Magazine article Newsweek

A Mogul in Full; A Quiet Retirement? Not for Sumner Redstone, Whose Media Empire Has Been Making Plenty of Front-Page News of Late, Thanks to Brad, Katie and Howard

Magazine article Newsweek

A Mogul in Full; A Quiet Retirement? Not for Sumner Redstone, Whose Media Empire Has Been Making Plenty of Front-Page News of Late, Thanks to Brad, Katie and Howard

Article excerpt

Byline: Johnnie L. Roberts

At 82, Sumner Redstone, a billionaire eight or nine times over, controls not one, but two giant media companies after splitting apart his Viacom empire in January. One is CBS Inc. (CBS network, Showtime and CBS Radio, the former home of Howard Stern). The other is the new Viacom (MTV, Nickelodeon and Paramount Pictures, among other operations). Redstone retains overwhelming shareholder control and remains chairman of both companies, which paid him a combined $24.4 million in salary, bonuses and other compensation for 2005. Yet in a few small ways, Redstone is just a regular guy. Consider, for instance, that he and wife No. 2, Paula Fortunato, a 42-year-old former teacher ("My most successful merger," Redstone says) like to occasionally stroll

over to the fence surrounding their Beverly Hills mansion to sneak food to the neighbor's dogs. It's just for fun. (Redstone, by the way, doesn't think his neighbor, Sylvester Stallone, neglects his pets.)

It's a welcome diversion from all that he has on his mind these days. The stock price of each company continues to sag, even though part of the reason he split Viacom in two was to provide a boost to the shares. He's grooming his daughter, Shari, 52, to step in for him--but not before, Redstone makes clear, he exhales for the final time. His plans for succession set off a family feud this year; his son, Brent is suing Sumner and Shari, arguing that he's been sidelined and demanding a $1 billion cut of the family fortune. At CBS, meanwhile, Katie Couric is coming onboard soon, under intense scrutiny for how she might shake up the traditional evening-news format. At the same time, CBS is suing departed star Howard Stern, alleging he illegally used CBS's airwaves to promote his new employer, Sirius. CBS wants to wrest from Stern a $200 million bonus that Sirius paid to the radio talk-show host. (Stern has denounced the lawsuit as "personal vendetta.")

Then there's Brad Grey, the superstar television producer and Hollywood talent manager. Hired early last year by Viacom as chairman of Paramount Pictures, one of the most powerful posts in show business, Grey is becoming increasingly prominent in a widening Hollywood wiretapping scandal. The unfolding story stars the rogue private eye Anthony Pellicano--who allegedly had a penchant for illegal bugging--and some of the industry's most influential figures, including Grey, and their powerful lawyers, for whom the detective worked. In his interview with NEWSWEEK, Redstone offered unqualified support for Grey. "I have absolute unequivocal faith in the integrity of Brad," he said. "When Brad came aboard, he told us everything there was to tell us about what was going on with Pellicano ... I would be shocked, truly, if Brad engaged in any--never mind illegal, but in any--inappropriate conduct."

Last Friday, two days after his NEWSWEEK interview and the day after a dinner with Grey and others, Redstone awoke to a front-page story in The New York Times further detailing Grey's involvement with Pellicano. Redstone said later that Grey still had his support. "I have read The New York Times, and I still say I saw nothing in it that would make me change my opinion," he said. Other excerpts from the conversation:

ROBERTS: You're grooming Shari to succeed you. How's it going?

REDSTONE: Shari's working very hard. She has played a major role in forming the boards of both CBS and Viacom, a major role in setting the agendas for the companies. She works with Tom [Freston] and Les [Moonves] on strategic matters. She's doing a great job. As much as she's doing, she'll do more and be more involved.

What's the reaction to her internally at the companies? Are there misgivings?

Do you think they'd tell me? Originally, I think there were a lot of misgivings. But now, from the best I can see, she's very well liked within the companies--as is my wife. …

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