Sumner Redstone Forced To Sell Viacom, CBS Shares

[DeSwiss]

Sumner Redstone forced to sell Viacom, CBS shares
Redstone's family firm dumps $400 million of nonvoting shares to raise cash to pay down debt.

By Meg James, Los Angeles Times Staff Writer
October 11, 2008



Billionaire Sumner Redstone got caught in the credit crunch Friday. The 85-year-old mogul, who has long bragged about his financial savvy and competitive drive, was forced to sell a fifth of his family's stake in his two media companies -- Viacom Inc. and CBS Corp. -- on a day when the companies' shares were trading at record lows. It shows that even the wealthiest people are not immune to the meltdown in the markets and are being thrust into once-unimaginable situations.

On the most volatile trading day in the stock market's 112-year history, Redstone's family's holding firm, National Amusements Inc., had to dump $400 million of nonvoting B shares in Viacom and CBS to raise cash to "pay down debt to comply with covenants under credit agreements," according to a statement from National Amusements.

"This was a margin call in the broadest terms," said Hal Vogel of Vogel Capital Management, a longtime media analyst and investor. "When the banks don't renew your credit, you get a margin call and that is, in effect, what happened to National Amusements." A spokeswoman for the closely held firm, which operates a chain of about 1,500 movie theaters worldwide including the Bridge in Westchester, declined to comment.

Redstone's credit troubles set off a chain reaction with damaging consequences for CBS and Viacom. Regulations require companies to publicly provide financial guidance whenever insiders sell large blocks of stock shortly before earnings reports are released. CBS is scheduled to release third-quarter results Oct. 30, and Viacom on Nov. 3. The revised guidance issued Friday was bleak. Both Viacom and CBS lowered earnings estimates, blaming the world financial crisis for weaker advertising sales. They said the situation could get worse.

http://www.latimes.com/business/la-fi-redstone11-2008oct11,0,6688094.story">MORE

- Kinda gets you right in the 'ol schadenfreude, doesn't it? Too bad he doesn't have his daughter (the one who doesn't know how to run a business properly) around to blame it on this time.

Of course there is another real downside to all of this. We have to realize that this means teevee at CBS could actually suck worse than it already does.

Hey!!! I hope Katie's check doesn't bounce....
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DeSwiss


http://www.atheisttoolbox.com/">The Atheist Toolbox





"Prayer is just a way of telling god that his divine plan for
you is flawed -- and shockingly stingy" ~ Betty Bowers

[peekaloo]

1. Aging Howdy Doodie finally admits his head may be made of wood.

artist renderings (film's too expensive) at 11:00.

[DeSwiss]

4. That's funny, I always thought of him as more of a Clarabelle....

:rofl:

[SpiralHawk]

9. "Clarabelle is another republicon propaganda stooge." - Phineas T. Bluster

[DeSwiss]

10. Kinda looks like Dubya's old man, doesn't it???

- But I love spats!!!!

[itsrobert]

2. Didn't he want Bush

because he thought Bush was better for business.

[DeSwiss]

5. It looks like it turns out....

...that he's as "good" for business as Bush is.

Although she won't inherit those shares he's sold now, I have to believe that his daughter is somewhere laughing her ass off.

[HamdenRice]

3. Come on banks -- Make him sell his VOTING SHARES!!!

So Sumner, the destroyer of the former "Tiffany Network" has had to sell his non-voting shares. That probably means he is desperately trying to hold on to his voting shares and control of corporate policy.

I hope he has to dump his voting shares, so maybe CBS can come back to something like a real tv network with a real news department.

[DeSwiss]

7. I've got my fingers crossed....

...that this is where he'll end up having to give up control.

More to the point, I wonder how Rupert's finances are these days. I'd love for him to have to sell Faux to George Soros or somebody....

[Reader Rabbit]

6. Karma catches up to the man who helped kill Star Trek

Hopefully the wheel of fate will focus on Les Moonves next.

[DeSwiss]

8. Les?

Oh, okay? But I had someone else in mind....

[underpants]

11. Colbert wins!!!

:bounce:

[jazzjunkysue]

12. Not enough little violins in the world.....Maybe this will bring the news back to journalists

and out of the hands of capitalists.

Small price to play. :nopity: