I hear Sumner Redstone is denying those persistent rumors that he’s talking to Peter Chernin about replacing Philippe Dauman as No. 2. “Chernin is from the creative side, and Dauman isn’t,” said a source explaining the whispering. And Sumner has been known to make shocking mogul moves. (Just ask Tom Freston.) Meanwhile, on the financial front, the over-leveraged old coot’s auction continues: he’s hawking chunks of his family holding company National Amusements’ theater chains to pay down his debt. Citigroup, which is handling the auction, sent out sales books to 60 parties for the domestic theaters except the 17 in New England (which are not on the block presumably for sentimental reasons since that’s where the company started), and to 20 parties for the overseas theaters in the UK and South America. Sources say so far he’s received 60 offers for the U.S. theaters and 20 offers for the UK and South American. I’m told Redstone has also received an offer for the Russian theaters which aren’t on the block — yet. Bids are expected in about a month.
But it looks doubtful he’ll get what he hopes. the 85-year-old Viacom chief still has a $1.4 billion balance left on his original $1.6B loan, some of which has to be paid back by the end of this year, and all in 2010. This crisis began back in October when Viacom and CBS share prices dropped 43% and 52% respectively, forcing the 85-year-old chief to sell stock in both companies worth $233 million. The falling prices put Redstone in violation of debt covenants, forcing him into negotiations with creditors. Because of how hard he was hit by the stock market crash, Redstone’s personal wealth dropped from nearly $7B to barely $1B. Will the pity party ever stop?
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