The King of Content

by Keach Hagey

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  While Shari was solidifying her role as her father’s successor as chairman and Brent was starting to come to terms with the new world order, Karmazin was having an increasingly hard time securing his promised position as the successor to Sumner’s role as CEO. In public, Sumner tortured Karmazin by refusing to commit to renewing his three-year contract when it was due to expire at the end of 2003, or to ceding his title of CEO. It got so bad that Viacom’s board at one point had to tell Sumner and Karmazin to stop fighting and run the company.24

  Sumner, meanwhile, had become a holy terror to the people around him. He was known to throw a steak across the room that he found not cooked to his liking, and he was banned from Le Cirque and Elio’s in New York for his rudeness to the waitstaff. Once, aboard a company plane, he threw a turkey leg at a flight attendant’s head after learning that it had not come from the iconic Nate’n Al Delicatessen in Beverly Hills.

  People close to him theorized that some of his orneriness during these years came from his personal life. The end of his marriage to Phyllis had not brought the liberation he had craved. Instead, the photos her private investigator snapped of Sumner strolling around Paris hand in hand with Peters had come as a shock to Delsa, who had always assumed they had a relationship of mutual trust. She felt betrayed by his cheating, and even further betrayed when he asked her to do whatever it took to keep any mention of their relationship out of the press during his divorce proceedings from Phyllis, lest it be used against him to deprive him of control of Viacom. On top of it all, she was appalled to learn during Thanksgiving dinner of 2000 that Sumner, a lifelong, self-proclaimed “liberal Democrat,” had voted for George W. Bush. (Some say it was because of his plans to roll back the estate tax, while others say it was more a matter of foreign policy.) After three decades together, Sumner and Delsa broke up. According to people close to both Delsa and Sumner, the fact that Delsa, despite being four years younger than Sumner, was nonetheless now in her early seventies and beginning to look her age had a lot to do with it. As Sumner once put it to one of the much, much younger girls he would later date, “Would you date someone your own age?”

  Paula Fortunato was in her late thirties—nearly a decade younger than Shari—when she was set up with Sumner in 2001 by his stockbroker, Steven Sweetwood, Madeline Redstone’s son. Like many people who worked closely with Sumner, Sweetwood suspected his step uncle might be happier—not to mention less of a trying curmudgeon—if he had a woman in his life. Sumner thought so, too. He was always trying to convince Christine Peters to marry him, and proposed to another striking, cosmopolitan blonde from a well-to-do Jewish Argentinian family named Manuela Herzer around the same time, bringing her to his company-owned apartment in the Pierre hotel in New York with her child and nanny in 2000.25 But both the blondes rebuffed his offer.

  Paula, an elementary school teacher who had never married, was a completely different species than the Hollywood sophisticates Sumner had been spotting squiring around Los Angeles in the previous few years. A trim, tan brunette with dark eyes and a Julia Roberts smile, she grew up a doctor’s daughter in New Jersey and bounced around to various jobs after college before finding her passion in teaching in her late twenties. When Sweetwood called about the date, she had no idea who Sumner Redstone was. “He’s not a parent at the school, is he?” she told Vanity Fair that she asked at the time. “Because I don’t date parents at the school.” She reluctantly agreed to meet Sumner at Il Postino. Immediately, there were sparks. The next day, Sumner messengered over a pile of his press clippings so she would understand who he was. Soon he was picking her up from school in his limo and whisking her to dinner in Los Angeles on his private plane.26 After a nearly two-year courtship, they were engaged in August 2002, a month after his divorce was finalized, and married on a chilly April day in 2003 at the grand Reform Temple Emanu-El on Fifth Avenue.27 The bride wore a demure long-sleeved cloak over a white brocade gown, while the seventy-nine-year-old groom wore a black yarmulke, improbably bright blond hair, and a schoolboy’s grin.

  Of course there was a prenup. Sumner told the New York Times that the marriage “does not affect anything on my economic life, and Paula has made it clear she wants nothing from me.” His assets after death would go to the children of his first marriage.28 Nevertheless, Shari was less than thrilled, not least because the marriage was soon followed by Sumner’s move to Los Angeles. After all these years of earning her way into the building, the minute she got there, he decamped for the other coast with his new bride.

  Sumner had actually bought the Mediterranean-style mansion in the exclusive enclave of Beverly Park, high atop the craggy hills overlooking Beverly Hills, from neighbor Sylvester Stallone before he had proposed to Paula. At one point, he even tried to convince Delsa to move to the West Coast with him, according to one person close to the family, though she demurred. Her health began to decline soon after, and she eventually moved into an assisted-living facility. But Sumner never forgot about her. He called from time to time, and every birthday or Valentine’s Day, he sent her embarrassingly large bouquets of roses. Delsa would usually feign annoyance. As late as 2011, when the flowers came, Delsa’s son, Winn Wittman, recalled, she opened the card and said, “Sumner, who’s this guy?”

  Sumner moved into the mansion with Paula and began a new life of daily nude swims in his private pool, feeding his vast collection of saltwater fish, and running his empire via phone from a soft chair in his study with a dog in his lap as CNBC blinked in the background.29 In the evenings, Paula, whose fit frame looked Oscar-party worthy in an evening dress, accompanied him everywhere. For a while, it seemed like he might be able to enjoy a life less consumed by conflict and conquest.

  But the move to LA also separated Sumner from his roots, the Boston circles that had known his father, his cadre of lawyers, his children, most of his grandchildren, Delsa, her children, and even Phyllis, whom he had befriended again shortly after his divorce. Suddenly he was removed from anyone who could tell him no. Out there, he was just a mogul in a city full of moguls. There was nothing to do but spend his money and enjoy himself, which, in retrospect, was a very dangerous position for someone like Sumner Redstone to be in.

  Within a year, he began to grow restless. It was not so much being removed from the buzzing energy of Viacom’s tourist-thronged Times Square headquarters; he quite liked his placid koi ponds and Zeus’s-eye view over the canyons of Los Angeles. It was the stock. For the better part of two decades, Sumner had measured his self-worth by Viacom’s stock price and needed to constantly buy back Viacom shares in the way that other people needed to breathe. In February 2004, Viacom decided to rid itself of the ailing Blockbuster, whose business was being hammered by the rise of cheap DVDs. It took a $1.3 billion write-down on the business and announced a tax-free split-off, which prevented Sumner from buying back Viacom shares for much of the year.30 Colleagues point to this prohibition to explain Sumner’s otherwise baffling decision to begin a slow-motion takeover of a beleaguered video game company that hadn’t turned a profit in five years: Midway Games. As one former Viacom executive put it, “He had time on his hands.”

  As the company that brought the seminal Space Invaders to the United States in 1978, Midway had a venerable pedigree in a fast-growing industry that was increasingly being blamed for television’s stalled ratings. But by 2004, it was still best known for its 1990s-era ultraviolent fighting game Mortal Kombat, had no titles on the list of top 20 bestsellers, and had suffered seventeen straight quarters of losses.31 Sumner, however, knew the management well, as he had been investing in its former parent, WMS Industries, since 1983—WMS’s pinball machines were in National Amusements’ movie theaters—and was convinced the company was in the midst of a turnaround.32 So in March 2004, he began to push his holding past 30 percent, a few percentage points at a time; by May that same year, he had control and overhauled its board. Among the first two directors he placed on the board was his daughter.33


  From the outside, his approach was similar to the way he initially approached Viacom, and his reasoning (when he gave it) was similar: he wanted to be in the business that he feared was killing the business he was currently in. But if his approach to buying Viacom had confused analysts in the early months, his Midway attack positively confounded them. Nobody could figure out what this wildly successful media mogul was doing with this demonstrably doomed video game company, especially if, as he claimed, he had no intention of merging it with Viacom. Even Shari, whom he soon elevated to vice chairman, seemed at a loss to explain it. “My father was originally fascinated with the company,” she told the Chicago Tribune. “It’s something that stemmed from him. I don’t know what the future holds, but we have enormous confidence in Midway.” To understand it better, she bought herself a PlayStation and got hooked on Psi-Ops: The Mindgate Conspiracy, a shooter game where players use psychic powers like “mind drain” and “mind control” to fight terrorists trying to take over the world.34 “He bought it as a plaything, and tried to manipulate the stock,” said a former Viacom executive.

  Some Viacom executives thought Shari was engaging in some “psi-ops” of her own when she bought an apartment overlooking Central Park in late April and told the New York Times that she planned to start spending a third of her time at Viacom in the fall. “It was always my intention that when the kids were grown, I would spend more time and play a more significant role at Viacom,” she said. “Next year is the year I intend to start attending meetings more regularly.” Sumner downplayed the significance of the move, which he had requested, emphasizing that Shari would not have an operating role. “She’s doing something extremely important,” he told the Times. “She is building relationships and building knowledge. And she is assisting Viacom.”35 He stopped short of saying she would be named chairman, saying, “No decision has been made,” but he was still in full praise mode about her running of the theaters. “If she were not doing the right job, she would not be there. She was not there a year before I could see that she was a hotshot.”

  If the writing was not yet etched on this particular wall, then it was in boldface on the stock price. Karmazin’s arrival atop Viacom had been greeted with cheers on Wall Street, but soon after the merger with CBS transformed the company into the biggest advertising player in the country, the United States slid into a prolonged advertising recession. Viacom missed its earnings targets from 2001 to 2003, and its stock price remained stalled for three years.36 By June 2004, the price had declined 20 percent over the past year, dragged down by the slowing ad sales in its radio division, which was most closely associated with Karmazin.37 The people who worked under Karmazin described him as a good boss and a straight shooter, with a wisecracking fearlessness that endeared him to his troops, but Sumner had grown to loathe him.

  Against this backdrop, the Times story caused a sensation. Nine days after it was published, Viacom held its annual shareholders meeting, and Sumner spent much of it fending off questions about his relationship with Karmazin. After the meeting, Karmazin told a few board members he wanted to leave. The next day, after attending an “up-front” advertiser presentation for Viacom’s struggling homegrown television network, the United Paramount Network, at Madison Square Garden, Karmazin walked back to his office, called his lawyer, and told him to tell Viacom that he was resigning. Karmazin walked away with a $30 million exit package and never had to have the awkward conversation with Sumner. He would later explain his decision as a response to the constant speculation about his future there, telling USA Today, “I didn’t want another summer of Sumner and Mel.” But he also admitted that questions about the role that Shari would play were “part of the stuff that was going on,” adding, “Sumner has control and can do anything he wants.”38 As long as Sumner was the controlling shareholder, he told the Journal, “there is never going to be a succession.”39

  As predictable as Karmazin’s exit was, its exact timing came as a surprise, and Viacom executives asked Karmazin to keep his exit under his hat until they could come up with a succession plan. Immediately after word had begun to leak out from the board that Karmazin was planning to leave, Sumner summoned Freston to his apartment at the Carlyle to deliver the bombshell: “Karmafuck is going to go, and I want you to be the CEO of the company.” Freston wasn’t sure what to say.

  “At every point in my life, I’ve always done exactly what I wanted to do, and I somehow fell into this thing on MTV Networks, which was everything I loved and cared about,” Freston said. “It was a creative business. We were building stuff. It wasn’t like pulling corporate levers. I’d been around enough to see what a public company CEO did. I didn’t want to get farther away from the creative process and put up there.”

  His mind was racing. Sumner, who could be exceedingly charming when he wanted to be, laid it on thick, praising Freston as the guy who had delivered for Viacom. As chairman and CEO of MTV Networks, Freston had long been responsible for the largest and fastest-growing profit engine in the company. The numbers were extraordinary: MTV Networks had revenue of roughly $100 million when Sumner took over in 1987 and elevated Freston; it now brought in more than $3.5 billion from a sprawling global network of channels and merchandising deals.40 He was the rare executive who was both respected and beloved in the industry, harnessing the power of the growth of pay television in the United States to nurture a creative culture that had shaped American society. Through it all, he maintained his countercultural credentials, spending his free time hanging out with the likes of the Flaming Lips and organizing music festivals in Senegal.41

  Freston felt flattered but cornered. “Let me think about it and be back to you tomorrow,” Freston told Sumner.

  Sumner, who abided waiting so little that his dining companions felt pressured to have their orders already queued up in their minds before sitting down to dinner with him, was not about to give Freston the requested twenty-four hours. Annoyed that Freston didn’t leap at the chance to be CEO, he turned around that same day and offered the job to Leslie Moonves, the highly competitive, politically savvy chairman and chief executive of CBS.

  A former actor with a deep tan and a salesman’s smile, Moonves approached programming as a showman, lifting the CBS network from third to first place, thanks to hits like CSI and Survivor. He grew up middle class in Valley Stream, Long Island, the son of a psychiatric nurse and the owner of a group of gas stations. He started out studying premed at Bucknell University but decided instead that he wanted to be an actor, moving to Greenwich Village and supporting himself as a bartender while auditioning for parts.

  After landing parts in shows like The Six Million Dollar Man, he moved into the business side of television, rising steadily through the ranks of Twentieth Century Fox, Lorimar Television, and Warner Bros. Television, where he developed megahits like Friends and ER. In 1995, he took over the CBS network, then in last place with the oldest audience on television. Using his considerable programming instincts, he turned it around and in the process earned a reputation as “the man with the golden gut,” as superagent Ari Emanuel put it. But behind the scenes, Moonves was a meticulous workaholic, even a bit of a micromanager, sending emails at all hours and showing up to casting calls for CBS shows.42

  Moonves, naturally, accepted immediately. The next day, as Moonves was performing his annual boasting ritual at the CBS up-front sales presentations for advertisers at Carnegie Hall (“Make no mistake about it,” Moonves declared from the podium. “We at CBS show across-the-board growth; everyone else is down in all categories!”), Freston called Sumner to accept the job. Sumner told him he’d already offered it to Moonves. “I told you to give me a day, for God’s sake!” Freston said. “A day’s not even up yet.” Freston had been like a son to Sumner, so Sumner decided to split the baby, making them co-COOs.

  Freston and Moonves carved up the company between them. Freston got to add Paramount and Simon & Schuster to his portfolio at MTV Networks, while Moonves added the radio and bi
llboard businesses to his CBS TV holdings. Among other things, the arrangement meant that Paramount’s Jonathan Dolgen, the financially savvy, innovative cost-cutter to whom Sumner spoke by phone multiple times a day, would leave the company. Sumner said he would break the news to Dolgen but failed to do so, leaving it to Freston to awkwardly explain why Dolgen’s name was left out of the press release announcing the changes.43

  In late May 2004, Viacom executives worked out an announcement knowing that it would shock Wall Street. It was to be released just after Memorial Day weekend: Karmazin had resigned as president and chief operating officer, Freston and Moonves were promoted to share those titles, and Sumner had agreed that he would hand over his CEO post by 2007. But just as Sumner was busy carving up his empire and laying out a new succession plan in the same fast-and-loose manner he’d done in so many of his previous business maneuvers, tragedy struck.

  Chapter 15

  “Sumner in a Skirt”

  Adam Redstone’s life was just beginning to turn around. The toddler who had been left behind when Sumner’s estranged niece, Ruth Ann, had died in Japan had spent his teenage years in and out of the best drug treatment programs that his grandparents’ money could buy—Hazelden, Betty Ford Clinic, Gray Wolf Ranch—as well as the occasional jail cell. But by age twenty, he had gotten sober, enrolled in community college in Los Angeles, and, a few weeks before his twenty-first birthday, been accepted at the Otis College of Art and Design, where he hoped that the large canvases he had been painting to hang in his friend’s warehouse would set the path toward a career as an artist.1 “He’d lend a friend bail if they got caught smoking weed, but he never talked about having money,” said Charmaine Reroma, who met Adam at a yacht party and dated him for about a year. With a surfer’s drawl that belied his privileged Yankee upbringing at schools like Milton Academy, gym-tended muscles, and a swoop of brown hair, he was popular with the ladies, whom he liked to take on high-speed joyrides down the Sunset Strip in his Ford F-150.