A FIRING AT FORT SUMNER

By Richard Zoglin

IN THE HIGH-FLYING, HIGH-VISIBILITY world of media moguldom, Frank Biondi has always been the rare bird: a quiet one. As the president and CEO of Viacom--the conglomerate that owns the Showtime and mtv cable networks, Simon & Schuster publishing, the Blockbuster video chain and Paramount's movie and TV empire--he has been regarded as a smart, low-key executive who stresses teamwork over autocratic rule. But being a team player is not always an asset when the reigning autocrat--in this case, Viacom chairman Sumner Redstone--wants to run the show. Last week, in a move that surprised practically everyone, Biondi was fired.

His fate was sealed at a meeting of Viacom's board last Wednesday morning, attended by all the company's directors except him. Over a breakfast that almost no one touched, Redstone spent 15 minutes explaining why he felt Biondi was not providing the "nimble and aggressive" leadership the company needed. After 2 1/2 hours of discussion, the board voted unanimously to oust the CEO. "It was a very intense meeting," recalls director George Abrams. "Later Sumner told me it was one of the toughest things he ever had to do."

Outside the boardroom, Redstone praised his deposed chief executive (who will get a severance package that could amount to $45 million or more) and promoted two lieutenants, general counsel Philippe Dauman and finance chief Tom Dooley, to be his chief deputies. But it was clear that the 72-year-old chairman plans to take hands-on control himself. "When you have a CEO, unless you want to undermine him--and I never wanted to undermine Frank--you pretty much have to follow his course," Redstone told TIME. "I saw issues developing, and my sense was that they weren't being dealt with as aggressively as they should have been."

Corporate tea readers spent much of last week trying to divine what might have soured Redstone on Biondi. Some pointed to the departure of Geraldine Laybourne, the widely respected head of Nickelodeon, who was hired away by Disney last month. Others cited disappointing financial results at Blockbuster; cash flow fell short of projections last year, as the video chain was faced with aggressive discounting by competitors. Early this month several Wall Street analysts lowered their profit estimates for the company.

Redstone has been especially concerned with the performance of Paramount Pictures, the glamorous centerpiece of Viacom's $10 billion acquisition of Paramount Communications in 1994. The studio has had a string of box-office disappointments lately--including Sabrina, Jade and A Vampire in Brooklyn--and Redstone complained that too many films were put into production with subpar scripts. The Viacom boss has been spending a growing amount of time in Hollywood, attending marketing meetings and consulting on details as small as what promotional knickknacks to send to video stores overseas to help push Paramount product.

Paramount executives maintain that the studio actually exceeded its financial targets in 1995, thanks to successes like Congo and Clueless. Indeed, top Paramount executives Jonathan Dolgen and Sherry Lansing were just given new contracts, and Redstone seems eager to work with them--closely. "Sherry said to me, 'I promise you I won't make a picture unless I'm in love with the script,'" Redstone relates. "That was the problem with Jade. I liked the picture, but I didn't know who was killing whom."

Biondi is the latest of several mega-media executives who have recently been toppled, with little or no warning, from major posts. Jeffrey Katzenberg, longtime chairman of Walt Disney Studios, left in 1994 after a falling-out with corporate chairman Michael Eisner. Michael Schulhof, head of Sony Corp.'s U.S. operations, was ousted last month after clashing with his Japanese bosses. Michael Fuchs, the longtime head of HBO and (for six months) chairman of the Warner Music Group, was fired in November by Time Warner chairman Gerald Levin.

The precarious if well-heeled life of these executives is, to some extent, a reflection of the increasing complexity of their jobs. Running a multimedia conglomerate--trying to combat big, aggressive competitors; weathering the relentless scrutiny of the press--has become difficult, if not impossible, for anyone to do well for very long. Biondi seems to have been the victim of another common business syndrome: an entrepreneur-owner's reluctance to hand over control to a successor. Redstone, who built his fortune from a chain of movie theaters, hired Biondi shortly after acquiring Viacom in a leveraged buyout in 1987. A Harvard M.B.A. and former chief executive at HBO, Biondi had a style that seemed to mesh well with that of the boss: Redstone, the volatile, confrontational owner; Biondi, the even-tempered manager--Redstone's "secret weapon," in the words of a New Yorker profile by Ken Auletta a year ago.

In fact, tensions between the two had been building, along with Redstone's growing fascination with his Hollywood operations. Redstone has compared himself frequently to Fox chief Rupert Murdoch, an aggressive, hands-on chief executive. "The references to me and Murdoch have been overblown," Redstone now says. "I do know that when Murdoch saw problems in China, the next day he was there. I don't want to take the slow boat to China."

Biondi, determined to avoid a public row with his ex-boss, nonetheless dismisses Redstone's claim that he was tossed overboard primarily because of a stylistic shortcoming. "This aggressive/laid-back stuff is just a joke," he told Time. "We had differences in approach, but that was strength. Sumner just decided he wanted to be totally involved. He's having a lot of fun. He loves the publicity. He wants his day in the sun, and he's going to get it."

The question is whether the sun will continue to shine on Viacom. The company's stock fell 3 5/8 on the day after Biondi's ouster, apparently reflecting Wall Street skepticism about Redstone's ability to run Viacom at his age. (The stock recouped a quarter of that loss the next day, closing the week at 37 7/8.) Redstone's response to the gerontology issue: "If Bob Dole thinks he can run the country at age 72," he told a company director, "then I can run Viacom."

Colleagues don't disagree. Says board member and close friend Abrams: "He runs three miles a day on the treadmill. His blood pressure is 117 over 70. His resting heart rate is 55. He's fully capable of putting in 10-, 15-hour days." A company whose directors have the boss's blood-pressure readings at hand, however comforting they are, may not be in ideal shape for long-term health. But no one doubts that Redstone is fully energized to prove otherwise. Just ask Frank Biondi.

--Reported by Jeffrey Ressner/Los Angeles and Barbara Rudolph/New York

With reporting by JEFFREY RESSNER/LOS ANGELES AND BARBARA RUDOLPH/NEW YORK