Sumner Redstone: 'Substantial progress' on saving media empire
Billionaire Sumner Redstone, who has been under pressure to restructure his family company's $1.6 billion in debt, said this morning that "substantial progress" had been made in talks with banks.
"An agreement is now within reach," the 85-year-old Redstone said during a conference call to discuss Viacom Inc.'s quarterly earnings.
In October, Redstone got caught in the stock-market avalanche, which created a credit crisis for the mogul, who owns controlling stakes in Viacom -- which owns MTV, Nickelodeon, Comedy Central and Paramount Pictures movie studio -- and television and radio broadcasting behemoth CBS Corp.
His family company, National Amusements Inc., was forced to sell non-voting shares in Viacom and CBS at record-low prices to come up with cash to satisfy bankers after National Amusements defaulted on bank loans. Since late last fall, National Amusements -- led by Redstone's daughter, Shari Redstone -- has been working closely with banks to restructure the company's debt.
A December deadline for National Amusements to repay $800 million in bank loans was extended into this year, a signal that the elder Redstone might be able to pull off his high-wire credit act and save his media empire. In December, National Amusements jettisoned its ailing video-game company and said that it would sell some of its movie theaters to pay down debt.
Redstone did not say when he expected an agreement would be reached, and he declined to answer questions. However, two people close to National Amusements said this week that a deal could come within the the next few weeks.
-- Meg James
Great job, L.A. TImes. Reporting the "news" as spoon fed by SR himself. How ironic to come under the headline, "buzz and scoop". The report of course is absurd. The REAL news is that his strategy of dividing his company to unlock value has been a disaster.
If you don't do a better job at reporting what is REALLY going on, the paper is going to be entirely irrelevant.
Posted by: DMS | February 12, 2009 at 09:43 AM
One would have thought that the Redstones would have learned from the Pattersons (of the Tribune Co.) what happens when a family-owned biz gets invaded by speculators and investment bankers. Or from the Chandlers of L.A., the Hoiles of Orange County or countless other families who had wonderful media businesses and got greedy. Greed is the only reason that any otherwise sane person would invest with borrowed money. Letting investors into family media corporations was just a form of borrowing. The family heirs will get a lot of dough regardless, which is all they care about, but the media outlets themselves may be reduced by arbitrageurs to a shell of themselves to maximize sale profits. The sucker line peddled by our dear, felonious investment bankers was that the families could sell part of the biz, but "retain control." Yeah, right.
Posted by: Lawrence of the Desert | February 12, 2009 at 11:13 AM
THE REAL TRUTH THE COMPANY SPLIT BECAUSE THE TOP BRASS COULD NOT GET ALONG
Posted by: fallen | February 12, 2009 at 03:57 PM
meg write the truth or stop writing. do you want to marry the old man?
Posted by: JASON | February 12, 2009 at 04:00 PM