TOM Dooley has a unique claim to fame: He’s been associated with media giant Viacom even longer than Sumner Redstone.
He may also be the media world’s own “deep throat.”
Redstone’s shocking firing of Viacom CEO Tom Freston – which brought Dooley back to the executive ranks at the company – last week had some in the industry recalling one of the media world’s enduring mysteries: How did Dooley emerge from the 1980s hostile takeover battle at Viacom with such a close relationship to Redstone?
Some bankers and others believe Dooley, as an insider at Viacom during the takeover, became a “deep throat” for Redstone, leaking the barbarian at the gate sensitive inside information.
“The lore is that Dooley was helping to make sure Sumner got what he needed,” said one prominent media investment banker.
Viacom declined comment, but a source close to Dooley said he never met Redstone until after the takeover battle. Once Sumner had control of Viacom, Dooley was assigned to walk Redstone through the business. In the mid-1980s, Dooley was a twentysomething assistant treasurer in Viacom – “a mid-level finance guy” is how one source put it.
At the time, Redstone, through his theater chain National Amusements, was buying up Viacom stock in a bid to take over the company. What resulted was a protracted battle between Redstone and a management group led by then-CEO Terrence Elkes, who was trying to take the company private in a leveraged buyout.
In an interview with Fortune, Redstone once called it a “really vicious battle” with Elkes.
Once Redstone emerged victorious, in 1987, Dooley was suddenly a part of Redstone’s inner circle, a spot that made him a fortune. When Dooley was cast aside in 2000 following the takeover of CBS – a deal that resulted in Mel Karmazin running Viacom – he was given an exit package valued at close to $150 million.
Dooley, a Viacom director, was ushered back in to the company last week to become the No. 2 exec in the wake of Freston’s firing. Working under new CEO Philippe Dauman, Dooley will be chief adminstrative officer.
Duped?
Some private-equity investors say they were duped by Bertelsmann during the German media outfit’s recent auction of its music-publishing unit.
In fact, some are so angry because they felt Bertelsmann lied to them during the process that they are making noise about funding a legal fight – perhaps by backing a potential lawsuit filed by Impala, the influential European association of independent record companies, according to a source.
Last week Bertelsmann announced it was selling BMG’s music-publishing arm to Universal Music for $2.1 billion. The deal, while making Universal the world’s largest music publisher, raises the risk that the deal won’t pass the muster of regulators.
Some of the private-equity investors that were bidding say that Bertelsmann told them throughout the process that they preferred to sell to a private investor to avoid regulatory risk.
“They lied to everybody,” fumed one suitor.
Impala, meanwhile, has publicly said it would try to break up a sale of BMG to another major record company. And some of the spurned private-equity shops, angry over the immense cost of participating in the auction, say they would be happy to bankroll such an effort.
Extra protectio n
The housing bubble may be bursting, but some chief executives are being protected from the downturn.
The latest CEO given so- called loss protection – a company guarantee to make up for any loss in the sale of an exec’s home – is Donald Knauss, the former Coke exec who now runs Clorox, the Web site Footnoted.org pointed out.
Knauss will be provided with $50,000 to protect the price of his home in Atlanta. “The idea of protecting top executives of publicly traded companies – the very people you’d expect to epitomize the power of free markets – from market forces just because those markets happen to be declining seems more than a bit ironic,” Michelle Leder wrote on Footnoted.org.