"Don't call me a mogul," says Sumner Redstone '47, the outspoken CEO and chairman of Viacom Inc. Daring entrepreneur and superb manager are better descriptions for Redstone, who began life poor, in a Boston tenement, and has built one of the world's largest media companies. Viacom holdings include Paramount Pictures, MTV, VH1, Showtime, Nickelodeon, and Blockbuster Video.
The Viacom building at 1515 Broadway presides over Times Square, where one and a half million people pass through every day to watch plays and movies, buy cheap camcorders and CD players, gawk at the sky-high signage, and slip into peep shows, a vanishing species in this district. The razzle dazzle infiltrates Redstone's tower, where MTV's live music studio on the mezzanine level can be seen from the street and digital displays announce Viacom entertainment offerings.
Starting with two drive-ins his father opened in the 30s, Redstone leveraged the concept of multi-screen movie theaters into National Amusements, his exhibition company. By the time it expanded to 400 screens, he was restless. "I saw exhibition as a non-growth industry. The number of people going to movies today is basically the same as 30 years ago." On the lookout for new ventures, he spied Viacom, "a sleeping giant" with tempting TV and software holdings. In 1987 he made his move and bought the company. Seven years later, when Viacom acquired Paramount, it was because Redstone saw "the beauty of marrying the most powerful group of TV networks to Paramount's studio and TV operations and its library."
In movies, TV, music, entertainment software, and other creative works, "the United States has a big competitive advantage in international trade," Redstone says. He often comments that "content is king" and that "powerful brands such as Nickelodeon and MTV reign supreme." Amid the chaos of emerging entertainment technologies, "it's what's delivered on the screen that will drive the entertainment industry." He enthusiastically describes Viacom product "spin-offs" and "tie-ins," such as Rugrats, the first Paramount-Nickelodeon movie, due in November 1998.
Listening to Redstone talk business, one nearly forgets that he once was a practicing attorney. Fresh from Harvard Law School, he served as a law clerk on the United States Court of Appeals, later moving on to the Justice Department, where he served as a special assistant to the United States Attorney General in the Tax Division. Subsequently, he joined a Washington law firm formed by the then-deputy United States attorney general and by the head of the Antitrust Division who had filed the famous antitrust case U.S. v. Paramount. That case led to the splitting of movie exhibition and production and forced Paramount to sell off its screens. (Little did Redstone suspect that once the laws changed again, he would personally reunite Paramount and movie screens in his own company.)
Redstone switched from law to business to launch National Amusements. "I loved being a lawyer. I like the competitive dynamic of legal practice," he says. "I'm still involved in legal matters every day. But there's too much litigation and not enough effort at conciliation in the entertainment industry." One big Viacom legal battle, against Seagram, was recently settled, he notes, while many joint ventures with European companies demonstrate a trend toward collaboration as media conglomerates broaden their global markets.
While Viacom's domestic businesses are continuing to grow, much of its future growth is directed overseas, and Redstone's schedule is packed with international travel, to meet company and government officials, make licensing deals, and form partnerships with telephone and cable companies abroad. "Nickelodeon is the top-rated cable channel in England and is moving into South America. MTV is now in 300 million households worldwide. VH1 has been an overnight success in England and Germany. The construction of multiplexes in Latin America and elsewhere in the world will enhance our Paramount studio business." Sometimes expansion doesn't work, he acknowledges. German retail laws made Blockbuster a bust in that country, but it has done well in England, Ireland, Italy, and Spain. China is "the toughest market to develop," Redstone says. "It's vital to make investments there now."
At present, Viacom's chief is committed to sharply reducing its M&A debt from the purchase of Paramount. But he looks forward to reaching the point "when I can return to my natural and rationally acquisitive self." -- Julia Collins