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The Mercurial Manners of Media Moguls

Every few years, Viacom Chairman Sumner Redstone seems to go out of his way to prove what nobody really doubts anyway: that the 83-year-old onetime lawyer is still The Boss. On Sept. 5, Viacom's (VIA) CEO delivered that message with the calm demeanor of someone who controls 72% of his company's stock.

Redstone told Tom Freston that he was out, scarcely eight months after giving him the top job at MTV's parent company. Indeed, it's the third time in 10 years that Redstone has sent his top guy packing. He did it in 1996 to Frank Biondi, and again in 2004, when Mel Karmazin quit under pressure. "It's like being the manager of a baseball team," says Biondi, who was fired after having spent nine years building Viacom into a world-class media company. "It's his company; he didn't buy it for someone else to run it for him. When he wants to make a change, he makes a change."

Alas, one skill they don't teach in business school is the care and feeding of the media mogul/owner. And they are a peculiar breed, these larger-than-life corporate titans. For Redstone and fellow moguls like News Corp. (NWS) Chairman and CEO Rupert Murdoch and Liberty Media (LCAPA) Chairman John Malone, the business is inextricably tangled with their own personal images—and family fortunes. "These guys are professional winners, and they like the image and prestige that comes with being a winner," says Peter Kreisky of Boston-based Kreisky Media Consultancy. And woe to anyone who could be perceived otherwise—or who imperils the boss's reputation.

MIRROR OF THE BOSS. One way to stay in favor is to be as direct and steely as the guy at the top of the org chart. Redstone's associates say the hard-driving executive has warmed to CBS (CBS) CEO Leslie Moonves because Moonves is just as competitive as his boss. What's more, Redstone likes the results Moonves is delivering, including a 12% gain in the price of CBS stock since it split from Viacom in January, not to mention aggressive dealmaking and cost-cutting.

The famously laid-back Freston no doubt couldn't survive the comparison to Moonves or The Boss. Philippe Dauman, Viacom's new CEO and a longtime Redstone lieutenant, was likely hired because he's more in Redstone's mold. "Leslie doesn't like to lose, like Sumner [doesn't]," says Dauman. "I don't like to lose, and I don't intend to lose in this job, either."

And Freston may have shortened his tenure by grumbling about Redstone's public comments on firing Tom Cruise from Viacom-owned Paramount Studios, even though Redstone says the Cruise situation wasn't a deciding factor in letting Freston go. Redstone points instead to Viacom's languishing stock, which had fallen 14% since January. It's not wise to contradict the guy who controls your fate.

AT THE MONARCH'S MERCY. Indeed, the stock price is often a critical issue for moguls, especially when the shareholder base has one very loud voice. John Malone went from being seen as a brilliant tactician to just another guy with deep pockets when the stock price of his cable programming company Liberty Media languished for several years despite some efforts to jump-start it with flashy deals. Robert "Dob" Bennett, Liberty Media's 48-year-old president and CEO, took the bullet despite years of working for Malone at his former company Tele-Communications and putting out fires for the boss on several occasions.

The company announced Bennett's retirement last year, although he remains on Liberty's board. In his place, Malone hired former Oracle (ORCL) CEO Gregory Maffei and charged him with restructuring the company to lure investor support. "It's very hard. Your fate is tied to [the mogul] rather than your technical expertise or your external network, and you have no end route around to the board," says Jeffrey Sonnenfeld, senior associate dean and professor of management at the Yale School of Management. "You're serving at the mercy of that monarch."

So what kind of executive fares best with a media mogul/owner? "One who knows to stay out of the limelight that the boss wants for himself," says media industry consultant Kreisky. One who has done it better than most is News Corp. President Peter Chernin, who has survived as Murdoch's No. 2 since 1996 by steering clear of Murdoch's passion for dealmaking while running the film and TV operations for the globe-trotting Murdoch. More important, Chernin pleads News Corp.'s case convincingly to Wall Street analysts who are wary of Murdoch's unabashed risk-taking. "Whatever Peter has, they ought to bottle it," says Kreisky.

No doubt there are a lot of top media executives out there trying to figure out how to duplicate Chernin's magic in a game where the only guaranteed winner is the guy who controls the ball club. Even after more than 20 years with Viacom, Freston found out that loyalty can be a fickle thing in the hands of the guy whose reputation is riding on something as mercurial as his company's stock price. The rules, as Freston, Biondi, and Karmazin learned, aren't always fair, because the guy who sets the rules also gets to change them.

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