SUMNER’S STUDIO
Redstone stymies Dauman’s Paramount sale
Sumner Redstone on Monday, in the most openly hostile move against Viacom Chief Executive Philippe Dauman, all but eliminated the executive’s ability to sell a piece of the media giant’s Paramount Pictures.
Redstone’s National Amusements Inc. theater chain, which controls 80 percent of the voting power at Viacom, changed the bylaws of the media company to require unanimous board approval for any such sale.
The change is effective immediately, it said.
Dauman announced in February he would seek to sell a minority stake in the embattled Hollywood studio — whose “Teenage Mutant Ninja Turtles” movie sequel opened last weekend to weak sales.
Redstone, through his lawyers, had complained that Dauman didn’t clear the sale with him — and that he was opposed to the move.
In announcing the bylaws change, NAI said it wasn’t opposed to a deal “that would unlock value at Paramount” but it believed such a move needed to be vetted by the entire Viacom board.
Dauman, in legal papers, claims Redstone was, indeed, told of the intended Paramount stake sale.
Viacom, in a statement, called the bylaw changes “invalid” and “completely at odds with good corporate governance.”
The Monday move by NAI proved that just when you thought the infighting at Viacom couldn’t get any nastier or more cutthroat — it could.
Redstone, 93, and in ailing health, and his daughter, Shari Redstone, have been out- wardly hostile toward Dauman for weeks. Shari has called for change in the C-suite and Sumner on May 20 ousted Dauman and George Abrams, a second Viacom board member, from the NAI Redstone family trust.
The trust will control Sumner’s $40 billion media empire, including CBS, after the mogul dies or is incapacitated.
Dauman’s ouster — and his ability to question Sumner’s capacity to make such a move — will be the subject of a possibly heated Massachusetts courtroom showdown on Tuesday. Losing the courtroom battle could shorten Dauman’s tenure at Viacom.
One day ahead of the faceoff, Dauman fought back against his ouster, claiming Shari has “abruptly taken hold of her father’s life” as part of a larger, “meritless” grab for control of Viacom.
The NAI trustee’s ratification of the Dauman and Abrams ousters is “null and void” as Sumner didn’t have the ability to OK the move, Dauman said in court papers.
Plus, the papers allege, the move by the trustees violated state law and the trust’s bylaws.
The CEO hopes to persuade a Massachusetts judge at the June 7 hearing to allow a quick mental examination of the Viacom founder.
Shari Redstone, her dad’s health care proxy, and others on the trust oppose the move.
Dauman’s lawyers argue that denying them an expedited examination could mean that Sumner will die before they get to prove their point.
“There is a great risk that Mr. Redstone will not be available for a delayed medical examination, deposition or trial testimony,” Dauman’s legal eagles told the judge in the filing.
“[Redstone] is 93 years old, frail, and has serious ailments,” the filing claims. “He is vulnerable to any number of medical setbacks and worse.”
Viacom shares on Monday gained 1 percent, to $45.43 — the 10th advance in the 11 trading days since Dauman’s trust ouster.