http://www.nytimes.com/2016/02/05/business/media/philippe-dauman-replaces-redstone-as-viacom-chairman.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
The New York Times With the ailing 92-year-old Sumner M. Redstone in his final act as a media titan, the two rivals jousting over the future of his $40 billion entertainment empire repeatedly crisscrossed the country in the last several months to visit his mansion in a gated Beverly Hills enclave. Shari Redstone, the ostracized daughter who had been restricted from visiting until mid-October, celebrated the holidays with her father, played games and discussed the media business. Mr. Redstone's grandchildren and two small great-grandchildren also visited. When not together, the father and daughter communicated via FaceTime, sometimes several times a day. Philippe P. Dauman, the chief executive of Viacom who formed a close bond with Mr. Redstone decades ago when he was a young corporate lawyer, also frequented the estate. The two discussed business, watched basketball and talked about films Mr. Redstone had recently screened. The backdrop to those visits was an epic fight for money, power and love from Mr. Redstone, the controlling shareholder in Viacom and CBS. It was a story line that some Hollywood executives deemed too implausible for a movie or television series. On Thursday, Mr. Dauman won that initial battle for control when Viacom's board of directors named him executive chairman, succeeding Mr. Redstone. Yet Ms. Redstone has made her wishes clear. She was the sole Viacom director to vote against Mr. Dauman's nomination, and is opposed to having Mr. Dauman remain in charge. And so, the real fight has only just begun. "Shari is going to continue to advocate for what she believes to be in the best interests of Viacom shareholders," Nancy Sterling, a spokeswoman for Ms. Redstone, said in a statement. Though he is now simply chairman emeritus at Viacom and CBS, where he also ceded his role as executive chairman, Mr. Redstone continues to hold about 80 percent of the voting stock in the two companies through National Amusements, the private theater chain company started by his father. He legendarily survived a fire in a Boston hotel when he was 55 years old, grasping onto a window ledge while sustaining serious burns. In the following decades, he emerged as one of the most tenacious moguls in the entertainment industry. His personal life also made headlines, with two marriages, a string of girlfriends and feuds with both his daughter and his now-estranged son. Upon Mr. Redstone's death, his stake in National Amusements is to be held by an irrevocable trust created to benefit his five grandchildren. Voting control of that trust is to be passed on to seven trustees, among whom alliances are now being formed. The trust could support the two succession plans enacted this week by the boards of Viacom and CBS, but it also could act like an activist shareholder, contesting those decisions, installing a new board and leadership team or even making moves to sell the company. Ms. Redstone will have her own constituency on the trust, starting with herself and her adult son Tyler Korff. Leonard L. Lewin, the divorce lawyer for Shari's mother, Mr. Redstone's wife of 52 years, is also a trustee. But Mr. Dauman is also a member of the trust, as is George S. Abrams, a Boston lawyer and a longtime Viacom director. The other trustees are David R. Andelman, a CBS director, and Norman I. Jacobs, a lawyer who has represented Mr. Redstone. Ms. Redstone, who controls the remaining 20 percent of National Amusements, has publicly feuded with her father over the years. In 2014, she declined a $1 billion buyout offer from her father for her stake in National Amusements, according to a person with knowledge of the discussions. Though the terms of the trust state that she succeed her father as chairman at both CBS and Viacom, she has made clear that she does not intend to do so. But she also does not support Mr. Dauman in the role because of his position on the trust. Ms. Redstone is seeking a "leader with an independent voice," she said in a statement on Wednesday. The appointment of Mr. Dauman as Viacom's executive chairman rankled some investors concerned about the company's performance. While both CBS and Viacom face challenges in a changing industry, Viacom's businesses - including the cable networks Nickelodeon and Comedy Central, and the Paramount movie studio - have had the more difficult path over the last year. Total revenue for the company declined 4 percent during the 2015 fiscal year, which ended Sept. 30. Profit was down about 20 percent during the period, when the company faced weak ratings and ad sales, and a lackluster film slate. Viacom's share price dropped nearly 45 percent during that fiscal year. "Phillippe has six to nine months to deliver, and it is very hard to see how he can do that," said Mario Gabelli, whose investment firm Gamco is the second-largest voting shareholder in Viacom and CBS. "They need someone with a creative dynamic. You can't have a lawyer who is a deal guy in the digital world." Even as Viacom has floundered, the board has endorsed Mr. Dauman's leadership. His total compensation increased 22 percent to $54 million during the 2015 fiscal year, from $44 million the previous year. Excluding stock awards, Mr. Dauman's pay decreased about 16 percent to $37 million. Viacom has said that it is turning the corner and has a plan for succeeding in the digital future, a stance the board seemed to affirm on Thursday. "In choosing a successor to Sumner, the board considered the need for seasoned leadership in this time of unprecedented change, Philippe's business experience and unparalleled knowledge of Viacom, and his long-term vision for the company," said William Schwartz, chairman of the governance and nominating committee of Viacom's board. "We believe his becoming executive chairman is in the best interests of the company and all shareholders." Corporate governance at both Viacom and CBS has been the target of scrutiny by investors in recent months, prompted by a lawsuit filed in November by a former companion of Mr. Redstone, which challenged the media mogul's mental capacity and depicted him as a "living ghost." Manuela Herzer, a onetime romantic partner of Mr. Redstone, claimed that a confession of infidelity by a girlfriend half his age had set Mr. Redstone on a physical and mental downward spiral, unable to follow more than a brief conversation and requiring round-the-clock nursing care. The petition included salacious and embarrassing personal details about his physical condition and his sexual demands. Ms. Herzer said she was concerned about Mr. Redstone's health care. His lawyers called the suit "meritless" and said she was after his money. Separately, a shareholder lawsuit has claimed that board members of Viacom and CBS were conflicted and put the interests of the Redstone family before those of the companies. As questions over corporate governance mounted over the last several weeks, the boards of both CBS and Viacom started setting succession plans into motion. On Tuesday, Mr. Redstone sent a letter to Leslie Moonves, the chief executive of CBS, and CBS directors announcing his resignation. The board subsequently met on Wednesday and nominated Mr. Moonves chairman. Ms. Redstone has voiced her support for Mr. Moonves. Viacom's board of directors discussed the chairman's role Thursday morning in a conference call, with Mr. Dauman participating from a long-planned vacation in St. Bart's and Mr. Redstone calling from his estate. The board later announced it had consolidated power and control with Mr. Dauman, who has been chief executive of Viacom since September 2006. Pointing to examples of Mr. Redstone's specific involvement with the company in the last year is difficult. He does not attend board meetings, but is said to listen over the telephone. Mr. Redstone was once a fixture at the red carpet premieres thrown by Viacom-owned Paramount Pictures, but his attendance fell off sharply about three years ago, and he is mostly sequestered at his mansion tucked between the canyons in the hills next to Bel Air. Nine months ago, a planned birthday party for him on the Paramount lot was canceled, with associates opting instead for a smaller gathering at a jazz club near his home. According to reports in Hollywood trade publications, Mr. Redstone entered and left through a side entrance, which was shielded from photographers with a portable black curtain. "It's a little bit sad," said Frank J. Biondi Jr., who was chief executive of Viacom from 1987 to 1996. "Everybody's day comes." _______________________________________________ Medianews mailing list [email protected] http://etskywarn.net/mailman/listinfo/medianews_etskywarn.net
