Selfish Sumner Almost Sank CBS

Thanks to a recent divident cut, Pali Research analyst Rich Greenfield upgraded CBS to neutral in a note today.

But Rich didn’t do it without bopping CBS’s billionaire chairman Sumner Redstone first.

Crains: Citing “multiple sources connected to current CBS board members,” Mr. Greenfield wrote that Mr. Redstone “resisted other board members’ desire to cut the CBS dividend for a substantial period of time, which jeopardized the well-being of CBS, in favour of his own personal financial needs.”

Mr. Redstone has been struggling since October to restructure $1.6 billion in loans owed by National Amusements Inc., the holding company through which he controls Viacom Inc. and CBS.

The plunge in both companies’ stock price tripped a loan covenant that forced Mr. Redstone to sell more than $200 million in nonvoting shares.

The dividend cut took a big bite out of Mr. Redstone’s income stream, reducing the amount of money he took home from CBS to $14 million a year from $78 million, according to the Wall Street Journal.

Last week Mr. Redstone came to an agreement with his lenders that gives him until 2010 to pay off his debts.

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