In a brazen move aimed at reasserting control over his flagging media empire, Sumner Redstone summoned his good friend and one-time heir apparent Tom Freston to his Beverly Hills mansion on Labor Day evening and unceremoniously sacked him.
Freston was stunned when Redstone told him he was history, associates of the axed exec said.
“It was a very emotional meeting,” said one source close to the matter.
And MTV insiders in New York – key Freston allies at the media giant – didn’t learn about the firing until early morning on the East Coast.
Redstone, who is 83 and insisted yesterday that he would be running Viacom for another 20 to 30 years, said he fired Freston, a well-liked media exec who founded MTV, because of frustration over the company’s stock price and a lack of progress in expanding Viacom’s brands – MTV, VH1 and Nickelodeon – to the Internet.
Viacom’s board of directors, chaired by Redstone, met by teleconference in the late afternoon on Monday, Los Angeles time, and voted to terminate Freston – a bold move that comes just weeks after Redstone very publicly cut Hollywood star Tom Cruise from the company’s ranks without telling his CEO that he was planning to do it.
“I’m very surprised,” said Jeff Bewkes, chief operating officer at Time Warner and a friend of Freston’s. “Tom has done an excellent job for 25 years. He’s built excellent brands well beyond MTV, on a global basis.”
The firing comes just nine months after Redstone split his media empire into two public companies – CBS and Viacom – in a bid to goose the value of each.
Since then, CBS, run by Les Moonves, has far outperformed Viacom, despite Viacom being billed as the faster-growing company. CBS’ stock is up around 12 percent, while Viacom has declined some 15 percent.
“The board felt not enough was being done,” Redstone said yesterday. “That we were not moving ahead as entrepreneurially and as aggressively as we should; that the communication with Wall Street had been deficient; that the stock price reflected that and suggested that maybe – maybe – Wall Street lacked confidence in that management.”
In a move that exacerbated tensions with Freston, two weeks ago Redstone very publicly ended a long-running deal between Viacom’s Paramount movie studio and Cruise.
Redstone’s public bashing of Cruise was seen by many as undermining Freston’s leadership.
“I think Sumner wanted to show that he was re-engaged,” said another source close to Viacom.
The board installed Philippe Dauman, Redstone’s longtime consigliere and a Viacom board member, to take over as CEO and Thomas Dooley, another board member and a business partner of Dauman’s as chief adminstrative officer.
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