Huffpost Media

Sumner Redstone May Sell CBS, Possibly No Longer Billionaire

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Sumner Redstone, the controlling shareholder of CBS and Viacom, saw both those stocks hit five-year lows last week, further exacerbating what has already been an incredibly rough autumn. And while he has previously maintained that he will not sell CBS, the New York Times' Tim Arango reports that he is open to the sale — and is more seriously considering selling off his family's 1,500-screen movie theater chain to restructure his $1.6 billion in debt:

In an effort to stave off the dismantling of his media empire, Sumner M. Redstone, the controlling shareholder of Viacom and CBS, recently proposed to sell his family's 1,500-screen theater chain in an effort to restructure his large debt load.

The proposal was made in a plan submitted to his bankers, according to two people briefed on the negotiations who spoke on condition they not be identified. But the proposed sale may not be enough to placate bankers, not least because no one can seem to agree on what the movie theaters are worth.

Here is what just about everyone, including those in Mr. Redstone's inner circle, agrees on: if it gets bad enough, Mr. Redstone has indicated he would be willing to part with CBS, but not Viacom, according to three people briefed on the talks who, like the others involved, spoke on condition of anonymity.

On the personal level, Redstone's debt and the tanking stock price calls into question his net worth, which may now be below $1 biillion:

In the swirl of these discussions is the question of Mr. Redstone's personal wealth. Just three months ago, Mr. Redstone was listed by Forbes magazine as the 66th-richest American with a net worth of $5.1 billion.

But now much of his wealth -- at least that which is tied to the stock prices of Viacom and CBS -- has evaporated, and it is unclear if Mr. Redstone remains a billionaire because it is unclear how much money he has outside of National Amusements, other than personal holdings in Viacom and CBS that together are worth around $10 million.

Half the debt, or $800 million, comes due on Dec. 19. Mr. Redstone recently said publicly that the talks with banks had been going smoothly and that the value of the assets held by National Amusements "well exceeds its debt."

The underlying value of those assets may be much greater than the debt, but the amount they could fetch on the market is unclear. Based on Monday's closing prices of Viacom and CBS, the value of National Amusements' stake in the two companies is about $1.4 billion.

Previously in Redstone's Rough Fall:
Redstone Assures Investors, Can Cover $1.6B Debt [November 14, 2008]
Sumner Redstone Struggling To Get Agreement On Refinancing [October 28, 2008]
Sumner Redstone May Have To Sell More Viacom, CBS [October 23, 2008]
Sumner Redstone Divorces Wife Paula Fortunato [October 21, 2008]
Sumner vs. Shari: Redstone Family Feud Continues Over Share Sell-Off [October 15, 2008]
Sumner Redstone's Credit Crisis Hits CBS And Viacom [October 11, 2008]