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After years of battle, Shari Redstone runs an empire of her own

Bloomberg logoBloomberg 8/13/2019 Christopher Palmeri
Shari Redstone© Jared Siskin/Patrick McMullan via Getty Images Shari Redstone

She and her billionaire father went to war but she returned to the fold when she thought two of his ex-girlfriends were taking the old man for millions. She dispensed with two CEOs who mutinied against the family and took control of two media giants in the process.

Now Shari Redstone is poised to cement her position as the most powerful woman in media. Move over, Oprah.

With the merger of CBS Corp. and Viacom Inc., announced Tuesday, the 65-year-old Redstone will control the voting stock and chair the newly combined company, to be called ViacomCBS. That’s after spending 13 years playing second fiddle to others as vice chair of both.

While women increasingly are overseeing media companies, none chairs one as big as the rejoined CBS and Viacom, whose combined sales last year were $27.4 billion.

“You have to give Shari a lot of credit, for having a point of view, a strategic vision and executing on that very carefully,” said Jessica Reif Ehrlich, an analyst at Bank of America Merrill Lynch. “She had some amazing hurdles and she’s gotten over all of them.”

The $11.7 billion merger reunites CBS, the most-watched TV network in the U.S., with the parent of MTV, Nickelodeon and Paramount Pictures. Her father, media mogul Sumner Redstone, had separated the two in 2006 because he thought the market was undervaluing the cable-TV networks due to the slower-growing broadcast business. CBS, however, proved to be the better investment.

For at least three years, Shari Redstone has sought to put the companies back together, believing that the combination will provide more leverage to negotiate with TV distributors and bring enough scale to compete with newly enlarged industry giants such as AT&T Inc. and Walt Disney Co.

Related video: CBS and Viacom will merge — again (provided by Newsy)

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Long before that, in 2007, she publicly fell out with Sumner, now 96, owner of 80% of the family holding company, National Amusements Inc., through which he controlled Viacom and CBS. She’s also had to contend with strong-willed chief executives who stood in her way, such as Viacom’s Philippe Dauman, a onetime confidant of her father’s, and CBS’s Les Moonves, considered one of the most powerful men in the industry until his fall from grace last year after accusations of sexual misconduct.

Marty Kaplan, a professor of media studies at the University of Southern California, said Shari Redstone’s rise in a media company still recovering from the Moonves scandal could serve as inspiration for others.

“Having a woman at the top should lead to more diversity in hiring,” he said. “If you’re a male senior manager, you might want to double-check that you’re including a diverse slate of talent” writing the scripts and directing the shows, he said.

Shari Redstone has already been exerting her influence at Viacom. She pushed for Bob Bakish, formerly head of the international division, to lead that company. Now he’s set to take the reins of the combined businesses and will join the board. Acting CBS chief Joe Ianniello, considered a Moonves loyalist, is staying on as CBS chairman and CEO but reporting to Bakish.

Despite her differences with her father -- he once released a letter saying she made “little or no contribution” to the companies -- she has clearly learned a thing or two about business and fortitude from her dad. He is famous for his court battles and family scuffles. He’s bought out family members, including his brother Edward and his only other child, Brent.

But Shari Redstone has managed to hang on to her 20% stake in the family business. When an unflattering 2015 Vanity Fair profile highlighted her father’s declining health and influence of two of his girlfriends, she stepped in and ultimately took control of her father’s affairs. After his death, she’ll assume his place on a family trust that oversees their holdings.

For many years now, she’s run Advancit Capital, a venture-capital firm based in Norwood, Massachusetts. Her interests, besides her favorite team, the New England Patriots pro-football franchise, have been new-media ventures. Advancit, for example, recently invested in podcast network Wondery Inc. Redstone has said she enjoys listening to shows such as “CBS Evening News” and “Face the Nation” through that medium.

Jonathan Miller, who works with Shari as a senior adviser at Advancit, said the firm has also been investing in businesses that have subscription-based models, such as Headspace Inc., a meditation app, and MasterClass, which offers online lessons from sports and other celebrities. She’s also granted more interviews and appeared at industry conferences, recognizing her own need to take a leadership role, Miller said. “She feels company culture and corporate governance are very important.”

With her new status, she won’t be able to pin any decline in the company’s performance on others. CBS and Viacom are under pressure from the challenges that all traditional media companies face in a streaming era. These include customers canceling cable-TV packages and spending more time watching subscription services such as Netflix.

Paramount Pictures, Viacom’s film studio and a beloved holding of both Redstones, has struggled to develop hits. Last weekend, “Dora and the Lost City of Gold,” a live-action film based on Nickelodeon’s long-running kids’ show, finished a disappointing fourth at the box office.

Many believe Shari Redstone will ultimately sell the combined CBS-Viacom to a larger telecommunications or technology business, after squeezing hundred of millions of dollars in cost savings from the merger.

“It’s still a $30 billion company dealing with $1 trillion companies that want content,” said Porter Bibb, a long time adviser with Media Tech Partners in New York.

Given Shari Redstone’s tenacious climb to the top, it would be unwise to underestimate her.

--With assistance from Anousha Sakoui.

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