One of the most controversial power struggles in media comes to a close
One of the world's biggest media companies has been embroiled in a complex personal and professional power struggle for months. That may all have come to an end this week.
Control of Viacom, the $40 billion media company that owns MTV, Comedy Central, Nickelodeon and Paramount Pictures, will go to Sumner Redstone, the 93-year-old billionaire who ran the company for years but is now in failing health.
Redstone took over the company in 1987 after a power struggle of his own. He became known for his aggressive business strategy and personality. His decades in control of the Viacom empire were marked by success, but also increasingly complex personal relationships that complicated the plan for his succession.
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In May, Redstone ousted two of his former confidantes, Philippe Dauman and George Abrams. The decision removed both men from the trust that will control Redstone's affairs when he dies or is declared mentally unfit, as persistent rumors claim he is. His move set off a legal battle that has gone on for months, damaging nearly every player involved and the company as a whole.
Executives on the other side of the battle believed Redstone was being manipulated by his daughter, Shari Redstone. The pair had been estranged. When she reentered his life his alliances began to shift.
They said Redstone was mentally unfit to control his own affairs.
While Redstone was facing these challenges from within Viacom, he also faced a legal battle outside of it. His former lover and companion Manuela Herzog in November sued to similarly challenge Redstone's ability to control his own affairs. She said she had been disinherited of millions of dollars she had earlier been promised.
Redstone strongly denied these allegations through his various representatives. Over the past few years, he has suffered a series of strokes that left him with a prohibitive speech impediment.
“It is absurd for anyone to accuse Shari of manipulating her father or controlling what goes on in his household," a spokeswoman said in May, according to the New York Times. "Sumner makes his own decisions regarding whom he wants to see both in his home and elsewhere, and he has his own team of independent advisors to counsel him on corporate and other matters.”
After months of this complicated legal drama, things finally came to a conclusion in a settlement agreement this week.
Redstone and Shari Redstone emerged with control of the company intact. Dauman, who had been Viacom's chief executive, will be removed from the position. The company's chief operating officer, Thomas Dooley, will serve as interim CEO.
So where does this leave Viacom?
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The company has faced a tough few years. It lost some of its biggest talent (including Stephen Colbert and Jon Stewart at Comedy Central) and produced flops on the studio side. And it's been criticized for failing to adapt to the digital age.
Viacom's earnings were down a startling 29 percent in its last quarter. The previous year, its stock lost one-third of its value.
The legal battle played out through National Amusements, the company founded in 1936 by Redstone's father that controls 80 percent of voting shares in Viacom.
Dauman is leaving the company with $72 million in severance, but the Redstones have emerged victorious in the theatrical saga.
It's still to be seen if Viacom will do the same.
Emma Hinchliffe is a business reporter at Mashable. Before joining Mashable, she covered business and metro news at the Houston Chronicle.
