Sun, Jul 22, 2007 - Page 11 News List

Feud puts Viacom, CBS succession at risk

AP , NEW YORK

Sumner Redstone, CEO of Viacom Inc, attends the US Open tennis tournament in New York on Sept. 9. A family rift at Viacom Inc and CBS Corp widened on Friday, as Redstone, the chairman of both companies, took aim at his daughter Shari, who had been widely expected to succeed him.

PHOTO: AP

A family rift at Viacom Inc and CBS Corp widened as Sumner Redstone, the chairman of both companies, took aim at his daughter Shari, who had been widely expected to succeed him, in a letter faxed to Forbes magazine.

The letter came out on Friday, a day after Fortune magazine and the Wall Street Journal reported on the rift, which could put the future control of both companies in question if Shari winds up exiting her father's media empire. Shari, who is 53 years old, serves as a director and vice chairman of both companies. Her father is 84.

The articles quoted people familiar with Shari's thinking as saying she had had differences with her father over corporate governance issues, including Shari's effort to tie executive compensation more closely with financial performance.

"While my daughter talks of good governance, she apparently ignores the cardinal rule of good governance that the boards of the two public companies, Viacom and CBS, should select my successor," Redstone wrote in his letter, which Forbes posted on its Web site on Friday afternoon.

It is not clear what communications Shari Redstone has had with her father on succession, and a spokeswoman for Shari Redstone didn't immediately return a call and e-mail message seeking comment.

The spat comes less than six months after Redstone settled a separate dispute with his only other child, Brent, a lawyer who lives in Colorado. The elder Redstone wound up buying out his son's interest in National Amusements Inc, a privately held company that owns a chain of movie theaters, as well as voting stock in CBS and Viacom, which controls a majority of the shareholder vote in both companies.

That left Redstone owning 80 percent of National Amusements and Shari the other 20 percent. Redstone said in his letter on Friday that he would consider buying out Shari's interest, "as long as the price is acceptable."

Redstone has a history of clashing with executives as well. Last September he ousted Tom Freston as the CEO of Viacom after just eight months, installing in his place longtime adviser Philippe Dauman, and in 2004 Mel Karmazin quit as president of Viacom after a long period of butting heads with Redstone.

Redstone closed his letter by saying: "It must be remembered that I gave to my children their stock; and it is I, with little or no contribution on their part, who built these great media companies with the help of the boards of both companies."

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