The rift between Viacom chairman and CEO Sumner Redstone and his daughter, vice chairman and heir apparent Shari Redstone, seems to be widening, with several published reports Thursday claiming that Shari Redstone could step down from the board of directors of her father’s company soon.
News of Shari Redstone’s possible departure appeared to be greeted warmly by Wall Street -- Viacom stock was up as much as $2.62 per share to $43.85 in early trading Thursday, before falling back slightly, closing at $42.50 each, up $1.27 per share.
According to a report in TheWall Street Journal, the Redstones have been increasingly at odds ever since Shari, who heads up the family’s National Amusements theater chain, became more involved in Viacom’s operations. Shari Redstone was named nonexecutive vice chairman of Viacom in 2005.
Viacom did not return a call for comment. Nancy Sterling, a spokeswoman for Shari Redstone, did not return a call for comment. However, in an online article in Fortune magazine, Sterling denied that Shari Redstone would step down, adding that the vice chairman remains “committed and involved.”
The rift became more apparent earlier this year when Shari Redstone made moves to bolster National Amusements, adding gaming and upscale restaurants to some venues and stating in several reports that she believed the theater business was a growth business.
That was almost immediately countered by her father, who stated in press reports shortly after that he would prefer that National Amusements exit the theater business and use the proceeds to invest in casinos and other gaming interests, which he believed had greater value.
This would be the second dispute Sumner Redstone has had with one of his offspring. Earlier this year, he settled a suit brought in 2006 by his son, Brent, accusing his father and sister of freezing him out of Viacom affairs.
Shari Redstone had been thought by many to be the heir to the Viacom throne and, in published reports, the elder Redstone appeared to be leaning that way. In a 2005 Journal story, Sumner was quoted as saying that Shari would likely take control of the company “when I’m gone.”
But Sumner Redstone is famous for saying -- only half-kidding -- that he has no intention of dying. And past potential heirs to the Viacom throne -- including former CEOs Frank Biondi and Mel Karmazin -- have eventually been shown the door.
The Viacom chairman has also been dropping hints in recent months that Shari Redstone’s ascension to the CEO spot was not a given.
In an October 2006 airing of CNBC’s Conversations with Michael Eisner, Redstone said that he would not give Shari the CEO role, adding, “Now, you wanna give away what you have to your family, be my guest,” according to a transcript of the broadcast. Later in the same interview Redstone said, “My wife is closer to me these days than my daughter.”
That refers to Sumner’s new wife, former school teacher Paula Fortunato, whom he married in 2003. Redstone has said that he took his wife’s advice in deciding to oust movie icon Tom Cruise from his contract with Paramount Studios, a Viacom property.