News Articles

Viacom's Big Daddy

10/06/2006 08:00:00 PM Eastern

Years back, I was talking to a Viacom executive who was in the middle of a contract negotiation. “How are you going to handle it?” I asked. “I'm going to spend a lot of time being best friends with my bosses—wining and dining them, telling them exactly what they want to hear,” the executive said.

“I know it's sucking up, but sucking up works.”

That little bit of wisdom came back to me last week when I watched PBS' Charlie Rose interview Viacom Chairman Sumner Redstone. Clearly on a public-relations jag to let Wall Street and the world beyond know that all is well in his kingdom since he cut loose CEO Tom Freston in September, the 83-year-old Redstone looked noticeably younger than he had in years. “I think I look and act like a 40-year-old,” he said.

Maybe if Freston had made a point of telling his boss how virile he looked, he'd still have a job.

Redstone described “that fateful night” when he summoned Freston to his Beverly Hills estate to fire him. “We weren't crying,” said Redstone. “But we were close to it.” A shocked Freston apparently told his boss and old friend, “I thought I was growing into the job.” That was proof enough for Redstone that he wasn't up to the task.

As Rose pressed him about his reasons for canning Freston a scant eight months after putting him in charge of the company, Redstone stuck to the same spin. Freston had been slow to grow Viacom's Internet business, he said, and had missed the chance to buy MySpace for a bargain-basement $500 million. When Rupert Murdoch's News Corp. later snatched up the social-networking site instead for $580 million, Redstone said it was “humiliating”—a chillingly loaded word for a man whose autobiography was entitled A Passion To Win.

Redstone told Rose that Leslie Moonves, who took charge of CBS Corp. when Redstone broke it off from Viacom, had assured him he would've snatched up MySpace for $500 million if he had the chance. Rose didn't ask why Moonves hadn't done just that if MySpace was in play. But it wouldn't have mattered; Moonves is obviously the favorite son, a status Freston himself once enjoyed.

And that appears to be the key to success when your boss is Sumner Redstone.

A week after Freston was fired, The New York Times ran a flattering story about Moonves that noted how close he and his wife, Early Show co-host Julie Chen, had become with Redstone and his young wife, Paula.

Contrast that with the way Redstone described his relationship with ex-Viacom COO Mel Karmazin (now head of Sirius satellite radio). In one of the most telling moments of the interview, Redstone told Rose how he thought of his senior lieutenants like family and how much he valued socializing with them. He looked wounded as he recounted how Karmazin never once invited him to lunch.

The truth is that Viacom is a family business, and Redstone runs it like the paterfamilias who just doesn't want to let go.

When Rose asked him if his daughter, Shari, would one day succeed him—after all, she's president of National Amusements, which owns both CBS and Viacom, and truly is part of the family—Redstone was noncommittal.

“Don't count me out,” he said. “I might be here longer than you think.”

Freston may have believed Redstone back in 2004 when he announced—finally—that he would retire in 2007. But if Freston wanted to keep his job, he should have behaved as if Viacom's Big Daddy weren't going anywhere any time soon.

E-mail comments to
bcrobins@reedbusiness.com

September
October