Viacom Shuffle: Redstone's Search for Youth

In ousting Tom Freston, Viacom mogul Sumner Redstone may have been driven by more than just lost faith in the longtime exec who successfully expanded cable's MTV into a global juggernaut. At 83, the multibillionaire Redstone is a self-avowed "stud" whose wife No. 2 is four decades younger. He brags that his exercise regimen and health-nut diet will buy him at least a couple more decades here on Earth. Yet it was the hereafter that Redstone had in mind when he installed Philippe Dauman, 52, to succeed Freston, 60, as CEO. According to associates who wouldn't dare talk on the record about what amounts to their boss's estate planning, Redstone sees Dauman as his future surrogate. The mogul admits as much to NEWSWEEK. "Obviously, I want to put in place the most competent and the most committed person in the world, and that's Philippe," Redstone says. "I hope Philippe is there [as Viacom CEO] when I say goodbye."

Dauman and Redstone's history highlights their special bond. As a junior corporate lawyer in the late 1980s, Dauman took Redstone seriously when he was weighing a hostile takeover of Viacom. "He believed in me, and I believed in him," Redstone recalls. Dauman served as one of Redstone's two chief deputies at Viacom until 2000, when he left after helping the mogul acquire CBS. "My stock price tripled" during the period, Redstone says. Dauman also is a director of National Amusements, the theater chain owned by Redstone that also holds his controlling stake in Viacom. And as one of Redstone's personal attorneys, Dauman "does play a role in my estate," the mogul says.

Not that Redstone's grudging sense of mortality was the most urgent factor in the shuffle. As Redstone bluntly declared, there were more immediate considerations for dumping such a popular exec as Freston. Viacom's lagging stock price, which is off by double digits this year, was driving the stock-obsessed Redstone crazy. He also blamed Freston for being too slow in expanding Viacom's presence on the Internet. Murdoch envy may have played a role as well. With his acquisition of Internet teen hangout MySpace, the septuagenarian media mogul Rupert Murdoch is gaining a lock on youth--something these aging tycoons crave.

Dauman tells NEWSWEEK that he'll make Viacom more aggressive. "I don't see any large acquisitions that make sense right now," he says. Instead, he wants Viacom, which already has a strong base of youthful consumers and audiences, to attract Internet entrepreneurs willing to work together on innovations. It's all about "how we interact more effectively as an entrepreneurial company to connect with the new ideas," Dauman says. That's the kind of brash young talk that the old man has been wanting to hear.