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Sumner Redstone Has Finally Resigned from CBS Corp. and Viacom, Replaced by CBS Chief Les Moonves and Viacom’s Philippe Dauman

Sumner Redstone Has Finally Resigned from CBS Corp. and Viacom, Replaced by CBS Chief Les Moonves and Viacom's Philippe Dauman

There was a time when I would have bet on billionaire Sumner Redstone—who survived a hotel fire by hanging onto a ledge with his burning hand until he was rescued—to win any game of “Survivor,” well into his 80s. But even this wily media mogul, who started in Boston exhibition and until Tuesday wielded control of two empires, thriving CBS and struggling Viacom—including Paramount Pictures, MTV, Comedy Central and Nickelodeon—couldn’t outsmart time. His age, 92, finally caught up with him, as his handlers tried to keep him away from reporters and cameras. He could barely speak at this point, and had stopped participating in Viacom and CBS earnings calls or annual shareholder meetings for over a year.
The problem is that while Redstone has insisted that “I am not going to die,” his senior executives, led by 60ish CBS CEO Leslie Moonves and Viacom CEO Philippe Dauman, have been waiting for him to let go of the reins. Well, on Wednesday Redstone finally resigned as executive chairman at CBS Corp. and on Thursday, let go of Viacom as well. The aging mogul had been infirm since early 2014. The board of directors elected Moonves the next chair of the CBS board, continuing on as CEO and president. Redstone now has the title chairman emeritus at both companies. 

Viacom Inc.’s board convened on Thursday morning, electing Dauman as chairman and offering Sumner’s powerful 62-year-old daughter Shari Redstone, a veteran exhibitor and digital investor, the role of non-executive chairman; she stayed on as vice chair. She did not want Dauman to take over, as they are both trustees in the Sumner Redstone Trust. At Viacom, Shari backed Moonves’ CBS ascension, but wanted a new independent chairman at Viacom. Viacom stocks initially went up on the Moonves news, but went down on the Dauman chairmanship.

Poised to fight over their share of his $5.6 billion fortune are two girlfriends and the eventual seven trustees of Sumner Redstone’s holding company National Amusements, including Dauman, Shari, and her son, 29-year-old lawyer and rabbi Tyler Korff. Dauman had taken over health decisions for the mogul after pushing out an ex-girlfriend who then filed a lawsuit to declare Redstone incompetent. A doctor hired by her legal team examined him Friday. 

Now Moonves can set about righting the ship at CBS. As Redstone kept his would-be successors dangling, the companies he runs have stagnated. 

Viacom’s Paramount Pictures, which is run by chairman Brad Grey and vice chairman Rob Moore, has shed key personnel including production chief Adam Goodman, replacing most of them from within. Over the last year, the studio released a skimpy lineup led by graying Arnold Schwarzenegger’s return in “Terminator: Genisys,” which went on to disappoint at the summer box office, Tom Cruise in daredevil mode, hanging by his fingernails off an A400 aircraft in Chris McQuarrie’s “Mission: Impossible —Rogue Nation” (July 31), more “Paranormal Activity” and “Ring” sequels, Christopher Landon family comedy “Scout’s Guide to the Zombie Apocalypse” (October 23) and holiday releases “Daddy’s Home,” starring Will Ferrell and Mark Wahlberg and Oscar contenders “The Big Short,” starring Christian Bale and Steve Carell, and R-rated animated pickup “Anomalisa,” from Charlie Kaufman and Duke Johnson. 
Viacom remains powerful, in 2014 earning $2.4 billion in net income on $13.8 billion of revenue (up from 2013) despite cable network ratings declining 19%—more than double the overall slump in viewers 18-49—including Comedy Central (which lost both Jon Stewart and Stephen Colbert), BET, VH1, Nickelodeon, Spike, TV Land and MTV. The company has been laying off employees. 
Some cable operators wonder if they need to carry Viacom’s channels. This comes at a time when the future of ad-supported TV is not bright and costly cable bundles which support smaller networks at the expense of popular ones are under fire. Consumers have started cutting the cord as they watch more video-on-demand: Netflix, Hulu, Amazon and YouTube. Viacom’s stock fell 24 percent last year.
While studios like Disney have purchased creative powerhouses like Pixar, Marvel, and Lucasfilm, Paramount has contracted, losing its Marvel movies along with DreamWorks and DreamWorks Animation. Rumors abound that Paramount is staying stripped and lean as it prepares to be sold. That fate could also meet CBS and Viacom after Redstone steps down.

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