Even Summer Redstone has money problems

Nov 4, 2008 5:08 PM

by Ray Poirier | Media giant Sumner Redstone, 84, whose majority ownerships include CBS Corp. and Viacom Corp. and their respective companies (too many to mention), is under pressure to come up with cash to ease the debt obligations incurred by his flagship, National Amusements Inc.

According to the Wall Street Journal, National Amusement is negotiating with bankers regarding its $1.6 billion debt. Recently, Redstone sold some of his CBS and Viacom stock to generate cash necessary to ease his debt problem.

Last year, Redstone was listed in Forbes magazine as having a net worth of $9 billion.

Not being mentioned among Redstone’s holdings – probably because it pales in comparison to the media outlets – is his nearly four million shares of WMS Industries Inc. (WMS), the gaming machine manufacturer.

Redstone acquired the shares through his friendship with then WMS Chairman Louis Nicastro, in the early 90’s. And, after an impassioned plea before the Nevada Gaming Control Board in which he promised never to even vote the shares he had accumulated, he was granted a waiver from the usual investigation the regulators required of major stockholders.

Even today, the shares are voted by Brian Gamache, the WMS chief executive officer.

The recent financial pressure for Redstone comes at a time when his personal problems have mounted. His daughter, Shari, designated as his successor in the operation of the media companies at the time of his death, disagrees on the path he should take to relieve his debt obligations.

She would rather he sell shares in National Amusement than in CBS/Viacom, thus diluting his returns.

And, on the homefront, Redstone has filed for divorce from his second wife, Paula. They’ve been married five years. His first marriage to Phyllis, mother of Shari, lasted 55 years.