After a hostile takeover in 1987, Redstone won voting control of Viacom and led a series of acquisitions to make Viacom one of the top players in modern media (along with Bertelsmann, General Electric & Vivendi's NBC-Universal, News Corporation, Time Warner, Sony, and Disney).
Redstone's next acquisition came in the form of the purchase of Paramount Communications, parent of Paramount Pictures, in 1993, which he fought over with Barry Diller (former board member of Vivendi Universal and CEO of IAC/InterActiveCorp) and John Malone (president of TCI/Liberty Media), where he had to raise his bid three times. Some say that Redstone overpaid, but after he shed certain assets (the Madison Square Garden properties to Charles Dolan's Cablevision and Simon & Schuster's educational publishing units to Pearson plc for almost $4 billion), Redstone turned Viacom's expenditure into a substantial profit. Under Redstone's leadership, Paramount went on an almost ten-year streak of record performance, producing such films as Saving Private Ryan, Titanic (one of the highest grossing film of all time and Best Picture Academy Award winner), Braveheart (Best Picture Academy Award), and Forrest Gump (also a Best Picture winner) and the creation of the hugely successful Mission Impossible series of pictures.
Redstone replaced the team of Jonathan Dolgen and Sherry Lansing in 2004 after their nine-year winning streak ended and the studio has struggled since with the relatively inexperienced team of Brad Grey and Gail Berman who both came from the TV business. The Dolgen and Lansing years were the high point of Paramount in many other regards as well.
In addition to the aforementioned award winning films, They also doubled the size of Paramount's music publishing division, Famous Music; expanded UCI Cinemas into 13 foreign countries; created the Digital Cinema Initiatives standards body for the new digital film technology; introduced the DVD; and launched the UPN Network (later part of CBS and now called the CW). The current Paramount Pictures consists only of the movie studio, the other groups having been sold or parcelled out to other divisions given Grey's lack of prior management experience.
The Paramount acquisition was only the tip of the iceberg. Redstone purchased Blockbuster Entertainment, which included Aaron Spelling's production company and a huge library of films, much of which has been merged into Paramount Pictures. Blockbuster has now been spun off into its own independent entity. Redstone acquired CBS Corporation in 2000 and then spun it off as a separate company in 2005, taking with it all of Paramount's television shows and catalog. Following the CBS and Blockbuster Spinoffs, Viacom consists of MTV Networks (MTV, Nickelodeon, VH1, Noggin etc.), music publishing (Famous Music) and Paramount Pictures.
In December 2005, Redstone announced that Paramount had agreed to buy DreamWorks SKG for an estimated $1.6 billion. The acquisition was completed on February 1, 2006. A subsequent financing brought Viacom's investment down to $700 million. The animation studio, DreamWorks Animation, was not included in the deal as it has been its own company since late 2004, however Paramount now has the rights to distribute films by DreamWorks Animation.
One of Redstone's largest acquisitions came in the form of Viacom's former parent, CBS. Former Viacom President & COO Mel Karmazin (who was then the President of CBS) proposed a merger to Redstone on favorable terms and after the merger completed in 2000, Viacom had some of the most diversified businesses imaginable. Viacom had assets in the form of broadcast networks (CBS and UPN), cable television networks (MTV, Nickelodeon, MTV2, Comedy Central, BET, Nick at Nite, Noggin/The N, TV Land, CMT, and Spike TV), pay television (Showtime and The Movie Channel), radio (Infinity Broadcasting, which produced the immensely popular Howard Stern' radio shows), outdoor advertising, motion pictures (Paramount Pictures), and television production (Spelling Entertainment, Paramount Television, and Big Ticket Entertainment), and King World Productions (a syndication unit, which notably syndicates the runaway daytime hit, The Oprah Winfrey Show, as well as Dr. Phil, Wheel of Fortune, and Jeopardy!), among others.After CBS and Viacom split in late 2005, Redstone remained chairman of both companies.
Redstone's trusts make it clear that Shari Redstone (Vice-Chairwoman of the Board of Viacom and CBS, Chairwoman of the board of Midway Videogames as well as President of National Amusements) is set to assume his role upon his death. However, a November 22, 2006 New York Times article indicated that Redstone was reconsidering his daughter's role. Recently they have been feuding publicly over issues of corporate governance and the future of the cinema chain.There have also been numerous articles stating that Sumner's marriage is in trouble.
Documents have recently been made public which verify that, as part of a settlement from Sumner's first divorce, all of Sumner's stock is in irrevocable trusts that will be left for his grandchildren.
Redstone made arrangements to step down as CEO of Viacom in 2006. After Mel Karmazin resigned in 2004, two heirs apparent were named: Co-President & Co-COO Leslie Moonves (who was #2 to Karmazin at CBS; he was the former head of Warner Bros. Television and before that, Lorimar Television) and Co-President & Co-COO Tom Freston (who had been President & CEO of MTV Networks since 1987 and had been with the company since the formation of MTV Networks' precursor company, Warner-AMEX Satellite Entertainment). Since the Viacom split, Moonves has headed CBS, and Freston had headed the new Viacom, Inc.
When Moonves was promoted to Co-President & Co-COO with Tom Freston, there was speculation that he was on the short list of executives to replace Michael Eisner at the Walt Disney Company whose contract expired in 2006.[10] Redstone has confirmed publicly in Vanity Fair that he originally offered the position only to Freston who initially turned it down and later relented when Redstone made it clear he was going to ask Moonves next.
On September 5, 2006 Redstone removed Tom Freston as President and CEO of Viacom and replaced him with director and former Viacom counsel Philippe Dauman. He also brought back former CFO Tom Dooley. This was surprising to many, as Freston had been seen by many as Redstone's heir apparent and that Redstone touted that Freston would run the company after he retired. Redstone publicly stated that he let Freston go because of Viacom's lack of aggressiveness in the digital/online arena, lack of contact with investors, and a lackluster upfront (coupled with falling viewership) at MTV Networks.
The company split was approved by the Viacom board on June 14, 2005.Currently, Redstone owns over seventy percent of the voting stock of Viacom, which, in actuality, is a not wholly-owned subsidiary of National Amusements, which is his privately held, family-owned company. CBS Corporation, likewise, is controlled by Redstone through National Amusements. Redstone also owned over eighty-nine percent of Midway Games, both individually and through National Amusements.
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