This recent nuttiness between Viacom and the Sumner Redstone family can be traced back to one bad decision made more than a decade ago, media analysts at MoffettNathanson Research wrote Tuesday in a biting blog post.
“In our view, the circus at Viacom was put into motion more than 10 years ago by the ill-fated move to separate CBS and Viacom,” the firm wrote in a piece titled “Viacom – What Took So Long?” “The idea that the market was mistakenly valuing the old Viacom asset made zero sense to us at the time.”
“Furthermore, the actual separation of assets just made the idea all the more wrong,” the company continued.
After all, without CBS attached to it, Viacom channels like MTV and Comedy Central became far less valuable a few years ago — something MoffettNathanson believes was predictable (and predicted by them) — and the cable content provider even started to see itself dropped by MPVDs (Multichannel Video Programming Distributor) over sour affiliate fee negotiations.
“At this point in time, we would have thought that either the management of Viacom or Mr. Redstone would see the errors of their ways and recombine with CBS,” MoffettNathanson wrote, referring to 2013-2014. “To our surprise, that never happened.”
And that’s when Viacom’s film studio Paramount Pictures also started to suffer, the analysts pointed out. Losing Paramount TV and Showtime, the cash-eating big-screen business had no small-screen cushion to help out — a move MoffettNathanson sarcastically called “genius.”
“Oh, and Viacom had to start its own premium cable network business (Epix) after CBS dropped its Paramount output deal,” the analysts continued in its harsh-yet-humorous tone. “Reverse synergy in play.”
It then became “painfully obvious” to the research firm that it was time to sell Paramount — but chairman-at-the-time Sumner Redstone wouldn’t, and as current chairman emeritus, the 93-year-old still doesn’t want to. The Viacom Board of Directors, however, does.
“Maybe he realizes the lunacy of his asset separation and wants to make things right by recombining these assets,” MoffettNathanson suggested, spelling out a little later: “Viacom and CBS should be recombined.”
“Nothing will be solved until the pieces are put back together again,” they concluded, adding on the “bizarre” twists: “We just aren’t sure how or when that happens.”
And no one is sure who will actually be seated on that Viacom board in the near future.
A Timeline of Sumner Redstone's Crazy Life in Pictures (Photos)
May 27, 1923: Sumner Murray Rothstein (later Redstone; pictured) is born in Boston, and the media world will never be the same.
1993: Redstone's Viacom acquires film studio Paramount Pictures.
This April, the aging figurehead publicly stated that he doesn't want to sell a minority stake in that company. The Viacom Board of Directors, on the other hand, is pushing for that to happen as early as end-of-June.
2000: Viacom and the so-called Tiffany Network, CBS, merge. It wouldn't last.
Just five years later, Viacom and CBS split, though the two publicly traded companies are still under the same umbrella -- Redstone's National Amusements, Inc. still controls 80 percent of both companies today.
2006: Shortly after the spinning off, Sumner began feuding publicly with daughter Shari (the pair pictured together here) over her role within the companies.
On September 5 of that year, Sumner Redstone taps legal counsel Philippe Dauman to lead Viacom. Shari Redstone and Dauman seemingly haven't gotten along since then, though she's apparently repaired the relationship with her ailing father.
October 2015: Sumner Redstone's longtime girlfriend Manuela Herzer (pictured) was booted as his healthcare proxy, losing her sizable inheritance in the process.
Dauman became Sumner Redstone's interim proxy, before Shari Redstone re-ingratiated herself and took the role over.
Herzer would sue in May 2016 to get back in the inner circle -- or at least reclaim her spot in Sumner Redstone's will -- but was denied by a judge. Sumner's mental competency was held up at the same hearing, though it wouldn't be the last time an adversary asks someone sitting on the bench to double-check that.
Jan 20, 2016: Activist investor SpringOwl calls for the Sumner Redstone (pictured, from 2012) to step down as Viacom and CBS chairman. The 92-year-old has had problems with his speech for years, and hasn't been able to so much as deliver a pre-written statement during quarterly investor calls.
February 2016: CBS President and CEO Leslie Moonves' replaces Sumner Redstone as the broadcast channel's chairman on the third of the month. Sumner Redstone takes on the title of "Chairman Emeritus."
A day later, Philippe Dauman (pictured, right, with Moonves, left, and Redstone, center) made the same exchange with Sumner Redstone at Viacom.
May 18, 2016: The Viacom Board of Directors votes to stop paying Sumner Redstone (pictured at LACMA), a perceived slap in the face by his legal counsel.
If you got a candid answer from someone at Viacom, however, they'd point out that the billionaire has plenty of money and does exactly zero work, so he's just fine. Plus, the company's been trying to cut costs where it can.
May 20, 2016: Sumner Redstone (pictured here with daughter Shari) removes Philippe Dauman and George Abrams as trustees in the Sumner M. Redstone Trust, and as board members of his family business, National Amusements, Inc.
This kicked off much public fighting between the two far-apart sides. The nastiest accusation came from Viacom and Dauman, who accused Shari Redstone of "manipulating" her father's signature.
They're not the only people who believe the daughter is pulling daddy's puppet-strings.
May 23, 2016: Philippe Dauman (pictured) and George Abrams (insert) sue in a Massachusetts court to overrule their oustings.
Across the country, Sumner Redstone's attorneys ask a Los Angeles Court to affirm his competency, which would affirm the removals of Dauman and Abrams.
May 24, 2016: Sumner Redstone (pictured) replaces Philippe Dauman and George Abrams with his granddaughter Kimberlee Ostheimer and a pair of family friends, Tad Jankowski and Jill Krutick.
August 18, 2016: Dauman is ousted from the company in a deal that also settles outstanding legal disputes. Robert Bakish is later named president and CEO of Viacom.
The CBS and Viacom chairman emeritus has survived a fire, family drama and more than his fair share of nonagenarian public humiliation — but he’s still got billions to show for it
May 27, 1923: Sumner Murray Rothstein (later Redstone; pictured) is born in Boston, and the media world will never be the same.