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Debt-Laden Redstone May Sell Theaters

Media mogul may have to sell CBS stake, too, to placate bankers

By Kevin Spak, Newser Staff

Posted Nov 25, 2008 9:11 AM CST

(Newser) – With debts threatening to consume his media empire, Sumner Redstone is considering selling his family’s 1,500-screen movie theater chain, the New York Times reports. But even that may not be enough to satisfy his bankers, say people briefed on the negotiations. If things get bad enough, Redstone may be forced to give up his majority stake in CBS or Viacom—and insiders say he’d rather lose the network.

CBS and Viacom shares are down 78% and 67.5% respectively this year, as investors worry about Redstone’s next move and speculate on his inscrutable finances. “You have a private company with minimal disclosure,” explained one analyst. “It’s like reading tea leaves.” For now, Redstone’s biggest concern is the valuation on the theater chain. Redstone has privately suggested it could be worth north of $1 billion, but analysts believe it’ll fetch just half of that.

[Images (3)]

[Quotes (1)]

Viacom Chairman and CEO Sumner Redstone being interviewed at the National Breast Cancer Coalition's annual gala at Cipriani on November 10, 2008 in New York City. (Getty Images)

Sumner Redstone, the 85-year old famed chairman of CBS Corp. and Viacom Inc., arrives at Paramount Studios in Los Angeles in this Sept. 18, 2008 file photo. (AP Photo/Chris Pizzello, File)

Viacom chairman Sumner Redstone talks to the media at the annual Allen and Co.'s media conference in this July 13, 2007 file photo, in Sun Valley, Idaho. (AP Photo/Douglas C. Pizac, file)

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There is definitely a Redstone discount on these assets. Investors will say, ‘I don’t want to be involved with any of these because we don’t know what Sumner will do.' - Michael Nathanson, analyst at Sanford C. Bernstein & Company, on CBS and Viacom's falling stocks

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Debt-Laden Redstone May Sell Theaters