Shari Redstone Pulled to Hollywood Power Circles as Father FadesChristopher Palmeri
Shari Redstone has a standing invitation to join New England Patriots owner Robert Kraft in his luxury box, where the guest list often includes the likes of Donald Trump, Jon Bon Jovi and Mark Wahlberg.
Instead, the daughter of 92-year-old Sumner Redstone and heir to his media empire prefers her own four seats outside, near the 50-yard line, cheering with less-famous fans even in freezing temperatures.
Redstone, 61, doesn’t hobnob in Hollywood either. She’s never been to the Oscars or the Vanity Fair after-party. Yet she is poised to become the most powerful woman in entertainment, with a big say in what happens at CBS Corp., the most-watched TV network, and Viacom Inc., owner of Paramount Pictures.
Her father, who is in poor health, made Shari and her 29-year-old son, Tyler Korff, the sole family representatives among seven trustees who will control $5.4 billion of stock in CBS and Viacom after he dies. As the eldest family member voting on the trust and mother of three beneficiaries, Redstone will play a major role at both companies -- even though, under the estate’s structure, she has to share power with other trustees, including Viacom Chief Executive Officer Philippe Dauman.
“Her position is assured to some extent,” said her friend James Packer, the Australian casino billionaire. “Anyone who underestimates her is making a mistake.”
Big questions hang over Sumner Redstone’s empire: Who will succeed him as chairman of Viacom and CBS? Will Viacom recover from shrinking TV ratings? And will either company succumb to merger mania sweeping the media industry?
Redstone, who divides her time between Boston and New York, declined to comment for this story. She encouraged friends to speak, however. A picture emerges of a leader who prefers to focus on the companies’ success rather than having an operational role; who values being in the family business her father built, and who is keenly interested in the emerging technologies roiling the media industry.
“She’s much more concerned with outcomes than being in the driver’s seat,” said Jon Miller, former CEO of AOL and a partner in Advancit Capital, her Norwood, Massachusetts-based venture capital firm. “She’s been very consistent with me: ‘What I want to see is the companies do well. I don’t have to be an executive in either.’”
Redstone is already a billionaire, having inherited 20 percent of National Amusements Inc., the family theater business where she is president. The company holds the CBS and Viacom stakes.
While Sumner Redstone is a larger-than-life mogul who famously clung to a ledge during a hotel fire and fought multibillion-dollar takeover battles, his daughter is described as more down to earth. She does her homework, listens, shows good judgment and looks for new ideas to meet challenges, according to Harvard Law School Dean Martha Minow.
Two decisions to be made in the post-Sumner world concern the high-profile CEOs, Viacom’s Dauman and CBS’s Les Moonves. Their contracts let them leave if they aren’t made chairmen of their companies after Sumner is gone. Shari Redstone is vice chair of both Viacom and CBS.
While CBS is thriving, Viacom, the owner of Nickelodeon and MTV, is losing younger viewers to online services, writing off investments in TV shows and cutting jobs.
“I know how respectful she is to Les in particular,” Packer said. “Philippe with Viacom is going through some issues.”
CBS and Viacom officials declined to comment. Viacom has reorganized management of its cable networks and is taking steps to increase digital revenue, Dauman said on an April 30 conference call.
The elder Redstone celebrated his 92nd birthday last week in Los Angeles at a bash put on by his 43-year-old girlfriend. The guests, including Dauman and Moonves, were entertained by crooner Tony Bennett. Shari Redstone wasn’t invited; her son Korff, a lawyer and a rabbi, got clearance to attend only hours before the event, after landing in Los Angeles, according to a person with knowledge of the event who wasn’t authorized to discuss it and asked not to be named.
Shari Redstone, a lawyer trained at Boston University, has been most involved with the Norwood-based theater chain started by her grandfather in 1936.
She cuts a much lower profile than the women who populate lists like the Hollywood Reporter’s Power 100, which ranks influential female entertainment executives such as Bonnie Hammer, chairman of Comcast Corp.’s cable-TV channels, Stacey Snider, co-chairman of the 20th Century Fox film studio, and Oprah Winfrey.
Assuming her grip holds, Redstone will leapfrog those executives, playing a major role in M&A decisions, board membership and CEO-level hiring at the two New York-based companies with a combined market value of $57 billion.
It would take a mutiny by the trustees to derail Redstone. In addition to her, her son and Dauman, those overseeing the trust include four lawyers with longstanding ties to the family, with a responsibility to act in the best interests of the beneficiaries -- Sumner’s five grandchildren.
As CEOs, Moonves and Dauman will answer to corporate directors that could be removed by the trust.
Redstone is conscious of her family’s history. At National Amusements, she supervised the opening of Legacy Place, a $200 million shopping center in Dedham, Massachusetts, built where her grandfather Michael “Mickey” Redstone opened one of his first drive-in theaters. Her son-in-law, Jason Ostheimer, is a partner with her in Advancit.
“She was always immensely proud of CBS and Viacom and proud of her father and grandfather, and very much into the family reputation,” said Paul Heth, who was a partner of Shari Redstone’s in theater ventures. “She sees Viacom and CBS as a legacy of her family, and it needs to be looked after in the best of ways.”
Redstone and Heth are credited with pioneering higher-end food and seating in cinemas, with the opening of the Bridge cinema in Los Angeles in 2001.
The pair also became partners in a Russian movie-theater venture, sold in 2011 for about $170 million, according to a local newspaper. Redstone was the only U.S. theater executive willing to consider joining him in Russia, Heth said, adding they made a substantial profit.
He recalled her standing up to a Russian executive who wanted her to pay a high rent in his mall.
“She looked at him and said, ‘You want to be careful what you’re asking for. You will not be able to sustain this, so ultimately you will not be a success. Let’s talk about how we can both be successful,’” Heth said. “The guy was a little taken aback, but when they thought about her point it turned out to be correct. She immediately had their respect.”
Advancit, her venture capital company, was an early investor in Maker Studios, an online video company sold to Walt Disney Co. for as much as $950 million last year. She realized a 10-fold gain on a $100,000 or so investment, according to another person familiar with the matter.
Redstone’s influence could potentially thrust her into Hollywood controversies, such as the gender gap in pay, ageism and male actors having veto power over their women co-stars. In April, she took part in a White House panel about access to the justice system for the poor, speaking in an unmistakable Boston accent.
The family history has been controversial. In the late 1960s, Mickey Redstone and Sumner fought with Sumner’s younger brother, Edward, over his role. Edward was bought out in 1972. In 2006, Sumner’s only son, Brent, sued National Amusements to gain control of his stake. He was bought out too.
Shari Redstone also tussled publicly with her father before reconciling. Standard & Poor’s said in October it may lower National Amusements’ debt ratings, because of low profitability at its theaters. The company counts on dividends from CBS and Viacom as a crucial source of income.
Tad Jankowski, National Amusements’ general counsel, declined to comment on the theaters’ profitability or the S&P report.
Like her father, Shari has an argumentative streak. Miller said the two disagreed over an Advancit investment. After he presented his case for the company, which he declined to name, she changed her mind and doubled the firm’s commitment.
“She very much believes the media landscape is evolving rapidly and she wants to be on top of the changes,” Miller said.
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