Sumner Redstone has to repay $800 million in debt by December 19. With just a few weeks left to go, he's in the midst of negotiations to restructure the $1.6 billion in debt held by his private National Amusements, which Redstone's daughter Shari Redstone runs.
Sumner Redstone has said he won't sell any more shares of CBS and Viacom , of which he's chairman, after National Amusements debt obligations forced him to sell $233 million in nonvoting shares in both companies. Now Redstone is moving forward with plans to get that debt under control.
Over the weekend Redstone sold his 87 percent stake in Midway Games (best known for its "Mortal Kombat" franchise) to a private investor, Mark Thomas, for $100,000 and the assumption of more than $150 million in debt. Redstone spent more than $500 million buying up that 87 percent stake, and Midway has been bleeding since Redstone took control, so it's very safe to say, he's taking a huge loss on this sale, somewhere north of $500 million. This doesn't help Redston'es cash situation, but it does give him a roughly $800 million tax benefit against income earned this year or to help when he sells other assets.
So, what will Redstone sell next? There's no question that Redstone's investment in Midway was difficult to say the least. He invested in the company to create other hit games and to transition the company to a more high-tech future. But Redstone is a lot more emotionally investd in holding on to his other companies-- Viacom in particular. Next up? movie theaters. It would make most sense for Redstone to sell all or part of his National Amusements movie theater chain with screens in the US, Latin America, the UK and Russia.
Analysts have valued the chain at around $500 to $700 million, but Redstone says they're worth more because his company doesn't just own the theaters, but also owns the property the theaters are on. Meanwhile Redstone is surely working hard to extend that December 19 deadline and give himself more time to sort out his debt situation. Not such a happy holidays for the Redstone clan.
- Sumner Redstone sells stake in Midway Games
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