Breaking News Emails
Extraordinary revelations emerged Tuesday about the tense — and, at times, allegedly physical — closed-door meetings between senior executives at CBS and Viacom, which remain locked in a battle over a potential merger. Legal filings describe how Shari Redstone, one of the most powerful women in media, was reportedly manhandled by Charles Gifford, a member of the CBS board, with Gifford "grabbing her face and directing her to listen to him."
Redstone, 64, who is vice chairman of CBS and Viacom and the daughter of the ailing media mogul Sumner Redstone, is under fire from CBS, which claims that National Amusements, the holding company that retains 80 percent of the voting shares in CBS and Viacom, was usurping its role by trying to force a merger of the two and potentially replace CBS board members.
Redstone suggested that Gifford, for one, not be renominated. After one meeting got physical, according to the filing, Gifford later told Redstone that he had meant no offense, adding "that was how he treats his daughters when he wants their attention." Redstone said she responded that "she was not Mr. Gifford's daughter but instead the vice chair of CBS."
CBS, which was once tied to Viacom but separated in 2006, is trying to dilute National Amusements' control and prevent a potential merger. National Amusements fired back by changing CBS bylaws to prevent a potential dilution of its voting stock. The two parties are now in court.
The filings also revealed that Redstone would likely have given up her controlling stake in both companies, had the merger been approved.
The filings on Tuesday by National Amusements in Delaware Chancery Court called CBS' efforts to dilute its voting rights "unprecedented, unjustified and unlawful."
The filings also revealed that Redstone would likely have given up her controlling stake in both companies had the merger been approved, noting that Redstone had told CBS Chief Executive Les Moonves that National Amusements "would consider relinquishing its controlling interest in the context of such a transaction."
CBS' holdings include broadcast network CBS, premium pay channel Showtime, and book publisher Simon and Schuster; while Viacom, run by chief executive Bob Bakish, owns cable channels including MTV and Nickelodeon, and Paramount movie studios.
In a statement Tuesday, NAI said, "Earlier this year, Shari Redstone and Les Moonves discussed and agreed that recombining CBS and Viacom would benefit both companies’ shareholders, providing greater scale as needed for success in today’s media and entertainment landscape, and better positioning the companies for a larger transaction in which the combined entity could fetch an attractive premium that neither CBS nor Viacom alone could command."
Redstone later agreed that the two companies could not be merged, and Moonves, who grew "tired of having to deal with a stockholder with voting control" took "particular umbrage that the exercise of such stockholder's control has migrated from Sumner Redstone to his daughter, Ms. Redstone," according to the statement.
Sumner Redstone, who is 95, stepped back from day-to-day duties at CBS and Viacom, though he remains chief executive of NAI.
The filing also noted that Moonves has the right to terminate his own employment agreement and stands to make $180 million if he has "certain good reason" for doing so.
“Today’s reactive complaint from NAI was not unexpected," CBS said in a statement. "The amended complaint filed last week by CBS and its Special Committee details the ways in which NAI misused its power to the detriment of CBS shareholders, and was submitted after careful deliberation by all involved. We continue to believe firmly in our position.”