Sumner Redstone offers to sell cinema chain to head off banking trouble
Wednesday 26 November 2008
Sumner Redstone, the octogenarian media mogul, has offered to sell the cinema chain that first made him a billionaire, in a desperate bid to hang on to the rest of his television and film empire.
With a 19 December deadline looming to refinance $800m (£520m) of debt taken out by his holding company, National Amusements, Mr Sumner has offered a partial break-up as a solution.
But with the mogul having been forced into negotiations with his bankers since coming up against debt covenants in the autumn, few observers are willing yet to bet that Mr Sumner will re-emerge still in control of his beloved Viacom and CBS. Viacom owns Paramount Studios, the Hollywood blockbuster factory, and television channels such as MTV and VH1. CBS, meanwhile, is one of the three big television networks in the US, and also owns the publisher Simon & Schuster.
Collapsing advertising sales at the broadcasting companies led to a share price plunge at CBS and Viacom, which in turn triggered Mr Redstone's difficulties last month. When National Amusements was forced to sell $233m in CBS and Viacom shares to satisfy its bankers, the trouble became the talk of the industry. According to people familiar with Mr Redstone's latest proposals, he has offered to sell the 1,300-screen cinema chain at the heart of National Amusements, plus some smaller assets, so that he can hang on to the controlling stakes in Viacom and CBS, but there is no agreement yet with his bankers. Discussions centre on fixing a valuation for the various assets, something which is problematic given the volatility in the share prices and the obscure outlook for consumer spending, which could affect cinema-going next year.
National Amusements began life as the Northeast Theatre Corporation in 1936, set up in Massachusetts by Mr Redstone's father, Michael. The chain is run by Sumner Redstone's daughter Shari, with whom he has had a sometimes fractious relationship. It was only when he was in his fifties that Mr Redstone expanded the company into film and television. The string of acquisitions made him a powerful media owner, and one of the richest men in the US. His fortune was estimated earlier this year by Fortune magazine at $5.1bn, but observers believe much of that wealth has evaporated.
- 1 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 2 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 3 Daily Show's Jon Stewart destroys Fox News for its Ferguson coverage
- 4 When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
- 5 Terror threat level raised to severe as PM warns Isis risk could last for decades
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Botched ice bucket challenge leaves man critically injured after plane drops hundreds of gallons of water
Terror threat level raised to severe as PM warns Isis risk could last for decades
Isis 'A Message in Blood' video shows beheading of Kurdish man in Iraq
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
- < Previous
- Next >
iJobs Money & Business
£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...
£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...
£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...
£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...