Sumner Redstone Might Not Want to Sell Paramount After All
The mogul was reportedly not happy about the prospect of selling off a portion of the iconic film studio.
The brewing battle over the future of Viacom just heated up with a report that puts Viacom chairman and CEO Philippe Dauman at odds with one of his key executives, Paramount chief Brad Grey, over whether ailing mogul Sumner Redstone approves of a plan to sell off part of the film studio.
Despite the dramatic turn of events, a Viacom spokesman confirmed Monday that the company is still seeking a buyer for a portion of Paramount. "The process continues," said the spokesperson.
Nevertheless, The Wall Street Journal reports that when Dauman visited Redstone at his home in Beverly Park in mid-February and asked about selling a stake in the studio, Dauman "thought he heard a yes." Dauman relayed that to the Viacom board, saying a nurse would back his account.
But Grey, summoned to Redstone's home soon after Viacom's Feb. 23 revelation of the planned sale, later said to several people that Redstone had declared, "I don't want to sell Paramount."
A source tells The Hollywood Reporter that Redstone's daughter Shari Redstone heard her father's exchange with Grey. Through a representative, Shari Redstone declined to comment. Grey did not respond to a request for comment.
Redstone is known to be unable to speak clearly. A speech therapist had to attend a recent evaluation by a geriatric psychiatrist done in connection with litigation brought by his former companion, Manuela Herzer.
Herzer has been claiming Redstone is incapacitated and therefore wasn't capable of removing her as her health agent. It appeared Monday as though she may have settled her lawsuit, though a snag has delayed a tentative deal.
Despite his declining health and speech, sources say Redstone apparently has been able to convey his vehement opposition to the sale of all or even part of Paramount.
Redstone is Viacom's founder and technically still controls the company through his majority position in the company's voting shares, so he could conceivably prevent Dauman from following through on his plans for Paramount, though the 92-year-old mogul has presumably chosen not to do so.
Also, insiders say that Redstone might not be as opposed to the deal as some are suggesting, given that he took part in some board meetings where the plan was discussed and he never indicated he was against it. In fact, no board member voiced opposition to the plan in those board meetings, including Shari Redstone, an insider said.
Insiders also say there are more than three dozen parties interested in bidding on a piece of the iconic film studio that is often considered the crown jewel of Viacom, the conglomerate that owns MTV, Comedy Central, Nickelodeon and other TV channels.
Dauman has been under pressure to do something dramatic to fix Viacom's ailing stock, and one of his responses was to announce at an investor conference that he was pursuing a strategic partner to take an ownership position in Paramount. Viacom's shares rose 5 percent on the news that day.
Viacom paid $9.8 billion for Paramount in 1994, but Wall Street analysts figure it is worth just $5.5 billion today, unless foreign bidders anxious for a foothold in the American film industry bid up the price.