In Focus

Rags to Riches, Rothstein to Redstone

I have to admit, I had second thoughts about writing this article. I mean, come on, Viacom CEO, Sumner Redstone? Other than a fantastic name, how interesting could this guy be? After doing the research, though, not only was I amazed by this seventy-seven-year-old coot, but the whole purpose of getting to know CEOs was completely reinforced. We do this because the next time you read about these guys -- or gals -- in the paper, or see them on CNBC, you will see much more than a name and a face. Sometimes having a better understanding of a person's background helps you to better understand their business decisions.

As I mentioned, the man is no spring chicken. He's more like the EverReady Bunny: He just keeps going and going. In 1979, he survived a Boston hotel fire with burns over half his body, yet today he's in terrific shape and working harder than ever. He's not simply a nameplate CEO who really has nothing to do with the day-to-day inner-workings of a company. Quite the contrary, Sumner Redstone is a follow-your-instincts, take-no-prisoners kind of leader. He's in the trenches on a daily basis and loves it. Imagine the vast experience and knowledge a company has to gain from such a senior CEO. Unlike many his age, he's not stuck in his ways, and he doesn't shy away from future technologies. If he feels that the potential is huge, that's precisely where he will steer his company, learning the details of the technology later.

When I wrote my article on Viacom Inc. during Super Bowl week, one thing I didn't mention was that Viacom actually has a parent company, "National Amusements, Inc.," of which Redstone also serves as Chairman and CEO. So, who the heck is National Amusements, and how did they come to own Viacom? Well, it goes back. way back. The story contains everything you need to know about the rise of Sumner Redstone.

I'm awestruck when I hear that a guy with a net worth of more than three billion dollars spent his childhood in a tenement with no bathroom. Yep, his was a meager existence in Boston's West End. Sumner was the first born of Michael Rothstein. Hmm, Rothstein to Redstone, not sure which sounds more Hollywood! After a few other pursuits, his father started a movie theater business. Like a typical teen, Sumner resisted the family business and left for Harvard at age seventeen. He graduated in a mere two-and-a-half years, which isn't so surprising considering he finished high school number one in his class. Okay, maybe he's not so typical after all! He credits his academic excellence to "an obsessive desire to win." These days, he attributes his business success to his willingness to take calculated risks. After reading some of the other CEO articles, it's clear that ambition and guts go a long way with these guys!

While at Harvard, Sumner became fluent in Japanese. Oh sure, pick the easy language! He was then selected to serve in a Military Intelligence Division in World War II, cracking secret Japanese codes, earning him several awards and honors. Then came Harvard Law school and a wife, Phyllis. I'm sad to announce the two divorced recently. Hollywood is brutal on relationships, even those with fifty years behind them! Well, I guess I didn't mention that the reason he was in that hotel room in Boston (the one with the fire) was because he was having an affair! Tsk. Tsk.

After getting restless with his law practice (he was partner at twenty-eight, by the way!), Sumner eventually returned home and joined the family movie exhibition business, now called National Amusements. From 1954 to the mid 1980's, Redstone was happy getting rich and seeing the hundreds of theaters he'd created gain prominence throughout the world. Then, it happened. Personally, I call it a mid-life crisis -- he started looking at the meaning of life. Who cares how many theaters the world has, had he really done anything of significance? This was his worry. In 1987, at age 63, he made a monumental decision that would shift his business life (as well as his personal wealth), into high gear. Once again, operating on a hunch, he launched a controversial takeover of a "sleepy" television company, Viacom. People thought he overpaid, but considering what he has turned it into, that is hardly the case. He clung to MTV and Nickelodeon, even though others thought he was crazy. Smart man, especially when you consider neither of those outlets are really suited for his generation. He went on to buy equally controversial entities, Blockbuster and Paramount in 1994. And finally, this past year saw the merger of Viacom and CBS. I'd say the man has made his mark, considering he has created the third largest media entity, behind AOL Time-Warner and Disney.

Again, like so many other CEOs, Redstone believes the key to the future is a global economy coupled with the world's appetite for American product. He always viewed his National Amusement multiplexes as one of the suppliers, but now with the conglomerate he has created, he has broadened both the means and the content being supplied. He says he is determined to reward the people who have believed in him (i.e. investors). Given his previously described "obsessive desire to win," I think this bunny's batteries are charged and ready for action!