Sumner Redstone

Business Person

• Born: May 27, 1923
• Birthplace: Boston, Massachusetts
• Died: August 11, 2020
• Place of death: Los Angeles, CA

Business executive, entrepreneur, and investor

A leader in the entertainment and the communications industries, Redstone built his father’s regional drive-in theater business into National Amusements, Inc., a multinational entertainment industry that includes Showcase Cinemas, Multiplex Cinemas, and Cinema de Lux. In the process of building his business, Redstone became the chairman of Columbia Broadcasting Service (CBS) Corporation and Viacom.

Areas of achievement: Business; entertainment

Early Life

Sumner Redstone was born Sumner Murray Rothstein in Boston, Massachusetts. He was the older of Max and Belle Rothstein’s sons. In 1940, the family surname was changed to Redstone. Sumner Redstone grew up in a public housing project apartment in a Jewish community in the west end of Boston. His father, proud to be a second-generation American, sold linoleum and wholesale liquor before becoming an owner of drive-in theaters and nightclubs. During his childhood, Redstone was required to study hard and work diligently. In 1940, Redstone graduated from Boston Latin School, earning the highest grade point average ever recorded at the school. Over the next two years Redstone earned the credits necessary to obtain a bachelor of arts degree from Harvard University. His foreign language studies and participation in the Reserve Officers Training Corps (ROTC) led Redstone to receive a special invitation to join a team of U.S. Army cryptographers that decoded Japanese messages during World War II. After the war, Redstone’s final military assignment was overseeing entertainment for Army hospitals. His father’s nightclub connections greatly assisted in this endeavor.

After leaving the military service as a first lieutenant, Redstone was awarded his bachelor’s degree from Harvard University. While working toward a degree from Harvard Law School, Redstone used his military connections to earn a tidy profit, buying and selling surplus military supplies. After graduating, he married Phyllis Gloria Raphael, and he accepted a clerkship at the Ninth Circuit Court of Appeals in San Francisco and a teaching job at the University of San Francisco Law School. In 1948, Redstone became a special assistant to the attorney general in Washington, D.C. From 1951 to 1954, Redstone had a law partnership of Ford, Bergson, Adams, Borkland, and Redstone.

Life’s Work

In 1954, Redstone left the law practice and joined his father and brother at Redstone Management, the controller of a dozen drive-in theaters. Redstone initially focused his attention on expansion of the company and its relationship with film companies, but he was soon assigned to handle the company’s daily operations. At this time, drive-ins were considered second rate and did not receive equal access to first-run films. Redstone took legal action against the film companies and gained drive-ins the right to show new films. In the 1960’s, the company became known as National Amusement, Inc., and soon thereafter it began converting the drive-ins to cinema complexes with multiscreen theaters. National Amusement eventually owned fourteen hundred film screens.

When fire swept through Boston’s Copley Plaza Hotel in 1979, Redstone escaped through the third-floor window, but he suffered third-degree burns on 45 percent of his body and severe leg injuries. His survival and his ability to walk again showed the breadth of his strength and his tenacity.

Realizing his need for a closer relationship with motion-picture companies, Redstone began investing in Warner Communications, Twentieth Century Fox, Columbia Pictures, and other entertainment and media organizations, including Viacom. Viacom had acquired cable network stations of interest to Redstone. Redstone wanted Viacom and persisted until he obtained his purchase goal in 1987. The more than three-billion-dollar procurement included eight radio stations, five television stations, and the cable channels MTV, Nickelodeon, Showtime, and The Movie Channel. Immediately after the purchase, Redstone made Viacom’s stock public. Redstone failed to acquire Orion Pictures in 1988, but the attempt gained the company eighteen million dollars in assets. In 1994, he achieved the ten-million-dollar purchase of Paramount Communications, which included theme parks, sports teams, and Simon and Schuster. He also acquired Blockbuster Entertainment Corporation.

In 1995, Viacom suffered financial deficits that led Redstone to sell some assets, including Madison Square Garden, USA Networks, and much of Simon and Schuster. Blockbuster suffered financial problems, too, but Redstone managed to shore up the troubled company’s finances for the time being. Despite these woes, Redstone’s business mergers continued to flourish throughout the late 1990’s and early 2000’s. He was elected Viacom’s chief executive officer in 1996, and three years later the company merged with Spelling Entertainment. In that year, Viacom also began trading on the New York Stock Exchange. Federal Communications Commission (FCC) regulation changes in 1999 allowed Redstone and Columbia Broadcasting System (CBS) Chairman Mel Karmazin to merge these businesses. Over the next few years additional purchases included Black Entertainment Network (BET), Comedy Central cable network, and other radio and television stations. Redstone negotiated additional MTV services in China and published his autobiography, A Passion to Win, in 2001. He survived prostate cancer in 2004, and in that same year Blockbuster separated from Viacom. CBS and Viacom became separate entities in 2005. The next year, Redstone stepped down from his chief executive officer position but remained a major stakeholder.

In 2009, Redstone and National Amusements suffered under massive debts to creditors. In order to appease creditors, National Amusement sold thirty-five theaters to Rave Cinema and also sold nearly one billion dollars in Viacom and CBS stock. In 2010, National Amusement announced the sale of its Russian movie theater chain to Shari Redstone. Despite these sales, Redstone continued to hold voting control in both Viacom and CBS. He remained executive chairman of both companies until he was forced to retire from their boards in February 2016, amid questions around the nonagenarian's mental competency.

As of 2014, Redstone refused to discuss business succession plans. He, his son, and his nephew have fought public battles in the courts over the years. Redstone also fired a number of high-level executives during the early 2000s, leaving many to speculate about the fate of Viacom and CBS, which could be sold by Redstone's named trustees following his death. The matter appeared to be coming to a head in 2015, when a former girlfriend brought suit against Redstone after he cut out of his estate planning. The case went to trial in 2016.

After fifty-two years of marriage, Redstone was divorced by Phyllis. (He married Paula Fortunato in 2002, and they were divorced in 2009.) He and Phyllis are the parents of Shari Ellin Redstone and Brent Dale Redstone and the grandparents of five. Sumner Redstone has lectured at Harvard Law School, Boston University Law School, and Brandeis University.

Significance

Redstone built National Amusements into a global family holding company and successfully conducted leveraged buyouts of Viacom and Paramount Communications. His humble upbringing, his rigorous education, his savvy investments, his competitive nature, and his endurance of physical hardships generated a strength and a drive that Redstone used to construct a media empire. Despite the demands of overseeing several major companies, Redstone also engaged in many civic and philanthropic activities. His service to the community included chairing the Combined Jewish Philanthropies of Greater Boston. He served as chairman or trustee to numerous nonprofit health and medical organizations and several art institutions. Redstone also gave millions of dollars in charitable grants to fund research in burn care and cancer treatment.

Bibliography

Cohan, William D. "Who Controls Sumner Redstone?" Vanity Fair. Condé Nast, 20 May 2015. Web. 28 Apr. 2016.

McPhail, Thomas L. Global Communication: Theories, Stakeholders, and Trends. Boston: Allyn, 2002. Print.

Redstone, Sumner, and Peter Knobler. A Passion to Win. New York: Simon, 2001. Print.

Steel, Emily. "Peace before Battle." New York Times 13 Mar. 2016: BU1. Print.

Wasserstein, Bruce. Big Deal: Mergers and Acquisitions in the Digital Age. New York: Warner, 2000. Print.