The King of Content

by Keach Hagey

  With their purple hair, torn jeans, and expectant chatter, the teenagers spilling out of Viacom’s headquarters into Times Square on the afternoon of November 30, 2017, might have been mistaken for their counterparts a generation ago, had they not all been staring down at their phones. They were, after all, lined up for a very late-’90s ritual: a live taping of MTV’s Total Request Live, or TRL, the music video countdown show that had once held young audiences in thrall with stars like Britney Spears, Eminem, and Beyoncé. After nearly a decade off the air that coincided with the rise of smartphones and social media, Viacom’s new management had decided to bring the show back, featuring a handful of fresh-faced hosts with large Instagram followings. The most piercing screams were reserved for the handsome Dolan Twins, a pair of seventeen-year-old YouTubers with five million social media followers. Their specialty that afternoon was shaving each other’s beards and eating pizza topped with bugs. (Were Mickey Redstone on the scene, no doubt he would have recognized them as vaudevillians.) The reboot of TRL was just one of the first of many efforts of the new Viacom, now helmed by Bob Bakish, to reassert itself as an arbiter of popular culture, a ratings winner, and a media behemoth to be reckoned with.

  Bakish had spent the previous decade running the company’s international channels overseas, where the MTV brand is still a beacon of youth culture and pay-TV is still growing. That vista had given him a unique appreciation of the staying power of many of Viacom’s older hits even as he recognized that, with the advent of smartphones and social media, simply replaying Viacom’s greatest hits wouldn’t be enough to revive the company. In Bakish’s first twelve months, MTV had revamped Unplugged, My Super Sweet 16, and, nearest and dearest to Bakish’s New Jersey–native heart, the Jersey Shore franchise. The original show only ran in the United States from 2009 to 2012, but globally it has had dozens of spin-offs that remain on the air to this day, including Geordie Shore and, Warsaw’s landlocked geography notwithstanding, Warsaw Shore. “The U.S. team five years ago walked away from it, and that was really dumb,” Bakish had told the Business Insider Ignition conference in November 2017. At Paramount, Jim Gianopulos, the studio chief Bakish installed in March 2017 after firing Brad Grey (who died of cancer two months later), was banking on sequels to Top Gun (1986) and The Terminator (1984) to pull the studio out of its slump.

  Such are the plans of a man with very little room to maneuver. When Bakish first stepped into the corner office, he found a company so levered that its debt was teetering on junk territory, Paramount had just finished losing half a billion dollars in a single year, and the ratings at iconic channels like MTV hadn’t grown in five years. With such weak ratings, the company was no longer in a position to play the bully with its distributors, who loathed the way Viacom had forced them for years to take dozens of channels they mostly didn’t want just so they could have SpongeBob and The Daily Show. Some analysts assumed it was only a matter of time before a major distributor dropped Viacom altogether. Nearly as bad, Viacom wasn’t having a lot of luck getting its programming on the new generation of cheaper, smaller pay-TV bundles delivered online by services such as Hulu or YouTube. 1

  Bakish’s solution was to get real: the future had no space for Viacom’s two dozen channels, and so in February he announced that Viacom would narrow its focus to six core networks—Nickelodeon, Nick Jr., MTV, Comedy Central, BET, and Spike, which was renamed the Paramount Network. In addition to getting resources to improve programming and global distribution, each of these would also have Paramount make movies out of their best intellectual property.2 Other channels weren’t necessarily killed outright, but many of the weakest would likely shrivel up and die. He overhauled the leadership of the six key channels, personally recruited money-minting producer Tyler Perry to make shows for BET and movies for Paramount, and started a new digital studio for short-form mobile content. He paid down debt and quietly said good-bye to about four hundred employees (in a company of more than nine thousand) while making plans for a more substantial restructuring. He tried to reset the company’s frayed relationships with distributors by taking a more conciliatory approach, offering them help with advertising and content creation—as well as a softer line on raising fees, represented by a new distribution team. As a result, Viacom did not get dropped from any major distributors during Bakish’s first year, and, in fact, wooed back Suddenlink, the small operator whose early decision to drop all of Viacom’s channels had been the initial signal that Viacom was in very big trouble.

  Through it all, Bakish benefited from Shari Redstone’s full support. He emailed with her regularly, listened to her advice, and frequently took it. Shari, for her part, found that all the connections she had made in the digital world through Advancit were finally starting to pay off. Not long after tapping Bakish as CEO, she mentioned to him that he should go meet Brian Robbins, the cofounder of AwesomenessTV, a producer and distributor of YouTube content aimed at teenagers to which the Dolan Twins are signed. Bakish flew to Los Angeles to meet Robbins and was impressed. A few months later, Robbins was hired to lead the newly created Paramount Players, a division set up to mine Viacom’s cable channels for characters and storylines to turn into movies.

  And yet, despite all this newfound synergy and good feeling, the stock continued to drop. By November 2017, it had bottomed out at $23—a far cry from the $60 a share that Bakish and his colleagues had suggested was possible when they had gone a year earlier to pitch Viacom’s prospects to CBS. The nice-guy approach to distribution kept the channels on enough people’s televisions to prop up the advertising business, but it meant that Viacom was now beginning to accept a reduction in fees charged to distributors—essentially shifting the engine that had driven the industry for decades into idle. And unlike in Dauman’s time, Bakish’s Viacom could not patch up holes in distribution revenue with fat checks from Netflix and Hulu. Bakish had made a strategic decision to pull back from these platforms, out of concern that they were bad for the pay-TV ecosystem. The focus on the six core networks yielded some early ratings gains, with MTV seeing its first summer ratings growth in six years, but by the end of Bakish’s first year, these had mostly been erased by the accelerating erosion of the entire industry’s ratings and distribution. Nearly all the major players in television suffered double-digit ratings declines in the last quarter of 2017, while the number of people who cut the cord that year grew 30 percent to 22 million.3 It was not just Viacom that was looking increasingly beyond repair—it was cable television itself. According to an analysis of Nielsen ratings by Pivotal research analyst Brian Wieser, the episode of TRL with the bug-eating Dolans drew just ninety-two thousand total viewers, roughly an eighth as many as the show got at its peak. MTV saw a surge of activity on social media as a result of the new TRL, but it didn’t make money from any of it.

  Viacom’s bigger competitors responded to these pressures by merging. In the span of a year, CNN owner Time Warner agreed to sell itself to AT&T; Discovery Communications agreed to buy Food Network owner Scripps Networks Interactive; and, in a move precisely no one in the industry saw coming, Twenty-First Century Fox agreed to sell the bulk of its assets to the Walt Disney Company. The idea that Rupert Murdoch would agree to dismantle the sprawling empire he had spent his life building struck many as extraordinary. And yet his explanation was matter-of-fact: there is simply no way that he would ever have the scale to compete with Netflix and Amazon, as they shovel ever more billions into making TV shows and movies. “New technologies, competitors and shifting consumer preferences have redrawn the whole media map,” he said.

  Murdoch’s move shocked Shari back into action. She had never stopped believing that merging Viacom and CBS made sense, but now the media’s game of musical chairs was entering a potentially dangerous finale. “The Fox-Disney thing changed the landscape for everybody,” said one person close to her. Ultimately, she suspected National Amusements’ media assets might complete the puzzle for some still-larger company—a cash-rich telecom like Veriz
on, say, or paired with a studio like Lionsgate—but none of those deals could be done until Viacom and CBS were recombined. “Scale matters now, and it’s going to continue to matter in the future,” she told an audience at New York’s Paley Center for Media in October 2017.4 By January, she had urged Moonves to kick-start a new round of merger talks.5

  Moonves was no more interested in the idea than he had been a year earlier, but the world around him had changed. Wall Street still regarded him as the most talented programmer in the business, but the industry’s problems were now looking bigger than anything his distinct talents could fix. Although Viacom was by far the sicker patient, both CBS and Viacom did worse in 2017 than analysts had expected.6 Moonves was valuable, yes, but was he indispensable? Privately, Shari and other members of the CBS board began to grumble that CBS’s management hadn’t done the kind of succession or long-range planning that was best practice in the industry, despite the fact that CBS chief operating officer Joe Ianniello was widely understood to be Moonves’s heir apparent. By mid-January, some of this discontent was reported by the Wall Street Journal, which noted that Shari was pressing for “new blood” on the CBS board and already taking names for some potential replacements. Among the people she thought might make good successors to Moonves in a merged company was Bakish.7 In response to the Journal story, which horrified the management of CBS, one Viacom executive whispered to Variety, “Here we go again.”8

  Within days, Reuters reported that Moonves and Bakish had met for a preliminary conversation about merging. Shari’s point had been made. Moonves might have a great deal of leverage—Wells Fargo estimated that CBS’s stock price would fall 10 percent if he left the company—but he still served at her pleasure.9 By February, the CBS and Viacom boards announced they were once again exploring a merger.

  * * *

  Shari turns out to be her father’s daughter: doggedly determined, shrewd, and not particularly patient. In her first full year in power, she has shown the world its first true female media mogul, a de facto owner of major assets who is neither a passive family steward nor in some way “talent”—as Oprah Winfrey and, to a lesser degree, Arianna Huffington have been—but rather a strategist, an aggressive operator, and a deal maker. With $5 billion in family assets and companies worth $36 billion under her control—including the storied CBS News division of Edward R. Murrow and Walter Cronkite—Shari is the most significant woman in the history of media ownership since Katharine Graham became the first female CEO and chairman of the Washington Post Company in the 1970s.

  Shari’s story has many parallels to Graham’s: both of their fathers amassed great media assets, which they then handed, not to their own flesh and blood, but to their daughters’ Harvard-trained husbands.(Graham’s father explained that he made arrangements in the late 1940s for his son-in-law to own more stock in the company than his daughter because “no man should be in the position of working for his wife.”)10 For a time, both Shari and Graham were content to play the roles of wife and mother, a role Graham once called being the “tail to his kite.” Shari often says she was happy baking cookies, telling the Worcester Telegram & Gazette in 1995 that she thought the family theater chain “was a business I’d never go into.”11 It took calamity—Graham’s husband’s 1962 suicide and Shari’s 1992 divorce—to create the opportunity for both women to join, and ultimately lead, their family’s business.

  Graham wrote that she was “pleased” that her father thought of her husband instead of her as a successor, while Shari began to chafe at the plaudits being heaped upon her father and husband after Sumner’s daring takeovers of Viacom and then Paramount. People who know the family point to the moment that Shari informed her father of the divorce, only to hear him bemoan the loss of his son-in-law from the company, as the root of Shari’s difficult relationship with her father, a man for whom business was the most vivid thing in life. Some describe Shari’s involvement in the business as motivated entirely by family dynamics: it was the only way that she could actually become a person in her father’s eyes. The irony was that Shari’s professional ascent could only come about by battling her own father, who obstinately refused to be succeeded. “He didn’t want her in the company, he didn’t want her to succeed him, but when she was there, he caved,” said one person close to the family. Any power that he did give her, she had to wrest from him, as he had wrested it from others.

  And yet, once Shari made her way into the boardroom of her family’s business, she was forced to reckon with some of the same dynamics Katharine Graham experienced a generation before. Both were belittled, talked over, and snickered at behind closed doors—in Shari’s case, often by her own father. Even well into the twenty-first century, a female media owner remains a kind of unicorn. Women own less than 7 percent of the television stations in the United States, despite decades of federal regulation attempting to increase diversity among station owners.12 Other parts of the media are so devoid of female ownership for it not to even be a topic of discussion. From this fundamental imbalance flows the litany of sad, stale facts of women’s seemingly permanently junior role in the business of telling the world’s stories: they are only on camera on TV news about a third of the time, only write about a third of the newspaper stories, only make up 6 percent of film directors13.

  And then, about a year into Shari’s reign, the dam broke. The New York Times and the New Yorker uncovered decades of Harvey Weinstein’s sexual abuse and harassment of women, opening a torrent of allegations against other men in the entertainment industry and beyond. No one knows what Hollywood will look like after this flood, but there will certainly be more women in charge. After seeing the brutality and misogyny of the media industry exposed, is it any wonder that a woman had to ferociously fight her way to power within it?

  During her first year as a proper media mogul, Shari continued her family’s legal fight against her father’s former companions, not flinching even as embarrassing personal emails were dredged up in discovery and alarming accusations were hurled at her alleging she was part of a conspiracy to break California law. (Her lawyers deny the allegations and maintain that Shari has nothing to do with Sumner’s lawsuit against the women.) Her own legal training and upbringing in a family of legal infighters had prepared her well: so far, the lawsuits against her have made little progress. She even scored a victory in October when a judge ousted Manuela Herzer from her penthouse apartment in the Carlyle.14

  However messy the details, in the court of public opinion, few blamed Shari for reclaiming her birthright. Her years spent running the theater chain, serving on Viacom and CBS’s boards, and investing in start-ups had given her a unique understanding and a broad set of relationships in an industry that was now in a state of total upheaval. If she didn’t have the answers, nobody else did either. In business, she shared her father’s interest in the next thing—the cable that would overtake the movies, the video games that would overwhelm the cable, the digital media that would overtake them all—but she faced a far more complicated landscape than he ever did.

  If Sumner had had his full faculties, would he have recognized the great wave that was overwhelming his companies—Viacom in particular—and done something differently? Would he, too, have come to a Murdochian realization that the deck was now stacked against traditional media companies competing directly against unregulated, automated, and ballooning tech giants and decided to cash in his chips? It’s hard to imagine that he wouldn’t have surveyed the landscape in which Google and Facebook accounted for 84 percent of global digital advertising spending in 2017—a situation that the business press dispassionately refers to as “the duopoly”—and tried to cook up some kind of antitrust suit, his trusty weapon of choice.15 But would he have had the flexibility of mind to upend his own estate planning documents, which go to elaborate lengths to bar his heirs from selling his companies, in order to preserve the wealth he built for future generations?

  He may still have the chance. These days, Sumner rests com
fortably in his hilltop mansion, tended to by nurses loyal to his family, in touch with his family via FaceTime and occasional visits, but otherwise cut off from the world in every measurable way. Unable to eat or talk, he communicates via buttons on a tablet loaded with recordings of his voice from stronger days—“yes,” “no,” and, his favorite, “fuck you.” The man who always wanted total control, who believed in his own abilities above those of anyone else, who vowed to never sell Viacom, who swore he would never die—as of this writing, this man, Sumner Redstone, still draws breath, thanks, perhaps, to a lifetime of healthy eating and, even more likely, his own iron will. It is he, not Shari, who owns the majority of the controlling shares in the companies, and so long as he is not declared incapacitated, it will be he who must technically decide the increasingly urgent question of whether to merge or sell Viacom and CBS. Because while content may still be king, kings, it turns out, can be bought just like anybody else.

  Author’s Note

  This book is based primarily on more than 170 interviews with family, friends, lovers, colleagues, advisers, employees, and competitors of Sumner Redstone and his family’s media empire, conducted between 2015 and 2018. While the bulk of these interviews were conducted for this book, a few—notably with Shari Redstone and Philippe Dauman—were conducted originally for the Wall Street Journal.

  Quotations that are not otherwise credited are from these interviews. Some of them were on the record. Many more were on background, due to the sensitive nature of the topic. For the sake of clarity, facts that were corroborated by multiple sources do not have attribution. Where facts came from a single source, I note that.

  A great deal of this saga is also drawn from court papers from five decades of legal infighting among members of the Redstone clan, as well as a series of high-profile lawsuits involving Sumner Redstone’s former companions, top lieutenants, and his daughter. These, as well as the many other newspapers, magazines, books, and other documents I used as source material are detailed in the book’s notes.