With a trial about to begin, lurid and alarming details of the billionaire’s condition and the scheming around him continue to emerge. Many questions will arise in the courtroom—and control of CBS and Viacom could ultimately hang in the balance.
As Redstone’s decline accelerated, the sordid goings on—both by the billionaire and those around him—continued. Eventually, his daughter, Shari, and Viacom’s Philippe Dauman (whose weak performance as CEO has made him reliant on his patron’s favor) re-entered the fray, setting off the contest that is now playing out in court.
It is among the many ironies in the Redstone saga that Sydney Holland was undone by falling for a charming con artist professing his love.
Her paramour was George Pilgrim, a handsome 49-year-old former actor who lives in Sedona, Ariz. For most of a year beginning in mid-2014, Holland and Pilgrim carried on a torrid affair. Holland would fly into Sedona on a private jet to rendezvous, then return to Los Angeles in time to spend the night with Redstone.
Pilgrim wasn’t exactly a smart choice for a clandestine relationship. He was a bipolar alcoholic and ex-con, who’d served 27 months in federal prison for a multimillion-dollar scam. He’d snared Holland (a complete stranger) on June 25, 2014, with unsolicited Facebook messages about her lawsuit against the leader of the Electric Barbarellas. “So glad your taking down Heather Naylor. I have so much Shit on her!!!” Pilgrim wrote. “Call me anytime.” He posted his phone number.
Pilgrim’s knowledge of the nasty court fight—and Holland—had come entirely from the Internet. When Holland didn’t respond, he sent her seven more messages: “Congrats on your beautiful child!!!…In other words I know who has your laptop…I think your Hot!!…Damn I’m hung…I could say Fuck u!! To not responding!!! But I can’t you are a real class act!! Call me.”
She took the bait. “Who is this?? Sorry I never read Facebook,” Holland wrote the following morning. “I will call you tomorrow and thank you for reaching out to me!”
It’s doubtful that Pilgrim actually provided any useful information about the Naylor case (which Holland would eventually abandon). But she soon launched into a sizzling romance with Pilgrim, whose TV appearances included a soft-core Cinemax series and an Animal Planet program showcasing his belief in UFOs. As she learned about his life, Holland even decided to option film rights to his work-in-progress memoir, Citizen Pilgrim, for her production company, Rich Hippie.
In November—after she’d already been alerted that Shari’s private detective was investigating her—Holland bought a $3.5 million five-bedroom home to share with Pilgrim in Sedona. The two began making plans to get married (after Redstone died, of course) and for Pilgrim to adopt baby Alexandra Red. Redstone knew nothing about his girlfriend’s Arizona liaison.
By the following May, the relationship had turned stormy. During fights, Pilgrim had begun demanding money from Holland, and threatening to tip off Sumner’s daughter, who Holland viewed as her biggest threat. “Fuck u I’m calling Shari I want house and 25 million or I help Ms. Redstone,” he texted Holland on May 26, according to message excerpts provided by her lawyers. “I’m going to expose us…Here’s our pic kissing…” And, on June 3: “We go to war…I destroy u…Your fucked Shari is my first call.” Holland convinced Pilgrim to enter a 30-day Texas rehab program for his alcohol problem, but he checked himself out just days after arriving. She changed the locks on the Sedona house. By then Holland wanted to end the relationship, but she was eager to keep her dalliance a secret.
Pilgrim hired a Los Angeles attorney, Bryan Freedman, who demanded a settlement from Holland for claims relating to the movie option and the purported promises involving the house and marriage. By late summer, according to Freedman, their lawyers were discussing a deal awarding him at least $6 million, including a percentage of what Holland got from Redstone’s estate. It would include a strict non-disclosure agreement, with clawback provisions for any violations. (Brad Rose, Holland’s lawyer, denies the sides were close to a settlement or that Holland was trying to buy Pilgrim’s silence. He says he was just seeking to gather evidence of Pilgrim’s “brazen extortion attempt.” Pilgrim declined to be interviewed.)
In the end, Pilgrim blew up any chance of settlement, setting in motion events that would reverberate in Beverly Park. In late August last year, Pilgrim walked into Wally’s, a chic Beverly Hills restaurant, and confronted the boyfriend of Manuela Herzer’s daughter. Pilgrim explained that he was Sydney Holland’s fiancé, displayed photographs that suggested he knew everything about Herzer’s family, and made threatening comments about both Redstone and the “hot” Herzer daughters.
Herzer, who learned about the encounter late that night while in New York (and recounted what she heard to Fortune), says she had “no idea that Pilgrim existed, much less that he was in Sydney’s life.” She says she alerted Los Angeles attorney Robert Shapiro, a onetime member of O.J. Simpson’s legal “Dream Team,” whose firm represented both Holland and Redstone in the Naylor case. Everyone soon agreed: Redstone had to be told.
On August 30, Holland, accompanied by Patty Glaser, Shapiro’s law partner, confessed her betrayal to Redstone face-to-face. When Holland told him how long it had been going on, he ordered her out of his house for good.
Since moving in with Redstone in 2013, Manuela Herzer hadn’t exactly devoted herself exclusively to his needs. While Holland logged many hours with the nonagenarian, Herzer was often gone, making regular trips to New York and Paris. She funded her lifestyle with freewheeling use of two Redstone credit cards, running up $2.7 million in charges in the first nine months of 2015, according to credit card statements reviewed by Fortune. Herzer spent $17,430 in a single day at Bergdorf Goodman in New York, $21,493 on a visit to Chanel in Paris. (O’Donnell says Redstone encouraged Herzer and Holland to use his credit cards “without limit” because it “was their money, anyway. They were going to get it when he died.”)
Holland’s abrupt exit increased Herzer’s duties, but with outsize rewards. Four days after banishing Holland, Redstone signed papers naming Herzer, who had already received a total of about $70 million from him, as his sole health care agent (Dauman was the alternate). He also changed his will to give her the $20 million Beverly Park estate and $50 million cash. That made her total bequest $70 million.
Staff would later complain that Herzer brazenly exploited Redstone, according to sources close to him. Shortly after Holland’s ouster, Redstone family lawyer David Andelman emailed Herzer to discuss canceling the lease on the oceanfront house Redstone was renting in Malibu, on the assumption he wasn’t using it. But Herzer—whose own relatives partied there frequently—insisted Sumner loved the beach. On Sept. 14, she ordered his staff to load Redstone into a van to drive to the coast. After arriving in Malibu, they helped Sumner into a chair in the backyard, where he was quickly photographed, with a blank expression—presumably as evidence of him enjoying the place. (The photograph was introduced in Herzer’s lawsuit.) Herzer then instructed the staff to load him back into the van for the trip back to Beverly Hills. Redstone was in Malibu for 30 minutes. (O’Donnell says Redstone “wanted to go out there.”)
Herzer tightened oversight of Redstone’s medical care at Beverly Park, where an RN, LVN, and aide were on duty at all times, working 12-hour shifts. To monitor the nurses, who spent the evening with Redstone in his pitch-dark room as he slept, she installed night-vision cameras throughout his mansion.
Herzer also assumed management of Redstone’s sexual demands. As Herzer would later describe it, Holland’s betrayal had sent Sumner into a physical and psychological tailspin. In an evocative court filing, she said he’d become “a living ghost”: blank and vacant, oblivious to his surroundings, prone to spontaneous crying spells, virtually unable to speak, and subject to “fixations.” Among them: He wanted steak and sex daily. For an incontinent, feeble 92-year-old who required a feeding tube and catheter and who struggled to swallow his own saliva, both were practical impossibilities. Nonetheless, Herzer sought to meet his “prurient urges.”
Redstone clamored incessantly for the companionship of a woman named Terry Holbrook, who Herzer’s lawyer says was paid $5,000 a month. On one occasion, after being told Terry was on a plane, Redstone ordered his staff to call all the airlines to try to find her. Herzer arranged a few visits, but nurses later reported that she’d instructed them to make excuses and lie to Sumner about Terry’s availability, explaining that Redstone’s doctor warned he shouldn’t engage in sexual activity more than once a week. (Herzer’s lawyer says she never ordered anyone to lie to Sumner about Holbrook’s availability.)
In a pre-trial brief, Redstone’s lawyers assert that Herzer had a different motivation: preventing Redstone from developing a closer relationship with a woman who might threaten her control. Redstone and Holbrook had a longstanding friendship. Now 60, Holbrook, thrice-divorced, is a former Houston Oilers cheerleader, a onetime model, and evangelical Christian, according to a videotaped interview she gave to a televangelist. After meeting Redstone, she received millions from him, most of it around 2010, when she bought a $2.4 million home. In a 2015 website posting discussing RainCatcher, an international charity she supported, Holbrook praised Redstone as “my largest donor, mentor, and friend.” After Holland’s exit, he seemed positively smitten with Holbrook, according to Redstone’s lawyers, regularly sending her “love notes and flowers.” (Holbrook did not respond to a call seeking comment.)
While curbing Redstone’s contact with Holbrook, Herzer encouraged sessions with Heidi MacKinney, who worked as Herzer’s paid assistant. MacKinney, whose past included a personal bankruptcy and a conviction for cocaine possession, submitted a legal statement supporting Herzer in 2007, during the custody fight involving her daughter; in it she said their children were playmates.
In a sworn statement submitted in the Redstone case, MacKinney says she saw Redstone five times in the five weeks after Holland’s exit. “Mentally, Sumner was not present,” she wrote. He was unable to communicate and “not fully aware of his surroundings or what was happening around him.” MacKinney found his condition on her last two visits “especially troubling…he was completely nonresponsive.”
Nonetheless, she wrote, she sought to engage sexually with him. According to MacKinney, “a male nurse was in the room with Sumner and me, directing me and telling me what sex acts I should perform. At the conclusion of my time with Sumner, the male nurse would sometimes tell Sumner that he had ejaculated, when in fact Sumner had not. Nevertheless, Sumner appeared to believe him, not aware of the truth.” After 20 minutes with Redstone on Oct. 10, she says, she resolved not to visit with him again.
As Herzer describes it, Redstone was doing poorly the next day. During his traditional Sunday movie screening at home with friends, this time showing Steve Jobs, Sumner aspirated, requiring Herzer to clear the room so nurses could suction his throat. She says he then kept falling asleep, first during the movie, then while watching a baseball playoff game. (Redstone’s lawyers claim that he wasn’t “out of it,” but was, rather, giving Herzer “the cold shoulder.”)
In a court filing, Herzer says she awoke at 8 a.m. the next morning, Monday, Oct. 12, so concerned about Redstone’s health that she ordered a nurse to summon his doctor, before leaving to run errands. She returned hours later to what she would later characterize as an ambush.
Staff members, backed by an armed security guard and Redstone’s probate lawyer, Leah Bishop, told her that Sumner didn’t want her there any more. “Are you mad at me?” Herzer asked Redstone. “Do you want me to leave?” Redstone’s lawyer says he replied “yes.” Herzer says he just made a grunting noise and burst into tears. Finally Herzer agreed to leave and was escorted out. With Herzer out, the path was clear for Shari Redstone to return to a position of influence with her dad.
Four days later, Sumner Redstone signed papers replacing Herzer as his health care agent with Dauman and Dooley, his trusted Viacom lieutenants. Redstone also erased Herzer’s $70 million bequest from his will.
The stage was now set for the most recent legal battle in Redstone’s lengthy history of legal feuds. The accusations would begin flying, and in many cases, it’s difficult to determine which are true. Every player may indeed have deep affection for Redstone—but every one of them also has sizable amounts of money or power riding on him too.
Ejected from Redstone’s house, Herzer wasn’t about to willingly depart his life. Within 24 hours, attorneys from three firms began dispatching letters to Redstone’s probate lawyers, claiming he was mentally incompetent and under “undue influence” when he’d given Herzer the boot. Warning of dire consequences for his care, they demanded her immediate reinstatement as his medical agent. “The bottom line is that he was brainwashed,” Herzer’s lawyer, O’Donnell, later proclaimed to reporters.
When O’Donnell filed suit on Nov. 24 to reinstall Herzer as Redstone’s health care agent, he asserted his client cared nothing about money; she was taking this step solely “to honor her sacred promise to Mr. Redstone to care for him for the rest of his life.” Of course, a determination that he was incompetent at the time he replaced Herzer would also invalidate his action to cut her out of his will. “This application,” Redstone’s lawyers shot back, “is all about Ms. Herzer’s personal financial agenda.”
Herzer’s claims seek to thread a neurological needle. She is arguing that Redstone remained mentally competent through early September, when he evicted Holland, then named Herzer his sole health care agent and raised her bequest to $70 million. But then, according to Herzer, Redstone was incompetent just six weeks later, when he ordered her out of the house, replaced her on his directive, and dropped her from his will. She blames the “trauma” of Holland’s betrayal for accelerating Redstone’s decline during this period.
Herzer claims Shari Redstone secretly orchestrated her father’s decision to suddenly turn on her. (O’Donnell calls it a “coup.”) Under this theory, Shari accomplished her mission by manipulating two key members of her father’s household staff: driver/house manager Isilei Tuanaki and registered nurse Jeremy Jagiello, whose skill at interpreting Redstone’s speech placed him regularly at Sumner’s side. In particular, Herzer asserts Jagiello—dubbed the “Sumner whisperer”—convinced Redstone that Herzer had stolen millions from him and lied to him about an array of matters, including the availability of Terry Holbrook.
Jagiello’s purported motivation? Herzer says the nurse wanted to increase his overtime pay and influence in the household, and get out from under Herzer’s scrutiny. “Jeremy has manipulated and lied to Sumner to promote his own personal benefit,” Herzer tells Fortune. “Jeremy took advantage of Sumner knowing that he was vulnerable and in a weakened mental and physical state.”
Jagiello and Tuanaki, who are listed as witnesses in the trial, both declined comment. Jagiello’s lawyer did not return calls seeking comment. But James Spertus, an attorney for Tuanaki, the driver, calls such claims “preposterous.” Says Spertus: “They’re going to lie so they get overtime? Give me a break!”
With both of Redstone’s companions finally gone, Shari returned to his Beverly Park mansion. In a later court declaration, she said Herzer’s departure had allowed her to reunite with her father, and, that after a history of “very public disagreements over business matters,” they had now patched those up and resumed their “uniquely close relationship.”
During Shari’s visits, Redstone abruptly reversed course on an array of issues. For example, eleven months after dispatching a letter that derided her claims that she was prevented from seeing him, he now sent a new letter saying precisely the opposite. The new missive, dated Dec. 11 and witnessed by Jagiello and a second nurse, acknowledged that his daughter shaped it. “I wanted to clearly lay out my thoughts, feelings, and expectations in writing, and you helped me to do so in this letter,” the letter stated. It explained that the nurses had helped Redstone review “each point,” and that the document reflected his “true feelings.”
“I wish to put our family back as we were before Sydney and Manuela….” it began. The letter voiced shock and remorse that “communications” had been sent over the past five years, “purportedly at my authority,” which, “among other things, criticized you and your family, prevented all of you from visiting me, threatened to bar all of you from my funeral, and specifically banned you from visiting me at the hospital.”
Several of these documents had been signed by Redstone and witnessed by his probate lawyer, who swore that he was competent to execute them. No matter. Any such materials that “in any way criticized you or your family or minimized your importance to me,” according to the letter, “should be considered withdrawn, terminated, voided, cancelled, inaccurate and of no effect whatsoever.”
Dauman stepped into the fray, filing a sworn statement in the court case about his visit with Redstone in October. In it, Dauman said that he spent “over an hour” with Redstone, describing him as “engaged and attentive” during “an extensive business discussion.” Herzer promptly called that account nonsense, saying she sat in for the entire meeting, which lasted “20-30 minutes at most.” She said Redstone sat in his chair while Dauman spoke, “gazing somewhat vacantly toward the television or me.” Redstone said “no more than five words” during the visit, according to Herzer. “This was not a conversation. It was a monologue by Mr. Dauman that Sumner did not appear to comprehend.”
With its tabloid-ready descriptions of the mogul’s condition, Herzer’s case produced an overdue stink on Wall Street about Redstone’s fitness to remain executive chairman of Viacom and CBS (CBS). If he hadn’t been controlling shareholder (and picked many of the directors), was there any doubt he would have been forced to step down years ago?
O’Donnell fed the fire, opening up what he calls a “second front” by sharing information with mutual fund investor Mario Gabelli, an outspoken Viacom institutional shareholder, and attorneys who brought a derivative case against both companies.
In January, O’Donnell won Judge Cowan’s approval to have Redstone examined by O’Donnell’s expert in geriatric psychiatry, Dr. Stephen Read. Although Redstone’s own physician had declared him mentally fit two months earlier, Read’s 37-page report, based on his own hour-long visit, tape-recorded and presented under seal to the judge, made a considerable impression. “Suffice it to say,” the judge later wrote, clearing the case for trial, “….those details are difficult to read in describing how this man is hanging on to life.” (From the start, O’Donnell worked hard to make sure the judge saw Redstone as he is today, in person or on video. As O’Donnell put it to Fortune in January, “I mean no disrespect, but Exhibit A in this case—and the only one you need—is Sumner. The only way I’m going to have a chance of winning is to get Sumner. If I don’t get Sumner, I don’t have Exhibit A.” And thus, the judge’s decision on the eve of trial to grant O’Donnell’s request to question Redstone was a huge victory for Herzer.)
Even Redstone was finally willing to accept reality. On Feb. 3, six days after the medical exam, CBS accepted his letter of resignation as executive chairman. Vice chair Shari Redstone, who had reached an accommodation with Moonves more than a year earlier, waived her claimed right to succeed her father and joined a unanimous board vote to name Moonves as executive chairman.
Things were quite different at Viacom.
It’s no wonder that Bernstein analyst Todd Juenger (admittedly, a particularly tough critic) has compared Viacom to Eastman Kodak: Virtually every source of its revenues is challenged. “Longer term,” Juenger recently wrote, “we continue to hold the view that the old business of serving kids/teens with linear TV networks is doomed, and the new business of serving kids/teens with on-demand, digitally delivered entertainment is unlikely to be won by Viacom.”
To be sure, some of Viacom’s woes are no fault of its own: In the cord-cutting age, viewers are migrating away from “fat” bundles of pay-cable channels, damaging revenues and profits. Viacom, with its youth-skewed audience—quicker to adopt new platforms—is especially vulnerable to this trend.
Wall Street has grown impatient with Dauman’s response to these challenges, as well as an assortment of other problems. Ratings and ad revenues have dropped, especially at MTV and Comedy Central, which has lost marquee talent over the past years, including Jon Stewart, John Oliver, Stephen Colbert, and Key & Peele. Top creative executives have been laid off or departed. The company continues to suffer from a lackluster digital strategy. And Paramount has performed terribly for the past four years, producing multiple box-office stinkers and running up losses ($136 million in the most recent quarter). Viacom has announced a search to find a “strategic” minority investor for the studio.
Dauman has been roundly criticized for failing to seize opportunities. In one widely cited example early in his tenure, he dumped Freston’s $3 million partnership stake in a subsidiary of Vice Media, whose value has since soared. Viacom’s spokesman notes that the subsidiary was ultimately shut down—and the company had no contractual rights to stock. But critics say continuing the relationship would likely have reaped big rewards, in both content and an ownership stake.
Other stumbles cost more in lost buzz than lost revenues. According to a former Viacom executive, MTV Networks CEO Judy McGrath (who has since left) told Dauman that, in exchange for a $1 million investment, the company could affix one of its showcase brands on a new Broadway musical by the creators of South Park. The show would have been titled: Comedy Central Presents Book of Mormon. Dauman decided to save a few pennies, agreeing to a $500,000 stake instead. As a result, Viacom failed to capitalize on a big hit and along the way managed to disappoint the South Park creators, whose show remains on Comedy Central. “We’re not in the Broadway business,” Dauman reportedly told McGrath at the time. (A Viacom official says Dauman doesn’t recall being offered such a branding opportunity.)
It all plays to the narrative that has dogged the CEO from the start: that he’s tone-deaf on creative issues. Yet he hasn’t even delivered in his obvious area of strength: Despite his background as an M&A lawyer—and top lieutenant to the deal-obsessed Redstone—he has made no game-changing acquisitions.
Instead, Dauman has poured massive sums into a stock-buyback program that has flopped. Since he took over in 2006, Viacom has repurchased more than half its non-voting shares, at a staggering total cost of $18.6 billion (more than twice what Disney spent on Marvel Entertainment and Lucasfilm combined). Yet Viacom stock has returned only a cumulative 35% during this period, compared with 82% for the S&P 500—and far bigger increases for comparable media companies (including 302% at Disney, 173% at Time Warner, 95% at 21st Century Fox, and 144% at CBS). In the past twelve months alone, Viacom shares have tumbled 39%.
With Dauman seemingly under attack from all sides, Viacom’s PR department prepared a three-page list of bullet points in his defense, offering up “Selected Achievements,” including a section rebutting the criticism that he’s insufficiently creative. (“He has enormous understanding of and passion for every aspect of the company.”) On a February conference call, Dauman insisted there was nothing wrong with Viacom’s business, angrily blaming its stock woes on “naysayers, self-interested critics, and publicity-seekers.”
CBS, by contrast, has prospered, maintaining stellar ratings, while Moonves moved aggressively to develop creative solutions to threatening industry trends, such as cord-cutting. More valuable than CBS when Dauman took over, Viacom is now worth $10 billion less.
Despite all this, Dauman, through fiscal 2014, has received a combined $331 million as CEO—second only to Moonves, who received $446 million, among media-company executives during that period.
Historically intolerant of stock declines, Redstone—as long as he was still talking—unflinchingly backed Dauman, introducing him on quarterly earnings calls as “the wisest man I have ever known.” Some chalk it up to their history. Dauman was unparalleled at the critical task of Redstone-management: happy to provide dinner companionship; consistently deferential; and assiduous at feeding his boss’ need to feel he remained in control. “Philippe gets the benefit of the doubt because they have such a close, long relationship,” says one longtime observer of the pair. “There was a different level of trust.”
To others, it was simply further evidence that Redstone had lost his edge. In Sumner’s prime, they say, no CEO would have kept his job in the face of such a decline.
So when Viacom, one day after Moonves’s promotion, prepared to give Sumner’s executive chairman title to Dauman, his daughter objected. But she didn’t attempt to exercise her claimed right to succeed her dad. Instead, Shari issued a public statement that no one connected to the Redstone family trusts should serve as chairman, a notion that would rule out both her and Dauman).
But Shari stood alone. Despite the time she spent with her father (Herzer mocked her “sudden conversion to the loving, omnipresent daughter” as part of Shari’s effort to win Sumner’s vote on the issue), Redstone sided with the remaining directors in handing his title to Dauman. (Shari’s spokeswoman says she never discussed the issue with her father.)
Shari has declined to discuss her future plans. But it seems likely she’ll revisit the fight with Dauman upon her father’s demise, or perhaps sooner, if Redstone is ruled incompetent in the current trial. At that point, controlling interest in Viacom and CBS will fall to the seven lawyers governing her father’s irrevocable trust. That group includes three presumably reliable Shari votes: her own, her son Tyler’s, and that of her mother’s divorce attorney, Leonard Lewin. The other voters are Dauman, George Abrams (a Viacom director who supported Dauman’s elevation); Norman Jacobs, Sumner’s divorce attorney; and David Andelman, who has long represented the Redstone family interests and serves on the CBS board. The latter alignment might provide Dauman with the deciding vote, but in truth, how it will play out is anybody’s guess.
But it could mean that the current trial, as messy as it is—and Redstone’s planned legal counterstrike against Holland and Herzer—might be just a prelude to a contest for control of both Viacom and CBS. Sumner Redstone, who turns 93 this month, could find himself a spectator as Shari, Dauman, and Moonves vie for control of the empire he created.
While Herzer sought to battle her way back in, Sydney Holland pursued quieter methods. In October she wrote Redstone, pleading for forgiveness and a chance to return. “I am beyond sorry that I hurt you, I am so sad that I was not allowed to say goodbye and I want nothing from you, but to see you….I beg of you to consider letting Alexandra and I visit,” wrote Holland, of her adopted daughter. “She is such a beautiful little girl…She reminds me of you and how resilient you are and how you never give up.”
“Sumner, just know that I will love you forever and always, not a day goes by without me thinking of what we shared…..Please Sumner, have Leah arrange for us to see each other. Love Always, Sydney.” When Redstone’s lawyers sought to interview her for the case, she agreed—on the condition that they meet at Beverly Park, with Redstone present.
Holland maintained a low public profile, while obtaining a protective order against Pilgrim, who pled guilty in April to a criminal misdemeanor charge for bombarding her with threatening voicemails and text messages. Her attorney, Brad Rose, says Holland regrets her relationship with Pilgrim, and “still to this minute loves Sumner and cares for his well-being.” Holland, he adds, “is absolutely disgusted with what’s going on in court with Manuela.”
As the Redstone trial opens, is there a meaningful lesson that can be extracted from this tortured saga? It feels almost trite under the circumstances to say that the sad deterioration of Sumner Redstone and the struggles at Viacom show the dangers of vesting too much corporate power in one person’s hands—though that’s certainly true—or that people reap what they sow (though that’s also true). In his fierce, nearly irrational desire to cling to power and his willful denial of aging, Redstone presents almost the inverse of King Lear—who gave up power to his children, only to deeply regret it.
By contrast, Redstone couldn’t let go, and instead found himself isolated, with almost nobody he could truly trust, both empowered and victimized by the riches he fought so long and so hard to accumulate. As his time winds down, his life resembles a lonely cross between the last days of Howard Hughes and the fictional Charles Foster Kane (of Citizen Kane). Though Redstone’s failures have affected companies that provide thousands of jobs and are worth tens of billions of dollars, in the end his tragedy is ultimately a human one, and all the more human for being largely self-inflicted.
For a few days in April, it appeared that the trial guaranteed to embarrass everyone might not happen after all. After nearly two weeks of mediation, the warring sides agreed on settlement terms. Herzer would receive $30 million from Redstone ($2.5 million would go to her charity), and keep the penthouse apartment at the Carlyle Hotel in New York. A third-party elder care manager would oversee the medical staff at Beverly Park. And everyone would agree not to challenge any previous gifts or provisions. That would include Redstone’s latest change in his healthcare directive: naming Shari as his agent, along with a Los Angeles family friend.
The deal would offer only a small concession to Herzer’s repeated post-eviction pleas for a personal visit with Sumner. A day after the agreement was signed, the mediator and one of Redstone’s doctors were to visit him at Beverly Park, where they would either read a letter or show him a short video from Herzer asking Redstone two questions: Did he want to meet with her? And did he want her and her three children to attend his funeral? If he answered no, she presumably would never see him again.
Word of a tentative deal—and Shari’s appointment as health care agent—soon leaked into the press. Days later, it all fell apart, with both sides blaming the other. O’Donnell claimed Redstone’s lawyers had tried to “re-cut” the deal. Herzer made new demands that were promptly rejected, including the dismissal of nurse Jagiello and driver Tuanaki and indemnification from lawsuits by anyone in the Redstone family. By April 11, the two sides, as O’Donnell put it, were “back on a war footing.” Less than a month later, the Redstone side was girding to fire its own legal salvos at Holland and Herzer. As long as Sumner Redstone is still breathing, it seems, that is the normal state of affairs—for his family, for his $5.2 billion fortune, and for the two massive companies he controls.
Correction: An earlier version of this article incorrectly identified Mario Gabelli as Viacom’s largest institutional shareholder.