Media mogul Sumner Redstone may decide to sell one of his businesses – incuding MTV parent Viacom and TV network CBS – following a ‘battle with his bankers’.
According to The Times, Redstone last week hired Citigroup and NM Rothschild to advise on restructuring $1.6 billion (950 million) of borrowings, with an $800 million payment due to be refinanced at the end of the year ‘amid signs of corporate distress’.
In the same week, Redstone’s privately-held cinema business, National Amusements Inc (NAI) – which owns a majority stakehold in Midway Games – unexpectedly dumped $233 million of stock in CBS and Viacom.
A statement by NAI described the sale as the direct result … of the historic financial crisis” – as reference to the value of Viacom and CBS stock nosediving as the credit crunch deepened.
According to The Times, repeated buying of shares in Midway has been particularly costly for NAI. The firm has spent $800 million building an 88 per cent stake in the games firm, which the newspaper reports ‘has lost an estimated $300 million in the past four years’.
The newspaper also lays blame at NAI’s cinema business. It reports:
‘[The firm’s] day-to-day running rests with Mr Redstone’s daughter Shari, with whom relations are strained after he signalled that she was longer going to take charge of Viacom and CBS after he dies.
‘Shari Redstone invested heavily in upgrading the cinemas, with better seats and pianos in the foyers. The result was that the chain never generated cash and so made no inroads into debts swollen by the payout to Brent Redstone and the Midway purchases.’