going to sell a radio station, a television station...(unintelligible). By the way, he does a great job with all of it. And asks my opinion. And I don't insist that he call me. Philippe calls me sometimes twice a day, depending on what--the India deal, he discussed that with me and the strategy for weeks before we did it. I do not intrude. I do not demand this. They think it's in their interest to talk to me and maybe they believe, after centuries in the media industry, I have some guidance that's worthwhile to offer.
BARTIROMO: We--all of us in the business, are worried about getting paid, about making sure content is used but used for a price.
Mr. REDSTONE: Yes.
BARTIROMO: You're doing business in China. How do you justify that? Are they stealing content?
Mr. REDSTONE: No, no, no. Please. Let me tell you about China.
BARTIROMO: Tell me about China.
Mr. REDSTONE: I have gone to China at least seven or eight times as I travel the world in the last few years. China's become an extremely important market for us. And my job, you have to understand, in China, is to create relationships of friendship and respect and trust. And that's what I've been doing. I know personally every minister in China. We don't bring New York or Europe to China, their music, we bring China to the rest of the world.
BARTIROMO: But are they stealing content?
Mr. REDSTONE: They're--listen! Let me tell my story. You can tell yours in another interview.
BARTIROMO: When you interview me.
Mr. REDSTONE: No, but seriously, they've--they respect us because of that, that we create Chinese music. We have--in China, you will see MTV and Nickelodeon in millions of homes. No other company can say that. You'll only see the other brands in hotels or compounds. That's because I've spent so much time developing these relationships. (Unintelligible)...used to say, `Sumner, you're my ambassador to the rest of the world, and me meant it. Today, not only do you see that, today, Nickelodeon animation, as a result of a deal I made with CCTV, TV is broadcast to 125 million homes. We have a joint venture with Beijing, we have the only branded channel in China, MTV China. We have a deal with Shanghai Media to co-produce children's and adult programs. And by the waywe're the first company to be allowed--and I'm to qualify it--to have an equity interest in a Chinese media company, Shanghai Media, that's now on hold as a result of the new tougher regulatory environment in China. But I will tell you this: We're treated better than anyone else, I had a big delegation in my home the other day, and they said, `Sumner, come to China and meet the new president. China will be open for you and your companies.' And I trust that.
Final question, and this is a follow-up to you saying, look, at this time, we're not going to consider doing anything private. Is anything for sale? Look at Clear Channel Communications, being sold for 12 times cash flow. Whynot sell outdoor? Why not sell radio?