Redstone’s Rap on Mel: He Never Came to Dinner!

Sumner Redstone, the 81-year-old chairman, chief executive and largest shareholder of Viacom, was insistent that he did not ask Mel Karmazin to leave his post as Viacom’s president and chief operating officer, and praised Mr. Karmazin’s “enormous contributions” to the company. But one might be forgiven for wondering if he was less than sincere.

” Nobody asked Mel to resign,” Mr. Redstone insisted on conference calls with analysts and reporters on Tuesday, June 1. “I did not ask Mel to resign. Nor did any executive of Viacom. I first heard this from another executive, who told me that Mel had told him that he was frustrated, and he was going to resign. I want to impress upon you that it was his decision, and his decision alone.”

Mr. Redstone proceeded to lavish praise, rather pointedly, on Tom Freston and Leslie Moonves, the chief executives of MTV Networks and CBS, respectively, who will be sharing Mr. Karmazin’s vacated job titles.

“You may not think it’s important, but Les and Tom are friends,” said Mr. Redstone. “And I am their friend. And frequently, we have been out together socially-and you may think it’s unimportant, but I think it makes our job easier. These guys like each other. I have a great admiration for each of them personally and professionally. I know that they have the same regard for each other.”

“We’ve been friends for a long time,” chimed in Mr. Moonves.

“I have great admiration for Les,” added Mr. Freston.

“Let me just add this,” interjected Mr. Redstone. “I’ve seen it, I’ve been with both of these guys: These guys are really friends. We’re all out together socially, have dinner together. You may think it’s not important-it’s very important. They’re friends, and they respect each other …. It should be obvious that Tom and Les are the leading candidates for my job.”

The presumption was that Mr. Karmazin, who abruptly announced his resignation Tuesday morning-apparently without even having had a conversation with Mr. Redstone-was not friendly, did not go out with the others socially or have dinner with them.

“Crazy as it sounds, Mel is not a good corporate political animal,” said one analyst. “I think Sumner needed to feel like he was important in how the company was run. Mel was not willing to make Sumner feel like he was integral in how the company was run, by keeping him in the loop. Sumner just wanted someone who would go out to dinner with him.”

This might explain why Mr. Redstone recently drew his 50-year-old daughter, Shari Redstone, closer into the fold. After briefly working as an attorney, Ms. Redstone took time off from the corporate world to raise her three children. She eventually returned to work in 1993, helming one of her father’s companies, the Boston-based movie-theater chain National Amusements. More recently, she purchased an apartment on Manhattan’s Upper East Side and announced that she would be spending a chunk of her time at Viacom’s corporate headquarters, prompting fears and suspicions that Mr. Redstone had plans to install her as chief executive of the company.

“As a theater company, they fared what was a horrific business storm very well,” said one analyst. “All these theater chains were going on this expansion, and National did not do that, and they fared that difficult period a lot better than some of their competitors. Her track record there seems quite good. Whether it’s translatable to Viacom is less clear-she won the gene pool, but she was inexperienced. It’s right to always be skeptical of nepotism. Sometimes it works; look at Comcast. But sometimes it goes horribly wrong.”

Ms. Redstone was known for not getting along terribly well with Mr. Karmazin, who several years ago requested that she and her brother, Brent, stop attending certain of the company’s board meetings.

During today’s announcement, Mr. Redstone vehemently denied that he had any grand plans for Ms. Redstone. “I am so tired of hearing my daughter mentioned, I might stop loving her,” he said. “My daughter will not, nor does she desire to, play any executive operational role at Viacom. Is that clear? I’m gonna say it one more time: She will not. Now, I do want her to learn everything, know everything about Viacom, because some day in the future-I hope a very distant future-that may become important.”

His hinting left some analysts with the impression that she was being groomed for the chairmanship rather than the C.E.O.’s role at Viacom.

“We’re talking about Sumner Redstone, and it’s too early in the process to be surprised by anything,” said Kevin Calabrese, an analyst with Argus Research.

For his part, Mr. Karmazin’s four years as head of operations for the media conglomerate that owns CBS, MTV, Showtime, Paramount Pictures and Simon & Schuster were less than smooth. There were constant rumors that he and his boss, Mr. Redstone, were at each other’s throats. The two clashed over the company’s growth strategy, and critics fingered Mr. Karmazin for the company’s underwhelming stock performance. Then there was the stigma of being known as “the radio guy” in a movie- and TV-obsessed world: Mr. Karmazin built the radio company Infinity Broadcasting from scratch, which, after being acquired by Westinghouse and CBS, was merged into Viacom in 2000. He was forever after associated with radio, and the fact that it lagged behind Viacom’s other businesses.

“The company had really been pilloried in the marketplace. Radio has improved, but it wasn’t as quick as Mel had been promising,” said Mr. Calabrese. “I think it kind of wore on [Mel]. This is the last piece of a long and illustrious career, and he didn’t need the aggravation.”

“I guess a lot of people were expecting that this could happen,” said Peter Mirsky, a media analyst with Oppenheimer, “but the suddenness of it was unexpected.”

“I’d heard rumblings, so I was not all that surprised by it,” said Don Hewitt, the executive producer of 60 Minutes . “Obviously, this didn’t happen overnight.”

Mr. Redstone’s comments about friendly dinners and mutual respect suggest that Mr. Karmazin was actually “frustrated” into quitting the company, not because of poor performance or management skills, but because of a lack of political savvy and an inability to stroke those who needed stroking-highly valuable talents, as anyone who has observed the machinations at Walt Disney can attest. The irascible Mr. Redstone, of advancing age and careening toward retirement, would appear to prefer folks who are friendly with one another, and friendly to him. Like, for instance, a daughter.

Redstone’s Rap on Mel: He Never Came to Dinner!