After failing institutions come failing individuals—which are more fun. The person most dramatically on the precipice of personal collapse this morning is Sumner Redstone, who, Tim Arango reports in the Times, is quite likely no longer a billionaire.
Redstone is caught in the kind of bind that most other inordinately wealthy people will shortly face: the value of what they own, which underwrites not just their identity but the debt which supports their cash flow and lifestyle needs, is not what it once was.
This value discrepancy embraces homes, art work, securities, and companies. It is not just that the value has shrunk, but that, in so many instances, nobody knows what the value is anymore—as likely to be down 90% as 40%. In other words, this suggests a perfectly reasonable scenario in which many people who were heretofore billionaires are, in fact, bankrupts.
(AP Image)
Sumner Redstone hopes to sell his private movie theater company, which he believes is worth a billion dollars, to pay down the debt secured by his holdings in his public companies—CBS and Viacom—which are trading at nearly 25% of their previous value. But Redstone’s theaters are worth…well…only what a buyer will pay (and there are no buyers).
There are broad media and cultural implications when billionaires, quite possibly in mass, stop being billionaires. An entire class and mythology is imperiled. For media purposes, the end of Redstone and his ilk will be as closely attended and as enjoyable as their rise.
