The 50 Wealthiest Angelenos: Sumner Redstone #14

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#14 – Sumner Redstone

Net Worth: $1.8 billion -74%

Last Year: $7 billion

Age: 85

Residence: Beverly Hills

Source of Wealth: Broadcasting, movie theaters



The Money:

Redstone hit particularly hard by financial crisis. Controlling stakes in CBS Corp. and Viacom Inc. have taken a pounding. Family movie theater business National Amusements fared dismally, too. Liquidated shares in Midway Games for mere $100,000, fraction of $210 million worth last year. Despite terrible performance, Redstone collected $12 million in compensation from CBS, including $3.9 million bonus.


Buzz:

Financial crisis pulled back covers on Redstone? finances and it wasn? pretty. At height of crisis, declining values of Viacom and CBS stock put up as collateral for $1.6 billion loan to National Amusements violated loan covenants, forcing Redstone to sell 10 million Viacom and CBS shares to come up with cash. Fiasco revealed octogenarian was more leveraged than believed. In late February, National Amusements announced deal to postpone payments till 2010. Big loan was supposed to fund expansion of family cinema chain, but analysts speculated it may have gone to settle Redstone? pricey 2002 divorce. In October 2008, divorced second wife, former school teacher nearly 40 years younger; this time prenuptial agreement limited losses to $5 million. Still faces an ongoing lawsuit from creditors angry over his hasty disposal of controlling stake in Midway Games ?and $70 million in associated debt ?at fire-sale price. In CBS boardroom, now wears title of ?xecutive chairman and founder,?a brush-off to William Paley, who founded broadcaster more than 70 years before Redstone bought it.

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