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Viacom chairman emeritus Sumner Redstone paid a visit to the Paramount Pictures lot last week, where the media mogul had a conversation with studio chief Brad Grey and took a tour of the grounds, according to an industry source.
The 93-year-old owner of Viacom, along with daughter Shari Redstone, arrived around 11 a.m. on Friday, said the source. Grey was summoned to meet the mogul at the minivan in which he was riding, which was parked in front of the Sumner Redstone Building.
The meeting lasted about 10 minutes before Redstone took a brief tour of the lot, while Shari Redstone continued to meet with Grey. It was not known what was said in either of the meetings. It was the first time Redstone has been seen in public for more than a year, and comes amid a fierce legal battle in which he opposes Viacom CEO Philippe Dauman’s plan to sell a minority stake in the fabled studio.
A spokesman for Viacom declined to comment on the meeting. However, Redstone’s face-to-face with Grey is apparently what prompted Viacom lead independent director Fred Salerno on Tuesday to write an open letter in an attempt to get a message to him.
“Sumner, we sincerely hope you are doing well,” Salerno says in his letter dated June 14. “But it is alarming that your representatives refuse us the opportunity to talk with you, express our perspectives, share our friendship, or understand directly from you what your wishes might be and why.”
Salerno writes in his letter that it appears Redstone misunderstands Dauman’s plan to sell a portion of Paramount, believing instead that the entire film studio is for sale.
The open letter is just the latest wrinkle in one of corporate America’s most bizarre dramas, whereby Redstone has removed Dauman from the board of directors of National Amusements — the entity that controls Viacom — and Dauman has sued to be reinstated.
Here is Salerno’s letter in its entirety.
I write to you as your long-time friend, as a director you have elected to the Viacom board 22 times, and as lead independent director of the Company. I am making my letter public in the hope that those around you will read it to you and that you can see the complexity of the issues confronting us.
You and I have worked together for decades to create shareholder value and develop shareholder trust. Over that time, many issues and differences have arisen. Working closely with the other members of the Board, we have addressed each of them with thoughtful dialogue and careful calibration across a variety of interests.
Strangely, in the last few months, a host of new advisors and spokespeople say they work for you. They claim that strongly held views you have expressed for decades have, in the past few months, completely reversed. They say you no longer trust your friends, your advisors, or your board. They tell us to believe that you have put your daughter Shari in charge of your trust and your board at National Amusements despite your clearly stated wishes and planning over many years that are to the contrary. A new law firm never before associated with you recently delivered a notice claiming you amended Viacom’s bylaws, taking away significant responsibilities from your board. They tell us that you are well and getting better every day. Last week they staged a drive for you, with Shari, to the Paramount studio for a brief visit in which you didn’t get out of your car.
Sumner, we sincerely hope you are doing well. But it is alarming that your representatives refuse us the opportunity to talk with you, express our perspectives, share our friendship, or understand directly from you what your wishes might be and why. Bill Schwartz and I have not been permitted to see you, despite repeated requests. Philippe hasn’t been allowed to meet with you since early March. And we are quite concerned that your voice — and views — are not being heard. When your phone is dialed into our board calls from your home, no one says a word. When we ask for your vote, all we hear is silence.
Statements from these people suggest you think we intend to sell Paramount lock, stock, and barrel, or that we would do it in the middle of the night and hide it from you. Nothing could be further from the truth. You may remember that in February, Philippe spoke to you at your home about new opportunities that could strengthen Paramount. He reported that you didn’t react, other than to nod when he asked you if you heard him and understood what he said to you. You may recall that a few days later, Philippe spoke about possibilities of a transaction at a special informational telephonic session of all of the members of the board, and you were dialed in. All of the board members except you spoke up, and the board supported exploring the possibilities further without dissent.
As of right now, Philippe and his team are busy exploring whether a transaction might be possible and how much value it would bring. Just last week, he said at a public conference that partnering with a new strategic investor could unlock a net after-tax value of approximately $10.00 per share of Viacom. If a transaction can be negotiated that creates value for the shareholders, you can be sure it will be presented to the entire board, including to you and to your daughter, Shari, and you will be given a full briefing and ample time to consider it. In the meantime, it is important for all shareholders that we are able to pursue this investigation without any new obstacles that may cause potential investors to shy away from the process.
Sumner, they tell us they won’t make you available for fear that such a meeting would become the source of more litigation. In reality, putting up a wall around you ensures more litigation — and that is not what we want. We want to understand what is happening with you. And I can assure you that you can count on us to stick up for you and for the many other Viacom shareholders you have served so well for so many years.
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