US media mogul Redstone opposes Paramount sale

May 23, 2016
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US mogul Sumner Redstone, 92, says he believes it is in the best interest of Viacom that Paramount Pictures should remain wholly owned by the parent company and has opposed any sale of a minority stake/AFP-Fi
US mogul Sumner Redstone, 92, says he believes it is in the best interest of Viacom that Paramount Pictures should remain wholly owned by the parent company and has opposed any sale of a minority stake/AFP-File

, NEW YORK, United States, May 23 – US mogul Sumner Redstone said Sunday he opposes the proposed sale of a minority stake in Paramount Pictures, the jewel of his media empire.

“Unless Viacom’s board presents a concrete plan that convinces him otherwise, Mr Redstone continues to believe that it is in the best interest of Viacom that Paramount Pictures should remain wholly owned by the parent company,” said a statement by Mike Lawrence of Cone Communications representing the ailing 92-year-old billionaire.

Overview
  • In late February, Philippe Dauman, the new CEO of Redstone's Viacom, Paramount's parent company, said the firm would sell a significant minority stake in the movie studio and had received expressions of interest.
  • The announcement prompted a jump in Paramount's stock price and praise from the activist fund SpringOwl, a Viacom minority shareholder, which demanded the company replace Dauman in order to better compete in the era of digital and streaming video.

 

In late February, Philippe Dauman, the new CEO of Redstone’s Viacom, Paramount’s parent company, said the firm would sell a significant minority stake in the movie studio and had received expressions of interest.

The announcement prompted a jump in Paramount’s stock price and praise from the activist fund SpringOwl, a Viacom minority shareholder, which demanded the company replace Dauman in order to better compete in the era of digital and streaming video.

Dauman had promised a deal over Paramount by late June.

But Redstone’s unexpected opposition further weakens his position, especially after another surprise decision on Saturday, when Redstone ousted Dauman and an ally at Viacom from a trust with the power to manage Redstone’s $40 billion empire if he dies or is declared incompetent.

Dauman called his ouster “shameful” and “illegal,” saying Redstone is being “manipulated” by his daughter Shari in an attempt to gain control of Viacom. She had voted against Dauman’s appointment as Viacom CEO in February.

Dauman accused Shari Redstone of restricting access to her father, saying he had become legally incompetent, accusations the billionaire rejected on Sunday.

“Sumner Redstone remains today as Phillippe Dauman described him less than six months ago: ‘engaged, attentive and as opinionated as ever,'” the statement said.

“Viacom’s false and unfair statements to the media, as well as Mr Dauman’s opportunistic claims of incapacity, now make it problematic to move forward with any direct meeting and briefing as Mr Redstone had previously requested.”

Besides the struggle between management and the Redstone family for control of the group, Viacom is also facing operational difficulties.

The parent of cable channels MTV, Nickelodeon and Comedy Central saw its revenue fall 2.5 percent to $3 billion in the last quarter.

Its stock has shed nearly 60 percent of its value since its peak in 2014.

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