“Not the C.E.O.-Type of Thinker He Needed”: Sumner, Shari, and the Greek Tragedy Set in a Delaware Court
#TIA – A family feud has escalated into a business tragedy threatening the future of CBS, one of the first and greatest broadcast networks
“A decade ago, when he was still somewhat spry, Sumner Redstone had an existential crisis. The shocking collapse of Lehman Brothers was still reverberating through the capital markets, and the Redstone family’s holding company, National Amusements, Inc., which owned nearly 80 percent of the voting stock in both CBS and Viacom, was larded up with some $1.6 billion in unsecured debt. Covenants in the debt had been breached. To satisfy the banks, Redstone unexpectedly sold $233 million worth of National Amusements non-voting stock in CBS and Viacom.
But he still wasn’t out of financial trouble. Over the years, he had also bought, on margin, hundreds of millions of dollars’ worth of shares in WMS Industries, a slot-machine maker, and Midway Games, which had been spun off from WMS. Redstone was particularly hot for Midway—maker of the video game Mortal Kombat—after deciding that gaming was the next big thing. He spent around $700 million on Midway shares, until he owned 87 percent of the company. At one point, his stake was worth more than $1.8 billion. But in the wake of the financial crisis, the Midway stock was trading for pennies; in December 2008, he sold his entire holding for $100,000.”
Read more at Vanity Fair