Viacom Family Feud

Are Sumner Redstone and his daughter heading into King Lear territory?

Ripeness Is All: If we read the leaves swirling around in the teapot correctly, it seems likely that the tempest between Sumner Redstone and his daughter, Shari, is going to blow over.

In recent weeks, the 84-year-old father and 53-year-old daughter have been like Lear and Cordelia in Act 1. But after sending Forbes magazine a snarling letter earlier this month asserting that Shari had made “little or no contribution” to his empire, Sumner has now said in a Business Week interview that he loves daughter and is concerned about her welfare.

We’ll give him the benefit of the doubt. But by now, maybe the fight has also kicked up too much press. It cast an unflattering light on Viacom’s governance practices and seemed to create a feeling that Redstone might soon be found wandering the moors and ranting at the wind. So, perhaps he’ll let Shari buy control of her precious theater chain and call it a day.

Shari is an interesting character. The Los Angeles Times ran a flattering profile earlier this week. It portrayed her as a devoted mother and the maker of a very good stuffed cabbage, which any cook knows can be rather labor intensive. “She’s unaffected … and she doesn’t lust after power,” said Time Warner CEO Richard Parsons.

Maybe she doesn’t lust, but recent events suggest she might have acquired a little taste for power nonetheless. Yes, she was called into Viacom at her father’s behest, but once in, she seems to have become intent on actually doing her job. And she has answered Sumner’s volleys with vigor. “I love the fact that Shari has been able to position herself as self-effacing,” says a former Viacom insider. “She’s the opposite of that.”

Another Viacom veteran who’s a fan of Shari’s says she’s like Dad—smart, hardworking, and opinionated. Still, this person adds, “taking on a man who has all the stock” may not be all that smart. “I could argue, ‘You’re right, Shari—the board isn’t really independent,’ ” this observer says. “There ain’t nothing you can do. If he wants to make his salary $20 million a year, there ain’t shit you can do.”

As the other former associate puts it, “She can’t kill him. That’s God’s job.”

Both these veterans, who are still in touch with Sumner, say the fact that’s he’s feuding with his daughter—as well as his son—doesn’t mean he’s any crazier than he was before. “I’m sure he’s half a step slower,” says one. “But you’re not talking about a guy who’s lost his faculties. He’s not erratic. He’s not a guy who says A in the morning and B in the afternoon.”

In fact, this observer thinks the dust-up is probably something of a tonic to the old man. “This is like giving him a 3-inch Porterhouse steak and an ice-cold cold beer,” he says. “He’s got his name back in the papers. … What could be better?”

The topic of Sumner and Shari wasn’t addressed when Viacom delivered its earnings news this morning, but CEO Phillipe Dauman scoffed at recent reports that the DreamWorks team might be unhappy. Noting that DreamWorks has been experiencing the best year in its history, he said Steven Spielberg is “happily engaged” in directing Indiana Jones 4, adding, “I think we’ll continue to make him happy.” In fact, there is much happiness to go around. “We are happy to have [Spielberg] as the leading star in our firmament,” Daumann said. And Paramount is happy to have a firmament, he continued, citing relationships that include Brad Pitt, Martin Scorsese, and J.J. Abrams. (link)

Judgment Call: When Mia Farrow wrote in the pages of the Wall Street Journal that Steven Spielberg risks becoming “the Leni Riefenstahl of the Beijing games,” you might think that she was doing the Lord’s work. Or you might think that she struck too low a blow to the man who founded the Shoah Foundation.

But whatever your reaction, you have to admit: She’s got some cojones. We caught up with her this week—she’s shooting a film in soggy Normandy—and she told us the back story.

In her op-ed, Farrow—set to be seen next in Michel Gondry’s Be Kind Rewind with Jack Black—reproached Spielberg for his role as an adviser to the Chinese on the ‘08 Olympics. Her view was that unless China pressures Sudan to stop the Darfur crisis, Spielberg must consider bailing on what she called “the genocide Olympics.” (If Rupert Murdoch gains control of the Journal, wonder how many more China-bashing op-eds we’ll see on those pages?)

Farrow told us she had written Spielberg two letters several months before the op-ed piece appeared. In the first, she asked for advice on what to do with footage she had compiled on a visit to the Darfur region. Included was a photo album with handwritten annotations. “I used each photograph to convey the enormity of the situation and the staggering statistics,” she says. “And I thought the faces that I showed him spoke so eloquently.” That communication also contained information about China’s role in the crisis, she adds.

Farrow got no response. Then she read that Spielberg was going to be an artistic director of the games. “I wrote him a letter of conscience saying I hoped he knew all these things,” she says. “I really suggested he think twice. And then when I didn’t hear back, I had a vision of a box within a box within a box—that he has an office, and then there’s a real office behind that and maybe a really real office after that and maybe three letters a month actually get to him. So to be fair, maybe he didn’t get any of my letters. [But] I’m on another time schedule where ten thousand people a month are dying. So you wait two weeks, that’s five thousand people right there. I just could not wait any longer. So the piece was born.”

Spielberg hasn’t commented on what he plans to do about the games, but he’s expected to communicate something soon. Clearly, he was stung by Farrow’s article. Perhaps it’s only coincidence that he wrote to the Chinese president soon after it was published, and asked for action. But he considers it unfair that he’s facing pressure to boycott the Olympics when none of the activist groups is asking the same of the athletes.

Farrow knows that many in the industry consider it madness to reproach Spielberg publicly or privately. “I know how it is out there,” she says of Hollywood. “I think the flags are flying at half-mast over at my management. But I’m not risking my life. Maybe I’m risking my career. It’s a pittance. We’re talking about millions of lives at stake.”

It might console those who have sent missives to Spielberg and heard nothing that a famous actress has no more pull than they do. But Farrow says being an actress does give her an advantage in spreading her message: “I have shirked interviews my entire life,” she says. “I’ve now given more than two thousand on the topic of Darfur. I’m doing what I think my only response possibly could be.”

BREAKING: Spielberg’s spokesman, Andy Spahn, has now gone on the record saying that Spielberg is considering “all options,” including quitting, depending on what the Chinese do in the days ahead: “We’re pretty far down the road in discussions and then we’ll decide if the path is productive or not and then consider other options.” (link)

July 23, 2007

The Hitcher: Last week, we reported that new NBC Universal co-chairman Ben Silverman owns a piece of a lot of shows that might make it onto NBC’s prime time schedule—Zip, Kath & Kim, American Gladiators, an Office spinoff, whatever.

And we’re happy to report as he gets richer, so does Barry Diller.

One of the sticky wickets in NBC Uni’s hasty efforts to get Silverman loose from his deal at his production company, Reveille, was getting Diller to let Silverman out of his employment contract.

Diller financed Reveille’s overhead, and instead of owning a piece of the company, he had an ownership position in the shows, according to sources familiar with the deal. Naturally Diller wouldn’t let Silverman walk away without exacting handsome compensation from Silverman’s eager new employer. NBC gave Diller his money back (and will pick up the tab for Reveille’s overhead), but Diller still gets a piece of Reveille shows that go forward at NBC or elsewhere for the lifetime of those shows.

It’s nice to have some fun money to play with.

Silverman, meanwhile, handled himself nicely at the Television Critics Association last week and made headway charming a crowd of critics still a bit drunk on the romance of the martyrdom of ousted NBC Entertainment President Kevin Reilly. (Reilly appeared Sunday morning in his new capacity as president of entertainment for Fox, and the critics spent a fair bit of time trying to get him to sling off on NBC. Given the temptation, he was fairly restrained.)

After making his bow, Silverman took off for a European vacation. Never let it be said that he doesn’t respect his elders. His agenda included visiting Norman Lear in Majorca, as well as Stephen Cannell (The A-Team and Rockford Files). Sometime during his sojourn, Silverman is also hooking up with b.f.f. Ryan Seacrest.

Yes, we said Ryan Seacrest.

Silverman raised eyebrows recently among some at NBC when he brought Seacrest into a marketing meeting. (Seacrest, you might recall, has a multimillion dollar deal at E!, not to mention a few other bits of business that have nothing to do with NBC.) We asked Silverman about Seacrest’s visit last week, and he said it was just for fun. But he said Seacrest is one of his best friends and mentioned the planned vacation.

We’re not sure whether Silverman wants to indulge too many caprices like having Seacrest mingle with his marketing staff. But we must say, Silverman has been at least outwardly good-natured dealing with questions that would make many executives cranky. Given the spotlight on him, we hope that doesn’t change. (link)

July 20, 2007

Steven Spielberg

Steve Almighty: Steven Spielberg is deep into politics, local and global, and that’s not even counting his endorsement of Hillary Clinton.

On Thursday, a Business Week article stirred the pot by speculating that Spielberg might leave Paramount when his contract is up late next year. The best detail was that Paramount CEO Bray Grey, in his effort to cement a bond with Spielberg, had paid a visit to his house in the Hamptons earlier this month, carrying a $1 million check for Spielberg’s Shoah Foundation.

The check was probably presented as a thank-you for the brilliant opening of Transformers that weekend. As part of the original DreamWorks deal, Spielberg apparently waived his fee and profit participation on Transformers. So, a $1 million check to his foundation is really just a drop in what would otherwise have been a very full bucket. And, everyone who’s been watching knows that DreamWorks has been ablaze with hits from Blades of Glory to Disturbia to the big robot movie, while Paramount has been pretty much sucking wind. And the DreamWorks team has long made it clear that they expect credit for their achievements. Grey, with little to brag about other than having acquired DreamWorks in the first place, seems to have decided that it’s best to hunker down and pucker up.

Whether or not showing up in the Hamptons with a big check will do the trick isn’t clear. The original DreamWorks triumvirate still has the issue of DreamWorks Animation to contend with. The prevailing view was that when David Geffen sold the DreamWorks live-action company to Viacom, the agenda was to bump off Viacom chief executive Tom Freston and install DreamWorks Animation chief Jeffrey Katzenberg in his job. Freston’s gone, but getting to the next step hasn’t been so simple. The Shrek franchise is getting old, and the next big thing from DreamWorks Animations—Jerry Seinfeld’s Bee Movie, set for release in November—may not bee all that.

So, perhaps it’s time to step up the pressure on Viacom chief Sumner Redstone. Certainly the Business Week article was seen among many as a ploy designed to do just that. Redstone is busy fending off his daughter, and the last thing he needs is a problem with Spielberg—the man who’s keeping his studio flush. Surely he knows that pretty much everyone in town would be only too happy to woo Spielberg away, starting with Universal, which (thanks to GE) let him get away in the first place. If that deal were to happen, Spielberg wouldn’t even have to move, since he’s still squatting on the Universal lot.

On a far more somber and urgent note, Spielberg must also figure out what to do about Darfur. That may not seem to make sense at a glance but it does in light of his role as an artistic adviser to the Chinese for the ‘08 Olympics. The Chinese have clout in Khartoum, and Spielberg, as fate would have it, has influence in China. Bizarrely, Spielberg may be one of the most powerful people in the world when it comes to pressuring the Chinese to lean on the Sudanese government.

Yes, George Clooney and Don Cheadle and their associates have done their part to push China to act. But Spielberg is in a unique position to embarrass the Chinese if he were to withdraw from his role.

In early April, Spielberg wrote to Chinese President Hu Jintao asking for action. Whether the Chinese have responded at all is still unknown, but sources say Spielberg will shortly have more to say on the subject.

Spielberg may have little imagined when he took the Olympics gig that he would become enmeshed in global politics this way. But in March, when activist Mia Farrow wrote in a Wall Street Journal op-ed that Spielberg could go down as “the Leni Riefenstahl of the Beijing games,” that had to sting. (He sent his letter to the Chinese president shortly thereafter.)

Certainly Spielberg is awkwardly situated, with some activists urging him to pull out and others arguing that he should stay in as long as he has any chance to influence the Chinese. Uneasy lies the head. (link)

July 16, 2007

Ben Silverman

Follow the money: Ben Silverman’s debut today before the Television Critics Association at the Beverly Hilton is the big story in televisionland. Hollywood can’t wait to see how this hyperkinetic young man comports himself before the ravening horde.

One of the issues clinging to Silverman in his new role as co-chairman of NBC Universal’s network and television studio is his continued ownership of his production company, Reveille. Silverman is supposed to be in a sort of blind-trust relationship with the company and is not supposed to profit from decisions he makes as an NBC exec. The idea is that while he keeps the money from existing Reveille shows, he gets nothing from shows that Reveille places on NBC’s schedule in the future.

The issue is: When does the future begin? Clearly Silverman is keeping his interest in shows that Reveille already has on NBC: The Office and The Biggest Loser. But we have come across several more Reveille projects that may yet find their way onto the network’s prime-time schedule with Silverman in a position to profit because they were in the works before he started his new job. Interestingly, two had appeared to be dead before Silverman got the gig but have miraculously come back to life.

You might think that to avoid a conflict of interest, Silverman would not be permitted to play a role in deciding the fate of projects that would line his pockets. But you would think wrong. Silverman and his co-chairman, Marc Graboff, have confirmed to us that Silverman will participate in deliberations on those shows, though he won’t cast the deciding vote. They say NBC Universal has procedures to ensure that what might look bad is really not bad. Or, as Graboff put it, even if the network cannot avoid the appearance of a conflict of interest, “it avoids the actuality of a conflict.”

An extraordinary committee will review decisions that involve shows in which Silverman has an interest. It includes NBC Universal chief executive Jeff Zucker, the company’s general counsel, and the chief financial officer. Silverman “cannot be the decision-maker,” Graboff said. “He has a voice at the table, of course. We’re very comfortable with it.” But this awkward arrangement certainly raises questions about the degree of influence that Silverman can or should or will have over big pieces of NBC’s prime-time schedule.

Silverman could have a stake in quite of chunk of prime-time real estate. Let’s start with comedy. Before he was ousted, NBC entertainment president Kevin Reilly had ordered three sitcom pilots from Reveille as hopefuls for the fall schedule. NBC wasn’t very happy with any of them. But Kath and Kim, based on an Australian show about a working-class mother and daughter, was a near miss and would have been rejiggered as a possible midseason entry even under the old regime. Since it was in the works before he arrived, Silverman keeps his interest in the show if it gets onto the NBC schedule.

Reilly had shelved another Reveille show called Zip, about a con man raising his kids in Beverly Hills. Having shot a pilot, NBC concluded that it was miscast and the script didn’t gel. Now, the show is getting a second chance. “A specific piece of talent approached us who had been unavailable [and] that talent made it very interesting,” Silverman said. We can’t help noting that one of Zip’s writer-producers is more than friends with Teri Weinberg, a former Reveille executive who now holds a top job at NBC. Silverman has repeatedly said that Norman Lear was one of his role models, but when he talked about All in the Family, we didn’t know this was what he meant.

We’re also told that Silverman is intent on creating a spin-off of The Office. And yes, he would have an interest in that.

In the reality genre, Silverman appears to be moving ahead with a new version of the old syndicated show, American Gladiators (which apparently rolls along nicely in repeats on ESPN Classic). In the Reilly era, says a well-placed source, the American Gladiators idea was shot down by NBC Universal chief executive Jeff Zucker—who might have recoiled from putting a show of that particular caliber on NBC’s prime-time schedule. Now it’s been resuscitated, and Reveille—that is, Silverman—owns a piece of that one, too.

Asked whether Zucker had rejected the project earlier, Silverman replied, “The offer was never rescinded. If Jeff did say no, it was never communicated.” So Silverman keeps his financial interest in it. As for the probability that the show will get on the schedule, Silverman said, “Nothing’s done. [But] you need to look at the context of NBC. What kind of reality shows would you put on after football?”

Silverman has another Reveille reality show about blended families that is also in consideration for a midseason appearance. And even those Reveille shows conceived in the aftermath of Silverman’s departure may enjoy an advantage at NBC. We’re told that reality producers are being advised to steer their projects through Reveille to improve their chances of getting a green light at NBC. Silverman says that makes sense because Reveille has an existing deal at the network and all companies so situated are favored. But when it comes to the reality genre, Reveille is the dominant supplier to NBC, so producers wouldn’t have many other avenues to approach the network.

Since Silverman won’t participate in the gain from those shows, he sees no problem. If in fact he returns to Reveille someday, he says, “I’d basically start again but I’d start again with the [same] name.”

If that seems credible—if Reveille will just be a name as opposed to a vibrant production brand with extremely valuable assets—then why go though all this trouble? Even before it became clear that Silverman might have a profit interest in a bigger chunk of NBC’s schedule than first appeared to be the case, some questioned the idea that Silverman could really be arms-length from his old production company—where he admittedly hopes to return some day. And they also wondered if he would refrain from deciding what competes against Reveille’s Ugly Betty on ABC.

What presumably happened here is that word of Zucker’s negotiation with Silverman leaked before the parties could agree on how Silverman would be compensated for terminating his relationship with Reveille. And, presumably, Silverman wanted more money to renounce his interest in the company than NBC Universal was willing or even able to pay.

We asked Silverman if he wouldn’t get tired of constant scrutiny over the possible conflicts created by his continued ownership of Reveille. Without hesitation, he replied, “Results is what people scrutinize.” (link)