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In Viacom Shakeup, Sumner Redstone Replaces 5 Board Members


A struggle over a $40 billion media empire has erupted into a full-blown crisis. The 93-year-old mogul Sumner Redstone effectively owns both Viacom and the CBS Corporation. Today, he moved to eject the chairman and CEO of Viacom from its board along with four other members. One of those board members is suing to block the ouster.

NPR media correspondent David Folkenflik has been covering this saga. Hi, David.


SHAPIRO: You call this a Shakespearean drama. Why?

FOLKENFLIK: Well, you've got Sumner Redstone. He's now 93 years old, as you say. He's the figure who assembled what we consider Viacom and also the CBS Corporation. His protege, his lawyer for many years, his advisor and counselor for three decades, kind of a surrogate son, Philippe Dauman, I should say, is the CEO and chairman of Viacom.

And he's tossed him off not only now the Viacom board but also National Amusements, which is Redstone's holding company through which he controls both Viacom and CBS. This has been a battle that's pitted Dauman, in a sense, against the daughter, the long-estranged daughter of Sumner Redstone who has, in recent years, reconciled with the media mogul.

And so you see a surrogate son and a once-estranged daughter battling for control of the future of this media empire.

SHAPIRO: What's behind the falling out between these two?

FOLKENFLIK: Well, part of it may well be the desire by Shari Redstone to control the future of this company. And Dauman clearly doesn't want any part of that. At the same time, the performance of the company, Viacom, under Philippe Dauman in the past decade, since it was split off from CBS, has really lagged.

Just last Friday, I broadcast an interview that I did with Tom Freston, Dauman's predecessor as CEO, who had been holding his fire on this. But he talked about the way in which the performance of Viacom had lagged against such competitors as Time Warner and Disney. And we have a clip of that interview here.


TOM FRESTON: Well, it went from really being number one in its class as a cable networker and as a creative enterprise to pretty much the bottom of the barrel.

FOLKENFLIK: And so right there, pretty stark terms from Tom Freston, the former CEO of Viacom, who called for Philippe Dauman to be tossed out. This seems to be the sort of penultimate step in the effort by Shari Redstone and her father to make sure that happens.

SHAPIRO: And what has the reaction been from Dauman?

FOLKENFLIK: Well, after this was announced, the ouster for the board of Viacom today, Viacom itself put out a statement saying that this was inappropriate. Again, pointing to the idea that somehow, Sumner Redstone, aging, was not mentally competent and was not - was, in effect, being manipulated by his daughter, Shari. That's a case they've been making in court, in a probate court in Massachusetts. There's also a lawsuit filed today by one of the board directors who Sumner Redstone would oust, saying that that's inappropriate, trying in a Delaware corporate Chancery Court to get a judge to say, no, hold off. That's inappropriate, and that's not consistent with the board. What you have here is a corporation who's upper management and currently elected board is at open war with the family that ultimately controls the fate of this company. And it's very hard to see a clean resolution for the current leadership of Viacom, even if somehow there managed to find a way to prevail.

SHAPIRO: That's NPR media correspondent David Folkenflik. Thanks, David.

FOLKENFLIK: You bet. Transcript provided by NPR, Copyright NPR.

David Folkenflik was described by Geraldo Rivera of Fox News as "a really weak-kneed, backstabbing, sweaty-palmed reporter." Others have been kinder. The Columbia Journalism Review, for example, once gave him a "laurel" for reporting that immediately led the U.S. military to institute safety measures for journalists in Baghdad.