Redstone, a graduate of Boston Latin School (the country’s first public school and alma mater of Benjamin Franklin, Samuel Adams, John Hancock and numerous other dignitaries) Harvard University and Harvard Law School and a code breaker during World War II, was the quintessential media mogul. A hard charging, take-no-prisoners executive, Redstone took his father’s small chain of movie theaters (National Amusements Inc.) and built it into one of the biggest entertainment conglomerates in the world, eventually encompassing ground-breaking cable networks (MTV, Nickelodeon, Comedy Central and others), a movie studio (Paramount), publisher Simon and Shuster, the former Blockbuster video store chain and broadcaster CBS. According to The New York Times, at its peak Viacom was worth about $80 billion.

“My father led an extraordinary life that not only shaped entertainment as we know it today, but created an incredible family legacy," Shari Redstone said in a statement. "Through it all, we shared a great love for one another and he was a wonderful father, grandfather and great-grandfather. I am so proud to be his daughter and I will miss him always.”

ViacomCBS CEO Bob Bakish, who spent decades at the company and was named CEO of the combined entity when it merged last year, noted Sumner Redstone's vision, leadership and business savvy. 

“Sumner Redstone was a brilliant visionary, operator and dealmaker, who single-handedly transformed a family-owned drive-in theater company into a global media portfolio,” Bakish said in a statement. “He was a force of nature and fierce competitor, who leaves behind a profound legacy in both business and philanthropy. ViacomCBS will remember Sumner for his unparalleled passion to win, his endless intellectual curiosity, and his complete dedication to the company. We extend our deepest sympathies to the Redstone family today.”

Former Viacom EVP of Communications Carl Folta, who stepped down in 2016 after more than two decades at the company, where he served as Sumner Redstone's chief spokesman, remembered a larger-than-life figure.

"Sumner was an extraordinary man," Folta said in a LinkedIn post. "Brilliant and flawed and larger than life in so many ways, he build a media empire with a clear vision and a fierce determination. It was a privilege and a nearly-never-ending adventure to know and work with him for nearly 30 years. RIP."

Redstone was 64 years old when he decided to enter the big media fray, purchasing Viacom, then a cable operator, from an investment group led by the company’s management. In 1994, he launched a surprising effort for iconic movie studio Paramount, outbidding former studio chief Barry Diller in the process.

Redstone continued to grow Viacom through acquisition, purchasing CBS in 2000 for $39.8 billion, and Black Entertainment Television in 2001 for $3 billion. Through his run, Redstone also famously clashed with his top executives, including his daughter Shari, with whom he had reconciled in recent years. Shari, along with six other trustees, will gain control of his interests in the company, according to reports. 

The elder Redstone has been relatively quiet since Viacom recombined with CBS to form ViacomCBS in 2019 (reversing a split that was initiated in 2005). He had officially been chairman emeritus of both companies since 2016.

In a research note, Wells Fargo Securities media analyst Steven Cahall wrote that while investment bankers will likely view the change in control as an opening for deals. He noted Sumner Redstone had been against the sale of the Paramount studio in the past, but now any offer would be put before the trust, which would have a fiduciary duty to consider it. Cahall also wondered if Shari Redstone would rather carry on her father’s ownership legacy or sell.

“...[W]e'd say most investors believe her legacy might be one of divestiture or exit,” Cahall wrote, adding he didn't have the answers but believes “media sewing circles will be alight with chatter and this is likely to be buoyant to ViacomCBS's [stock] price in the near-term.”

ViacomCBS shares were priced at $26.93 per share in early trading Wednesday, up 1.6% or 42 cents each.

Famous for declaring that “content is king,” Redstone’s movie theater company National Amusements bought a controlling interest in Viacom in 1987 and he became executive chairman of the board. He also was CEO from 1996 through 2005. 

Viacom became a cable TV giant with networks including Nickelodeon, MTV and Comedy Central, as well as Showtime and the Paramount Studio, While running Viacom, Redstone acquired CBS in 2000. In 2005, he separated the two companies but maintained control of both of them, serving as their executive chairman.

Over the course of his career, he was known for being combative, often starting legal battles with companies and people who cross his path, and dismissing potential successors.

As he became older and more infirm, battles for control of both companies ensued. He resigned his position as chairman of both companies after a court ordered he be examined by doctors.

His daughter Shari Redstone, who had a rocky relationship with her father in terms of her role at the company, eventually prevailed over Philippe Dauman at Viacom and Leslie Moonves at CBS. She also had to prevail over her father’s female companions, who also wanted to control his medical care of the future of his fortune.

After taking control of both companies, Shari Redstone merged them again to form ViacomCBS last year.

“Sumner Redstone was a brilliant visionary, operator and dealmaker, who single-handedly transformed a family-owned drive-in theater company into a global media portfolio. He was a force of nature and fierce competitor, who leaves behind a profound legacy in both business and philanthropy,” said ViacomCBS CEO Bob Bakish. “ViacomCBS will remember Sumner for his unparalleled passion to win, his endless intellectual curiosity, and his complete dedication to the company. We extend our deepest sympathies to the Redstone family today.”

Redstone was born in Boston, graduated from Harvard and got a law degree from Harvard's law school.

Famously, he suffered severe burns as he survived a fire at the Copley Plaza Hotel in Boston in 1979. His  strong will to live led him to declare that he had no intention of ever dying, which was one reason he never came up with a workable succession plan.

 What will happen to Redstone’s empire now was not immediately clear.

“With the passing of Sumner Redstone we think little has changed for NAI and VIAC, but that won't stop near-term speculation,” noted analyst Steven Cahall of Wells Fargo. “Mr. Redstone controlled NAI with an 80% stake and through it VIAC via the super class of shares. His daughter Shari is the minority owner of NAI but as his primary caretaker these last years she has represented the totality of NAI in our view. We think her leadership has been regarded as synonymous with his views. His 80% stake now passes to a Trust with seven trustees, including Ms. Redstone.”

Cahall noted that some assets that were Sumner Redstone was particularly attached to--notably the Paramount movie studio--might now be available. 

“Many will also wonder whether [Shari Redstone] wants to carry on her father's legacy of ownership and industry consolidation, but we'd say most investors believe her legacy might be one of divestiture or exit,” Cahall said.  

“Whether she wants to sell or not is currently of less import than the immediate challenges of navigating a fragmenting media ecosystem to recreate some of ViacomCBS’s lost value,” he added. “We expect that's what CEO Bob Bakish and Ms. Redstone are squarely focused on, though as our Underweight rating suggests, it's not an easy road to navigate.”

For more than 20 years, CBS Corp. was personified by chairman and CEO Les Moonves, booster of broadcast, programmer par excellence, streaming pioneer and, as it turned out, boardroom brinksman and sexual harasser.

With Moonves forced out by a controlling shareholder and the #MeToo movement, the future of CBS might be more complicated than one of Moonves’s shows, in which the identities of the hero and villain were clear and the plot wrapped up in 60 minutes. (Speaking of 60 Minutes, the executive producer of CBS’s acclaimed newsmagazine was also fired last week. More on that below.)

With a leadership vacuum left behind by a very hands-on chief, the two most likely scenarios involved CBS being merged with Viacom or sold to another owner.

Moonves, one of the highest paid executives in the country, had opposed suggestions by CBS vice chairman Shari Redstone’s that CBS consider a combination with Viacom, also controlled by National Amusements, the family holding company set up by ailing 95-year-old Sumner Redstone.

Taking the Pledge

To fight off the Redstones, CBS attempted to dilute their voting rights. The lawsuit that ensued was settled in an agreement that included the departure of Moonves, new directors being named to the CBS board and a pledge by National Amusements not to suggest a merger with Viacom for two years.

Despite the standstill agreement, there are those who still think that with Moonves gone, a combination with Viacom is inevitable.

BTIG analyst Rich Greenfield noted that while National Amusements agreed not to propose a CBS-Viacom transaction, that doesn’t mean it wouldn’t support one if the two companies’ boards reach terms.

One of the big issues making combining CBS and Viacom difficult was management. Moonves would have been the top dog and he didn’t want Viacom CEO Bob Bakish involved with the new company. With Moonves out of the picture, the Redstones can first pick a new CBS CEO and then decide whether that exec or someone from Viacom would run the companies if they were combined.

The other issue was the price: how many CBS shares would Viacom owners get?

While CBS seemed to think that Viacom’s cable networks were an albatross that would weigh it down, Greenfield thinks the Redstones would be smart to consolidate their media assets.

Weighing a Viacom Deal

“We continue to believe a merger between Viacom and CBS offers substantial value creation in terms of revenue synergies, cost savings and balance-sheet strength; we believe the independent directors will agree,” Greenfield said.

For CBS, there are few alternatives, he added. “We simply do NOT see a buyer for CBS beyond Viacom.”

After hitting a low of $54.04 in early trading Monday (Sept. 10), CBS shares bounced back to close at $55.85 on Friday. Viacom had a roller coaster ride, starting at $29.35 on Monday and trading as low as $28.84 on Wednesday before closing at $29.85 on Friday.

Others think any Viacom deal is dead. Sanford Bernstein media analyst Todd Juenger upgraded CBS stock because the chance of a re-merger with Viacom is “near zero” and the possibility that CBS gets sold has significantly increased.

“The management vacancies, need to cleanse the culture, and the agreement to remove the Redstone Trust provision which impedes an asset sale all make the sale of CBS that much easier and more likely (perhaps even necessary),” Juenger said.

The CBS culture appears to need cleansing because in addition to Moonves, Jeff Fager, the executive producer of 60 Minutes and former chairman of CBS News, was also fired. He too had been charged with misconduct with female staffers, but lost his job when he threatened the CBS reporter who was covering his case that she would be harmed if she wasn’t careful with what she reported.

CBS’s problems made it harder for Viacom to focus Wall Street on Bakish’s pitch that he’s turning the cable programmer around.

During a presentation to an the annual Goldman Sachs Communacopia conference last week, Bakish didn’t mention CBS. But afterwards, he was peppered with questions about CBS by CNBC’s David Faber.

Bakish said it’s “easy to get distracted” by the CBS goings-on, but that he focus was on “delivering a turnaround, delivering an evolution.” He pointed to improvements in distribution revenue, audience share and the financial results at Paramount Pictures. But Viacom’s stock price is capped by the potential of a deal with CBS, Faber noted.

“It’s definitely frustrating,” Bakish said. “We are focused on putting points on the board ... I think we’ll get respect for that.”

MoffettNathanson Research media analyst Michael Nathanson said he expects CBS and Viacom to be talking merger a year from now. With time, CBS’s board will have a better idea of how real Bakish’s turnaround is and how Viacom fared in its critical affiliate-fee negotiation with DirecTV.

CBS stock should be higher in 2019. It has the Super Bowl, the chance to increase retrans fees with 75% of its footprint due for renegotiation over the next two years, and some syndication opportunities.

“At that point, we would expect Viacom and CBS to finally consummate their long-anticipated marriage at terms that are more favorable to CBS than earlier,” Nathanson said.

The offer, which is expected to be submitted in the next few days, would put CBS CEO Les Moonves in charge of the combined company for at least two years, the report said.

CBS and Viacom are controlled by the family of media mogul Sumner Redstone, whose daughter Shari Redstone, vice chair of both companies, has encouraged their boards to consider a combination.

CBS’s low-ball bid signals that it thinks it is the more powerful and valuable company. It would also signal that difficult negotiations are ahead.

The two companies has been combined but were split by Sumner Redstone more than 10 years ago. The Two companies considered a combination in 2016.

John Janedis, analyst at Jefferies, said that a recombination of CBS and Viacom faces hurdles, with price and leadership among the key issues.

Janedis noted that similar issues, including governance and management autonomy, were issues the last time the companies considered combining.

“A theme that looms larger this time around is likely carriage for the combined company's networks and any potential dis-synergies,” he said in a note Monday (April 2).

“The challenges on the traditional media distribution models are all very real, though the solutions outside of scale don't necessarily guarantee successful outcomes,” Janedis said. “Assuming press reports are accurate, a take-under would make it very difficult to consummate a deal, in our view. It will be interesting to see to what extent a stalemate could translate to other potential bidders for either asset.”  

CBS and Viacom said late Thursday that their respective boards of directors have formed special independent committees to evaluate the potential combination of both companies.

The move has been expected for weeks. CBS’ and Viacom’s split in 2005 and their largest individual shareholder National Amusements, headed by media mogul Sumner Redstone and his daughter Viacom and CBS vice chair Shari Redstone, tried to recombine the companies in 2016. That plan was abandoned later that year, but in recent weeks reports have surfaced that Shari Redstone had been interested in revisiting a merger. Viacom CEO Bob Bakish and CBS chairman and CEO Les Moonves were said to have had discussions about a possible merger last month and it was expected that talks would resume after a scheduled board meeting of both companies Feb. 1.

In a statement National Amusements said it “supports the processes announced by CBS and Viacom to evaluate a combination of the two companies, which we believe has the potential to drive significant, long-term shareholder value.”

Whether the deal will happen remains to be seen. But some analysts have been pushing for a recombination for months. Moonves, who has resisted a merger in the past, is said to be more open to a deal in light of the recent consolidation activity in the industry. In October, AT&T announced a $108.7 billion merger plan with Time Warner and in December The Walt Disney Co. agreed to buy certain programming assets from 21st Century Fox for $66.1 billion. With its large content brethren getting even larger, some analysts believe that CBS could benefit from Viacom’s programming assets. Viacom, which has struggled with ratings declines and a sluggish ad market, could benefit from CBS’s position as the No. 1 broadcast network in carriage negotiations.      

There were no details as to which directors are on the special committees or how long it will take to evaluate a possible merger. Both CBS and Viacom said they would have no comment until the process is complete.

Former Viacom CEO Philippe Dauman figuratively laughed his way to the bank in fiscal 2016, receiving more than $93 million in total compensation in a year when he was ousted in a heated battle with former mentor and controlling shareholder Sumner Redstone.

According to a proxy statement filed with the Securities and Exchange Commission on Friday, Dauman received $93.02 million in total compensation, including $58.4 million in other compensation, mostly consisting of separation payments he received when he resigned from the company in August.

Dauman had been under pressure to leave from his former friend and mentor Redstone, who removed him from the trust that would have controlled his 80% voting interest in Viacom upon his death or incapacitation. What followed were a series of lawsuits where Dauman claimed Redstone was being controlled by his daughter, Viacom vice chairman Shari Redstone, and Redstone accused his former friend of being an incompetent executive.

According to the SEC document, Dauman’s former lieutenant, former chief operating officer Tom Dooley, received about $27.9 million in compensation in 2016, down from the $29.4 million he received in the prior year.  Dooley had served as interim CEO of Viacom after Dauman left, giving up that throne  in November.  Viacom named long-time executive Bob Bakish as acting CEO in October,  raising him to permanent CEO earlier this month.

With Bakish’s ascension, Redstone’s National Amusements dropped its support of a potential merger between Viacom and CBS, its other media holding. In December Viacom officially ended its exploration of the possible merger.

Viacom continues to line up its ducks for an inevitable merger with former corporate sibling CBS after the companies’ largest shareholder, Sumner Redstone, fired off a letter requesting the pairing.

While a hookup could benefit troubled Viacom, analysts said the plan could backfire if Redstone does not use a delicate hand, a trait for which the volatile media mogul is not known.

Redstone’s National Amusements, the theater chain that holds his 80% voting interests in both Viacom and CBS, urged the two companies to investigate a merger. The companies split in 2006, an effort to unlock hidden value.

At the time some skeptics thought the split could hurt Viacom, which lost the effective sledgehammer of retransmission consent from CBS in affiliate-fee negotiations.

Viacom got an early lift from the split — shares rose about 6% in the two months after the transaction — but in the longer run CBS was the real beneficiary. CBS shares have more than doubled since 2006, from $20.17 per share on Jan. 3, 2006, to $54.57 on Sept. 29. CBS also has been on the cutting edge of technology, launching in 2014 its own over-the-top service, CBS All Access, which now has about 1 million subscribers.

CBS chairman and CEO Les Moonves has been credited with much of that success, fueled by strong increases in retransmission consent revenue. CBS is expected to top $1 billion in that category this year, rising to $2.5 billion by 2020.

“For CBS, the opportunity can be distilled to one question — is a merger with Viacom a better opportunity than its standalone growth strategy?” Morgan Stanley media analyst Ben Swinburne wrote in a note to clients. “That case must be made. This is not a combination CBS needs to take on.”

Viacom has had an extremely volatile summer, kicked off by Redstone’s ouster of then-CEO Philippe Dauman from the trust that would control his shares in the event of his death or impairment.

The 93-year-old Redstone, who had been thought to be seriously ill, was apparently rejuvenated by Dauman’s moves to sell a minority interest in Paramount Pictures, the movie studio that Redstone won in a bloody corporate battle with fellow mogul Barry Diller in 1994.

Dauman had been scrambling to pay down debt as Viacom’s ad revenue dwindled in the face of falling ratings for its teen and kid-oriented networks. Viacom still needs to reduce leverage. And, according to the National Amusements letter, a sale of all or a part of Paramount is still off the table. So is a sale of all or part of Viacom to a third party.

That would limit the options for any new CEO, including Moonves. He is an extremely well regarded media executive and most analysts believe he is Viacom’s best shot at a turnaround.

But taking on Viacom’s challenges could present little upside to the CBS executive other than an ego boost. Pressing Moonves to take on that challenge could push him into the arms of another needy media property, The Walt Disney Co.

Disney has had some difficulties as cord-cutting and skinny bundles have eroded the subscriber base of its flagship cable network, ESPN. Chairman and CEO Bob Iger also is nearing retirement — his employment deal expires in 2018 — and the company passed on the former top candidate to replace him, chief operating officer Thomas Staggs, earlier this year.

Moonves, with his experience running broadcast and cable networks, would be an inspired choice to replace Iger. And, at least publicly, Moonves has been indifferent to a Viacom merger, saying at a recent industry conference that CBS was not in active discussions with Viacom. While that doesn’t mean talks couldn’t happen later, some analysts are warning Viacom to use a light touch when dealing with Moonves.

Viacom’s board of directors can finally end their mailbox vigil after controlling shareholder Sumner Redstone posted a much anticipated missive calling for the creation of a special committee to investigate the possibility of a merger with the other media company he controls, CBS.

News that a letter was coming from Redstone’s National Amusements, the theater chain that holds his 80% voting interests in both Viacom and CBS, broke yesterday. In a statement Thursday Viacom acknowledged receipt of the missive, adding that its board expects to form a special committee of independent directors to “carefully consider the request from National Amusements and any proposed transaction.”

Viacom noted that in the letter, National Amusements “communicated that it is not willing to accept or support any acquisition of Viacom by a third party or any transaction that would result in National Amusements surrendering its controlling position in Viacom.”

In addition to the 80% voting stake in Viacom and CBS, National Amusements, directly and through subsidiaries, owns about 10% of Viacom’s total common stock outstanding.

The full text of the letter follows:

Viacom’s EVP of corporate communications Carl Folta is stepping down after more than two decades at the entertainment conglomerate, interim CEO Thomas Dooley told employees in a company memo Tuesday.

Folta started out with Gulf + Western in 1984 and joined Viacom after the 1994 merger with Paramount Communications. Since then, Folta “has been on the front lines of every major initiative and transaction in the history of our company,” Dooley said in the memo. “Nobody fought harder for Viacom and all of us. Not only did Carl guide the company through some of the most active and challenging periods in the media industry, but he also helped Sumner Redstone become one of the most recognized and globally acclaimed media executives in history.”

Folta was the chief spokesman for Redstone and later for CEO Philippe Dauman. His decision comes about three days after Dauman announced that he would step down as CEO effective Sept. 13.

Folta was well-respected by the press that covered the company and was known as a straight-shooter with a vast knowledge of Viacom operations. He also was the catalyst behind some of Viacom’s most successful social initiatives, including KNOW HIV/Aids, the Peabody and Emmy Award-winning cross-platform public education partnership with the Kaiser Family Foundation and was the driving force behind the company’s current partnership with the Bill and Melinda Gates Foundation on Get Schooled, a multi-year educational program for young people.

Viacom CEO Philippe Dauman is out and will be replaced by Thomas Dooley, currently COO, as part of an agreement ending the battle for control of the media company that has been won by 93-year-old mogul Sumner Redstone and his daughter Shari Redstone, according to sources familiar with the situation.

According to a report in the Los Angeles Times, Dooley will serve until the company’s board meeting in September, but could be asked to continue in the job.

Dauman was one of the highest paid CEOs in the U.S. but in recent year’s Viacom’s business has been bad, with ratings dropping at its cable networks and ad revenues declining. Its stock hit new lows earlier this year.

RELATED: Dauman Resigns as CEO of Viacom: Report

Shari Redstone was a rival of Dauman’s for control of her father’s $40 billion media empire, which includes CBS. She also criticized Dauman and opposed his election as chairman earlier this year.

The deal was approved by Viacom's directors Thursday night, but some elements needed to be signed off on before an official announcement can be made.

Read more at B&C.

Viacom CEO Philippe Dauman has reportedly resigned and will be replaced by Thomas Dooley, COO, as part of an agreement ending the battle for control of the media company that has been won by 93-year-old mogul Sumner Redstone and his daughter Shari Redstone.

According to a report in the Los Angeles Times, Dooley will serve until the company’s board meeting in September, but could be asked to continue in the job.

Dauman was one of the highest paid CEOs in the U.S. but in recent year’s Viacom’s business has been bad, with ratings dropping at its cable networks and ad revenues declining. Its stock hit new lows earlier this year.

Shari Redstone was a rival of Dauman’s for control of her father’s $40 billion media empire, which includes CBS. She also criticized Dauman and opposed his election as chairman earlier this year.

The settlement would end lawsuits in Massachusetts and Delaware and allow the Redstones to add five new directors to Viacom’s board.  The new directors include Judith McHale, former president of Discovery Communications; Ken Lerer, an investor in companies including Buzzfeed; and Nicole Seligman, formerly president of Sony Entertainment.

Five current board members who sided with Dauman will depart over the next few months.

Dauman will remain as non-executive chairman until next month and will be able to present to the board his plan to sell 49% of Paramount Pictures. The Redstones have opposed the sale.

Read more at broadcastingcable.com.

A decade after he was unceremoniously ousted as CEO of Viacom, Tom Freston had some harsh words for his replacement, telling CNBC Wednesday that Philippe Dauman has led the once proud media company through a “series of errors” and should be removed.

The former chief’s comments came as Dauman is fighting a battle for survival with Viacom’s largest shareholder Sumner Redstone, who has ousted the current CEO from the trust that will control his shares after his death or incapacitation. Earlier Wednesday (June 15), Redstone sent an e-mail to Viacom board member Fred Salerno stating that he no longer trusted Dauman or the board.

Freston, who helped create MTV and countless other Viacom networks, was fired in 2006, reportedly for a failure to buy then-online jewel MySpace. News Corp. snapped up MySpace in 2005 for $580 million. Six years later it was sold for $35 million, a fraction of its original value.

Freston said Dauman has failed to embrace the digital culture that is at the heart of Viacom’s core audience – kids, teens and young adults – instead adopting a litigious stance that has backfired.

“Litigation became a key tool,” Freston told CNBC, according to a transcript. He pointed to Viacom’s decision to sue YouTube in 2007 for $1 billion for copyright infringement instead of recognizing that the online video pioneer was becoming a top destination for young viewers and trying to establish a relationship. That decision, Freston said “froze Viacom for years on the sidelines, unable to really make any digital moves.”

Viacom finally settled the suit in 2014, which Freston said netted the  programmer nothing, but cost them “tens and tens of milions of dollars” to litigate.

“There’s been a series of pretty serious errors,” Freston said.

While he didn’t believe it was is place to call for Dauman’s removal, Freston said Daman hasn’t been “the optimal leader for the company” and that he isn’t the right man for the job.

That right man would be someone familiar with pop culture and young audiences.

“The person who holds that chair should be somebody who is turned on, attracted to and somewhat knowledgeable about the creative community and the popular culture and what's going on there, and to be able to telegraph that and inspire the employees of the company behind that vision,” Freston said. “You can't run an entertainment company through lawsuits.”

Freston said he would not come back to the run the company, nor has he been asked to, adding that he has moved on with his life and is an investor in Vice Media, the millennial-focused media conglomerate. 

Viacom still has great brands, the former CEO said, and could be rejuvenated with a younger board and new, creative management.

“By no means have they reached the point of no return, and I think they could be rejuvenated,” Freston said. “America loves a second act.”

But he also wondered why Dauman, obviously under pressure from Redstone to throw in the towel, still holds on.

“For me, when the Redstones don't want you, when Wall Street doesn't seem to want you, and when from what you can hear, there's not a huge amount of support for him in the company, you've got to wonder what's the game he's playing,” Freston said. “What's the point?”

In a statement, Viacom said the company is “significantly bigger, more global and generates far more profits today than when Philippe Dauman's predecessor left office in 2006."

The statement continued: "Philippe has doubled the amount of investment in creative programming over his tenure to more than $6 billion annually, and has grown Viacom to be the #1 family of cable networks and the #1 destination on all of television for reaching younger audiences. Philippe has overseen substantial and consistent growth in the company’s international business, which is now on track to generate $1 billion in revenues by 2020. Viacom is making more global hits than ever before, exemplified by recent successes such as Lip Sync Battle now airing in 96 countries. Philippe has also brought in new creative leadership to reposition key networks, which is now driving ratings turnarounds, and has overseen an overhaul of the company’s advertising sales engine to deliver innovative data-driven products. The company has generated billions of dollars in new distribution revenues from emerging digital platforms while at the same time more than doubling affiliate revenues since 2006.”

In a blog post Thursday, Greenfield said shareholders have a case because it is obvious given Viacom’s recent performance, that independent directors haven’t held up their end of the bargain to act in all shareholders’ best interests.

Six of Viacom’s 11 board members are classified as independent. But Greenfield argues that although they have a fiduciary duty to look after all shareholders’ interests, instead they have rubber-stamped an ill-advised share buyback program that he says “squandered” liquidity and raised leverage; Okayed promoting Dauman to executive chairman and making him the third-highest paid CEO in the U.S., despite continued operational failures under his watch and now is trying to solve its debt problems via a sale of a 49% interest in its Paramount movie studio. Greenfield views the Paramount sale as “misguided.”

All that should give shareholders more than enough fuel for lawsuits, Greenfield wrote. Adding more logs to the fire is that, according to the analyst, the Viacom board is using company funds to finance Dauman’s and board member George Abrams lawsuits against Redstone to block his removing them from the trust that will control his shares upon his death or incapacitation.

The analyst has already noted that given the structure of the trust’s board, there is no way for Dauman or Abrams to be reinstated, even if they do win.

He added that the independent board members should oust Dauman and end the financing of the Dauman/Abrams lawsuits immediately or face removal themselves.  

“Viacom’s board is delaying the inevitable and wasting company resources,” Greenfield wrote. “The best course of action is to act swiftly to enable Viacom to refocus on the operational challenges at hand, bring on new management and pursue a merger with CBS at market.”

Embattled Viacom executive chairman and CEO Philippe Dauman, locked in an increasingly bitter fight with the media company’s largest shareholder Sumner Redstone, joked that he preferred to create content than to be it, told a mainly sympathetic audience at an industry conference that the company plans to go ahead with its Paramount movie studio sale, albeit on a longer schedule.

Dauman has traded lawsuits with Redstone ever since the media mogul kicked him off the trust that would control 80% of Viacom’s voting shares in the event of his death or incapacitation.  Dauman has filed suit in Massachusetts Probate Court to block the move, claiming Redstone no longer has the mental capacity to manage his affairs and that Redstone’s daughter Shari is exacting undue influence on her father.

Dauman opened his session at Thursday's Gabelli Movie & Entertainment conference in New York, briefly addressing the stand-off.

“I’ve been involved with the company for more than 30 years and this is certainly unique, and the one takeaway I have is, it’s a lot more fun creating the content than being the content,” Dauman said. He thanked Viacom’s employees for continuing to create great content “despite everything that is going on.”

Dauman then launched into a presentation describing Viacom’s business – Nickelodeon is doing “great,” with the top three animated shows on cable and “a lot of vitality.” He also said Viacom has successfully renewed its biggest cable distribution deals over the past two years, adding that the programmer doesn’t have a major negotiation for this fiscal year or next.

As for its movie studio, Paramount Pictures, plans are still to go ahead with the sale of a minority interest. While that sale has been the source of much of Redstone’s ire – he recently changed the bylaws of the holding company that contains his Viacom shares that would prevent a Paramount sale without a unanimous board vote.

Dauman said that originally Viacom had fielded interest in buying the stake from about 40 companies and is now having more detailed discussions with a smaller list of players. While those negotiations are going forward, he said in light of “recent events,” the company will miss the June 30 deadline for the sale.

“We are continuing to explore the potential of unlocking value with select partners with strategic value,” Dauman said.

Still, Dauman said that whoever buys the stake would be an “interesting partner” for Viacom as well. He estimated the sale would unlock about $10 or more per share of value for Viacom shareholders, helping the company move forward with its strategic plan and provide cash to help pay down debt.

Last week, psychiatrist Dr. James Spar said that he found Redstone to be able to make decisions, showing only a “mild degree” of age-related cognitive impairment after two examinations  of the media mogul at his Beverly Hill residence on May 20 and May 24, according to reports. Dauman, whom Redstone is attempting to toss off Viacom’s board of directors along with several other members, has claimed that the Viacom chairman emeritus is being unduly influenced by his daughter, Viacom and National Amusements Inc. director Shari Redstone.

In the most recent filing, Dauman claims that Spar’s findings present “a one-sided, uncross-examined and distorted view of Mr. Redstone’s mental condition.”

Dauman also addressed some critics who have claimed that Redstone was found competent by a California court judge in April in his dismissal of a suit by Redstone’s former care giver Manuela Herzer.  

The filing claims that the California court was only deciding the validity of Redstone healthcare directive – which ousted Herzer as his healthcare agent – and that it was “not making any ultimate findings related to Redstone’s mental capacity, one way or another, or whether he was unduly influenced in revoking the healthcare directive.”

Dauman also addressed critics who pointed to his own deposition in that case, which said Redstone was “engaged” and “attentive.” In the most recent filing, Dauman said that didn’t mean Redstone actually knew what was going on.

Dauman said in the filing those characteristics “could be attributed to a person who lacks the relevant capacity and who is supply unable fully to process information delivered to him no matter how engaged or attentive he is,” the filing stated. “In any event, Mr. Dauman’s affidavit was submitted more than six month ago. Six months is an eternity for a very sick man in his nineties.”

Dauman and Viacom board member George Abrams filed suit in Massachusetts in May to block Redstone’s moves to remove them from the trust that will manage his holdings in the media company in the event of his death or incapacitation. They have asked for expedited discovery in the case, and a hearing is set for Tuesday.

A decade after the split that was supposed to unlock the hidden value inside Viacom, some pundits are calling for the home of MTV Networks to put the old band back together by recombining with broadcaster CBS in an aggressive move to restore value and clout to the once-powerful cable networks.

Recent moves by Sumner Redstone, Viacom’s ailing top shareholder, to possibly oust CEO Philippe Dauman and the board of directors have brought the conversation to the fore.

But many say stitching Viacom and CBS back together would be a long, costly process that might make both weaker rather than stronger.

SpringOwl Asset Management hedge fund manager Eric Jackson has been one of the loudest proponents of reconstituting the old Viacom, combining the broadcast and cable assets and placing CBS chairman and CEO Les Moonves and his team firmly in charge.

Jackson pins most of Viacom’s woes on executive chairman and CEO Philippe Dauman and thinks a CBS-Viacom recombination would offer cost savings and greater efficiencies, as well as the obvious changes in management.

TARGET: NEW MANAGEMENT

Viacom might indeed rise out of the ashes of its current predicament — but possibly too late for Dauman. “Investors will value other management taking over,” Pivotal Research Group senior research analyst, advertising Brian Wieser said in an interview. “You could literally put anyone in the CEO spot.”

Wall Street’s top candidate would be Moonves, who has overseen a huge resurgence at CBS in the past 10 years, while Dauman has seen Viacom’s value diminish. The biggest question, Wieser said, is if Moonves wants to take on the daunting task of reviving Viacom or would rather continue on his current path of growing’s CBS assets.

Under Moonves, CBS stock has more than doubled in price, to $55.17 from $26.64 per share, over the last 10 years.

CBS expects retransmission-consent revenue to reach $1 billion by year-end (up from “tens of millions” after the 2006 Viacom split) and to more than double to $2.5 billion by 2020.

Moonves has been quick to the attack on the over-the-top front, launching CBS All Access, which last year attracted an estimated 100,000 monthly subscribers. CBS has projected it could have 4 million customers by the end of 2020.

Moonves has deflected merger talk, saying on a 2015 earnings call, “We’re feeling pretty strong about ourselves and don’t need any partners.”

One roadblock could be finding an acceptable premium for Viacom, which currently has an enterprise value of about $29 billion, about the same as CBS’s EV of about $32 billion.

Wieser said a Viacom-CBS combination makes sense on some fronts and there could be tons of synergies across the board, but Moonves and CBS would have to articulate their vision for the company for any recombination to work.

Viacom still has value in that its Nickelodeon networks reach more kids than any other programmer, Wieser said. In the music arena, MTV Networks could recapture some of the lost mojo in that sector with new programming introduced at the most recent upfronts. “It really comes down to whether there is a fundamental belief in the durability of the assets,” he said. “I believe there is value in the assets, but it’s understandable why some don’t have that view.”

Others, like Telsey Advisory Group media analyst Tom Eagan, think the risks would outweigh the rewards, adding that Viacom’s problems could also be solved with time and the move toward Total Audience Measurement.

Total Audience, which is beginning to emerge from ratings companies Nielsen and comScore, potentially will track all viewership all of the time, even those elusive viewers who watch content on every device but their TVs.

CROSS-PLATFORM ELEVATION

One of Viacom’s biggest problems has been declining ratings at its youth-oriented networks, which have driven ad sales down and made the company vulnerable in affiliate-fee negotiations.

“The inclusion of more cross-platform measurement is going to help Viacom,” Eagan said. “You could arguably say it will help them more than any other cable-network group, because so much of their viewership is off-linear. But they need to be able to monetize it.”

Wieser wasn’t so sure that Total Audience would be Viacom’s magic bullet. He believes the company’s problems are much deeper, even more than its failure to develop shows its core audience wants to see and the loss of talent like Comedy Central’s Stephen Colbert and Jon Stewart.

“The fundamental problem Viacom has is, it has a controlling shareholder,” Wieser said. “Investors never seem to care [about that] until things go badly.”

Keryn Redstone, one of media mogul Sumner Redstone’s granddaughters, said she will side with the Viacom board against her aunt Shari Redstone in the battle over his media empire.

She said Shari Redstone was able to “effectively kidnap, brainwash and take advantage of [her] grandfather due to his debilitated state of mind and frail health” so her aunt could control his assets.

The Viacom board has accused Shari Redstone of having an “undue influence” over Sumner Redstone as he moves toward replacing Viacom’s directors and management, including CEO Philippe Dauman.

A suit by Dauman and another Viacom director, George Abrams, charging that a move to remove them as trustees of Sumner Redstone’s trust, which holds a controlling interest in the company that owns 80% of the voting rights for Viacom and CBS, will be heard next week in a Massachusetts court.

Related:The Philippe Phactor [subscription required]

On Wednesday, Keryn Redstone rejoined the fray, issuing a statement that said that Sumner Redstone’s health has deteriorated and that he has been incompetent since October.

“The last time that I saw my grandfather was on Valentine’s Day for fifteen minutes," she said. "As he sat there lifeless and flanked by his nurses and caretakers, he seemed unaware of his surroundings. It was one of the most surreal experiences of my life."

Keryn Redstone also said Shari Redstone orchestrated the removal of Manuela Herzer as her grandfather’s companion and overseer of his health care, and has kept the Viacom board from communicating with him.

‘Because I was in the house, I know that my grandfather has been incompetent since last October," she said. "This is why Shari is keeping me away, because I will not lie or conceal the truth about my grandfather’s condition. I love my grandfather and I cry myself to sleep every night knowing that I might never see him again."

Keryn Redstone has hired the same lawyers who represented Herzer in her unsuccessful suit to have Sumner Redstone declared incompetent to make health care and financial decisions.

“I do not intend to let Shari get away with this outrage,” she added. “I will soon be announcing legal steps to join with the Viacom directors in our common cause to liberate my grandfather from Shari’s clutches and protect my fellow trust beneficiaries and myself from her machinations.”

Read the full text of Keryn Redstone's statement at broadcastingcable.com.

As Viacom’s controlling shareholder Sumner Redstone continues to make moves to oust the company’s board of directors, the lead independent board member, former Verizon vice chairman Fred Salerno, issued a letter to shareholders stressing that they will continue to fight in the best interests of the company.

Redstone has been setting the wheels in motion to remove the board, including his former friend and confidant executive chairman and CEO Philippe Dauman. Dauman has filed suit in Massachusetts probate court to block Redstone's actions, claiming that his daughter Shari Redstone is exerting undue influence on her father.

Related:The Philippe Phactor [subscription required]

Salerno has requested a face-to-face meeting with Sumner Redstone, but has been unable to do so. The letter, Salerno wrote, is being issued to let shareholders know what the board is thinking.

“We know that none of us is ‘entitled’ to his or her Board seat,” Salerno wrote. “But we were elected, until our terms expire or we are properly removed, to look after the interests of all the stockholders of Viacom. That is what Delaware law requires – and that is what Sumner Redstone has always expected.”

Salerno said the board believes that Redstone’s actions are out of character and inconsistent with his prior commitment to ensure that an independent board and professional management remain in place at Viacom after his death or incapacitation.

“More specifically, it would be equally inconsistent with his stated judgment for many years that his daughter, Shari, should not control Viacom or his other companies,” Salerno wrote, adding that the board faces a decision: to either fight a removal attempt or just let it happen.

“Acquiescence is appealing – it would remove some of the antagonism and public controversy, and avoid contentious and time consuming litigation,” Salerno wrote. “But to a person we feel the responsibility to challenge in court what we honestly believe would be legally flawed removals.  That is especially so because the flaw we see would be the inexplicable assertion that Sumner was acting of his own free will and with the mental competency to do so.”

Besides Salerno, Viacom’s other independent directors are: senior adviser to the chairman at the World Economic Forum Cristiana Falcone; International Finance LLC president of leadership Blythe McGarvie; Inside Edition anchor Deborah Norville; former Oracle Corp. president and current CEO of Infor Global Solutions Charles Phillips; and counsel to the law firm of Cadwalader, Wickersham & Taft, William Schwartz.

The remaining board members are Sumner Redstone, Shari Redstone, Dauman, attorney George Abrams and Viacom chief operating officer Thomas Dooley. Sumner Redstone controls 80% of Viacom’s vote, and could call a special meeting to remove the board, Given the size of his stake, his wishes would rule the day, save a court order declaring him incompetent.

“We will contest the purported removal if it comes, because we see that as our responsibility to the non-control shareholders of Viacom who own 90% of the equity of the company – and to the legacy of a man we greatly admire and consider a dear friend,” Salerno wrote. “We can do no less than try to make sure that the fates of Viacom, its majority equity holders and Sumner's legacy are ably represented on their behalf and impartially decided by the courts.”

It hasn’t been a good week to be Philippe Dauman.

The Viacom executive chairman and CEO is a regular target of irate shareholders who blame him for the content company’s precipitous fall over the past few years. Now, he’s even taking shots from his onetime friend and mentor, and Viacom’s largest shareholder, Sumner Redstone.

Redstone’s moves to oust Dauman and longtime Viacom board member George Abrams from the trust that will manage Redstone’s controlling stake in Viacom after his death or incapacitation has fueled mounting speculation that Dauman is being forced out.

While Dauman works hard to repair his reputation, signs point to a showdown with Redstone’s daughter and Viacom nonexecutive vice chair of the board Shari Redstone, who has been gaining influence in the trust. Lawsuits have traded back and forth: Dauman to block Redstone’s moves, Shari Redstone to have her father’s wishes upheld.

As the palace intrigue roils on, it might be time to take a closer look at Dauman’s performance by comparing his often-criticized pay package with the rise or fall of Viacom’s market capitalization over the past five years.

Related:Viacom Board Prepared to Fight

There has been much talk of Viacom’s mismanagement and how executives were more interested in cashing massive compensation checks while ignoring trends in the TV business. That is all a matter of perception, though: Few current pay TV executives could have anticipated the rise of OTT players and skinny bundles five years ago, and most didn’t.

At the same time, whether or not its youth-oriented channels make it a canary in the coal mine for the rest of the TV business, one unmistakable fact is that under Dauman and his top lieutenant, chief operating officer Tom Dooley, Viacom has faltered in the past few years.

A quick look at the stock price is evidence of that. Viacom shares are down about 25% since May 2011, shedding about $19 billion in market cap. At the same time, Dauman has received nearly $200 million in total compensation over that span and Dooley received $154 million in salary, stock-and-option awards and incentive compensation.

Since 2014, when Viacom stock was trading in the $80 range, the falloff is more dramatic. Since March 10, 2014, when Viacom shares closed at $88.90 each, the stock is down more than 50% to $39.95 on May 24, subtracting about $20 billion in market cap. Dauman and Dooley reaped a combined $145.8 million in total compensation over that period.

Dauman and Dooley aren’t the only media executives who have been criticized over their pay packages — and they aren’t even the highest paid. That distinction belongs to Discovery Communications CEO David Zaslav, who has received $324.1 million in total compensation in the past five years, skewed mostly because of one-time awards in 2014 that inflated his total pay to $156 million that year. Viacom’s sister company CBS was second, with chairman and CEO Les Moonves receiving $313 million in total compensation in the past five years.

But while Disney chairman and CEO Robert Iger received $199 million in total compensation between 2011 and 2015, for instance, Disney’s market cap soared 144.6% from $41.1 billion to $100.5 billion. CBS is up 105.6% to $54.2 billion from $26.4 billion in 2011; 21st Century Fox is up 69.6% to $28.9 billion from $17.1 billion in 2011; and Discovery is up 23% to $26.8 billion from $21.8 billion in 2011. Viacom’s market cap has fallen from about $35 billion in 2011 to $16.7 billion as of May 25.

Whatever the outcome, some analysts believe Dauman’s days are numbered. In a research note last week, Telsey Advisory Group media analyst Tom Eagan charted out several scenarios that ultimately end with Dauman’s ouster.

In a piece titled “Jersey Shore Has Nothing on This,” Eagan noted board changes at Viacom and National Amusements (the vehicle that holds Redstone’s Viacom stock). “We expect that Sumner and Shari Redstone will attempt to make changes in Viacom executive management, chiefly replacing CEO and chairman Phillippe Dauman,” Eagan wrote. “Although Mr. Dauman has the support of the Viacom board, we expect changes in that board.”

According to CNBC’s David Faber, Viacom’s board is ready to file suit to block any drastic moves by Redstone, who has in the past week focused his ire on Dauman,  a man he once called “the smartest man I know.”

Viacom shareholders benefitted from the turmoil, with shares rising 5% ($2.10 each) to $44.63 per share this afternoon. These moves and others have pushed Viacom stock into positive territory since the beginning of the year as Redstone, fresh off a salty court video deposition that helped get a lawsuit brought by his former girlfriend and caregiver dismissed, has taken aim at Dauman and the Viacom board.

Redstone is supposedly upset with Dauman’s plans to sell a minority interest in Paramount Pictures, the movie studio he grappled with media mogul Barry Diller for in the 1990s.

As the owner of 80% of Viacom’s vote, Redstone could carry any agenda he wants at a special shareholder meeting, which is forcing board members to prepare for the worst.

Former Verizon Communications vice chairman Frederic Salerno, Viacom’s lead independent director, has been seeking a face-to-face meeting with Redstone to determine his take on company strategy and his overall well-being.

Redstone, who turns 93 today, has been embroiled in a battle with his former top lieutenant for about a week, since he made moves to oust Dauman and Viacom board member George Abrams from the trust that will control Redstone’s 80% interest in Viacom after his death or incapacitation. Those moves strengthened Redstone’s daughter Shari Redstone’s power in the trust and some fear that she may be engineering a coup that would remove Dauman as Viacom chief.

According to a report in the Wall Street Journal, Salerno sent a letter to Sumner Redstone’s attorney Michael Tu asking for the meeting, which the paper he insisted include “unfettered and unfiltered access,” which has been Redstone’s past policy.

According to the Journal, Salerno, Viacom’s lead independent director and the former vice chairman of Verizon Communications, somewhat sarcastically wrote in a Thursday letter to Tu that the meeting would begin with “greetings and pleasantries,” followed by a question and answer session to hear Redstone’s position on company strategy and its planned sale of a minority stake in Paramount Pictures. Redstone, who won Paramount in the early 1990s after a bloody battle with mogul Barry Diller, has reportedly taken exception to that sale.

In a lawsuit filed Monday, Dauman claimed that Redstone has diminished capacity, can barely speak or feed himself and is being unduly influenced by his daughter, all which she has refuted as false accusations. Shari Redstone has countered with Dauman’s November court deposition that said her father was alert, aware and “as opinionated as ever.”

Dauman’s spokesmen have said that depositon was made was six months ago, and Redstone’s health has deteriorated rapidly.

In a research note Wednesday, Telsey Advisory Group media analyst Tom Eagan said given the recent developments, odds are that Shari Redstone will attempt to replace Dauman.

Sumner Redstone’s ongoing battle with two former trusted advisers heated up Tuesday after the former Viacom chairman named two new members to the trust that will control his 80% voting stakes in Viacom and CBS upon his death or incapacitation.

Redstone, who abruptly removed Viacom executive chairman and CEO Philippe Dauman and Viacom board member George Abrams from the trust on Friday, has named National Amusements general counsel Tad Jankowski and former TV executive and former Salomon Smith Barney media analyst Jill Krutick to replace them.

Redstone also named his granddaughter Kimberlee Ostheimer (Shari Redstone’s daughter), to the National Amusements board of directors. National Amusements is the theater chain that holds Redstone’s stakes in both Viacom and CBS. Upon his death or incapacitation, the Sumner M. Redstone Irrevocable Trust, led by seven trustees, would control his voting stakes in the companies.

“This is my trust and my decision,” Redstone said in a statement. “I have picked those who are loyal to me and removed those who are not.”

Dauman and Abrams filed suit yesterday in Massachusetts to block Redstone’s effort to remove them from the trust, claiming the media mogul is being unduly influenced by his daughter Shari Redstone, a member of the trust and vice chair of National Amusements. If Dauman’s and Abrams’ removal is upheld, Shari Redstone’s influence over the trust could rise significantly.

Sumner Redstone’s attorneys filed their own suit yesterday in Los Angeles to validate his decision to oust Dauman and Abrams, adding that Dauman’s claims the Viacom media legend is a shell of his former self, unable to walk, speak or feed himself are a direct contradiction to the CEO’s earlier testimony that Redstone was alert and “opinionated as ever.”

In a statement, Dauman’s counsel Les Fagen said the latest litigation is a further attempt by Shari Redstone to control her father.

“The suit in California is Shari’s attempt to run away from the Massachusetts courts and to deflect attention from the real issue:  Whether our friend and colleague Sumner is under the undue influence of his daughter, surrounded by a web of unfamiliar lawyers and public relations firms that she directs,” Fagen said in the statement. “It is outrageous for the new complaint and recent statements to rely on Mr. Dauman’s affidavit from last fall.  Mr. Dauman stated only that Mr. Redstone was alert and attentive during two brief meetings last fall.  But Mr. Dauman never asserted that Mr. Redstone was free of undue influence; indeed his lawyers later stipulated that he was susceptible to undue influence. And Mr. Dauman never commented as to Mr. Redstone’s competence on any matter, at any time, much less his ability to make conclusive decisions about complex issues concerning large public companies.”

As expected, Viacom executive chairman and CEO Philippe Dauman and board member George Abrams have filed suit in Massachusetts Probate and Family Court to try to block a move by their former boss Sumner Redstone to remove them from the  trust that would manage the company in the event of Redstone’s death or incapacitation.

The suit brings to a head moves over the weekend by Redstone, angered over Dauman’s attempts to sell a minority stake in Paramount Pictures and the overall decline of the media company he helped build. In the suit, Dauman and Abrams are seeking immediate judicial relief and a court ruling to invalidate their removal from the trust.

The two men said in a statement that Redstone’s daughter, National Amusements and Viacom director Shari Redstone is unduly influencing her father, who they claim they have been denied access to.

“Shari Redstone is attempting to illegally hijack her father’s well-established estate plan by removing professional managers and reportedly installing her daughter, an employee and a friend who are firmly under her control,” Dauman said in a statement. “We all continue to have great respect and affection for Mr. Redstone, but he is clearly being manipulated by his daughter, Shari.  After years of estrangement, she has inserted herself into his home, taken over his life, and isolated him from anyone not under her control, including long-time business colleagues.  In fact, she has recently and repeatedly arranged to deny requests for Viacom Board members to meet with her father.  Her singular goal is to assume complete control of his businesses, despite Mr. Redstone’s long-term desire for a professionally managed Trust and an independent Board of Directors.  Shari’s actions amount to an unlawful corporate takeover, and if effectuated, could have far-reaching consequences for thousands of shareholders and employees of Viacom.”

In a separate statement, Abrams said Redstone’s moves are out of character, reflect a “diminished capacity,”  and contradict what have been his wishes for more than 25 years.

“My sole purpose in joining in this law suit is to allow  a court to determine whether Sumner Redstone, in his current diminished capacity, has been subject to undue influence in his recent actions in changing his Trustees and in changing  other documents,” Abrams said in the statement. “ For over 25 years Sumner has discussed his will and various Trusts with me and I was instrumental in setting up this Trust at the time of his divorce.  He has impressed on me his wishes that the Trust be managed in a professional manner and that the children of the son and his daughter be treated fairly and equally despite some internal family conflicts.  He also discussed at length with me his feelings about Viacom and CBS and the future of both companies.  The changes purportedly being made would alter his previously and repeatedly expressed wishes.  As a result of some of the information which has recently  been received, I believe a court test on the question of undue influence is necessary.”

According to Fortune magazine and since confirmed by Viacom, Sumner  Redstone, through his lawyer Michael Tu, informed Dauman and Viacom board member George Abrams that they have been removed from the trust via fax. The trust was set up through National Amusements Inc. -- Redstone's theater chain business -- to hold his 80% voting control of Viacom and CBS. In the event of his death the trust would be managed by a seven-member committee that included Shari Redstone (also vice chairman of National Amusements), her son Tyler and her mother's divorce attorney. Since it is expected that Shari Redstone would replace Dauman and Abrams with trustees more sympathetic to her position, her power in the event of the death of her father rises exponentially.

In a statement, Shari Redstone said "I fully support my father’s decisions and respect his authority to make them.”

Because National Amusements is separate from Viacom, the most recent developments shouldn't affect Dauman's standing as executve chairman and CEO of the media company. But Shari Redstone  has increasingly become critical of his stewardship -- she was the lone board member who voted against Dauman being named executive chairman after her father gave up the title. 

Dauman has been a trusted advisor to Sumnr Redstone since the beginning -- he helped him win Paramount as a young Boston lawyer -- and has been regularly praised by the founder as one of the smartest men he knows. But Viacom has foundered under his watch, as ratings and its stock price have plunged.

Through a spokesman, Dauman called Shari Redstone's steps "invalid and illegal."

"They are a shameful effort by Shari Redstone to seize control by unlawfully using her ailing father Sumner Redstone's name and signature,"Dauman's spokesman said. "As she knows and as court proceedings and other facts have demonstrated, Sumner Redstone now lacks the capacity to have taken these steps. Sumner Redstone would never have summarily dismissed Philippe Dauman and George Abrams, his trusted friends and advisors for decades."

Redstone's capacity has  question in recent months. Back in November, when Redstone's former girlfriend and caregiver Manuela Herzer was attempting to have Dauman removed as health care agent for the then-Viacom chairman, Dauman claimed in statements that Redstone was "engaged, attentive and opinionated." 

Herzer's suit, whcih called Redstone a "living ghost" unaware of his surroundings, was dismissed  by a California court after the media mogul's profanity-laden videotaped deposition on the first day of the trial, where he appeared lucid and vehemently denied any desire to have Herzer run his affairs. Although his speech was slurred -- the result of an earlier minor stroke -- Redstone said through an interpreter that he threw Herzer out of his house for lying to and allegedly stealing from him.

According to Fortune, Sumner Redstone has been angered at recent moves by Dauman to sell a minority interest in Paramount Pictures, the movie studio that Redstone battled to gain control of in the 1980s. He was prompted to oust Dauman and Abrams from the trust after expressing concern about company performance to them and receiving no response, according to reports.

Abrams, who has been with Redstone for more than half a century, also expressed sadness at the most recent developments.

“I have known and represented Sumner Redstone for over 50 years," Abrams said in a statement.  "I worked closely with him on the building of his theater chain, the acquisitions of Viacom, Paramount and CBS and countless business matters relating to all three of those entities as well as National Amusements.  I have also handled many personal matters for Sumner.  Above all, he is my friend.  The Sumner Redstone I knew would never have taken this action.  What is going on now is unsettling and sad.” 

In a statement, Viacom said the moves by Shari Redstone come as a surprise.

"The actions taken yesterday in Sumner Redstone’s name are completely inconsistent with his long expressed wishes and intent and extremely disruptive and damaging to Viacom and all its shareholders," Viacom said in its statement. "...The picture is quite clear, Mr. Redstone is being manipulated and used by his daughter in an attempt to accomplish her long-held goal, which Mr. Redstone has always opposed, of gaining control of National Amusements and Viacom."

Viacom claims there has been no communication from Sumner Redstone himself, and that during an in-depth strategy session with Viacom's board Tuesday evening -- where both Redstones were participating via phone -- no mention was made of any concerns regarding the trust.

"The only contact was a written communication on Tuesday from Mr. Tu, a lawyer previously unknown until this week to anyone associated with Sumner other than Shari Redstone," Viacom said in a statement. "It is clear that Shari Redstone has isolated her father and put his residence on lockdown, which provides clear evidence of her exercise of undue influence. Despite many attempts by members of Viacom's board, including the lead independent director, to meet with Sumner they have been denied access. Mr. Tu, when asked by the board’s independent counsel in response to Mr. Tu’s letter, could not even confirm he has met Mr. Redstone."

Earier this month Viacom's board of directors moved to eliminate Sumner Redstone's annual compensation, a move that lead independent director Fred Salerno said in a statement was made because of Redstone's lack of involvement in company matters.  

"We took this action based upon his recent complete lack of communication with the Viacom Board and management team and his silence during recent board meetings, as well as recent public disclosures raising concerns about his health," Salerno said in the statement. "In addition, despite numerous requests, I, along with the Chair of Viacom’s Governance and Nominating Committee, have been denied access to Sumner for a face-to-face meeting.

"The Independent directors are fully engaged and will carefully monitor actions at National Amusements, which is the controlling shareholder of Viacom," Salerno continued. "We are also continuing to work closely with the management team of Viacom and we fully endorse the strategy for the future of Viacom that the team presented at the Board’s day-long strategy meeting this week. We have great respect for Sumner and what he has accomplished. Our overarching duty is to represent the interests of all shareholders — in the same spirit that Sumner Redstone always led our Board to do.  We will continue to fulfill that role and uphold our fiduciary responsibility to ensure that Viacom’s interests are protected in concert with good governance practices.”

After just one day of testimony – dominated by the expletive-laden video deposition of former Viacom chairman Sumner Redstone – California Superior Court Judge David Cowan has tentatively dismissed the mental competency lawsuit against the media mogul.

According to reports, Judge Cowan, after reviewing documents submitted by both sides of the case over the weekend,  decided that there is no basis to keep the former Viacom chairman from making his own healthcare decisions.

Redstone’s former girlfriend and caregiver Manuela Herzer filed a lawsuit in November claiming Redstone was not aware of his situation or surroundings and that he had become a “ghost” of his former self. Herzer, who had been dismissed as Redstone’s health care agent and physically removed from his Beverly Hills residence shortly prior to filing the suit, had been seeking to be reinstated as Redstone’s  health care agent.

Herzer and the Redsonte camp were reportedly close to a settlement last month but talks broke down and the trial, which had been expected to last at least a week, began on Friday May 6. The trial started off with an 18-minute video deposition from Redstone, where the former Viacom chairman repeatedly referred to Herzer as a “f***ing b***h and said he had thrown her out of his house for lying to and allegedly stealing from him. During the video testimony, where reports said Redstone had to be asked some questions more than once and needed a translator to decipher some of his answers, the media mogul also said he wanted his daughter Shari Redstone to serve as his health care proxy.

In a statement, Shari Redstone said she was pleased the ordeal is over.

"I am grateful to the court for putting an end to this long ordeal," Shari Redstone said in the statement. "I am so happy for my father that he can now live his life in peace, surrounded by his friends and family."

In his tentative ruling, Cowan said that Herzer failed to produce any evidence that Redstone lacked the mental capacity to make he own health decisions.

According to Reuters, Judge Cowan wrote in his decision that Redstone’s own testimony convinced him that the trial should not continue.

"Redstone's testimony has ultimately defeated her case,” Cowan wrote, according to Reuters. “Though Herzer may have believed that Redstone would not be able to say anything, or be able to understand the questions, Redstone did both."

Lawyers for former Viacom and CBS chairman Sumner Redstone and his ex-companion Manuela Herzer are reportedly in settlement talks and a deal could be reached as early as today, according to several published reports.

While details of the potential settlement are unclear, it would end an increasingly embarrassing chapter in the media mogul’s recent history. Herzer, Redstone’s former girlfriend and caregiver, filed suit in November after she was removed as his official health care agent. Herzer claimed that Redstone was incompetent and lacked the mental capacity to make decisions regarding his own health care.

Herzer was replaced as Redstone’s health care agent by Viacom executive chairman and CEO Philippe Dauman. According to some reports, Dauman relinquished his oversight of his former boss’ health decisions earlier this week to Redstone’s daughter Shari.

A settlement would avoid a lengthy and potentially embarrassing trial. Already depositions that were scheduled to be taken of Dauman and Shari Redstone in anticipation of a May 6 trial date, have been canceled, reports said.

CBS executive chairman Sumner Redstone has stepped down from that position at broadcaster CBS, handing the role of chairman to CBS CEO Les Moonves.

The move comes as Redstone, in frail health, has come under scrutiny concerning his mental capacity and ability to make decisions regarding the company.
While Redstone remains executive chairman of Viacom, the other media giant he controls, the CBS move adds to speculation he may do the same for the cable programmer. Viacom's board of directors is scheduled to meet tomorrow (Feb. 4), where Redstone's status could be discussed.

Moonves was nominated by Shari E. Redstone, vice chair of the CBS Board, and his appointment was confirmed by a unanimous vote of the CBS directors. He also will continue to serve as president and CEO of CBS, positions he has held since 2006. Summer Redstone becomes chairman emeritus. Shari Redstone, who was offered the position of executive chairman but declined it, will remain vice chair.

“I am honored to accept the chairmanship of this great company,” Moonves said. “I want to thank Sumner for his guidance and strong support over all these years. It has meant the world to me. I am particularly grateful that Shari Redstone has agreed to continue in her role as vice chair of the company. Her business acumen and knowledge of the media space remain very important to me as we move forward, and I greatly appreciate her support and invaluable counsel. I would also like to thank our excellent board of directors, who have contributed so significantly to our success. The people of CBS have achieved much together, and I believe the best is yet to come.”

Shari Redstone said in a statement: “I have been fortunate to work with Les, and he has clearly established himself as a creative and effective leader who understands both the challenges and the opportunities that are shaping today’s media landscape. I am sure he will make a great chair and I look forward to working with him for many years to come.”

On the heels of claims from an activist shareholder that it has been paying its top executives way too much over the past several years, Viacom said it has dramatically reduced the compensation packages of its executive chairman Sumner Redstone and CEO Philippe Dauman.

Viacom said in a statement that Redstone’s annual compensation in fiscal 2015 declined 85% to $2 million, versus a total of $13 million in 2014. His salary was unchanged in fiscal 2015. He became ineligible to receive a bonus beginning in fiscal 2015 and has not been eligible to receive an annual equity award since fiscal 2012, the company said.

Dauman’s bonus declined 30% to $14 million in fiscal 2015, versus $20 million in the prior year and his contractually provided salary and annual equity award were substantially unchanged. He received a salary of $4 million in fiscal 2015, versus a salary of $3.9 million in fiscal 2014, and an annual equity award valued at $18.9 million in fiscal 2015, compared with an annual equity award valued at $19.9 million in fiscal 2014.

The news comes a day after shareholder SpringOwl Asset Management issued a 99-page report criticizing the company and calling for the ouster of its management. In the report, SpringOwl claimed that Viacom has paid Dauman and chief operating officer Tom Dooley a combined $432 million over the past five years.

The 92-year old Redstone is the focus of a lawsuit filed by a former girlfriend that claims he is no longer in command of his mental faculties and seeking to be reinstated as his primary health care agent. Redstone’s attorneys have disputed  those claims and Dauman said he would not comment on the litigation.

But the Viacom CEO did address concerns about succession should Redstone not be able to make decisions for the company, adding that the chairman long ago set the wheels in motion to assure continuity.

Redstone owns 80% of National Amusements, a private entity that owns 80% of Viacom and CBS. Redstone’s daughter Shari owns the remaining 20% of National Amusements. As has been stated publicly in the past, should Redstone die, his interest would be placed in a trust controlled by two family members and 5 non-family directors (including Dauman), each of whom are independent-minded and each with an fiduciary duty to both the best interest of the trust and the companies it controls. But no one individual would have control, he stressed.

As far as Redstone’s health care decisions, Dauman said that he had been named the chairman’s health care agent in the event Redstone himself can no longer make those decisions for himself, a responsibility he takes seriously.

“It’s not  a big secret, he’s 92-years-old and  has physical ailments that require him to be under medical supervision,” Dauman said. “Contrary to what some people are saying, no one other than Sumner Redstone is making healthcare decisions for him.”

He added that he speaks with Redstone several times per week, meets with him regularly, but added that “what has been said [about Redstone] has been disturbing.”

Dauman also seemed to chafe at the media circus that has focused on some of the more prurient aspects of the litigation. He called for those that speak or write about the situation to remember that they are writing about a human being “who has accomplished a whole lot,” and has an “incredible will to live and an enjoyment of life with some physical disabilities.”               

Lawyers for Viacom and CBS chairman Sumner Redstone fired back at his former companion’s claims that he is unaware of his surroundings and unable to make basic decisions about his personal care, claiming the media mogul is as mentally sharp and opinionated as ever.

Redstone’s former companion and self-described caregiver Manuela Herzer painted a disturbing picture of the media boss in a filing in Los Angeles County Court Nov. 24. In that document, Herzer said Redstone had become “a living ghost,” after his former girlfriend, 50-year-old Sydney Holland left him in August.

“Those who know him now describe him as vacant, unable to reliably communicate, unaware of his surroundings and without interest in things that used to excite and engage him,” Herzer said in the filing.

The 92-year-old Redstone’s health has become a concern as the chairman has stepped away from participating in quarterly earnings conference calls and missed both Viacom’s and CBS’ annual shareholder’s meetings this year.

Redstone controls about 80% of Viacom and CBS through his National Amusements Inc. A trust consisting of seven members, including Viacom CEO Philippe Dauman, Redstone’s daughter and National Amusements president Shari Redstone, will have voting control of both companies after his death. 

Herzer laid out in excruciating detail Redstone’s current health state, including his daily demands for steak and sex (neither of which he is supposed to have under doctor’s orders). She states that Redstone is incontinent, requires the suctioning of phlegm and fluid from his lungs 15-20 times per day and almost all of the night, communicates mainly through grunts and cannot initiate a conversation.

Herzer claims she was in charge of making most of Redstone’s health decisions from April 2013 to Oct. 12 of this year, when she was asked to leave Redstone’s home by his estate lawyer. On Oct. 16 Dauman, a long-time confidant of the chairman, was put in charge of his health care.

In response to Herzer’s statements on Nov. 25, Redstone’s own lawyers said the Viacom chairman is in good spirits, has control of all of his mental faculties and is fully aware and engaged.

“Let’s be blunt. Ms. Herzer’s baseless demands and allegations are an attempt to take discovery in service of building a record for the post-death trust contest she intends to bring, and have nothing to do with any present (let alone urgent) concern for Mr. Redstone’s protection,” the filing states, adding that he  continues to be under the care of his long-time physician Dr. Richard  Gold and “has the best care money can buy.”

 “This litigation is a farce and it should be summarily dismissed,” the filing continued. “If Ms. Herzer wants to challenge Mr. Redstone’s estate plan, the very least she could do is wait until he dies.”

The filing also included a statement from Dauman, who had visited Redstone in October and November and found the chairman to be “engaged, attentive and opinionated as ever.”  He continued that at a November meeting he and Redstone spoke on several topics, including the business, watched a basketball game and spoke about a movie he had seen recently.

Dauman admitted that Redstone has “a substantial speech impediment,” but said he speaks to him several times a week by telephone and visits with him monthly.