Fault Lines

The first robins have already hopped into view here in Breckenridge, CO ... which is not a good sign for those of us who worry about things like global warning. For the moment, however, global warming seems a bit less dire (or at least less immediate) than the news sprouting from my computer, TV and various newspaper subscriptions.

The world is not a pretty place these days and those of us in multiplatform land have any number of potentially macro business-changing events to keep our eyes on. I won't alarm you with my full list; you probably have lists of your own. But one relatively benign item caught my attention this Saturday morning (in the winters I ski on Fridays, work on Saturdays) that serves to remind of the major changes likely coming to the media landscape.

This morning's news brought word that Sumner Redstone got grace period he needed for repayment of his $1.46 billion in debt. As you will recall, in October of last year Mr. Redstone was forced to sell a $233 million chunk of non-voting stock in his Viacom and CBS businesses in order to meet calls on his debt. Since then the octogenarian oligarch has been in heated negotiations with lenders in order to avoid the sale of more stock. On Friday, he got his reprieve ... a two year extension on existing debt and (most importantly) the right to decide which assets he'll sell in order to meet that debt. Redstone has made quite clear that these assets will consist of National Amusements Inc, the privately held theater chain started by his father and used by the son as the holding company for Viacom/CBS stock.

The question now is: Will National Amusements' assets be enough to meet the debt? According to some sources, National Amusements' annual revenues are in the $1 billion range which ... combined with soaring box office receipts (Jan. 09 was the first $1 billion month in history) ... could be enough to put Mr. Redstone in the money. It could also be just enough to allow him to dig a deeper hole.

Whichever the outcome, Redstone's iron fist remains considerably weakened; his legendary fights with his children (in this case, daughter Shari, who has run National Amusements) will be undoubtedly be heated once again to boiling point; and the two-year supply of bandaids for Redstone's empire are likely to signal more, not less, upheaval as the old warrior scrambles for money and would-be heirs, successors and just plain vultures keep their teeth close to his heels.