Michael Wolff on Shari Redstone: Yes, She Does Have a Plan for Viacom
Sumner's daughter may be an accidental mogul, but her moves to scrap a CBS merger, install Bob Bakish as CEO and oust veteran programmer Doug Herzog reveal something new at the company — actual strategy.
And still there is Viacom.
This of course is after its great annus horribilis — with hardly a way even to recap the personal and corporate dramas, tortured litigation and the company’s breakdown and ridicule in the market. And it is after its controlling shareholders, the Redstone family, publicly appeared to declare the company on a management respirator and send it on its way to be subsumed into CBS, the other significantly more successful company the Redstones control, only to realize, well, that wasn’t going to work. Oh yes, and there are years now — almost a decade of attrition — in which the company paid little attention to its creative assets and the development of new ones.
But here we are again, somehow beyond shame, back to square one: Viacom will stay an independent media company. So now what?
The figure at the center of it all is Shari Redstone, the daughter of 93-year-old former executive chairman Sumner Redstone, whose dementia and cruelties have held Viacom in its difficult limbo and alienated most everyone from him, including his executives and family. His helplessness, her recent rapprochement with him and various favorable court rulings have given Shari the central role her father always denied her. And so far she has played it in many ways the opposite from how he would have played it.
At 62, a nonpracticing lawyer who has run her family’s legacy movie theater business and has a small investment company of her own, Shari finally wrested full control of Viacom in September. She thereupon, with an uncharacteristic Redstone moderateness, seemed to acknowledge the limits of control. She rather appears to be treating Viacom as a troubled child. She’s the parent trying out all solutions, a wealthy one surrounding herself with knowledgeable and strong-minded experts to whom she appears to actually be listening.
Indeed, during the battle to oust her father’s old crony Philippe Dauman as Viacom’s CEO, she loaded the board with sophisticated media voices — digital media investor Kenneth Lerer, former Sony Entertainment president Nicole Seligman, former Discovery Communications CEO Judith McHale, former DreamWorks COO Ronald Nelson — and too, as board chairman, energy executive Thomas May. A strong board seemed to be a step to buttress weak management. The interim CEO, former Dauman lieutenant Tom Dooley, immediately feeling board heat, in late September decided to step out of contention for the top job, leaving as unlikely successors a group of what might fairly have been seen as part-of-the-problem insiders. Redstone and her board, many believed, would opt for a high-profile outsider as a credible reformer and a new public face. Redstone was said to be meeting with the most eligible industry names. Likewise, each board member was said to be acting as a rabbi for one or more eligible big foot — either as CEO or as a strong chairman.
But then, suddenly, Redstone punted for the CBS option, and with Dooley’s interim reign ending Nov. 15 — and, notably, a formal executive search for his replacement yet to begin — one of the insiders, Bob Bakish, head of international (“a stable, thoughtful operator, a status quo guy,” according to one informed view), was named the next interim CEO to shepherd, virtually everyone believed, the integration with CBS.
The politics of this re-merger were clear: Redstone would have to assuage CBS Corp. chairman and CEO Leslie Moonves, one of the industry’s leading management figures, with a deal that would not penalize him or his shareholders (CBS did not want to be on the hook for the cost of a Viacom turnaround) and, reportedly, offer him an extra level of voting control. Redstone is said to have been willing to bend on the control issue, and, given that her family held equal positions in the $27 billion CBS and the $14 billion Viacom, the financial terms of a re-combination would not really have mattered to it. But the terms would have mattered to Viacom shareholders and management, to whom she was listening — as much as she was listening to CBS shareholders. In addition, she was said herself to have remained ambivalent — and even sentimental — about the fate of a company at the center of her family’s saga (a not-small issue in the discussion with CBS was the fate of the Viacom name). Hence, rather than working out a fait accompli agreement with Moonves and the Viacom board (which she controlled), she dumped the deal into the hands of myriad law firms, bankers and board committees, seeking consensus but arguably inviting deadlock.
With the re-combination stalled, a determined Bakish, on the job for hardly a month, suddenly became a new reason for Viacom to stay independent: He had impressed the board and, most importantly, the company’s controlling shareholder with his plan. “It’s like you stepped out from a shadow,” Redstone is reported to have said to him after a key meeting.
This was puzzling to other insiders, who, amid doomsday scenarios and executive exits, said that at best there was only a plan to at some point come up with a plan. And, of the two elements that most people agreed were vital for a Viacom CEO — credibility on Wall Street and the creative chops to oversee Paramount Pictures and such networks as MTV, Comedy Central and Nickelodeon — Bakish, on the face of it, had neither.
And yet, he suddenly had the backing of Redstone and the board. It was a stunning reprieve. A company on the verge of massive transformation — indeed, of disappearing altogether — would stay the same. After all the Sturm und Drang, nothing much was different, except for less Sturm und Drang. And a sense that now the job was to pick up the pieces.
In a management meeting held shortly after the Bakish appointment to permanent CEO, there was, according to insiders, a sudden can-do, even enthusiastic sense of confronting grim reality, with Bakish succinctly codifying Viacom’s existential issues: damaged brands, lackluster content, a broken culture, resistant distribution partners and lagging global reach. “A bunch of ideas came out that would have been unthinkable even weeks before,” said one insider.
Indeed, in his first week as CEO, Bakish, in his sudden bloom, ousted Viacom’s most important creative executive, Doug Herzog, responsible for many of the company’s legacy hits (The Daily Show, Real World, South Park) but absent recent breakthroughs. With the elimination of the fief-conscious Herzog, creative managers now would report directly to Bakish. It was a bold move against a sacred cow. “Viacom’s streak of idiocy continues,” said one of the company’s significant creative partners, assessing this as a do-anything-to-seem-to-be-doing-something offensive. Many insiders see the more crucial test of Bakish’s ability to do anything as a looming one: how this Hollywood neophyte handles Paramount chief Brad Grey (first step: Bakish has sent CFO Wade Davis out to look over Grey’s shoulder). But while he often has been blamed for the studio’s woes, Grey nevertheless has seemed to maintain Shari Redstone’s support. (Current hits Arrival and Fences help.)
And that, in sum, may define the company as it always has been defined. It’s a Redstone company. Many are betting she’ll take the job of chairman, a role she previously has declined. Shari Redstone may be an accidental mogul — and the first woman as media mogul — one more willing to suffer more opinions, one more willing to give Viacom more of a turnaround chance than it might logically be given by a more hard-hearted figure, and one still gaining confidence on the learning curve. But in the end, it all depends on her.
This story first appeared in the Jan. 20 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.