Superrich Squabble As Their Money BurnsOld Viacom overseer Sumner Redstone announced last week that he had to sell hundreds of millions of dollars worth of his company's stock, after the Wall Street crash left him short on cash to back a huge loan. Then this week, out of the blue, his daughter Shari Redstone, who runs the movie theater portion of National Amusements (the other parts being Viacom and CBS), sent out a statement to the media saying, basically, "HEY, THIS ISN'T MY FAULT!" What's the deal with this madness? Shari wants to run the whole company whenever her dad keels over, but her dad's not so sure that's a good idea, so they kind of hate each other. Sumner never even said that this whole stock sale was the fault of the movie side of the business; Shari went public anyhow:
"The implication that this stock sale was required by the operation and expansion of the company's theater circuit is not accurate," Ms. Redstone's movie theater unit said in an emailed statement Tuesday. "National Amusement's recent sale of a portion of its Viacom and CBS nonvoting stock was the direct result of last week's historic financial crisis, which included the precipitous drop in value of CBS and Viacom stock."
So she pins the blame on her dad directly, in a very public fashion. Why? This all comes down to human nature. The Redstones—and countless other families in the business world—all thought their future was secure. Then, suddenly, the economy tanks, wiping out a huge portion of their company's value. And since it's always much harder to give up money that you thought you had than to never have that money in the first place, these families descend into squabbling and finger-pointing. For some reason, Sumner Redstone had a $1.6 billion loan out, backed up by Viacom and CBS stock. (Why? Nobody really knows. Greed is always a good answer). The market caved, the value of what he had backing that loan went to half of what it was earlier, and he had to put up cash to make good. That's what he gets for taking out a loan like that. No great tragedy. But, in some small way, it's tragic to see these interfamily squabbles, even among the rich. Greedy bastards. At least play nice. [pic via NYT]