The change will take effect in February and was disclosed days after the Redstone family changed course on a recommendation that CBS and Viacom combine into one company. Viacom controls a number of major brands, including MTV, Paramount Pictures and Nickelodeon; CBS is one of the country's largest television networks. The two split in 2006 in hopes that it would allow the firms to compete more nimbly in a changing media economy, but Viacom has lately struggled, with its stock price tumbling about 60 percent since 2014.
While Redstone's daughter and Viacom's vice-chairman, Shari Redstone, had initially suggested the two media giants consider a merger — a sign of her growing influence with her father — the family later backtracked and recommended against the deal this month. In a letter on the matter, Viacom and CBS's parent company — which is privately held by the Redstone family — cited recent leadership changes at Viacom for its change in thinking.
The back-and-forth over CBS and Viacom's future was linked to a power struggle between Shari Redstone and two of Sumner Redstone's longtime business partners, Philippe Dauman and George Abrams, who in legal filings claimed Shari Redstone had manipulated her father into forcing them off Viacom's board.
Stuart Slotnick, a defense attorney at Buchanan Ingersoll & Rooney PC who has worked with billionaires such as the casino magnate Steve Wynn, said the move will likely put to rest questions surrounding Redstone's ability to continue running his corporate empire.
“This move may be seen as a sign that Mr. Redstone’s daughter is confident that she is in a position of power and control,” he said.
According to Friday's SEC filing, Shari Redstone will remain vice-chairman of Viacom, and the company's board will be trimmed from 15 positions to 10.
Correction: A previous version misstated that Redstone was on Friday relinquishing his role as chairman. This version has been corrected.