The King of Content

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The King of Content Page 12

by Keach Hagey


  But it was now painfully clear to him that this was not enough. Not long after the fire, he visited Delsa at her home, and they took stock of the future. He saw two paths before him: he could give up and spend the rest of his life running the theater chain, or he could go on to bigger and better things. Together, they decided to double down. As if to prove his point, Sumner sat down at the piano and played, despite the still-healing wound that would leave his hand like a claw. “When he got up,” Wittman recalled, “the keys were covered in blood.”

  Delsa threw herself into her writing, and by 1981, she won a $3,000 Massachusetts Council on the Arts and Humanities fellowship that allowed her to buy her first computer, upon which she composed a half-dozen novels. Sumner, meanwhile, appeared for a moment to question his capitalist impulses and signed up to teach the Boston University Law School’s first course in entertainment law. “If I had any talent and ability, I probably should have spent it in a more worthwhile way,” he told the Boston Globe in his first major newspaper profile in March 1981. But as the profile wore on, it became clear that Sumner’s regrets were not about having been insufficiently philanthropic. Rather, it was that he had spent so long stuck in the clunky caboose of the media train. Although his public persona came from his relentless warring against the studios, his true wish was to join them. “We sometimes wish we were they, and they were us,” he said.19

  By then, of course, he was already on his way to taking control of the media industry’s engine. He had already turned heads on Wall Street with the huge profit National Amusements made on its Fox stake and had amassed large positions in Warner Communications, MGM Films, Columbia Pictures, and Time Inc. “I don’t see movie stocks as entertainment stocks,” he told the Boston Globe. “Every time they produce a picture, they produce an asset, which will outpace inflation in growth. The ancillary revenue from these pictures is escalating.”20 And so was his stake in the studios. Over the course of 1981, he ramped up his stake in Columbia to nearly 10 percent.21 When Coca-Cola Company agreed to buy the company in January 1982, his shares were worth $48 million, giving him a profit of about $26 million.22 That year, Sumner appeared on Forbes’s list of the four hundred richest Americans for the first time, at number 316.23

  This milestone came as Sumner was, rather curiously, doling out increasingly dour predictions about the prospects of his own industry. As early as 1981, he saw the future of the five-hundred-channel cable package, as well as the threat it augured for movie theater owners. “Despite what others have said, the fact remains that the average person will, before too long, be able to punch out one of perhaps 100 possibilities on his television set, which also will be different in terms of size and resolution. And this fact will have to affect exhibition, perhaps drastically. There’s an enormous revolution going on today, and I don’t know if most theatre-owners are as aware of it as they should be,” he wrote in Film Journal International in November 1981, just as he was upping his Columbia stake. He added, “And let’s face it: if distributors begin a policy of simultaneous release of major films to home markets along with theatre, then theatres are through, over and out.”24 In a Boston Globe profile of his rival exhibitor A. Alan Friedberg, in 1982, he was even more blunt. “The theater industry is a non-growth industry,” Sumner said. “It’s going down.”25

  Nevertheless, he continued to build ever-larger multiplexes and unveil them with ever-grander displays of pomp. In the summer of 1982, he lit up the sky over Revere with fireworks celebrating the opening of what he claimed—in true Redstone fashion—was the largest indoor movie complex in New England, Showcase Cinemas 1–10, built atop the demolished remains of Mickey’s Revere Drive-In.26 The next year, he performed the same trick on the Whitestone Drive-In, converting it into a ten-screen multiplex,27 with an entire room dedicated to nothing but popping popcorn around the clock. By then, the eleven-theater multiplex built on the site of the former Sunrise Drive-In, which he had demolished in 1979, was, he claimed, “the world’s largest-grossing theater complex.”28 If he delivered a mixed message on indoor theaters, on drive-ins, his naysaying was not for show. He told Newsweek in 1983 that “drive-ins are rapidly becoming part of our nostalgic past—I foresee their extinction by the end of the decade,” and set about unsentimentally hastening that reality.29

  In 1983, Sumner turned sixty, the age at which another man in his position at such a closely held family company might have begun to turn his attention to succession. Had it been given, such attention might have been rewarded: Brent and Shari were model Redstone offspring. Both were attorneys who, in 1980, married other attorneys. Brent had followed in his father’s footsteps to Harvard, followed by a law degree from Syracuse University in 1976. By the early 1980s he was working as an assistant district attorney in Boston, prosecuting murder cases, and had married Anne Vanderwerken, a graduate of Rochester Institute of Technology from upstate New York. Yet not a word of their marriage ever appeared in the press, in contrast to Shari, whose announcement of her engagement to Rabbi Ira Korff, the scion of a prominent family of Boston rabbis, filled half a column in the New York Times. It had to be long just to list all of the degrees that she and her fiancé had racked up in their barely three decades on the earth.

  In adulthood, as in childhood, Shari was Sumner’s favorite child, the one most like him and the one he most liked to brag about. “He always spoke more admiringly about Shari than about Brent,” Wittman said. She inherited his auburn hair, blue eyes, intelligence, combativeness, and obsessive streak. Like Sumner, Shari was impatient to get to the next thing. In middle school, she attended a special program that let students work at their own rate, and by her junior year she was taking all senior-level and AP courses. Like many teenagers of her generation, she fell for the books of Ayn Rand and Rand’s objectivist philosophy that a person’s primary moral duty was to her own happiness. But she was also pulled toward public service and working with children. She volunteered at Boston Children’s Hospital and spent her free periods in high school helping teach kindergartners and second graders. After she graduated from Newton South High School and enrolled in Tufts University, she thought she might go into education. Instead, she studied psychiatry before switching to English, writing her thesis on police discrimination and discretion in arrest procedure. The research gave her a taste of legal work, and after graduating from Tufts in 1975, she went on to receive a JD degree from Boston University Law School in 1978.

  But her ambition was never to join a high-powered law firm. She had a job teaching constitutional law at METCO (Metropolitan Council for Educational Opportunity), the pioneering voluntary school desegregation program, when she ran into Mark Shub, the nephew of Mickey and Sumner’s longtime secretary, Tilly Berman, at a funeral. Berman was a kind of mother figure to Shari, mentoring her on how to navigate the male-dominated world of exhibition and typing up her papers for her when she was at school. Shub’s law firm, Salon, Silver, Heffernan & Shub, was looking for an associate. The firm did some criminal defense work, and Shari had enjoyed her criminal procedure professor in law school, so she took the job. She worked alongside partner Stephen Salon on at least one criminal case, records show, and otherwise enjoyed the convivial culture of a firm where the associates went out drinking together after work and she learned to play cards and backgammon. “We enjoyed life,” Shub said. But over time, she found that the partner she really wanted to work with was Shub, who did business transactional work, which required a sophisticated understanding of tax law. So she decided to enroll in the same master’s program in tax law that he had attended at Boston University.

  It was there, in the dubiously romantic setting of a tax law lecture, that she met her future husband. A slight man with intense brown eyes and an air of great confidence, he was sitting a few seats down the row. She moved to sit next to him, and they struck up a conversation. She was surprised to find that he had no idea who she was, but they soon discovered that their grandfathers had been close.

  Korff was the
grandson of Grand Rabbi Jacob Korff, a direct descendant of the founder of the Hasidic movement; he had been elected the last rabbi in Zvhil, a Ukrainian town near Kiev that was a center of the movement. When a pogrom tore through Ukraine in 1919, the family of the grand rabbi, who was in Boston at the time, was targeted. His wife attempted to flee her home carrying her infant son—Ira’s father, Nathan Korff—with her three other young children behind her. A bullet went through Nathan’s foot and killed his mother, but the children survived and immigrated to Boston.30 There the grand rabbi and his family welcomed waves of refugees, becoming prominent pillars of Boston’s Jewish community. All three of his sons also became rabbis, the most famous of whom was “Nixon’s rabbi,” Baruch Korff, a close adviser to the president who controversially defended him during the Watergate scandal.31

  The Korffs came from the tradition in which rabbis chose not to make a living from their rabbinical work and so always needed a second—or in Ira’s case, third or fourth—profession to support them. By the time Ira met Shari, he had a formidable résumé across both the spiritual and secular worlds, including a BJE degree from Hebrew College, a BA from Columbia University, a JD from Brooklyn Law School, an MA in international relations, another MA in international law and diplomacy, and a PhD in international law and politics from Tufts University’s Fletcher School of Law and Diplomacy. By the time he was married, in 1980, he had worked in Boston’s DA’s office and with the Massachusetts attorney general and was then serving as a consultant in international law and relations and working in business. As if that weren’t enough, he was also serving as chaplain of the City of Boston and had been the rabbi of Temple Aliyah of Needham since 1975.32

  Sumner saw a great deal of himself in his eloquent, ambitious son-in-law. Like Sumner, Korff spent much of his thirties giving speeches, on everything from “President Reagan’s Foreign Policy”33 to “World Current Events,”34 and Sumner was always bragging about his résumé. Shari’s engagement announcement notes that “in 1973, at the age of 24, Dr. Korff was selected by the Chamber of Commerce as one of the ten outstanding young men in America”—the kind of thing that only Sumner would have included in an engagement announcement. Sumner was overjoyed when Shari and Ira had a daughter, Kimberlee, the year after they were married. (As Sumner put it to a profiler a few years later, “I have a 3-year-old granddaughter, Kimberly [sic], who recently said to me: ‘We should spend some time alone.’ That’s more important to me than building 315 theaters.”)35 By this point, Ira had joined the Boston law firm of Berman & Lewenberg and brought Shari on board, briefly naming the firm Berman, Lewenberg, Redstone & Korff. Shari did a bit of legal work for her husband’s clients, but as their family grew she decided that a legal career was incompatible with the kind of mother she wanted to be, the kind that baked cookies and, as Tilly Berman once put it, made “seventy different kinds of chicken, each more delicious than the last.” She kept her law license but focused on her family.

  With the next generation out of professional school, married, and ready to take on the world, this was just like the point in Mickey’s life when he had begun grooming Eddie and then Sumner to run the business one day. But Sumner showed few signs of preparing to hand over the reins to his own children. Brent, who always had the more difficult relationship with his father, made clear early on that he wanted nothing to do with it, and his father had concluded that he lacked the pugilistic instinct that exhibition required. Shari would often say later in life that she had never imagined going into the family business, and indeed her only apprenticeship growing up was a summer between college semesters spent interning on the Paramount lot, mostly as a way to visit California. For a while, this was fine by Sumner, who honestly believed after living through the fire that he would live forever.

  But as his fire-forged ambition made him grow ever more restless with what he saw as the dead-end business of exhibition, he began trying to persuade his son-in-law to step into the role as potential successor, a trusted insider who could hold down the fort at home as he prepared for bigger things. One day he took Korff for the proverbial walk in the woods, telling him, “I don’t have a son,” meaning that he didn’t have the kind of son he felt could take over the business. “What if something happens to me? Even if you decide you want to sell the company, you have to be in it to understand the value.” He suggested Korff come in and try it out, just one day a week. Sumner of course had no intention of selling the business, but the guilt trip worked, and by the mid-1980s, Korff joined National Amusements as executive vice president, the title Sumner had once held under his father.36

  Meanwhile, Sumner focused on completing his consolidation of control of National Amusements. “Sumner wanted to buy Michael out,” said a person close to the family. He had given Michael a job at National Amusements, it hadn’t worked out, and he somehow convinced Michael that it was he who wanted to cash out, not the other way around, the person said.

  Beginning in 1982, Sumner began preparing to redeem all of the National Amusements stock he was holding as the sole trustee of the Ruth Ann and Michael Trusts and as trustee of the Grandchildren’s Trust, according to court documents later filed by Michael. He directed the company’s accountant, Sam Rosen, to prepare a valuation of the company and then hired Jim DeGiacomo—the same lawyer who had represented Eddie in his settlement—to help with the redemption.

  By 1984, Michael, now twenty-seven, had stabilized and moved back to Boston, where he was attending Northeastern University. But he “was struggling,” according to one person who knew him, and “chafing” against the many hoops he had to jump through to get at the money that had been set aside for him. He wanted to cash out. Sumner was only too happy to oblige. On March 8, 1984, he drew up an agreement to have National Amusements redeem all 831/3 shares of National Amusements stock held in the three trusts for $21.4 million, based on Rosen’s valuation. As trustee of the trusts and president of National Amusements, Sumner was, as Michael would complain, both buyer and seller in the transaction.37

  Michael got $7.5 million. Ruth Ann, still at large somewhere in South America and not in communication with her family, theoretically got the same, though she would never lay a finger on it. Brent and Shari each got $3.2 million from the redemption of the Grandchildren’s Trust38 but held on to their own trusts, together owning 331/3 shares in NAI. That left Sumner with 662/3 shares—clear, overwhelming control. As a hint of what he planned to do with that control, six weeks after the redemption, he amended National Amusements’ articles of organization to authorize it to engage in either cash or margin transactions in commodities and securities.39

  Years later, both Michael and Brent would accuse Sumner of lowballing the trusts for his own benefit. Michael complained that Rosen made National Amusements appear far less valuable than it was by using financial information that was more than two years old and failing to count National Amusements’ substantial investment income, treating it as a nonrecurring event even though the company had been investing in media stocks since the mid-1970s. Perhaps more deviously, the valuation included all of Sumner’s naysaying about the state of the theater industry, raising “serious concerns about [the company’s] future ability to continue its past performance” because the motion picture industry had been “flat” for nearly two decades and faced a “serious and potentially devastating threat.”

  What Rosen failed to mention, amid all the corporate boilerplate, was that Sumner had a plan for how to fight that threat. But he would need total control to carry it out.

  Years later, Brent would claim that Sumner justified seizing that control—in a maneuver that, in redeeming the Grandchildren’s Trust, would end up costing his own children millions—by telling Brent and Shari that they would manage and control the company.40 He just didn’t say when.

  Phyllis wanted no part of this journey. On August 23, 1984, she filed for divorce, citing cruel and abusive treatment. By this point, she and Sumner were living separately, she at 98 Baldpate Road in
Newton and he at his parents’ former condominium at 180 Beacon Street in Boston. A family friend told Boston magazine that Delsa was named a codefendant in the suit, which has since been sealed. Their relationship had been rocky from the beginning, and Delsa was hardly Sumner’s first dalliance. Phyllis was “verbally and physically and financially abused by him every day of her life,” Shari wrote in an email in 2014, and the fighting was constant. For his part, Sumner complained bitterly to colleagues that Phyllis would not even get out of bed to get him a cup of coffee, and her tendency to run late made him apoplectic. But Doc Sagansky’s daughter, Marilyn Riseman, said it was Sumner’s Hollywood dreams that turned Phyllis off. “I think she’s a simple person, and she just wanted her simple husband,” Riseman told Boston magazine. “She doesn’t understand the bigness.” Because Massachusetts divorce law allowed her to potentially walk away with half of his assets, the suit threatened his careful designs on the control of National Amusements. He begged Phyllis to stay, and on January 8, 1985, she withdrew the suit.41

  With control of National Amusements even more firmly in his grasp, Sumner began to pursue his extracurricular studio investments with new fervor. In 1981, MGM, one of the original Big Five major studios known for epics like Gone with the Wind and Ben-Hur, bought United Artists, the near-bankrupt Little Three studio. The newly merged company then spun off its Home Entertainment division into a separate company set up to exploit its library of forty-six hundred movies—the largest in the industry—across home video, pay-TV, and other nontheatrical markets and sold 15 percent of that company to the public.42 Sumner, keenly aware that the growth of cable was going to open up vast expanses of open airtime that would make these old movies newly valuable, bought up about half of that outstanding stock, calling it “the most effective way of participating in the exploding home entertainment market.”43

 

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