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Sumner Redstone
Born May 27, 1923 (1923-05-27) (age 86)
Boston, Massachusetts, USA
Occupation Global media businessperson
Spouse(s) Phyllis Gloria Raphael (1944–1999)
Paula Fortunato (2002–2009)
Children Shari Redstone, Brent Redstone

Sumner Murray Redstone (born Sumner Murray Rothstein; May 27, 1923) is majority owner and Chairman of the Board of the National Amusements theater chain. Through National Amusements, Sumner Redstone and his family are majority owners of CBS Corporation, Viacom, and MTV Networks, BET, and movie production and distribution Paramount Pictures and DreamWorks movie studios, and are equal partners in MovieTickets.com.

Contents

Early life and career

Sumner was born to Jewish parents in Boston, Massachusetts, Belle (née Ostrovsky) and Michael Rothstein.[1] His family's name was changed from Rothstein to Redstone when Sumner was 17. His father was the owner of the Northeast Theater Corporation in Dedham, Massachusetts--the forerunner of National Amusements.[2] He also owned the Boston branch of the Latin Quarter Nightclub.[3]

Redstone attended the prestigious Boston Latin School, where he graduated first in his class. He then attended Harvard College, where he completed his B.A. in three years. Later, Redstone served in World War II, serving with the team that decoded Japanese messages for the United States Army.[4] Upon completion of his Army service, he worked in Washington, D.C. and attended Georgetown University Law School. He transferred into Harvard Law School and received his LL.B., later amended to a Juris Doctor, from that institution.

After completing law school, Redstone worked for the U.S. Department of Justice in Washington, D.C. and San Francisco, and then went into private practice. After a few years in practice, he joined his father's theater chain.

As National Amusements grew, Redstone believed that content would become more important than distribution mechanisms. There would always exist channels of distribution (albeit in varied forms), but content was always going to be necessary (he coined the phrase "content is king!"[5]). He then made investments in Columbia Pictures, Twentieth Century Fox, Orion Pictures, and Paramount Pictures (the latter of the four of which Redstone's Viacom would buy in the 1990s-see below), all of which turned over huge profits when he chose to sell the stock in the early 1980s.

In 1979, he almost died in the Boston Copley Hotel fire. He crawled out of a window onto a ledge. He was not expected to survive and underwent 30 hours of intense surgery[6]

Viacom

Looking for a new business venture, he set his sights on Viacom International, a company which he had already been buying stock in as an investment and was a spin-off of CBS in 1971 after the FCC ruled that television networks could not syndicate programs they produced. Viacom syndicated most of CBS's programs, but also made a lot of money from syndicating other programs, including most of Carsey-Werner Productions' shows (The Cosby Show, Roseanne, and A Different World), as well as syndicating shows for other companies (Columbia Pictures Television's All in the Family was one notable example), and cable channels (Nickelodeon's Double Dare and Finders Keepers (co-syndicated with 20th Television) were two examples).

Viacom also owned MTV Networks (formerly known as Warner-AMEX Satellite Entertainment), which owned MTV and Nickelodeon. In addition, other included properties included Showtime Networks (a similar pay-television network to HBO and Cinemax) and The Movie Channel. Viacom acquired MTV Networks in 1985 for $550 million from Steve Ross' Warner Communications. (WCI bought American Express' share and then sold the entire entity to Viacom, as they felt that they could not make a lot of money from the venture and the bias of a studio owning cable channels would be a conflict of interest. The studio's stance changed in 1995, when as Time Warner it bought Turner Broadcasting.)

After a hostile takeover in 1987[7][8], Redstone won voting control of Viacom and led a series of acquisitions to make Viacom one of the top players in modern media (along with Bertelsmann, General Electric & Vivendi's NBC-Universal, News Corporation, Time Warner, Sony, and Disney).

Paramount Pictures

Redstone's next acquisition came in the form of the purchase of Paramount Communications, parent of Paramount Pictures, in 1993, which he fought over with Barry Diller (former board member of Vivendi Universal and CEO of IAC/InterActiveCorp) and John Malone (president of TCI/Liberty Media), where he had to raise his bid three times. Some say that Redstone overpaid, but after he shed certain assets (the Madison Square Garden properties to Charles Dolan's Cablevision and Simon & Schuster's educational publishing units to Pearson plc for almost $4 billion), Redstone turned Viacom's expenditure into a substantial profit. Under Redstone's leadership, Paramount went on an almost ten-year streak of record performance, producing such films as Saving Private Ryan, Titanic (one of the highest grossing film of all time and Best Picture Academy Award winner), Braveheart (Best Picture Academy Award), and Forrest Gump (also a Best Picture winner) and the creation of the hugely successful Mission Impossible series of pictures.

Redstone replaced the team of Jonathan Dolgen and Sherry Lansing in 2004 after their nine-year winning streak ended and the studio has struggled since with the relatively inexperienced team of Brad Grey and Gail Berman who both came from the TV business. The Dolgen and Lansing years were the high point of Paramount in many other regards as well.

In addition to the aforementioned award winning films, They also doubled the size of Paramount's music publishing division, Famous Music; expanded UCI Cinemas into 13 foreign countries; created the Digital Cinema Initiatives standards body for the new digital film technology; introduced the DVD; and launched the UPN Network (later part of CBS and now called the CW). The current Paramount Pictures consists only of the movie studio, the other groups having been sold or parcelled out to other divisions.

The Paramount acquisition was only the tip of the iceberg. Redstone purchased Blockbuster Entertainment, which included Aaron Spelling's production company and a huge library of films, much of which has been merged into Paramount Pictures. Blockbuster has now been spun off into its own independent entity. Redstone acquired CBS Corporation in 2000 and then spun it off as a separate company in 2005, taking with it all of Paramount's television shows and catalog. Following the CBS and Blockbuster Spinoffs, Viacom consists of MTV Networks (MTV, Nickelodeon, VH1, Noggin etc.), music publishing (Famous Music) and Paramount Pictures.

In December 2005, Redstone announced that Paramount had agreed to buy DreamWorks SKG for an estimated $1.6 billion. The acquisition was completed on February 1, 2006. A subsequent financing brought Viacom's investment down to $700 million. The animation studio, DreamWorks Animation, was not included in the deal as it has been its own company since late 2004. However, Paramount now has the rights to distribute films by DreamWorks Animation.

CBS

One of Redstone's largest acquisitions came in the form of Viacom's former parent, CBS. Former Viacom President & COO Mel Karmazin (who was then the President of CBS) proposed a merger to Redstone on favorable terms and after the merger completed in 2000, Viacom had some of the most diversified businesses imaginable. Viacom had assets in the form of broadcast networks (CBS and UPN), cable television networks (MTV,VH1, Nickelodeon, MTV2, Comedy Central, BET, Nick at Nite, Noggin/The N, TV Land, CMT, and Spike TV), pay television (Showtime and The Movie Channel), radio (Infinity Broadcasting, which produced the immensely popular Howard Stern' radio shows), outdoor advertising, motion pictures (Paramount Pictures), and television production (Spelling Entertainment, Paramount Television, and Big Ticket Entertainment), and King World Productions (a syndication unit, which notably syndicates the runaway daytime hit, The Oprah Winfrey Show, as well as Dr. Phil, Wheel of Fortune, and Jeopardy!), among others.

After CBS and Viacom split in late 2005, Redstone remained chairman of both companies.

Succession

Redstone's trusts make it clear that Shari Redstone (Vice-Chairwoman of the Board of Viacom and CBS as well as President of National Amusements) is set to assume his role upon his death. However, a November 22, 2006 New York Times article indicated that Redstone was reconsidering his daughter's role. Recently they have been feuding publicly over issues of corporate governance and the future of the cinema chain.[9] There have also been numerous articles stating that Sumner's marriage is in trouble.[10][11]

Documents have recently been made public which verify that, as part of a settlement from Sumner's first divorce, all of Sumner's stock is in irrevocable trusts that will be left for his grandchildren.[12] On March 1st 2010, Sumner publicly announced that all of his stock will be left for his grandchildren.[13]

Redstone made arrangements to step down as CEO of Viacom in 2006. After Mel Karmazin resigned in 2004, two heirs apparent were named: Co-President & Co-COO Leslie Moonves (who was #2 to Karmazin at CBS; he was the former head of Warner Bros. Television and before that, Lorimar Television) and Co-President & Co-COO Tom Freston (who had been President & CEO of MTV Networks since 1987 and had been with the company since the formation of MTV Networks' precursor company, Warner-AMEX Satellite Entertainment). Since the Viacom split, Moonves has headed CBS, and Freston had headed the new Viacom, Inc.

When Moonves was promoted to Co-President & Co-COO with Tom Freston, there was speculation that he was on the short list of executives to replace Michael Eisner at the Walt Disney Company whose contract expired in 2006.[14] Redstone has confirmed publicly in Vanity Fair that he originally offered the position only to Freston who initially turned it down and later relented when Redstone made it clear he was going to ask Moonves next.

On September 5, 2006 Redstone removed Tom Freston as President and CEO of Viacom and replaced him with director and former Viacom counsel Philippe Dauman. He also brought back former CFO Tom Dooley. This was surprising to many, as Freston had been seen by many as Redstone's heir apparent and that Redstone touted that Freston would run the company after he retired. Redstone publicly stated that he let Freston go because of Viacom's lack of aggressiveness in the digital/online arena, lack of contact with investors, and a lackluster upfront (coupled with falling viewership) at MTV Networks.[15]

The company split was approved by the Viacom board on June 14, 2005.

Holdings

Currently, Redstone owns over seventy percent of the voting stock of Viacom, which, in actuality, is a not wholly-owned subsidiary of National Amusements, which is his privately held, family-owned company. CBS Corporation, likewise, is controlled by Redstone through National Amusements. Redstone sold his holdings of Midway Games, of over eighty-nine percent, in December 2008.

Personal

In 1999 Redstone was divorced from his first wife of 55 years, Phyllis Gloria Raphael. He is the father of Shari Redstone and Brent Redstone. Three years after his divorce, he married Paula Fortunato, a former primary school teacher who is 39 years his junior. Redstone filed for divorce from Paula Fortunato on Friday, October 17, 2008. Their divorce was finalized on January 22, 2009.

Redstone owns a house in the Beverly Park area of Beverly Hills, California, which he purchased in 2002 for $14,500,000.[16]

Books

Redstone's autobiography, A Passion To Win[17] (co-written with author Peter Knobler), was published in 2001 by Viacom's Simon & Schuster. This book details everything from Redstone's life as a young boy in Boston to the difficult takeover of Viacom and the problems he overcame in purchasing and managing both Blockbuster Video and Paramount Pictures. The book also recounts the legendary CBS merger (Viacom was a spin-off company of CBS to syndicate its programs, and the subsidiary bought the parent almost 30 years later).

Viacom's broadcasting properties at the time of A Passion To Win's release included several radio stations and two TV stations: WBZ CBS 4, which had just become a CBS O&O through a merger with Westinghouse four years before Viacom and CBS merged, and WSBK UPN 38 in Redstone's hometown, Boston.

Net worth

In 2007 he was ranked #86 on Forbes magazine's list of the hundred richest people in the world, with an estimated worth of US$ 9 billion. The declining stock market of late 2008 decimated his wealth. Recently, with the partial recovery of the stock market, Sumner Redstone's net worth is again on the rise.[18] Redstone may also have an easier time settling his debt because of the recent surge in shares of movie-theater companies.[19] In March of 2010, Forbes estimated Sumner's net worth to be 2.4 billion dollars.[20]

Political views

While claiming to be a Democratic supporter, and having a history of donating to many Democratic campaigns, including regular donations to Edward M Kennedy, John F Kerry, and Tom Daschle[21], he endorsed George W. Bush over John Kerry in the 2004 Presidential election, due to his argument that Bush would be better for his company and the economy.[22] Despite this public endorsement, he donated money to John F Kerry during the primaries. In later years, he has increased his donations to Republican candidates and to tradegroup pac's.

Philanthropy

In April 2007, Sumner M. Redstone announced a commitment of $105 million in charitable grants to fund research and patient care advancements in cancer and burn recovery at three major non-profit healthcare organizations. The cash contributions of $35 million each will be paid out over five years to FasterCures/The Center for Accelerating Medical Solutions, based in Washington D.C.; the Cedars-Sinai Prostate Cancer Center in Los Angeles, California; and the Massachusetts General Hospital in Boston, Massachusetts.[23]

Sumner is a noted philanthropist. He recently contributed $500,000 (the largest donation the charity could accept) to the Cambodian Children's Fund, a nonprofit program that provides a wide range of critical health and educational services to impoverished and abused children in the capital city of Phnom Penh.[24] Redstone's contribution will be used to create the Sumner M. Redstone Child Rescue Center, a stand-alone facility scheduled to open during the fall of 2007 for children 5 to 16.[25]

In early 2010, Autism Speaks announced that Sumner Redstone made a $1 million donation to be applied to scientific research into autism's causes, improved treatments, and, ultimately, its cures. Part of the gift will support Autism Speaks' programs for children, adults and families. While Redstone has supported Autism Speaks since 2007, this is his largest gift to date.

Further reading

References

  1. ^ Sumner Redstone Biography (1923-)
  2. ^ Weddings/Celebrations: Paula Fortunato, Sumner M. Redstone, The New York Times, April 6, 2003
  3. ^ http://www.highbeam.com/doc/1P2-8005517.html
  4. ^ Cf. "The Highwaymen" by Ken Auletta. Auletta also wrote that Redstone finished his Harvard undergraduate degree in two and a half years.
  5. ^ [1]A Conversation with Sumner Redstone
  6. ^ Fabrikant, Geraldine, "His Toughest Challenge Yet", New York Times, March 15, 1987
  7. ^ [2]
  8. ^ [3]
  9. ^ Redstone says he relies on his instinct - The Boston Globe
  10. ^ Nikki Finke’s Deadline Hollywood Daily » Redstone Family Woes: Now His Marriage
  11. ^ LA Biz Observed: Redstone marriage in trouble?
  12. ^ Redstone family rift may not be healed - Los Angeles Times
  13. ^ [http://www.cnbc.com/id/15840232?video=1428207331&play=1
  14. ^ Bloomberg.com: U.S
  15. ^ http://www.viacom.com/press.tin?ixPressRelease=80704186 Press Release
  16. ^ http://www.bergproperties.com/blog/76m-mansion-goes-on-the-market-near-san-diego-just-after-vanna-whites-ex-puts-a-beverly-hills-ca-estate-on-the-block-for-50m
  17. ^ A Passion to Win by Sumner Redstone with Peter Knobler (2001)
  18. ^ http://www.marketwatch.com/investing/multi?tickers=via,via.b,cbs,cbs.a
  19. ^ http://www.bloomberg.com/apps/news?pid=20601109&sid=a0Ii_SHPV5tk
  20. ^ http://www.forbes.com/lists/2010/10/billionaires-2010_Sumner-Redstone_KJHY.html
  21. ^ [4]
  22. ^ Redstone supports Bush-WSJ
  23. ^ Sumner M. Redstone Commits $105 Million To Fund Cancer And Burn Recovery Research And Patient Care
  24. ^ Redstone to help Cambodian kids - Entertainment News, Business News, Media - Variety
  25. ^ Redstone to help Cambodian kids - Entertainment News, Los Angeles, Media - Variety

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