The King of Content

by Keach Hagey

  Such glory came at a steep price. The Paramount fight left Viacom $10 billion in debt, forcing it to sell off assets like Madison Square Garden and its cable systems.4 In order to service this debt, it had had to acquire Blockbuster, well past its sell-by date, which turned a company of about seven thousand employees focused largely on content into a content-and-distribution behemoth of more than seventy thousand, blurring Sumner’s investment thesis considerably.5 The deal also significantly diluted National Amusements’ ownership interest in Viacom, though it maintained control through super-voting shares. While some executives at the company in those days argue that the Paramount acquisition paid for itself with well-negotiated subsequent asset sales—the bulk of Simon & Schuster’s assets went to the UK’s Pearson for the rich price of $4.6 billion in cash—many others believe buying Paramount was a mistake. “The fact that they needed this film studio ended up taking so much value out of the company, because in order to get the studio, they had to overpay for Blockbuster, which they sold basically for scrap metal years later,” said John Sykes, who returned to Viacom in the 1990s to lead VH1. “The real value was the growth of the cable business,” Biondi agreed. “If he had just stayed with the original company, he would have been richer than Bill Gates. It turns out, motion picture companies are not a growth business. They are able to grow their top line, but they end up giving most of it back to talent.”

  Most challengingly for Sumner, buying Paramount forced him to publicize his succession plans. As part of Nynex’s negotiations to fund Viacom’s campaign for Paramount, Nynex wanted assurances that the company would not be sold or otherwise destabilized after Sumner’s death. Sumner agreed to show Nynex his estate plan, which named Dauman as chairman in the event of his death, assuring Nynex that his trusted consigliere knew enough about both his estate and Viacom’s operations that he could block a family attempt to sell or otherwise dismantle the company after his death. As the word began to circulate among more executives, Dooley recommended that Sumner make a wider disclosure of this plan. When the New Yorker brought this arrangement to light a year later, Wall Street was stunned.6 “I would have thought that Biondi would have been named,” one Wall Street analyst told USA Today. Another agreed. “Biondi is integral to the success of Viacom.”7 (One family associate said, “Sumner had no intention of naming a successor. As long as he had control, he could have named the Man in the Moon and then taken it back.”) But in some ways, the real news was that Sumner had passed over his own children, who were then in their forties, both lawyers, both on the board of Viacom, and both actively working in the family business. Indeed, Shari and Dauman were exactly the same age.

  * * *

  Brent was the first Redstone of his generation to join Viacom, becoming a director in November 1991, one month after leaving a fourteen-year career prosecuting murderers and rapists as an assistant district attorney in Boston.8 His cases in Suffolk County were often grisly and emotionally wrenching. Early in his career, he won a conviction for an eighteen-year-old who had raped a seven-year-old girl, though the rapist only got half the sentence Brent asked for.9 Toward the end, he prosecuted a man for fatally whipping his girlfriend’s three-year-old 277 times with an electrical cord.10 The man was charged with first-degree murder but was ultimately convicted of a lesser charge of manslaughter because the defense had successfully argued that cocaine had driven him temporarily insane.11 Brent was drawn to the work, according to his daughter Keryn, because of his own difficult childhood, during which he had watched his father routinely reduce his mother to tears. “My dad wanted to do something of service to humanity,” she said. “He was going to put people away.”

  Brent inherited his father’s height but his mother’s disposition, with none of the ruthlessness that Sumner so valued in his closest colleagues.12 His curly hair and full, pink cheeks gave him a benign, cherubic air—like Sumner, but plumper—while his thick glasses made him appear harmless. He was, as one former Viacom executive put it, “a really nice guy not up to Sumner’s demand.” He was ethical almost to a fault, loved animals, rarely expressed his emotions, and sometimes seemed to inhabit a world all his own. During one sales trip to Vail in the 1990s, he brought his family and tried skiing for the first time. The first day he loved it, Biondi recalled—“rosy cheeks, smiling from ear to ear”—but the second day he complained his feet hurt. When Biondi looked down, he identified Brent’s problem. “He had the boots on the wrong feet. He can be that absentminded.”

  He had also always had tense relations with his father. During one family vacation to the Korffs’ place in Plymouth, Massachusetts, toward the end of his prosecutorial career, Brent and Sumner got in a fight and Sumner told him “to go fuck himself,” Keryn recalled. Brent exploded and declared that his family was leaving. “Everyone was like, Brent, ignore it. They sent all the kids outside to play on the beach in front of the house” while the adults argued. In 1993, he left the Boston area for good, moving to Evergreen, Colorado, where he and his wife, Annie, eventually built their dream home on a six-hundred-acre ranch. When people would ask him later why he moved to Colorado, he would reply, “Because there are no direct flights from Boston.”

  Nonetheless, Brent went along with the plan when Sumner decided that, as part of his estate planning, he wanted to bring his children onto the board of Viacom. (Ironically, Dauman had been the one to suggest to Sumner that he bring his children aboard, arguing that it would be better for Sumner’s ultimate goal of never having his companies sold if they were engaged in the business.) “My dad felt it was better to know what was going on,” Keryn said. “He felt like there needed to be some voice of reason there.” Brent worked for Viacom briefly at Showtime’s office in Denver—the early mecca of the cable industry—and did work for National Amusements setting up its Latin American theaters. By the late ’90s, he worked in the legal department at MTV, trying to head off incidents like the time a mother sued Viacom after her five-year-old burned down her trailer after watching Beavis and Butthead. When he heard that Dauman was named in his father’s will as his successor, Brent was livid. “During the last year that we were in Dover [a suburb of Boston near Dedham], there was a lot of aggressive language about Philippe,” Keryn recalled. “‘Philippe’s a fraud.’ ‘Philippe is a piece of shit.’ ‘Philippe is exploiting the situation. . . . Philippe’s a yes man, and that’s why he’s in this position.’”

  Shari had even more reason to feel uncomfortable with Dauman’s ascent. Just before Viacom’s battle for Paramount, her marriage ended, and Sumner, wanting to avoid any entanglement with a breakup that was also going to deprive him of the executive running National Amusements, tapped Dauman to quietly keep Korff in the fold. Sumner had come to rely on Korff to run the theater chain and expand it to new overseas markets while he was busy chasing the latest corporate megamerger, and when he heard the news about their plans to divorce, his first response was, “Does that mean Ira’s going to leave the company?”13 Shari wanted her ex-husband out of the business. In May 1994, just after the dust had settled from the Paramount fight, Korff resigned his positions as president and director of National Amusements, though he retained a long-term consulting contract that he would ultimately keep renewing for the next decade and a half as he remained a close adviser to Sumner—a relationship that greatly angered Shari. “Ira remains a member of my family and the father of my grandchildren,” Sumner told the Los Angeles Times at the time of his departure. “Neither his business nor personal relationship with me has been affected by the divorce.”14

  But, from the outside, Korff himself appeared greatly changed. In 1990, the year before his marriage fell apart, he acquired the Jewish Advocate, one of the country’s most venerable Jewish newspapers, founded eighty-eight years before in Boston by the Zionist leader Jacob de Haas, which made Korff an important player in Boston’s Jewish community. Then, a couple of years later, his uncle, Baruch Korff, “Nixon’s rabbi,” received a terminal cancer diagnosis and summoned Korff to tel
l him he wanted him to assume the mantle of a Hasidic rebbe, or grand rabbi, that his grandfather had once held. Korff agreed and began to go by the title Grand Rabbi Y. A. (Yitzhak Aharon) Korff. Once a clean-shaven business executive who was so competitive that Biondi said he “always had the look like Al Pacino after a long day,” Korff grew his beard long, donned the flowing black garments of Hasidism, and politely instructed people how to properly refer to him in the third person.15 Although Korff had always been a traditionally minded practicing rabbi who kept kosher and proudly proclaimed his direct lineage to the founder of Hasidism, some corners of Boston’s Jewish community found the transformation bizarre. “None of us in our lifetime has watched a conservative rabbi become a rebbe,” said one member of Boston’s Jewish community. “It doesn’t happen.”

  Sumner and Phyllis respected Korff’s traditionalism, making their house kosher for him and the children. But sometimes it caused awkwardness. During one Rosh Hashanah service at his synagogue in Dover in 1993, after the divorce was finalized, he shocked the congregation by delivering a sermon railing against the vulgar influence of MTV and shows like “Beavis and Butt—I can’t even say it in a synagogue” on American popular culture while Sumner sat a few feet away in the front row, according to people who were there. Several members of the congregation of about thirty people were aghast, but none of the Redstones seemed to mind. Shari and Phyllis, who were seated in the separate women’s section, stayed for the whole service.

  Shari, who had once been so supportive of her husband’s rabbinical work that she helped organize bus service from the neighborhood of the struggling synagogue he had built in Dover, where they lived, to Boston’s Jewish day schools a half an hour away in an effort to draw more observant Jews to the area, had meanwhile become less religious.16 Friends say she remained committed to Judaism but was just not particularly interested in Hasidism.

  As she was trying to figure out what to do with the next chapter of her life, a friend suggested she talk with Paula Stahl, founder of Children’s Charter, a clinic for abused children in Waltham, Massachusetts. Stahl’s work inspired her and crystallized her decision to enroll in the master’s degree program at Boston University’s School of Social Work. “She was very much intuitively drawn to helping children,” Stahl said.

  And yet, in 1993, a newly single Shari was approached again by her father, with his classic maneuver of suggesting she try coming in for a couple of days a week. “Someone in the family needs to know how to run the business,” he said. (Some Redstone observers believe it is not a coincidence that this overture came the same year that Brent defected for Colorado.) She took a leave of absence from social work school and within six months was working full-time for a salary of $200,000. She joined the board of National Amusements, still as Shari Korff, alongside her parents and brother. By 1994, she had dropped her ex-husband’s name and joined the Viacom board, and by the next year, National Amusements named her executive vice president, the same title her father held for much of his rise to power. “This is something I never anticipated doing,” she told BoxOffice in her first big profile as a National Amusements executive in 1995. In the photo, she wore a red double-breasted blazer with Working Girl shoulder pads, a curling-ironed pouf of auburn hair, and a fearless expression.

  Exhibition was an overwhelmingly male industry, and National Amusements had been run by a cadre of mostly the same male executives for decades. Sumner set up regular Monday management meetings as a way for her to learn about the business. For a year, she mostly kept her mouth shut and listened, occasionally suggesting wild ideas that were dismissed, like serving coffee in the theaters. After one meeting she had convened to prepare a presentation to National’s board, she walked out of the room and heard the door close behind her, as the men in the room circled to talk about her behind her back. Tilly Berman, recognizing what was going on, told Shari to walk right back into the room, which she did. The men met later without her anyway, but the episode showed that she was not going to tolerate being isolated from her team. She befriended Nikki Rocco, the head of distribution for Universal, in part because they were the only women anyone could think of who did what they did. “As a woman in the business, you have to go the extra mile to get along with men,” Rocco said. “You have to be very tough, and you have to be able to take your lumps because that’s what happens in this business. There’s no room for weakness.”

  Shari attacked her role at National with Redstonian zeal. Learning at the feet of the graybeards who had been running National for Sumner for decades, she got up to speed quickly and carried forward a massive building spree, planning to expand the 850 screens in the United States and Britain deeper into Europe and South America. In the meantime, she quickly began to fill her father’s shoes at NATO events, holding forth on the state of the industry.

  Yet, strangely, throughout it all, her father was largely silent about her role at National. As she began to be cast as her father’s second in command in the press, he seemed to bristle. As she recounted to Forbes in 1994, he normally beat her at tennis, but one recent day she had beat him for a change. “I said, ‘Dad, doesn’t it make you feel good that here I am, your daughter, and we played tennis together, and I did really well?’” Shari told the magazine. “He looked at me and said, ‘No, it doesn’t.’”17

  Chapter 13

  “Remember, I’m in Control!”

  Far from wanting to cultivate a successor, Sumner had become convinced he could run the entire show himself. Frank Biondi’s laid-back style had begun to annoy him. “Sumner didn’t like Frank because Frank would leave at five,” Tom Freston said. “Frank would not want to go out to meals with him. Frank was a no-bullshit guy. He had a family, and he drove a regular car to work from the Bronx. He would write his own checks for his houses. He’d pay the plumber. Any time I’d go into his office he was always writing checks to somebody.” For MTV Networks, which enjoyed one hundred quarters of double-digit growth, this hands-off approach was just what the doctor ordered, allowing its channels to keep their quirky, authentic voices and unshakable connections to their audiences. But Sumner believed that other divisions of Viacom, especially Paramount and Blockbuster, needed more of a swashbuckling, Murdoch-style CEO, ready to swoop into problem areas and fix them himself. He was eager for the role.

  On the afternoon of Wednesday, January 17, 1996, Sumner nervously padded across the few feet of plush carpet that separated his office from Biondi’s at Viacom’s Times Square headquarters with a press release announcing Biondi’s departure in his hand. He told Biondi that it was time to make a change, he was tired of sharing the credit, and he wanted to run the company himself. “I said, ‘I think you are making a big mistake,’” Biondi recalled.

  Biondi was surprised because, by most objective measures, he was performing well. Viacom was the toast of the media industry, its decision to focus on content—and, specifically, meaningful brands like MTV and Nickelodeon—rather than distribution seeming ever smarter against the backdrop of the rise of the Internet. Analysts expected the company to outgrow competitors such as Disney, Time Warner, and News Corp by at least 10 percent over the next several years. “I cannot find anyone who has anything bad to say about the management at Viacom,” Keith Benjamin, a media analyst for Robertson Stephens, told Wired in April 1995. In the nine years that Biondi had been at the helm, the company that Sumner had bought for $3.4 billion had grown to be worth nearly $30 billion.1

  But over the past few months, the bloom had begun to come off the rose. The stock was down 27 percent2 from $54 as recently as September. Just two weeks before Biondi’s ouster, it dropped 8.6 percent in a single day when analysts cut their cash-flow forecasts for Blockbuster and Paramount. The real issue was the variable common rights, or VCRs, that Viacom had issued as part of the Blockbuster purchase. Those securities were to convert into Viacom Class B stock if its closing price didn’t reach $52 a share by the end of the previous September, leaving the company vulnerable to having to i
ssue as many as 39 million new shares, a massive dilution to its stock price. So Biondi and his team pulled out all the stops to keep the stock price up and in the end only had to issue 6.4 million shares to VCR holders. “But the rosy prospects that Mr. Biondi and his team painted for the company, which helped drive the stock price up, haven’t fully materialized,” the Wall Street Journal noted. As a result, Viacom investor Mario Gabelli explained that Sumner “had to shoot someone.”