Redstone health update sought
A big investor calls on Viacom and CBS to disclose the media mogul’s condition.
A big investor in Viacom and CBS calls on the companies to disclose the media mogul’s condition.
The second-largest voting shareholder of Viacom Inc. and CBS Corp. has called on the media companies to disclose Sumner Redstone’s health condition to give investors a better glimpse into whether Redstone is too ill to continue as executive chairman of the two companies.
GAMCO Investors Chief Executive Mario Gabelli said directors overseeing the two companies that Redstone controls should be more forthcoming about his health situation.
“Where are the boards of Viacom and CBS?” Gabelli asked during an interview with The Times on Tuesday. “Don’t they have an obligation to tell the world what is going on?”
Last week, Redstone’s former girlfriend, Manuela Herzer, filed a lawsuit in Los Angeles County Superior Court that seeks to have the 92-year-old mogul found mentally incompetent. Herzer filed the suit after she was removed Oct. 12 from her position as Redstone’s primary caretaker.
Redstone’s lawyers have said that Herzer’s suit is financially motivated, and that she is paving the way to contest her alleged removal from Redstone’s will and as the point person for his advance healthcare directive. They say Redstone’s primary physician visits twice a week and that Redstone has passed mental competency tests. He has had a CT scan in the last month, Redstone’s attorneys said.
A judge on Monday ruled that Redstone’s health situation did not constitute an emergency.
The mogul’s health is being watched closely because he is the executive chairman and controlling shareholder of both CBS and Viacom Inc., owner of the Los Angeles movie studio Paramount Pictures and cable TV channels Nickelodeon, MTV, TV Land and Comedy Central. Redstone’s broadcasting company owns the nation’s most-watched network, CBS; premium cable channel Showtime; and dozens of radio and TV stations, including KCBS-TV Channel 2 in L.A.
When Redstone dies or is no longer able to oversee his affairs, seven trustees overseeing a trust will determine what happens to his controlling interest in the two companies. Redstone and his family control 79% of the voting shares in CBS and Viacom. There has been speculation that CBS and Viacom could eventually be sold.
Investors have been unhappy with the recent performance of Redstone’s companies. Viacom shares have fallen more than 36% this year. On Wednesday the shares closed down $2.04, or 4.1%. to $47.65. CBS shares are down 10% this year and fell $1.05, or 2%, to $50.05 on Wednesday.
A Viacom board member Wednesday responded to the concerns raised by Gabelli and other investors.
“As has been widely and publicly disclosed, Mr. Redstone’s physicians have publicly attested that he is mentally capable, and this information is consistent with other medical and other information available to me,” William Schwartz, chairman of Viacom’s governance and nominating committee, said in a statement distributed by Viacom.
Redstone was hospitalized three times in 2014, but he has experienced a marked decline in recent months, Herzer’s lawsuit alleges.
“Sumner’s health decline accelerated in the past few months,” Herzer said in a declaration that supports her lawsuit.
In recent years, Redstone has not been too involved in the day-to-day operations of his two companies and now monitors earnings calls and company board meetings from his home in the Beverly Park enclave of Los Angeles.
Despite his ailments, Redstone continues to collect a handsome salary in his role as executive chairman of the two companies. He has received more than $169 million in salary, bonuses and benefits during a threeyear period from 2012 to 2014, company filings show.
A CBS spokesman declined to comment Wednesday.