Sumner Redstone: is he a pawn or king in legal battle over media empire?

Behind the walls of his Beverly Hills compound, largely silent and in declining health, Sumner Redstone, 93-year-old controller of one of the biggest media empires on Earth, is at war with his lieutenants.

Depending on whose story you believe, the executive, long known for his ruthlessness, is either the pawn or the king in the battle for control of his firms.

Redstone and his closely held family trust are controlling owners of CBS Corporation and Viacom, home to Paramount Pictures, Comedy Central, MTV and other major media assets. It’s an empire he planned to rule in perpetuity.

The media mogul has been fond of telling people he will live forever. “The people who fear dying are people who are going to die,” he told Larry King, according to Vanity Fair. “I’m not going to die.”

But those around him seem less convinced and are jockeying to make sure that when his time comes, they are in control of the empire.

Although Redstone has not spoken to the press in years – a representative who declined to set up an interview with the Guardian last year cited “a speech impairment that makes an interview impossible” – more has been revealed more about him and his family than ever before through a series of ugly legal battles, with a cast of characters ranging from spurned lovers to favored proteges.

Those conflicts have displayed the billionaire’s personal life in lurid detail: red meat and “daily sexual activity” remain important to him, according to a court filing late last year, as do his professional battles.

Redstone’s personal fortune is $4.5bn according to Forbes, but the wealth he controls through his holdings is vaster still. Through his company National Amusements, Redstone owns the majority of voting shares in Viacom and CBS in addition to some 950 movie theaters and a stake in MovieTickets.com. The value of the TV businesses alone tops $40bn.

The main asset in question at the moment is Viacom, the cable TV conglomerate led by Philippe Dauman, Redstone’s former protege. As of May, Redstone wants Dauman and four others off the board of Viacom; Dauman has sued to counter the reorganization, which would almost certainly result in his dismissal, and Viacom is funding the lawsuit.

Viacom stakeholders are irate: “We hate the use of shareholder funds for this,” Jason Ader, head of investment firm SpringOwl Asset Management, told the Guardian. Ader has petitioned for Dauman’s removal and positioned himself alongside Redstone. “We both want a higher stock price,” he said. “Dauman and the board have destroyed shareholder value over the last several years. This company needs new leadership, improved governance and a plan to unlock its value.”

A Viacom spokesperson said the suit was “certainly in the interests of all of Viacom’s stockholders”.

Dauman’s contention is that Redstone does not have the capacity to make decisions and that he is being manipulated by his daughter, Shari Redstone. The two sides will meet again in a Massachusetts court on 30 June.

In the meantime Viacom’s share price has suffered – it has fallen nearly 27% over the last year. It’s a mighty blow for Redstone, who has been famously obsessed with even the smallest movements in his companies’ stocks.

Redstone’s mental faculties will be central to the next court hearing. To some at Viacom the attempt to oust Dauman does look strange. The two have been close business allies and – seemingly – friends since the 1980s. But it’s hard to say what constitutes erratic behavior for a figure as mercurial as Redstone.

Dauman’s predecessor as head of Viacom, the highly regarded Tom Freston, was excused from that position without ceremony after he failed to outbid Rupert Murdoch’s News Corp for its $580m acquisition of MySpace – an asset News Corp sold for $35m a scant six years later.

His anger over the abortive MySpace bid was a function of Redstone’s competition with Murdoch: “I have always wanted to be number one in my business,” Redstone is quoted as saying in Julia Angwin’s book Stealing MySpace, “and to be number one, you have to be ahead of Rupert Murdoch.”

But Redstone’s empire has slipped far behind Murdoch’s 21st Century Fox. And some analysts see Viacom as having been allowed to go to seed under Dauman. Sanford Bernstein analyst Todd Juenger itemized every stock buyback the company announced in the 10 years Dauman has been CEO – the total came to about $14.5bn, which Juenger said should have been spent on programming and talent. (In an interview with Fortune this week, Dauman defended Viacom’s expenditures.)

Now that the share price has begun to flag, buybacks or no buybacks, Redstone has brought down the hammer on Dauman.

Or has he? With George Abrams, another of the five board members Redstone wants out, Dauman has filed an injunction requesting a stay of their removal from the board, saying that Redstone is being manipulated by Shari Redstone. Dauman’s lawyers have called his ouster “a brazen and demonstrably invalid attempt by Ms Redstone to gain control of Viacom and its management in disregard of Sumner Redstone’s wishes.”

The accusation is certainly a daring one: only weeks earlier, Redstone’s former girlfriend Manuela Herzer was accusing Dauman of manipulating Redstone, who vouched for his mentor’s competence. Herzer, also fighting for a bigger slice of Redstone’s fortune, argued that the media mogul was incapable of making his own decisions. Redstone mustered enough strength to tell the court that Herzer was “a fucking bitch.” The suit was dismissed.

Now Herzer’s lawyers have joined the chorus against Shari in an apparent effort to get their client back into Redstone’s inner circle. A memorable filing this week cites Shakespeare’s King Lear: “Shari is the conniving Goneril and Regan combined, Manuela Herzer is the wronged Cordelia who truly loved and cared about Lear, and Redstone is Lear, blind to his daughter’s lies about Manuela,” wrote Herzer’s attorney Pierce O’Donnell of Greenberg Glusker.

Shari Redstone may not have Shakespeare on her side but she is family, as neither Dauman nor Herzer are. She also has another quality both likely envy: she is a member of Redstone’s irrevocable SMR Trust, the body that governs National Amusements and the legal vehicle that will decide the fate of the empire. That trust included Dauman until May, when the senior Redstone had both him and Abrams removed. Dauman called the move “illegal” at the time and challenged the removal in court; that’s when Redstone doubled down by kicking Dauman off the Viacom board.

Dauman’s right to a place at the multibillion-dollar Redstone family table has clouded the future of the Redstone empire, but Rich Greenfield, media analyst at BTIG, said those clouds are clearing now that Shari Redstone is in the game. “If Sumner does not have capacity, then the SMR trust kicks in and Shari has four votes out of the seven,” Greenfield said. “Eventually, yes, this will stick, I believe. The only thing I don’t know is how long it will take.”