He bested business rivals throughout his long career as he engineered deals for Viacom, Paramount and CBS and displayed an unwavering passion to win.
Sumner Redstone, the hard-charging mogul who parlayed his father’s New England drive-in theater business into a media empire that now flows into virtually every avenue of entertainment, has died. He was 97.
Redstone was the controlling shareholder of the recently merged ViacomCBS — and previously CBS Corp. and Viacom — who made famous the mantra “content is king.”
His daughter and ViacomCBS chair Shari Redstone said: “My father led an extraordinary life that not only shaped entertainment as we know it today but created an incredible family legacy. Through it all, we shared a great love for one another and he was a wonderful father, grandfather and great-grandfather. I am so proud to be his daughter and I will miss him always.”
National Amusements, through which the Redstones control ViacomCBS, said that he died Tuesday. It is understood that he was at his 15,300-square-foot Beverly Park mansion. A cause of death was not provided, but sources said it was not related to COVID-19.
Redstone had been in declining health for some time amid questions whether he was mentally capable of running his businesses.
Like William Randolph Hearst before him, Redstone ruled like a king, his companies and employees subject to his whims. In 2006, he famously fired Mission: Impossible star Tom Cruise after the actor jumped on Oprah Winfrey’s couch during an interview. “His behavior was terrible,” Redstone said while also acknowledging that Cruise was “getting paid $10 million, on the lot, for doing nothing.”
Six years later, he reconciled with Cruise and said he and the star were “best friends.”
Redstone’s net worth was recently estimated by Forbes at $4.3 billion. He and his family, through National Amusements, controlled about 80 percent of the voting shares of Viacom and CBS, which announced in August 2019 that they were reuniting. He owned 80 percent of National Amusements shares; Shari held the rest.
Redstone did not go quietly. In August 2016, he and Shari orchestrated the removal of Philippe Dauman as Viacom CEO, ending a long and bitter legal fight.
Months earlier, Redstone’s longtime girlfriends, Sydney Holland and Manuela Herzer, were banished from living in his home (Holland was said to be involved with another man). Herzer then filed a lawsuit claiming Redstone was not mentally competent when she was removed from making medical decisions on his behalf.
But after Redstone had testified on video, a Los Angeles judge concluded that the mogul was in command of his faculties and dismissed the suit. He then sued Holland and Herzer to reclaim $150 million in gifts he had given them. A settlement with Herzer was announced in January 2019.
Sumner Murray Rothstein was born on May 27, 1923, and raised in a lower-class section of Boston, where his father worked as a linoleum salesman. Redstone said he grew up in poverty, writing in his 2001 autobiography, A Passion to Win, that his apartment had no toilet. “We had to walk down the corridor to use the pull-chain commode in the water closet we shared with the neighbors. That sort of living was all I knew, and I never felt less privileged than anyone else.”
The tenement areas in which he grew up, though, were full of striving, achieving immigrants, including his father, Michael “Mickey” Rothstein, a keen businessman who bought a used truck and turned it into a profitable “carting” business. His acumen attracted the interest of bookie Harry “Doc” Sagansky, whose betting syndicate rivaled Meyer Lansky’s. With hundreds of thousands of dollars from Sagansky pouring in, Rothstein began acquiring nightclubs and theaters and opened his first drive-in theater on New York’s Long Island in 1934.
As his business thrived, Rothstein changed the family name to Redstone, in part to avoid the anti-Semitism in certain Boston business circles and also to negate any conjecture that he was associated with New York mobster Arnold Rothstein, who allegedly conspired to fix the 1919 World Series.
“Redstone sounded so solidly American, so ecumenical, so Christian. I thought my father was trying to walk away from our being Jewish,” Redstone wrote in his autobiography. “It troubled me a lot.”
Redstone studied at the prestigious Boston Latin School where, he later wrote, “I was first exposed to the idea that thinking, educated and disciplined people have the power within themselves to create a new and better world.”
Afterward, he attended Harvard, where he was tapped by professor Edwin Reischauer to be among a select group of students charged with cracking Japan’s military codes, learning the culture and language largely through watching Japanese movies. Following the war, he attended Harvard Law School, making money by playing piano in his own dance band and using his veteran status to purchase army surplus goods at a discount and sell them for a profit to Boston-area stores.
After law school, Redstone was selected for a clerkship at the Ninth Circuit Court of Appeals in San Francisco under Judge William Orr, where one of his most memorable assignments involved the denial of citizenship to a Jewish teacher because he was accused of being a communist at the beginning of McCarthyism. Redstone argued in favor of citizenship, but Orr overruled him.
Redstone next worked as a special assistant to U.S. attorney general Thomas C. Clark, mostly handling tax-litigation cases. While with the Justice Department, he helped overturn the decision years earlier against the Jewish teacher.
Six years removed from law school, Redstone was making $100,000 a year running his own firm though disillusioned that practicing law had become “just a business.” So, in 1954, he went to work for his father’s burgeoning movie exhibition business at a salary of $5,000 a year. He traveled New England acquiring properties for the growing chain, which came to be known as National Amusements.
“Forget real estate agents,” he wrote. “I would get in a car and drive around looking for good potential sites. I always carried a pro forma contract in my jacket pocket.”
While driving the back roads, Redstone developed an insight into the theater business, coming to the conclusion that “content is king.” It was the quality of the movie the chain was showing, not its location or its frills, that dictated the money it would make.
He grew the business exponentially after applying for a $10 million loan and, after impressing bank executives, he received a $50 million line of credit instead.
“I was on the phone with the movie studios’ general managers, trying to get the best movies at the best prices,” he recalled. “Barry Reardon at Warner Bros., Frank Mancuso, then the branch manager in Buffalo for Paramount, Jimmy Spitz at Columbia — these were the important people in my life.”
National Amusements was a smaller exhibitor, though, and, in deference to the larger players, studios routinely refused to supply it with first-run movies, prompting Redstone to sue in 1958. The landmark case, United States v. Paramount, ended in a decree that studios had to sell their product, picture by picture, theater by theater, without discrimination.
He became a savvy film critic; after viewing 101 Dalmatians in the early 1960s, he purchased a sizable chunk of Disney stock, and he was named CEO of National Amusements in 1967 and reportedly coined the term “multiplex.” A decade later, he was making investments in movie studios, including Disney and Warner Bros. In 1977, he saw Star Wars, walked across the street to a pay phone and bought 25,000 shares of 20th Century Fox.
By 1982, National Amusements owned roughly 10 percent of Columbia Pictures when Coca-Cola took over the studio, netting Redstone’s company a $26 million profit. He had a 5 percent stake in Fox before Marvin Davis’ acquisition, and he was a significant stockholder in MGM/United Artists Home Entertainment before Ted Turner’s venture into the movies.
Midway through the 1980s, Redstone became interested in Viacom, spun off from CBS years earlier and then the owner of such assets as a fledgling MTV, Nickelodeon and Showtime. Viacom CEO Terry Elkes wanted to take the company private in a $2.7 billion leveraged buyout, but Redstone, then owning 18.3 percent of Viacom, was livid at the insider’s price. He launched an aggressive, hostile takeover attempt and threatened to sue on behalf of shareholders.
After protracted infighting, Redstone landed Viacom in March 1987 for $3.4 billion, which included more than $400 million of his own money, and became chairman of the company. He was not the typical corporate raider of the times. Unlike aggressive takeover buyers, such as MGM’s Kirk Kerkorian, who often bought studios and dismantled them for quick profits, Redstone was in it for the long haul.
In a move to acquire Paramount Communications in 1993-94, Redstone fought QVC’s Barry Diller, his longtime friend, in the toughest battle of his career. The bidding war vastly inflated the cost of the conglomerate and its historic movie studio and placed Viacom more than $11 billion in debt. For years, Redstone would refer to Diller as his “$2 billion ex-friend” until Diller finally told him, “Lay off, will you, Sumner? Enough is enough.”
In a plan that raised eyebrows in financial circles, Viacom had purchased Blockbuster for its strong cash flow, then borrowed against the video-rental company to raise enough money to get Paramount. Viacom separated from Blockbuster in 2004, and in 2010 the chain filed for Chapter 11 bankruptcy protection. “On occasion, you make a mistake. But I don’t want to make too many,” Redstone told The Hollywood Reporter in December 2013, when the topic of Blockbuster came up during his last in-person interview.
He made another mistake when he funneled hundreds of millions of dollars into Midway Games, then dumped his stake in the now-defunct video game company for less than a penny a share in 2008.
The Paramount deal, combined with the later firing of its CEO, Frank Biondi, caused Redstone serious problems with Wall Street. Needing to pay down debt, he unloaded Madison Square Garden, the New York Knicks and New York Rangers teams and the educational and professional divisions of publisher Simon & Schuster.
In 1999, Redstone sealed another big deal, this one to acquire CBS from Westinghouse Electric Corp. for a reported $37.3 billion, at the time jumping Viacom past Disney as the world’s second-largest media company. After assuming CBS’ debt, Viacom’s debt was roughly $11 billion, not outrageous for a company then valued at $80 billion.
During the war with Diller over Paramount, his legal team filed an antitrust suit against John Malone’s Tele-Communications Inc. (Malone was backing Diller), charging the distributor with trying to monopolize the cable business through “bully-boy tactics and strong-arming competitors.” In 1995, Viacom sold its cable systems to TCI for an estimated $2.25 billion, becoming, as Redstone said then, a “content-driven media company.”
Redstone’s tenacity and temper were legendary, and it was risky for his closest lieutenants to publicly argue with him. An executive who did was Mel Karmazin, at one time thought to be the top candidate to succeed Redstone. Karmazin was the chief executive at CBS when Viacom purchased the company. The merger was mostly Karmazin’s idea and Redstone once called him “a kindred spirit.” Karmazin’s relationship with Redstone, though, quickly deteriorated, and he quit Viacom in 2004.
In January 2006, Viacom split into two publicly traded companies: Viacom, led by Tom Freston, and CBS Corp., led by Leslie Moonves. Freston was fired months after the split and replaced by Dauman.
With Redstone gone, trustees, who include Shari and her son Tyler, now will oversee his stake in National Amusements. He has another child, Brent, who sued NA in 2007 before settling.
Succession for years was a hot topic at CBS and Viacom, but Redstone refused to seriously address that during his December 2013 interview with THR, during which he called Moonves “a miracle worker” and Dauman “one of the wisest men I have ever met.” (Moonves left CBS Corp. in September 2018 after being accused of multiple episodes of sexual harassment.)
But amid the rise of mega-deals and the need for scale in the race to compete with streaming and technology giants, the Redstones ended up supporting a recombination of Viacom and CBS into ViacomCBS, a deal that closed in December.
Bob Bakish, president and CEO of ViacomCBS, called Redstone “a brilliant visionary, operator and dealmaker who single-handedly transformed a family-owned drive-in theater company into a global media portfolio. He was a force of nature and fierce competitor.”
Redstone, who often joked later in life that he would never die, was married twice, to Phyllis Raphael for more than 50 years until 1999 and then to Paula Fortunato from 2002-09. Both marriages ended in divorce.
It was remarkable that Redstone lived as long as he did. In the middle of the night on March 29, 1979, the executive, then 55, opened the door of his room at Boston’s Copley Hotel after smelling smoke and was enveloped in flames. “The fire shot up my legs. The pain was searing. I was being burned alive,” he wrote in his autobiography.
“Somehow I staggered to the window. It was stuck, I couldn’t budge it. I moved to another window and, I don’t know how, got it open and clambered outside. I was kneeling on a tiny ledge, barely big enough to put one foot on. I was three floors up. If I jump, I’m dead. Flames were shooting out of the window head-high and I crouched there, hanging onto the windowsill, my fingers cupped, my right hand and arm in the fire and burning.”
A firefighter rescued Redstone. His right wrist was nearly severed, and he suffered third-degree burns on 45 percent of his body. He underwent five operations, 60 hours in all, and was in the hospital for months. (He sued the hotel and donated his sizable settlement to the Massachusetts General Burn Center.)
Was Redstone transformed by his ordeal?
“Absolutely not,” he wrote. “I had the same value system after the fire that I had before. Whether in high school or college or law school or building a theater circuit, I have always been driven. I have a passion to win, and the will to win is the will to survive.”