Sumner Redstonethinks he'll live forever. Last fall on CNBC's "Conversations with Michael Eisner" when Eisner asked what his succession plan was, he said he'd live forever. If Thursday's news is any indication he was serious! It's been widely reported--first in Fortuneand then also immediately in The Wall Street Journal,that Sumner and Shari Redstone had a huge falling out and that Shari would be stepping down fromViacom's board--presumably trading her stake in Viacom and CBS for full ownership of National Amusements, the theater chain which she currently runs and also has a stake in.
But Shari Redstone's representatives are denying this, telling CNBC "Shari Redstone remains a committed member of both the CBS and Viacom boards. She has no plans to resign and looks forward to continuing her work with both companies." What we do have confirmation of is the fact that the father-daughter relationship has totally deteriorated. But it sounds like Shari has no intention of leaving, but that she's getting pushed out.
This is one dysfunctional family. Sumner's son Brent just sued him--and just a few months Sumner settled and bought out his billion plus stake in the family. And Sumner and Shari have sparred plenty in the past over the future over National Amusements. Sumner thinks it's a bad business, they're better off investing in casinos, Shari thinks it's smart and that there's an untapped market in higher-end theaters that are entertainment destinations.
This time they're fighting (according to Fortune) over corporate governance and executive compensation issues. It all started when Sumner split up the companies and put Shari in charge of assembling the new boards. She was pushing for total accountability for compensation, and apparently that caused a rift. (These media execs are paid highly).
Yes, we know that Sumner has a history of booting those who look like they'd make a good replacement for him, but what I think is most interesting here is what this means if Sumner never appoints a replacement. Media Tech Capital Partners Porter Bibb called the two companies (without Sumner) "sitting ducks for private equity". The bottom line is, without Sumner at the helm, a sell off of the two companies' various assets is increasingly likely. Pali's Rich Greenfield told me that no succession plan is great for investors because it means that Viacom and CBS's assets, which he thinks are undervalued, might actually get a higher value- which means ka-ching for shareholders.
Interesting theories for sure. For now the question remains-- will Shari cede to her father in this standoff?
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