Viacom Inc.'s 70-year-old chairman, Sumner M. Redstone -- a man who began his career managing two movie theaters and will now personally control what becomes the nation's second-largest media conglomerate after Time Warner -- has suddenly become the most powerful executive in the entertainment business.

But to achieve that status, Mr. Redstone has taken on billions of dollars in debt and the daunting task of melding Viacom and Paramount Communications Inc., a disparate empire that will include Paramount Pictures, MTV, Simon & Schuster, cable television stations, the New York Knicks basketball team and the New York Rangers hockey team.

It was during a late dinner with colleagues Monday evening at the Manhattan restaurant "21" that word came by telephone to Mr. Redstone that he had finally won Paramount, beating out Barry Diller, chairman of QVC Inc., a home shopping channel.

"Here's to us who won," Mr. Redstone said, toasting his dinner guests with champagne ordered by his son, Brent.

It may be Mr. Redstone's last chance to celebrate for some time.

To begin with, his own personal stake in Viacom, which was worth $6.6 billion before the bidding war last September, has deteriorated to $2.85 billion as Viacom's stock has plummeted.

Stock in Viacom has fallen in part because winning companies in takeovers are generally burdened with more debt and the issuance of new stock.

The decline of Viacom's stock has been particularly precipitous, and it could fall still further when the deal is completed and 240 million new shares are added to the existing 121 million shares already in the market, according to analysts.

Yesterday, for example, Viacom's Class B nonvoting shares fel to $28, down $1.875.

That constitutes a decline of nearly 53 percent since the original merger deal was announced on Sept. 11.

And Mr. Redstone will have some formidable enemies going forward.

During the course of the battle, he sued Tele-Communications Inc., the nation's largest cable television company, which is controlled by John Malone, the most powerful man in the cable industry.

He also has lost the loyalty of Paramount's chairman, Martin S. Davis, who originally agreed to a friendly merger with Viacom before QVC countered with a hostile bid.

That original Viacom-Paramount agreement would have left Mr. Davis as chief executive officer of the merged companies.

But as the bidding became rancorous and Mr. Redstone was forced to take on new partners in his quest for Paramount, he subsequently dropped Mr. Davis from his plans, without consulting him.

Mr. Davis will have no job at the new company, although he will leave with around $117 million in cash and securities.

Given these challenges, why did Mr. Redstone, at a stage in his career when most executives might be planning a comfortable retirement, throw himself into a battle where victory has been so costly?

"I wanted to do it," he said in an interview yesterday. "It has added to my life span. I just love what I am doing."

Despite his age, he said he had no intention of handing over the reins.

"I don't have any plans to go anywhere," he said. "Yesterday, ran two and a half miles on a treadmill and I played tennis for an hour. I recognize that my health has some bearing on the company," he said.


Sumner M. Redstone's new Viacom will become the second-largest media conglomerate in the world, after Time Warner. Here are the numbers Mr. Redstone can expect to be dealing with:

Debt: $10.2 billion

Annual revenue: $11 billion

Annual earnings: $1.7 billion

The new company's income is expected to be enough to meet its interest payments. But because much of that debt is short term and will require refinancing, the big risk for Viacom is that interest rates will rise.

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