The reminders came often from Sumner Redstone, self-made architect of a vast media empire.
“Viacom is me,” he once told Fortune magazine. “I’m Viacom. That marriage is eternal, forever.”
“I’m in control!” he chided Mel Karmazin in a nationally televised news conference as the executive tried to outline his vision for the newly merged Viacom and CBS. “Remember — I’m in control!”
The late Frank Biondi Jr., who engineered a series of key deals in the 1980s and ’90s as Viacom CEO, once acknowledged to the New Yorker‘s Ken Auletta that it could be frustrating toiling in semi-obscurity. “Sumner is the embodiment of this place,” he shrugged.
Redstone, who died Wednesday at age 97, personified more than just a single company. He came to represent a media and entertainment era when deeply flawed, nakedly ambitious, larger-than-life personalities single-handedly set the agenda.
“Sumner Redstone was, for all his business thuggery, one of the last truly great and visionary players in media,” Barry Diller, chairman of IAC/InterActiveCorp, said in a statement to media outlets today. “He would ‘bet the company’ for what he believed, and had the will and tenacity to pull it through whatever the obstacles.”
Along with Diller, Rupert Murdoch, Ted Turner, John Malone and a few others between the late 1980s through the 2000s, Redstone had a brash, swashbuckling approach utterly at odds with the ethos at companies like Netflix. The streaming giant’s co-founder and co-CEO Reed Hastings has said he considers a good day to be one when he hasn’t had to make any major decisions. Delegating and collaboration are far more prized than a single executive’s individual will. (Hastings, who has already published Netflix’s “culture deck” online, is preparing to codify his widely studied management approach in a book to be published this fall.)
Redstone, an irascible, hard-driving figure, would likely have flunked Netflix’s “keeper test,” a human resources tool it uses to ensure workers are consistently improving. After firing Biondi in 1996, a move as equally stunning as his 2006 axing of Tom Freston, Redstone named himself Biondi’s successor. Told that his age at the time, 72, was a concern to investors, Redstone cited Bob Dole, the Kansas senator around Redstone’s age who was running for president. “If he can run America,” Redstone said, “Believe me, I can run Viacom.”
One person who worked closely with Redstone for years told Deadline that managers today, not just in technology but also in media and entertainment, are “all just engineers. They are trying to figure out how they can go from Point A to Point B with minimal friction.”
Redstone knew friction. Although he had a Harvard Law School degree, he was raised in the pragmatic setting of his father’s business operations, which included nightclubs and drive-in theaters. He obsessed about ticket sales and customer patterns. Once in the corporate suite, he would ride his executive team until they matched his zeal and make a flurry of phone calls when new movies opened to gauge every showtime.
Just as Murdoch came up through newspapers and Malone and Turner latched on to the nascent cable TV business of wildcatters and pole-climbers, Redstone unabashedly favored instinct over the MBA playbook.
The financial community at first didn’t know quite what to make of Redstone. He confounded all expectations when he persuaded Steve Ross and American Express to sell him Viacom, which they intended to take private. He repeated the feat a short while later when he scraped together funds to buy Paramount, out-muscling both Diller and Malone.
As they remembered him Wednesday, financiers called Redstone brilliant, relentlessly focused on share price and financial details — though also someone who shed executives too easily. “He had a style. Look, I was a big fan of Biondi, of Tom Freston and so on,” said Mario Gabelli, founder and CEO of GAMCO Investors, who first crossed paths with Redstone in Boston in the late-1960s and early ’70s. His family of funds has been a investor since the mogul acquired Viacom in 1987. Gabelli clients today own 4 million-5 million of the outstanding voting shares of ViacomCBS.
“If you are doing a history of the movie industry and the individuals who ran those companies, he has to go down with them, like Rupert, who is probably the last one, and Tom Murphy,” Gabelli said. Murphy, who co-ran Capital Cities and bought ABC, launched the career of former Walt Disney CEO Bob Iger.
The issue of succession grew steadily more fraught for Redstone as he continued to hold on to power and refused to designate a successor, even splitting acrimoniously with his children. (Son Brent settled with the family and was bought out, while daughter Shari eventually reconciled and went on to lead the family’s National Amusements Inc. theater chain. She is now chairman of ViacomCBS.)
“You just don’t know at what point he started to deteriorate, but clearly there are lessons there for everyone about hanging on,” said Tom Wolzein, an entertainment analyst at Sanford Bernstein & Co. from 1991-2005.
As far as Wall Street relations, Wolzein called Redstone “a vicious and vehement supporter of his stock. If he didn’t like what you said, he would be on the phone five minutes after yelling at you and he’d try to bully you.”
One deal prompted an even heavier wave of pressure than usual: Blockbuster, which Redstone had bought for $7.6 billion in stock. The Blockbuster acquisition gave Redstone enough cash to raise his Paramount offer to $9.8 billion in cash and stock and win the studio. Once the dust settled, though, the reality set in that Viacom had bought into the home entertainment business just as it was near its peak.
“Early on with Blockbuster, when they bought that which was obviously a fiasco, they claimed to have a new distribution center that is ready to go online and it was going to save all kinds of money,” Wolzein said. “One day, I was down in Texas and I drove 90 miles north of Dallas and find a distribution center which was two pieces of concrete tipped up in the air and nothing else.”
Along with Blockbuster, there was also the serial splitting up and merging of Viacom and CBS and various ill-fated attempts to do the same, a ritual that grew tired. Despite its missteps, Wolzein said it was a reliable performer for many years. “I had a buy on the stock through much of the ’90s,” he said. When Viacom and CBS were split, he added, “it became financial engineering. And financial engineering is what you do when you don’t have a story.”
Gabelli lauded Redstone’s consistent belief that amassing the best-quality movies and TV shows would be the surest path to success. The provenance of the phrase “content is king” is a matter of some debate, but Redstone adopted it early and used it as his mantra.
In the years to come, Gabelli said, the house of Redstone faces major challenges. With exhibition in a tailspin, he wonders how Shari Redstone plans to manage movie theaters, the family’s original business and a core one for National Amusements, the controlling shareholder of ViacomCBS. He called current CEO Bob Bakish a solid manager who has energized the merged company. But the company’s $33 billion enterprise value is “minor” in today’s landscape, Gabelli noted.
Shari Redstone years ago engineered preliminary discussions with Amazon about a potential multi-step acquisition of Viacom and CBS, though it did not result in a deal.
Speaking of the tech colossus led by founder Jeff Bezos, it offers another fascinating case study in terms of an executive’s public profile, one former Redstone associate notes. In 2019, the corporate force field was penetrated when text messages were leaked to the National Enquirer spilling details about Bezos’ affair with Lauren Sanchez. The pair have since been photographed vacationing and canoodling and Bezos has donned black tie to attend the Oscars. While plenty of secrecy continues to shroud the workings of Amazon — Bezos, for example, never participates in quarterly earnings calls, which were long a favorite platform for Redstone — simply seeing the world’s richest man in a less-guarded moment is a reminder of how unusual that is in today’s business world.
“That never happens now!” one media veteran marvels. “Executives now are just caretakers of the assets. They’re not taking risks or placing big bets. They seem to have taken the human element completely out of it.”