Tycoon who pioneered age of multiplex cinema and retail outlets
Sumner Redstone, American businessman
Born: May 27, 1923;
Died: August 11, 2020.
SUMNER Redstone, who has died aged 97, was an American businessman who built up a media conglomerate from a chain of drive-in cinemas; at one time or another, his company, National Amusements, owned or controlled substantial holdings in Paramount studios, the video chain Blockbuster, the American broadcaster CBS, and Viacom, who owned cable channels including MTV and Nickelodeon and, in the UK, Channel 5.
Redstone had a reputation as a ferocious business opponent, but although he amassed a personal fortune estimated at more than $2 billion, he did not become a major figure in media until almost at retirement age, 10 years after surviving serious burns which, he was told, might prevent him from ever living a normal life.
Instead, he described the fire, in which he was “enveloped in flames”, and which led to third-degree burns over 45 per cent of his body, as contributing to his drive to succeed in building his empire, and maintain an iron grip on it. It was not until 2016, when he was 92, that he was finally persuaded to give up day-today control of his companies.
He had begun his career as a lawyer in the US Attorney General’s office and the tax division of the Department of Justice, before entering private practice, and it was not until 1954 that he joined the family firm, which had been founded in 1936, and ran a chain of modest drive-ins in the Boston area. He became CEO in 1967.
Sumner Murray Rothstein was born on May 27, 1923, in Boston, Massachusetts, the elder son of Michael Rothstein and his wife Belle. Rothstein senior had started out selling linoleum and as a theatre usher, then owned a truck company before branching out into nightclub and cinema ownership. Sumner attended Boston Latin School, a highly academic public school, where he had few friends and worked hard at his studies. In 1940, his father changed the family name to Redstone, a literal translation of the Yiddish, and Sumner was accepted by Harvard on a scholarship under that name.
The war meant that he finished his degree within three years, and then served in the US Army Signal Corps, based in Washington, DC, and helping to decode Japanese transmissions. After demob he returned to Harvard, where he completed his law degree. In 1947 he married Phyllis Raphael, with whom he was to have a daughter, Shari (who eventually succeeded him at Viacom), and a son, Brent.
He began his working life in San Francisco, where he taught law at the university and worked as a legal clerk for the US Court of Appeals, then moved to Washington and the Attorney General’s office.
After a spell in private practice in the early 1950s, he joined his father’s cinema company, which became National Amusements, and gradually built up a chain of more than a dozen outlets. During the 1960s, as the popularity of drive-ins declined, Sumner Redstone realised that they had greater value as development land, and moved into real estate, while building indoor cinemas and malls. He was one of the first to pioneer the “multiplex”, with several screens and retail franchises.
But, faced with the fees demanded by studies and distribution companies, in 1979 he filed a lawsuit
against all the major studios, which he accused of operating as a cartel. It was an early indication (although he was already in his mid-50s) of his determination to take on much more powerful vested interests, and he obtained a settlement in his favour. It also convinced him that the value in the entertainment and media sector lay in content, rather than in delivery: he was often credited with having popularised the mantra “Content is King”.
At around the same time, he was staying at a hotel in Boston which was set on fire, and suffered serious injuries; it was only after several months and a series of operations that he was able to return to work, but with an even stronger desire to expand. Over the next decade, he
pursued this aggressively, incurring substantial debts in a series of deals – which frequently involved litigation in which he almost invariably emerged the winner – until, to the surprise of many industry observers, he seized control of Viacom, a cable TV company, in 1987. He fought off an attempt by Time, Inc to shut off his channels and, in 1994, expanded the company by taking over the movie and TV studios Paramount, at a cost of $10 billion.
This was seen as foolhardy, and the stock price dived in 1997, but Redstone split the businesses, sold off peripheral companies and, by the following year, was being lauded for having snapped up a bargain. A year after that, National Amusements, through the second incarnation of Viacom, took over CBS in a $38 billion merger; in his 80s, Redstone was in sole command of the company, and showed no signs of relinquishing control.
For a brief period in 2006, it looked as if he would step back in favour of his daughter; when stock prices fell, he stepped back to fire the chief executive (and sever the firm’s
links with Tom Cruise and his production companies). He later made up with Shari, though his son Brent sued the firm, claiming he was entitled to $1 billion of its assets.
In 2009, he was obliged by rising debts to sell off stock, though he retained majority control; the rise of on-demand video streaming also affected Viacom’s profits, especially in the children’s cable TV market, that it had dominated. He finally ceded control of the company in 2016, though not before winning a court battle against another executive who had challenged his capacity to run the firm.
He supported various Democratic politicians, though he endorsed George W Bush in 2004, and was a substantial donor to charity. In 2001, he published an autobiography, A Passion to Win.
His first marriage ended in divorce in 1999 and a second lasted from 2002 until 2009; there were several legal and financial wrangles with later girlfriends. He is survived by his two children.
It was not until 2016, when he was 92, that he was finally persuaded to give up day-to-day control of his companies