Technology

Sumner Redstone handed a media empire to his daughter, Shari, who now controls its fate





Shari Redstone, chairwoman of ViacomCBS and president of Nationwide Amusements, reacts as she celebrates her firm’s merger on the Nasdaq Market web site in New York, December 5, 2019.

Brendan McDermid | Reuters

Sumner Redstone, who died Wednesday at 97, constructed a sprawling media empire. It is now his daughter’s determination if she desires to maintain it. 

The Redstone household holding firm, Nationwide Amusements, owns 79.4% of the Class A voting frequent inventory of ViacomCBS — the proprietor of cable TV networks, Paramount Footage, Simon & Schuster and the CBS broadcast station. Eighty % of NAI’s voting was managed by Sumner Redstone. That now goes to a seven-person trust that places Sumner Redstone’s daughter, Shari Redstone, in command of the corporate. The trustees are Shari Redstone, her son Tyler Korff, David Andelman, Norman Jacobs, Leonard Lewin, Tad Jankowski and Jill Krutick. Shari owns the opposite 20% by a separate belief.

ViacomCBS has an enterprise worth of about $35 billion and a market valuation of about $16 billion. Which will sound massive, however in right this moment’s world, ViacomCBS is competing towards behemoths.

Comcast (proprietor of NBCUniversal), AT&T (proprietor of WarnerMedia), Disney and Netflix all have enterprise values properly over $200 billion. Amazon tops $1.5 trillion and Apple’s closing in on a $2 trillion market cap.

A collection of legal maneuvers and corporate filings in 2016 paved the way in which for Shari Redstone to take over for Sumner because the decision-maker for Nationwide Amusements’s controlling stake in ViacomCBS. Nevertheless it stays unclear if Shari has the identical empire constructing aspirations as her father. 

Sumner Redstone efficiently acquired Paramount in 1994 for $10 billion. He then acquired CBS in 1999 for $37.three billion in what was the biggest media merger ever on the time. 

You do not have to be a math main to determine one thing went unsuitable with that deal, given ViacomCBS’s worth in 1999 is increased than it’s right this moment. The corporate split into two – Viacom and CBS – in 2006, which, in hindsight, looks like a mistake. Whereas CBS flourished underneath CEO Les Moonves, Viacom ultimately floundered as MTV, Comedy Central and VH1 misplaced cultural relevance by the 2000s. Each corporations discovered themselves undersized in recent times, ultimately culminating in a December merger that reunited them as ViacomCBS, with Shari Redstone’s blessing. 

Shari Redstone pushed Viacom and CBS to merge and has had her eye on getting even larger, based on individuals acquainted with her pondering. However ViacomCBS’s subsequent goal is unclear, particularly as lengthy quarantines and 10% unemployment erode conventional TV promoting {dollars} whereas pushing audiences towards cheaper streaming choices. ViacomCBS is shifting forward with its personal streaming ambitions, adding content to the already-existing CBS All Access and officially rebranding it in early 2021.

ViacomCBS’s subsequent steps

Being a mogul will not be Shari Redstone’s raison d’etre, although she’s arguably essentially the most highly effective lady in media. She co-runs a small media enterprise capital agency referred to as Advancit together with her son-in-law, Jason Ostheimer. Nonetheless, Redstone fought for years to reclaim possession of the enterprise after a series of estate changes threatened to chop her out. 

“I actually revered how she acquired management again of the corporate, which on the time was not being run very properly, to be sincere,” former Viacom board member and present New England Patriots proprietor Bob Kraft mentioned in a CNBC interview final yr. “She’s gone by some troublesome conditions and actually dealt with it superbly. I do not know that lots of people may do it and succeed and have the psychological toughness and fortitude.”

Her mission to develop ViacomCBS can take a number of paths. She will be able to proceed to acquire smaller businesses, comparable to Discovery, Univision, LionsGate, MGM, AMC and different smaller media corporations. However even when ViacomCBS had been to purchase all of these companies, a feat that might take a few years with doubtlessly painful integrations, the mixed firm would nonetheless probably be considerably smaller than Disney, Comcast, AT&T, Amazon, Netflix and Apple.

She will be able to attempt to merge ViacomCBS with an organization like Sony Footage, a deal that may very well be structured in order that Redstone arms over management of ViacomCBS fairness to Sony over time. 

Or, she may merely promote ViacomCBS to a bigger participant on the lookout for extra content material in a world the place solely so many massive streaming providers can survive and flourish.

Whereas Shari Redstone has successfully been accountable for Viacom and CBS for a number of years, her father may still communicate through an iPad. He had continued to precise needs on company choices, comparable to opposing a deal to promote a portion of Paramount in 2016.

His loss of life totally transfers decision-making authority to Shari. If promoting ViacomCBS is the top recreation, that idea in all probability turn out to be much more possible together with her father’s passing. 

WATCH: Jim Cramer and David Faber on Sumner Redstone’s legacy





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Author

PJ

PJ is the Digital Marketer & Founder of PJ Digital Marketing, has involved in this field from 2010 onwards. Also the owner of a few more sites in different fields.