Profile: Hollywood blockbuster: Sumner Redstone: A grumpy billionaire is loose in the entertainment world. Phil Reeves reports

Click to follow
The Independent Online
HARDLY anyone had heard of him a year or two ago, but mention Sumner Redstone in Hollywood or on Wall Street these days and you are guaranteed to raise a smile of admiration or a snort of contempt. Within months, the gritty 70-year-old billionaire - dubbed by some the 'hippest grandpa' in the US - has joined the giants of the entertainment industry.

Redstone surfaced more than six years ago, after winning a messy six-month battle for control of Viacom, the cable TV company whose MTV (Music TV) pumps American youth culture into 247 million homes around the world. But he owes his international fame to a more recent and even uglier battle: his quest for Paramount Communications.

More than four months ago, Redstone and Barry Diller, head of the QVC shop-at-home cable network, locked horns in one of the most dramatic takeover soap operas the entertainment industry has seen. Both see the acquisition of Paramount, with its library of 900 films, as a passport to success on the 'information highway' of the future. The result has been a multi-billion bidding war, in which egos appear to wield almost as much influence as balance sheets.

Given his ambition, it took Redstone a surprisingly long time to earn a place at the top table of US industry. It was not until he was 64 - when most of his contemporaries had hung up their suits and headed for the putting green - that he emerged from the shadows with a leveraged dollars 3.4bn buyout of Viacom. At the time, there were those who said he knew too little about the communications business to handle Viacom's operations, which include Nickelodeon (the children channel), MTV, Showtime, five television stations and syndication rights to the two top-rated shows, Roseanne and The Cosby Show. He has since silenced the early critics.

By all accounts, Redstone has never particularly sought the spotlight, although he is a flamboyant enough performer. After unveiling what he believed to have been a successful merger with Paramount in September (before Diller entered the fray) he was asked about being the world's fifth largest entertainment conglomerate. He replied, punching the air: 'We will be number one - not number five or number two. Number one]'

This is vintage Redstone. A business associate has likened his performance at company brainstorming sessions to that of a 'mad dog, foaming at the mouth'. On occasion, Redstone emphasises his arguments by waving his cigar with such excitement that he strikes himself on the head, showering spittle and ashes.

The grandson of German and Russian immigrants (the original name was Rothstein), he was born and brought up in Boston, was first in his high-school class, won a place at Harvard and went on to join an elite group in US military intelligence, assigned to cracking Japanese codes during the Second World War. Then came a stint at Harvard Law School and a plum job in the Justice Department, as special assistant to the US Attorney General.

During the 1950s, Redstone decided the time had come to leave Washington and join the business established by his father, Michael. The relationship between father and son is something of a mystery, but it was certainly formative. His mother, Belle, also fuelled his drive. During his hour-long piano practice sessions, she would secretly put the clock back by half an hour to keep him at it.

His father, the son of a Russian baker, started out selling linoleum from the back of a lorry, worked as a liquor wholesaler and eventually acquired two Boston nightclubs. He then began buying up land along the route of a proposed interstate highway and, by 1934, owned a drive-in cinema, one of the first in the country.

This small business became the foundation of National Amusements, which Redstone built into a chain with more than 800 screens in the US and Britain. In the 1970s, he pioneered the multiple-screen 'multiplex' cinemas that have since replaced almost all the old picture houses. By the early 1980s, he was worth several hundred million. A decade later, Forbes magazine listed him among America's richest men, with an estimated fortune of dollars 4.2bn.

The acquisition of personal wealth for its own sake does not, however, appear to have been his primary motivation. In fact, he has a reputation for being frugal, preferring short sleeves and a herringbone jacket to hand-tailored suits and monogrammed shirts. And despite his fortune, he has lived in the same three-bedroom home for the last 30 years.

Rather, he has been propelled forward by what he often calls his 'visions', which, in the Paramount affair, involves a passionate belief in the fast-approaching 'new age', when the public will be able to access and interact with programmes and data squirted into the home by 500 TV channels.

His bold takeover of Viacom in 1987 was a sign of similar foresight. As he later pointed out, he knew little about MTV - the jewel in Viacom's crown - beyond the fact that he disliked watching it. 'Grumpy', as this unlikely impresario of youth entertainment was known to his five grandchildren, preferred Glenn Miller. But he correctly suspected that cable and video technology was outstripping the cinema business, and wanted a slice of the pie.

But his career also turned on a terrifying personal incident. In 1979, he was caught in a fire in the Copley Plaza hotel in Boston, which he only survived by clinging to a third-floor window ledge while flames licked around him. He recalls counting up to 10, over and over again, waiting for help to arrive. His burns were such that doctors expected him to die. The flesh on his legs was burnt down to the arteries; one of his hands was reduced to a stump. He survived 60 hours of skin grafts and emerged from the trauma with new vigour. Up to then, he had been increasingly bored by business and money. The fire changed all that.

His newfound sense of purpose is reflected in his modus operandi. Redstone watchers describe a wily negotiator, who is at once hard- nosed and stubborn and enormously genial. He laughs generously, but fights like a cat under pressure. When asked by a reporter from the Wall Street Journal about his purchase of Viacom stock just before the thwarted September merger with Paramount, he reportedly launched into a seven-minute explanation, littered with expletives, and concluding: 'The idea that I would buy the stock to affect the stock is sheer outrageous nonsense.'

This, too, is in character. For an old-style Boston liberal with a kindly twinkle in his eye, Redstone is a surprisingly formidable street-fighter, taking on some of the meanest operators in the entertainment industry without appearing to flinch. As the brawl over Paramount has worsened, he has begun to deride Diller, a man whom he once regarded as his 'best friend on the West Coast'. Furious at Diller's intervention in what he claimed was a 'closed consensual deal', he described the shopping channel executive as a mere 'jewellery merchant'.

This is, of course, unfair. Diller, a former head of the Paramount and Fox studios, is much more experienced in Hollywood and broadcasting than Redstone. But Diller still handles him with care. 'I won't talk about Mr Redstone,' he told the Independent on Sunday last week, 'except to say that he is extremely effective and shrewd. And that's just the least of it.'

The signs are that Redstone will need to deploy these qualities to the full if he is to triumph in the battle for Paramount, Hollywood's last great independent studio.

In the past, he has described victory for QVC as 'unthinkable and impossible'. But last week the board of Paramount Communications concluded that they thought QVC's dollars 10bn bid superior to Viacom's latest improved offer, in which Redstone increased the cash element to dollars 105 per share. The board's recommendation is non-binding. Shareholders will decide the winner by tendering their shares either to Viacom - whose offer is thought to be worth about dollars 9.1bn - or QVC by 21 January.

Despite this setback, the picture is not as bleak as it sounds. Even if he fails to win the crown that he is so hotly pursuing - his dream of a Viacom-Blockbuster-Paramount with dollars 26bn assets, almost dollars 9bn in annual revenue, and a foothold in almost every aspect of the entertainment and media businesses - Redstone will not emerge empty-handed.

Nine days ago, Viacom announced a merger with Blockbuster Video, one of its main supporters in the Paramount battle, as a means of raising more money for its bid. The move has added almost 3,600 video stores and 500 record outlets to Redstone's hand, and gives him 61 per cent of the voting stock. His holding in the merged company is worth almost dollars 5bn - a stake that Grumpy will one day tell his grandchildren is not a bad wooden spoon.

(Photograph omitted)

Comments