Last week, Sumner Redstone, majority owner of CBS and Viacom, kicked Viacom CEO and protégé Philippe Dauman off the trust Redstone setup to run things after his death. Suits and countersuits have been filed as the Redstone saga continues.
William Cohan is a contributing editor at Vanity Fair where he’s reported on the Redstone story extensively. Cohan spoke with Kai Ryssdal about how the case is progressing.
Who is Sumner Redstone and why does he matter in corporate America?
Because Sumner is a kind of media mogul from a bygone era. He’s pretty much a self-made man and he created a fortune for himself worth around $5 billion. And he controls two very important companies in the media industry, Viacom and CBS. And now, with his advancing age there’s a big fight about what will happen should he die.
How much of what’s really happening here is palace intrigue and how much is substantive and could affect Viacom and CBS?
I think it’s a healthy dollop of both. But it really is substantive. Because what happens to this trust and who controls this trust will decide what happens to CBS and Viacom after Sumner dies. By the way, there’s no requirement that this trust sell either Viacom or CBS… There’s probably no compelling reason to sell either company at the moment. Especially Viacom, which the stock is down something like 40 percent in the last year.
So if stock is down 40 percent, why should Philippe Dauman be on the trust anyway?
I think you’re seeing play out in real time, virtually almost every day now, what will result in Philippe Dauman’s departure from Viacom, I would say in the very near future.
What about Redstone’s daughter, Shari Redstone, who stands to take over control of the trust and thus these two companies?
That’s true, and an important point to point out is that she was a long time estranged from her father Sumner. He tried about two years ago to buy her out of their holding company, National Amusements, for about $1 billion dollars [and] she turned that down. Theoretically they have reconciled through all of this and this will definitely allow her to take control of the trust and direct the outcome of what happens with Viacom and CBS.
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