Redstone addresses sales, merger ideas
He wants Paramount to remain part of Viacom "forever"Viacom and CBS Corp. chairman and controlling shareholder Sumner Redstone wants Paramount to remain a part of Viacom "forever" and doesn't expect much studio consolidation beyond the MGM auction.
In a wide-ranging interview with CNBC's David Faber, portions of which aired on the network during the business day Monday, he also touted his relationships with Tom Cruise and Steven Spielberg.
According to a CNBC transcript, Faber asked about some industry and Wall Street analysts' suggestions that Viacom should sell Paramount or maybe merge it with the studio operations of Rupert Murdoch's News Corp. "With who?," Redstone responded.
Asked if a sale wouldn't provide financial benefits, Redstone replied: "Have you ever known me to be motivated by money?" He argued that it also wouldn't create long-term shareholder value. "It's not in the long-term interest of these companies to do what you just suggested," he said. "Because we're the best. Why should we merge with less than the best? We are the best companies."
Redstone also argued that owning film production is key for content companies: "Control is everything. If you don't know it, ask Ted Turner. Control is everything, because when you have control, you control your own destiny."
Asked about possible consolidation on the studio front beyond MGM, Redstone said: "I see very little ... I see no consolidation among the major companies."
He also argued that a lack of mergers is good for the business and consumers. "Let them each be on their own, do their best to create good product," Redstone said.
Asked about his relationship with Tom Cruise after their very public falling out, Redstone told Faber: "Tom and I are very good friends now." Cruise is working on a script for "Mission Impossible 4," "and he might even be doing other pictures for us at the studio," he said.
"I always thought Tom was charming," Redstone explained. "I thought he was a great actor. But his behavior at a certain period, you know what it was, was really unacceptable. And I thought it cost us, even though his picture did well, 100 million bucks. And also, just to have him on the lot at that time cost us $10 million without doing anything ... I didn't think that was good. And I changed it. And I think I changed the industry approach also at that time."
Redstone emphasized that Cruise will get paid in a way that is success-based. "If the picture succeeds, he will make a ton of money and so will we. It won't be just disproportionate," he said.
He confirmed that the two patched up things at the Beverly Hills Hotel and have since cemented their relationship.
In his CNBC interview, Redstone also predicted Leonardo DiCaprio "will win best actor" for "Shutter Island."
Here are other highlights from Redstone's comments to CNBC:
• In a broader discussion of the role of actors, Redstone argued that "It's not the actor who makes the picture -- it's the script." He continued: "You have to have a great script to have a great movie. If in addition, you have a great actor like Tom, then you're a big winner. But you have to start with the great script. Big, big actors, big-name actors, cannot make a good movie with a bad script."
• Discussing his and Paramount's relationship with Spielberg, Redstone said: "Steven remains a friend, and he will produce for Paramount."
• Asked about how it made him feel when his holding company National Amusement worked through its debt problems and retained control of CBS and Viacom, Redstone told Faber: "It took a tremendous weight off me. But I'm an optimist, as you know. I always knew we would get out of it well."
• Asked about the economy, he said: "We have had a very tough time, and the economy has been bad ... both [Viacom CEO] Philippe [Dauman] and [CBS Corp. CEO] Les [Moonves] have weathered the storm, which shows the strength of the companies."
• How are CBS and Viacom shares doing? "People have been buying our stocks. Analysts are recommending our stocks," Redstone said, calling the stocks undervalued. "They will go up. I have absolute confidence ... I'm willing to be patient, for a year or two, till they go up fast."
Confronted with the fact that the stocks are well off their previous levels, Redstone said: "We'll be higher than we were."