The King of Content

by Keach Hagey

  “The operators just sat there and let Netflix and Hulu and the other platforms take away the digital share of their business,” said one media company executive. They never invested in the infrastructure that would make pay-TV as pleasing to use as Netflix because they didn’t have to—they could just exit the TV business altogether and focus instead on selling broadband, using TV as a mere glue to hold together bundles of telecom services rather than as the main attraction. The fact that programming costs were going up sharply every year—eating into distributors’ margins unless they raised prices—made it an easy strategic decision for distributors to make. “I think the distributors could care less,” the executive said. “They are thriving on their broadband business. Their TV business was secondary.” So while TV Everywhere continued its glacially slow rollout, Netflix relentlessly increased its market share to a majority of U.S. households, teaching a whole generation to expect television without advertising. Still, Dauman was sanguine about it, often joking to colleagues in later years that Viacom made more money from Netflix, Amazon, and Hulu than any of those companies had, with their emphasis on growth over profits.

  Viacom stock kept going up, and earnings per share, the ultimate Wall Street report card, went up even faster, boosted by the company’s constant buybacks. By the time Paramount celebrated its centennial in the summer of 2012, earnings per share had more than doubled since Dauman became chief executive, and the fixer who once delighted in flying under the radar was profiled in the New York Times in a piece titled “The Man Who Would Be Redstone.” “I can’t say what will happen after I’m gone—which will be never,” Sumner told the Times. “But everyone understands, I think, that Philippe will be my successor.”54

  Behind the scenes, though, Dauman and Shari were playing tug-of-war. Two weeks after the Times story, Sumner gave an interview to the Wall Street Journal clarifying that “it hasn’t been decided yet who will be my successor. And Philippe knows it. He knows Shari might be my successor and it’s not a competitive race between them. We have to see what happens.” But then he said that it was likely that Dauman would inherit the chairman role at Viacom and Moonves would inherit it at CBS. There was reason for him to say this: both Dauman and Moonves had provisions in their contracts that allowed them to walk away with big payouts if they had to report to anyone other than Sumner.

  The real fight, however, was not over the boards of CBS and Viacom but over the trust that would one day control them both. And increasingly, Shari was starting to feel like she would have to one day sue Dauman to protect her family’s empire. A month after the Journal story, she wrote her father a draft letter to complain about changes to his estate planning that she felt disadvantaged her, and she sent it to Sydney for advice. “This is nothing more than a calculated move by Philippe to oust me from the company, and limit my role going forward,” Shari wrote her father. “Having grown up with you as my mentor, and having learned from watching you at work, I am sure you understand why I will not give in to a bully.” And then, to Sydney, she wrote, “In the meantime, every email my father sends to me will be used against me in court if I ever have to take Philippe on.”55

  * * *

  By early 2013, as Sumner headed toward his ninetieth birthday, he had grown weak enough to need overnight nursing care, and Sydney was exhausted. He demanded her constant presence; if she stepped into another room or went out to run an errand, he would call her phone over and over. (Keryn Redstone once joked to Sydney that Sumner ought to just go ahead and get her a shock collar, so agitated did he become when she was not in his line of sight.) So Sydney was grateful when a longtime female friend of Sumner’s, Manuela Herzer, decided to move into the mansion while her house was being renovated.

  Manuela, a blond Argentina-born beauty who had dated Sumner before he had married Paula, was seven years older than Sydney and more worldly. Born in Buenos Aires to a wealthy Jewish family, she immigrated to the United States with her parents and four brothers when she was a small child. Fluent in French, Spanish, and English, she attended college in Paris, where she met and married her first husband, Eric Chamchoum, son of a wealthy Lebanese family with business interests in Nigeria, when she was twenty-one. They had two children, Bryan and Christina, before going through a bitter divorce. With a subsequent boyfriend, Manuela had a third child, Kathrine Herzer, who plays the daughter of the secretary of state in CBS’s Madam Secretary.

  Like Christine Peters, Manuela had met Sumner through Bob Evans, Hollywood’s indefatigable ladies’ man. They were both taking tennis lessons at his estate and were introduced by tennis pro Darryl Goldman. They went on to date for two years. Sumner proposed marriage, but she did not want to marry again. Instead, she settled into the role of friend and confidante, particularly when it came to Sumner’s relationships with other women, and he grew close to her children. In 2009, he bought her a $3.85 million house in Beverly Hills, according to Fortune, and by 2010, she says he told her he was setting aside money for her and her children.56 Not long after Sumner met Sydney, he invited Manuela and her son, Bryan, over to dinner to meet her. Two years later, when renovations on Manuela’s house were dragging on and she tired of renting, Sumner invited her and her daughter Kathrine to move into the mansion. She moved in in April 2013.

  And so began one of the stranger partnerships in the history of the Redstone family. Sydney and Manuela, who in any normal circumstance might see each other as rivals, became a team. Together, they made the mansion accessible for people with disabilities and managed Sumner’s increasingly complex health care needs. And together, they began to receive increasingly large portions of Sumner’s personal estate in his estate planning. By the time he turned ninety, his lawyers say they were each due to receive $15 million in Sumner’s will.

  Chapter 19

  “Our Family”

  For Sumner’s ninetieth birthday, Sydney and Manuela threw him a surprise party worthy of the “King of Hollywood” he had long claimed to be. Tom Cruise, Mark Wahlberg, David Letterman, Danny DeVito, and Al Gore all strode down the red carpet they had installed leading up to his Beverly Park mansion beneath a movie marquee. They erected a stage in the backyard under a tent, where a four-course dinner was served, and the entertainment was provided by Sumner’s good friend Tony Bennett, who thanked Sumner for “putting me on MTV and making me a bigger star than I ever was.” Dauman, Moonves, and Grey were there, as were old friends Bob Evans, Sherry Lansing, Jeffrey Katzenberg, Michael Milken, and Michael Eisner. Shari and her children came, and so did ex-wife Phyllis. Every one of them, alongside Sydney, Manuela, and Manuela’s kids, took part in an elaborate birthday video in Sumner’s honor, “created with love by Sydney and Manuela.” Sydney, sitting next to a giant teddy bear with a white toy poodle on her lap, made it clear that she thought of herself as Sumner’s family, saying, “I’m so excited to be spending your birthday with all our family and friends.” Manuela’s message was even more overt. “There are not enough ways to express how grateful and blessed we are to be a part of your family, yesterday, today, and tomorrow—and for the rest of our lives.”

  It was an odd thing to say in front of Sumner’s actual family. But, according to Manuela’s legal filings, that’s how they talked about each other: he called her “family,” and she returned the sentiment. She and her children celebrated birthdays and holidays with him, and he attended her son Bryan’s graduation from the University of Southern California in 2012.1 Sydney had recently decided to become a mother herself, hiring a surrogate (with Sumner’s financial help) to bear her a child in June 2013. By the time the red-haired, blue-eyed baby, who was named Alexandra Red, was brought into the mansion, Manuela’s and Sydney’s respective hauls in Sumner’s estate had been raised to $22.5 million, according to his lawyers. By all accounts, Sumner adored the baby, and Sydney claims he wrote her into his will in 2015.2

  Shari saw the baby as a ploy for Sydney to increase her influence over her father. In April 2013, she wrote her sons, “Sydney has
a contract for a baby to be delivered in the summer. Grumpy is not planning to adopt the baby, but of course [the] baby will be living there. I’m done.” Still worried that Sumner might indeed adopt the child, she followed up saying, “If I go May 27 that will be it. I am not going to that home with Sydney’s baby living there.”3

  Shari wasn’t the only one concerned about Sydney and Manuela’s growing sway over Sumner. While Sydney was in San Diego4 picking up her baby on June 12, 2013, Heather Naylor came by the house to have lunch with Sumner. According to later legal filings, Naylor appeared to be on a mission to reveal to Sumner that Sydney was a gold digger. Naylor sat Sumner down and showed him printouts of compromising photos of Sydney and emails between Sydney and her lawyer strategizing about how to get more money from him. Manuela witnessed the exchange and, according to Fortune, interrupted it by downplaying the materials’ significance. Sydney fired back by suing Naylor for $1 million, accusing Naylor of stealing her laptop—which she believed to be the source of the materials—in 2011 and demanding that it be returned and the materials destroyed.5 Naylor denied having the laptop and countersued, accusing Sydney of convincing Sumner that her band was “talentless,” contributing to MTV’s canceling her show and the disintegration of her relationship with Sumner.6 She also alleged that Sydney had Sumner on lockdown, going so far as to change his phone number to keep potential rivals away so she could “control” Sumner “for her own economic advantage.”7 Sydney denied these claims.

  In the wake of this dustup, Sumner’s lawyers claim Sydney and Manuela overhauled the house staff, firing long-serving staffers and even cutting ties with Sumner’s longtime doctor, Dr. David Agus. They hired new staff that reported to them and hired a new doctor, Dr. Richard Gold.8 (People close to Sydney think Sumner made these decisions, though Sydney did, at his request, hire the new staff.) Agus says that’s baloney. “The decision to bring in Dr. Gold was one hundred percent made by Sydney Holland and Manuela Herzer,” he said. “As soon as they left the picture, I resumed my friendship with Mr. Redstone.” Friends who did visit during this time were shocked to see the man who had been such a health nut and never taken much medication suddenly taking sleeping and antianxiety pills. Sumner’s lawyers alleged that Sydney and Manuela asked the nurses to administer the antianxiety drug Ativan to calm Sumner when they wanted him to sign documents.9 (People familiar with Sydney’s thinking vehemently deny this.)

  One longtime friend said that during this period, Sumner was often so disoriented that he would ask what the women were doing in his house and would express surprise when told that they lived there. “The last time he called me, he had me on speed dial. [After that] all the speed dial numbers got taken out of his phone,” the friend said. “He said, ‘Help, they are finally gone. Can you come up here?’ Somewhere in the back of his mind, he knew.”

  The person added: “He wasn’t there. Since 2011. And they all knew it.”

  * * *

  Concerned friends expected that Sumner’s family would intercede but didn’t realize that his family was feeling increasingly cut off. From Sydney and Manuela’s perspective, the estrangement between Sumner and Shari was simply the continuation of tensions that had been racking the family for years. “I just can’t deal with LA and Grumpy for four days,” Shari wrote to her son Tyler on December 27, 2012. “I can’t even begin to describe what it does to me mentally and physically.”

  By early 2014, tensions had grown worse. Sumner considered Shari’s behavior too “erratic” to become his successor, according to people close to the mogul, and so Dauman, George Abrams, and David Andelman began plotting a way to buy Shari out of the company. National Amusements formed a special committee to explore buying out her 20 percent stake. Moonves, whose fear of a post-Sumner future reporting to Dauman made him a natural ally of Shari’s, got wind of this effort in its early stages and tipped Shari off. “If my father wants me to drop dead, he doesn’t need to do anything else,” Shari wrote her children, her mother, Andelman, and Leah Bishop, an estate planning attorney at the firm Loeb & Loeb, on June 3. “He has made how he feels about me perfectly clear.” Shari spent much of the year in negotiations over the buyout proposal but was ultimately able to beat it back. Dauman, meanwhile, assured Sydney that he would help her if Shari came after her gifts when Sumner was gone.

  In later litigation, Sumner’s lawyers alleged that Sydney and Manuela blocked his family’s calls, barred them from visiting, and then told him that they hated him because they never called or visited.10 (Sydney and Manuela have denied blocking Shari or her family from visiting the mansion or talking to Sumner, and in legal filings both pointed to the long history of tension between Shari and Sumner.) Still, several people close to the family believe the women helped widen the gulf between father and daughter. One longtime friend said that Sumner may have griped about Shari over the years and not wanted her running the business, but “he never hated Shari like that, not like they made it to be.”

  * * *

  By 2014, life in Beverly Park had settled into a rhythm of daily deliveries of bags of $100 bills and millions charged to Sumner’s credit cards at stores like Yves Saint Laurent, Chanel, and Barneys, according to Sumner’s lawyers. But as his ninety-first birthday approached, Sumner’s lawyers alleged that Sydney and Manuela began to worry that Shari and her family would challenge the gifts Sumner had made to them in his will, and they hired an estate planning attorney to explore ways for him to transfer more of his wealth to them while he was still alive. (People familiar with Sydney’s thinking say it was Sumner who instructed them to hire the attorney because he was worried about what Shari would do.) While almost all of his net worth was tied up in National Amusements’ share of Viacom and CBS, he did have various stock options and other forms of compensation from the companies that could be converted to cash without threatening his control. On May 19, 2014, Sumner startled investors by exercising his options and selling stock worth about $236 million, or about $100 million after taxes, which he essentially split in half and gave to Sydney and Manuela. Each got $45 million the same day.11 According to Sumner’s lawyers, because the women had emptied his bank accounts, he had to borrow $100 million from National Amusements to pay the generation-skipping taxes on the gift. At the same moment, Sumner’s will was changed to split the remaining $150 million of his estate—everything that existed outside the trust—between the women, and they were named co-agents of his health care.

  Up to this point, Sumner’s longtime personal attorney, David Andelman, had signed off on all his gifts to the women. But Andelman had recently begun expressing concerns to Sumner that the women were, as Andelman put it in a sworn declaration, “exercising immoderate influence” over him, particularly after Sumner fired his longtime caretaker and house manager, Carlos Martinez, in early 2014. 12So, according to Sumner’s lawyers, the women recruited Leah Bishop to work with Sumner on these and all future bequests. Keryn Redstone said Bishop once introduced herself to her at a party as “one of the good guys who is going to protect your grandfather from Shari.” It was an understandable position given her knowledge of the situation. During this period, Sumner referred to Shari alternately as a “bitch” or a “fucking bitch” and was adamant that he wanted Sydney and Manuela to get everything. To protect the gifts against future challenges, Bishop had a geriatric psychiatrist test and sign-off on Sumner’s mental capacity whenever he made any estate planning decisions, according to Andelman.

  It was all more than Shari could take. On May 26, 2014, a week after her father’s $45 million gifts, she emailed her children saying, “I am reviewing legal options. I am going to go after them regardless of the strength of the case. Enough is enough. Sydney believes that she can keep doing this and we will never act. The time has come.”13

  With this maneuvering in the background, Sumner’s ninety-first birthday party was a smaller, tenser affair than his ninetieth. Organized by Manuela and Sydney in a private room at Nobu in Malibu, a couple of dozen guests g
athered from the warring camps.14 One of them was Keryn Redstone, by then a thirty-year-old law school graduate whom Sydney and Manuela had been cultivating, knowing that Keryn had bad blood with her aunt Shari. As Brent’s daughter, Keryn had grown up amid a fair amount of Redstone family tensions, but she and Shari had become mortal enemies in recent years in the course of a fight over the health care of Phyllis’s childless sister, Cecelie Gordon, who had dementia and with whom Keryn had been close. Keryn petitioned to be named her aunt Cece’s guardian, Shari opposed it, and eventually Keryn withdrew her petition after the court named an independent guardian. Not long afterward, in 2013, David Andelman removed Keryn as a future trustee on Sumner’s trust, replacing her with Shari’s son Tyler. The move effectively left Brent’s side of the family without representation on a trust that was still held for the benefit of all five of Sumner’s grandchildren.

  Keryn wouldn’t find out about the change for another year, but that night at Nobu, there was no doubt that Shari was on a war footing. Sumner had been having trouble swallowing, and he asked Keryn to sit down next to him to help him eat. Shari asked that Keryn switch seats with her, so that she could sit next to her father. When Keryn refused, she claimed, “Shari erupted and threatened to kill me.”15 (Shari’s spokeswoman, Nancy Sterling, denied all of Keryn’s claims when she filed them in court in 2016.)16