CBS CBS Corp

By Joe Flint 

Sumner Redstone is stepping down as chairman of CBS Corp. and will be succeeded by President and Chief Executive Leslie Moonves, the first major change in the aging mogul's media empire since speculation over his declining health began to mount in recent months.

Mr. Redstone, 92 years old, who has served as executive chairman of CBS, was named chairman emeritus, the company said on Wednesday. He has a nearly 80% voting stake in broadcaster CBS and cable giant Viacom Inc.

Mr. Moonves was nominated to succeed Mr. Redstone by the mogul's daughter, Shari Redstone, who is vice chair of CBS. She said she declined an offer to become nonexecutive chair of CBS.

The succession process at Viacom, where Mr. Redstone is also executive chairman, is far less clear.

In a statement, Viacom, owner of cable networks like MTV and Nickelodeon and the Paramount film studio, said it is holding a board meeting on Thursday but didn't specify whether it would be making any executive changes. A spokesman didn't respond to a request for comment.

Stepping back from the stage, at least at CBS, marks the end of an era for Mr. Redstone, who assembled a sprawling set of media assets through gutsy deal-making and opportunism.

Rarely seen in public nowadays, Mr. Redstone is currently embroiled in a legal battle over management of his health care with Manuela Herzer, a former companion who has challenged his mental capacity. Last month, a California judge ordered that Mr. Redstone be examined by a geriatric psychiatrist who is working on behalf of Ms. Herzer.

The change inside Mr. Redstone's empire comes as his media companies are entering a tough business environment where pay-TV cord-cutting is squeezing profits and investors are scared of a future that could be dominated by streaming-media outfits like Netflix Inc.

Viacom, whose major networks have suffered ratings declines, has been a source of particular anxiety on Wall Street, with shares down 30% over the past year. CBS, which has National Football League broadcast rights and several hit shows, is widely viewed on Wall Street as the stronger performer. Its shares are down 14% over the past year.

Both companies--or pieces of them--could be acquisition targets when Mr. Redstone dies or is deemed incapacitated. At that time, his interests will pass to his grandchildren and their descendants, and a seven-person trust will manage the holdings by majority vote.

In a statement, Ms. Redstone said Mr. Moonves has "clearly established himself as a creative and effective leader who understands both the challenges and the opportunities that are shaping today's media landscape."

In a separate statement, she said she doesn't believe her father's successor at Viacom should be a "trustee of my father's trust or otherwise intertwined in Redstone family matters, but rather a leader with an independent voice."

Viacom Chief Executive Philippe Dauman is a member of the trust that will oversee Mr. Redstone's holdings in CBS and Viacom once he dies or is incapacitated. Ms. Redstone is also on the trust.

The relationship between Ms. Redstone and Mr. Dauman has been tense for the past few years. She has expressed dissatisfaction about the direction of Viacom. Ms. Redstone has a much friendlier relationship with Mr. Moonves.

Write to Joe Flint at joe.flint@wsj.com

(END) Dow Jones Newswires

February 03, 2016 18:15 ET (23:15 GMT)

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