92-year-old media Mogul Sumner Redstone had to protect his fortune, which, according to the counter “real-time” Forbes, is $5 billion Last fall, former mistress of Redstone tried to achieve recognition of his incapacity to inherit, but last week a court in Los Angeles rejected her claim.
The controlling shareholder of the holdings of Viacom and CBS, Redstone is one of the most influential media magnates in the world. The total capitalization of its companies is $40 billion, including assets of Redstone’s most popular television network USA, Paramount Pictures, reputable publishing house Simon & Schuster and such TV brands as MTV, Nickelodeon, Comedy Central and Showtime.
From alcohol to the cinemas
Sumner Redstone was born in 1923 in Boston, Massachusetts, the son of Jewish immigrants. His parents Michael (Michael) Rothstein and Bella Ostrovsky moved to the US from Russia. In 1940, Sumner persuaded his father to change the name to a more American and became Redstone (literally “red stone” in Yiddish and English, respectively).
The family lived modestly, in their apartment in Boston’s West end was not even the toilet. The father of Sumner started his working career with the sale of linoleum, and then, to save money, took delivery of alcohol. Shortly before that (in December 1933) to the U.S. abolished prohibition, and liquor business has again become legal. Michael got into the circle the major buyers of drink — restaurants, Nightclubs and cinemas. By 1936, he owned several cinemas and cinemas on wheels (drive-in), one of which is worked by his son Sumner, selling snacks.
In the same year for the management of the cinemas Michael founded the company Northeast Theatre Corporation, which his son turned into a cinema operator National Amusements (the tenth largest in North America on July 1, 2015), which now controls the shares of the family Redstone in CBS and Viacom.
Redstone was raised by Sumner and his younger brother Edward in the spirit of competition, stimulating them day in and day out to develop their abilities (this is followed by a stern mother of boys). According to Sumner, she sometimes took the hands on the clock back so that it is more time devoted to classroom music as a teenager learned to play the piano. In 1940, Sumner was the first student in the class graduated from the First public school Boston Latin School, the oldest public school in the United States, known for its high educational standards. At school he was head of the debating club, and his favorite subjects were classical literature and history.
Much later, Sumner acknowledged that these years were the most stressful period of his life. “I had no friends, no social life as such,” Sumner described his teenage years in an interview Instituonal Investor. The University did not change this situation. Sumner, apparently, felt miserable and lonely, recalled the Professor who knew him: “he Probably still remembers with distaste Harvard snobs”.
In search of himself
Enrolling in Harvard in 1940, three years Sumner went through the undergraduate program. As later noted billionaire, after the academic load that was at school, studying at Harvard was given to it easily. Redstone studied German and Japanese, and in 1943 he was drafted into the army in control of when to decrypt the secret messages of the Japanese military and diplomats. For two years the future billionaire was promoted to the rank of first Lieutenant and earned two merit badge. After the Second world Sumner retired from the army and for some time earned a living uncomplicated business using the veteran’s discount, bought surplus office equipment in military offices, supermarkets reselling them at a significant mark-up.
Not finding the use of their humanitarian knowledge, Redstone decided to become a lawyer and returned to Harvard. After receiving a diploma in 1947, he immediately found a good job as an assistant US attorney General Tom Clark. By 1951, after several years of working in different departments of the Ministry of justice, Redstone moved on to private practice, but it is over three years managed to bother him. In 1954, 31-year-old, Sumner returned to family management company National Amusements cinema on a modest salary of $5 thousand ($44 thousand in current prices).
The return of Sumner in Boston has led to discord in the family. The father saw his older son his successor and began to move away from the things of younger son Edward, a graduate of the Harvard business school. Edward endured it for nearly 20 years, but in 1971, still left the company. By the time Michael retired, dividing his 20% of the company between the four grandchildren — the children of Sumner and Edward. Another 40% was in sons, and Edward filed for a father and a brother to court, threatening to sell 40 percent stake in the company to an outside investor.
The conflict was solved with money. Edward received $5 million and became a successful banker. Sumner gained control of National Amusements, in exchange for the right to control the trusts that controlled their stock with Edward children. Later Sumner was purchased from the trusts greater part of these securities for $21.4 million, bringing its stake to 67%. The remaining shares — 33% — became the property of the children of Sumner, Shari and Brent.
A tough Manager
Under the control of National Amusements Sumner blossomed — to replace cinema drive-in came to modern multiplexes (the author of the term — the entrepreneur), for which, in his opinion, was the future of the entertainment industry. Even then, Sumner watched the more valuable assets. He wanted to show not just the content but also to control its creation.
Since the 1980s, he became actively to the market to buy shares of public companies, the entertainment industry, while still remaining unobtrusive figure outside the Boston business community. Everything changed in 1987, when Redstone was victorious in the battle for control of Viacom. This media company just two years earlier, gained perspective, as it turned out, the assets: music channel MTV, children’s entertainment Nickelodeon and Showtime. The purchase cost Redstone to $3.4 billion.
The billionaire did not stop: in 1993, he paid $10 billion for the flagship Paramount, and in 2000, gained control of the media company, CBS Corporation, including television and radio broadcasting, publishing and advertising business.
Deal Redstone has paid off. MTV and Nickelodeon began to bring huge profits, including as well as the sale of rights to broadcast the most popular products, for example, show comedian bill Cosby. In the 2000s came true and the rate for younger viewers and animation: show such as “South Park” and “Sponge Bob”, set records for audience and ensured the growth of advertising sales. In 2000, the personal status of Redstone reached a record $14 billion.
Redstone working day started at four in the morning with the view the latest data on fees in his cinema, and after that he did only three things: the stock of Viacom, lawsuits his companies and preparing for the next large transactions. Frank Biondi, a former Viacom Executive Director, recounted his words: “I’m not interested in operational management. I’m interested in the deal. If you scheduled the transaction, give them to me, I am good”.
By this time, Redstone was no longer burdened by the publicity — he’s appeared on the covers of magazines, closely followed by the place occupied in the ranking of the sharks of the movie business, and in 2001 he released a memoir, “Passion to win”, in which, however, kept silent about his complex relationship with his family.
Although Viacom and was a public company, the control over it remained in the hands of Redstone through National Amusements, he owned a majority of the voting power of the class And never got tired to remind: “Viacom is me, and I am Viacom”. “This marriage is eternal,” said he, Fortune in 1999.
Own marriage as such, he could not name. In 2003, he divorced his first wife, Phyllis Redstone, with whom he lived for 50 years, and a month later married the 40-year-old elementary school teacher Paula Fortunato. “Paula is a lovely girl — led one of the top executives of Viacom, the words of Redstone. — Not beautiful, of course. But she knows that my primary love is Viacom”. Five years later, Redstone got divorced again. After that, according to Vanity Fair, the billionaire first lived with 51-year-old Manuela, Herzer, and then — 43-year-old Sydney Holland. Both women are rumored to have been included in the will of a billionaire. In the fall of 2015, Herzer decided in court to conduct a psychiatric evaluation of a billionaire to prove his incapacity. She accused the daughter of Sumner, Shari, and his nurses in the conspiracy to deprive her of the right to a share of his inheritance, and demanded compensation for potential losses in the amount of $100 million of These claims were eventually rejected by the court in Los Angeles.
Sumner Redstone in numbers
$5 billion — as Redstone for may 2016
$39.4 billion and the total capitalization of Viacom and CBS may 2016
At $6.85 billion — total revenue of CBS and Viacom in the first quarter of 2016
$5 thousand a year paid to Sumner’s father work in the family business
80% of the holding company, National Amusement Redstone controls personally
11 statuettes “Oscar” won the film produced by Paramount Titanic
$100 million requires Redstone Manuela, Herzer
Sources: Fortune, Forbes, company data