Working World

The museum of Broadcast Communications calls Sumner Redstone one of the most powerful media moguls of the late 20th century. He’s not doing badly in the 21st century either, and even at age 83, he's not done yet.

He just renegotiated his compensation package with Viacom, the media company that he built into a huge conglomerate over the last 20 years. His 2007 package will cut his cash salary of $1.75 million a year to a measly $1 million (and no more deferred compensation of $1.3 million) and will link most of his earnings to shareholder returns. But as a well-established workaholic, he says he believes in pay-for-performance.

In fact, it’s his brains, savvy and hard-driving ambition that made Viacom what it is today: a giant entertainment company that includes cable networks such as MTV Network, VH1 and Nickelodeon, as well as Paramount Pictures and DreamWorks.

His father, Michael Rothstein (who changed the family name in 1940) owned nightclubs and one of the first drive-in movie theaters in the United States. Sumner Redstone finished Harvard in less than three years and then spent World War II cracking Japanese intelligence codes for the Army. With a law degree from Harvard, Redstone was employed by the U.S. Department of Justice before opening his own practice. Eventually, however, he joined the family business, National Amusements, which had become a successful movie theater chain in Massachusetts.

National Amusements bought Viacom in 1987 for $3.4 billion and took it public. Paramount Pictures was acquired in 1994 for $10 billion. Some assets were sold off over the next few years, including Madison Square Garden and the Knicks, then Blockbuster was acquired for $7.6 billion and CBS in 2000 for $43.5 billion. It bought BET and Comedy Central, and spun off Blockbuster, but the radio-heavy CBS was dragging down value and stock prices. So in 2006 Viacom was split into two companies. CBS retained the TV networks and some affiliate TV stations and the radio group. The new Viacom Inc. still holds many cable networks, including MTV, BET and Nickelodeon, plus Paramount studios.

Redstone remained chairman and the controlling shareholder of both companies, and National Amusements is the parent company of both. His daughter Shari Redstone, from his first marriage, has been running National Amusements with its 1,400 movie screens, but has become more involved in Viacom and was named non-executive vice chairman of the board this year.

These days, Sumner Redstone has given up his tendency to be deeply involved in the businesses, but still serves in a senior adviser role. He spends much more time at home now, which is an estate high above Beverly Hills, with his second wife Paula, a 40-something former schoolteacher, and his fish. He has five tanks full of rare, exotic and valuable fish that have become a major interest. Redstone, who has been described as “cranky, impatient, self-absorbed,” and “famously combative,” says they have a calming effect on him.

However, he’s not ready to give up his empire to collect tropical fish. In a Newsweek interview this year, Johnnie L. Roberts asked Redstone whether he would retire now that Shari is on board; his answer was an unequivocal “no chance.” Redstone says that he’s up at 5am every day to exercise and swim and has never felt better. He is still executive chairman of the Viacom board of directors and chairman of the board of CBS, and on the board of the National Association of Theater Owners. He also lectures at various universities.

Suzanne Ridgway is a freelance writer and regular columnist for Working World and Working Nurse magazines. Suzanne also writes grant proposals for nonprofit organizations.