Ownership of movie studio Paramount Pictures has become a key issue in the high-stakes battle over the future of Sumner Redstone’s media empire.
On Sunday, for the second time in three months, the ailing Redstone has made known his opposition to the proposed sale of a stake in Viacom’s legendary Los Angeles movie studio, Paramount Pictures, which has long been one of Redstone’s most treasured assets.
The latest salvo came via a lengthy statement released by Mike Lawrence, a newly hired representative for the ailing 92-year-old media mogul. Lawrence’s statement blasted Viacom’s unprecedented move this weekend to announce that it believes that its founder is incapacitated, and under the undue influence of his daughter, Shari Redstone, who is vice chair of Viacom and CBS.
The drama is pitting Shari Redstone against her longtime adversary, Philippe Dauman, Viacom’s chief executive and chairman. Until Friday, both served as members of a trust that will eventually oversee Sumner Redstone’s voting stakes in Viacom and CBS.
But Sumner Redstone late Friday abruptly dismissed Dauman and another longtime advisor, Viacom board member George Abrams, as designated trustees of the Sumner Murray Redstone National Amusements Inc. Trust. In addition to Shari Redstone, the seven trustees include her youngest son, Tyler Korff, and four other attorneys, including David Andelman, who serves on CBS’ board and is Sumner Redstone’s long-time estate attorney.
Dauman’s proposal to sell a piece of Paramount Pictures to raise money to pay down company debt appears to have contributed to Redstone’s ire over the stewardship of Viacom.
“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,” Lawrence said in the statement, which came at the end of tense weekend of back-and-forth exchanges.
In February, Redstone reacted angrily over Dauman’s plan to sell a minority stake in Paramount Pictures. Dauman more recently has said the Paramount sale was proceeding, with an investor expected to be named by the end of June.
Now, the proposed sale of the studio could be derailed — or challenged by Redstone, introducing another messy chapter in Viacom’s corporate woes. As part of his statement, Lawrence said
“We continue to be deeply troubled and saddened by this state of affairs. We have the deepest respect for Sumner Redstone, but it is clear he is being shamefully manipulated,” Viacom spokesman Carl Folta said in a statement late Sunday.
Viacom board members have discussed the proposed Paramount sale three times, with Redstone listening in to the various meetings.
An in-depth discussion of the Paramount sale occurred as late as last week, Folta said.
“The facts are clear. Viacom's 12-hour strategy meetings on May 17 and 18, that Sumner attended by phone, addressed all issues, including Paramount, to the satisfaction of all the independent directors,” Folta said.
“Despite numerous requests,” other Viacom board members have been unable to meet with Redstone in recent weeks, Folta said.
Lawrence’s statement also took issue with Viacom’s contention that Shari Redstone was exercising undue influence over her father, who suffers from a severe speech impediment.
“Viacom's false and unfair statements to the media, as well as Mr. Dauman's opportunistic claims of [Redstone's] incapacity, now make it problematic to move forward with any direct meeting and briefing as Mr. Redstone had previously requested,” Lawrence said in the statement.
“However, Mr. Redstone remains intent on receiving the briefing through his advisors — a request that still has not been responded to despite Mr. Redstone's rights as a director.”
Lawrence noted that late last year, it was Dauman who, in court records, described Redstone as “engaged, attentive, and as opinionated as ever.”
Now Sumner Redstone “removed Mr. Dauman and George Abrams as trustees of the Sumner M. Redstone National Amusements Trust and as directors of National Amusements, Inc. based on what Mr. Redstone believes are the best interests of beneficiaries and shareholders,” Lawrence 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,” Lawrence said. “However, Mr. Redstone remains intent on receiving the briefing through his advisors — a request that still has not been responded to despite Mr. Redstone's rights as a director.”
In response, Folta, said, “The Sumner Redstone we knew would never refuse a meeting about his businesses and he certainly would not want advisors to stand in for him,” Folta said.
Viacom board members “remain willing and eager to meet with Sumner at any time,” Folta said.
In a recent deposition in a separate case that asserted that Redstone was mentally incompetent, the mogul failed to respond when asked to provide his given name: Sumner Murray Rothstein. That case was brought by a former companion, Manuela Herzer.
This month, a Los Angeles County judge stopped short of deciding whether Redstone was mentally incompetent, saying Redstone made it clear that he wanted his daughter in charge of his healthcare.
Now, the battle is over whether Shari Redstone will succeed in controlling the seven-member trust that will oversee her father’s voting shares in the two media companies.
meg.james@latimes.com
@MegJamesLAT
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