Take my theaters, please


A new battle could be brewing between Sumner Redstone and his daughter, Shari. In the quarterly conference call for Viacom, Sumner hinted that the key to resolving the refinancing problems at National Amusements Inc. (NAI), the company via which he controls both CBS Corp. and Viacom, may lie in NAI’s theater properties. That’s not likely to sit well with Shari.

Shari Redstone runs the theater operation and has insisted publicly that the theaters have nothing to do with the current stand-off with lenders – that it is all due to the huge stock price drops at CBS and Viacom. But in the call with Wall Street analysts, Sumner noted that NAI owns “valuable real estate holdings throughout the country.” He also said he’s no longer bullish on the future of the theater business.

Sumner has already said NAI will not sell anymore of its CBS or Viacom stock, so what’s the alternative? Some observers think he may want to put up NAI’s real estate holdings as collateral to refinance some of NAI’s $1.6 billion in debt – about half of which has to be refinanced next month.

Viacom, meanwhile, reported that Q3 net income fell 37% to $401 million (65 cents per share), although revenues rose 4% to $3.4 billion. “Our advertising business continues to feel the effect of the macroeconomic trends in the quarter,” said CEO Philippe Dauman. He said Viacom will be spending more on programming next year for MTV Networks to cut down on low-rated repeats as it tries to boost its advertiser-attractive young audience.