The Redstone family’s National Amusements Inc. has sold 700,000 shares of Viacom stock and 1.7 million shares of CBS stock. The stock sales have also rekindled a father-daughter conflict.
Someone told the Wall Street Journal that the $233 million in cash was needed to avoid breaching covenants on a $1.6 billion loan at the family’s theater business, run by Shari Redstone. She fired off a statement denying the WSJ claim.
"National Amusements’ recent sale of a portion of its Viacom and CBS non-voting stock was the direct result of last week’s historic financial crisis, which included the precipitous drop in value of CBS and Viacom stock. The implication that this stock sale was required by the operation and expansion of the company’s theater circuit is not accurate," the statement said.
Sumner Redstone, who owns 80% of National Amusements, has made no comment about the stock sales. But he is known to have differed with his daughter, 20% owner of the family company, over the future of the theater business, which she manages.
National Amusements is in no danger of relinquishing control of either CBS or Viacom. The recent stock sales were all of non-voting Class B stock. The family company still owns the overwhelming majority of the Class A voting stock of both companies, not to mention millions more shares of the Class B issues.
Whether or not Sumner Redstone was, directly or indirectly, the source of the original WSJ story, the stock sales have made it clear that there continues to be a strain in relations between the 85-year-old patriarch and his daughter, Shari. Son Brent was cashed out of National Amusements last year. Sumner has stated that Shari will not be heading CBS and Viacom once he dies, but he hasn’t ever said who will. For her part, Shari has defended her management of the theater business and has persisted in growing the business, despite her father’s belief that movie theaters are on their way out. She also disapproved of his heavy buying of stock in Midway Games, which has been in a slump of late with no new hits in the video gaming market.
RBR/TVBR observation: So, if Sumner Redstone, now a spry 85, is so intent on feuding with the only offspring he hasn’t disowned, just who does he have in mind to be his successor? Shari, now 54, is certainly independently wealthy and won’t have to worry about her livelihood if she doesn’t get to control the family fortune, much of which will reportedly be left to her children and their cousins. Just as he has feuded with his children, Sumner Redstone has over the years had close, trusted business lieutenants, only to turn against them at some point. Will the last trusted confidant on hand when the grim reaper comes be the one anointed to run the empire?