Redstone, continued

It is amazing to me how little good press $105 million buys these days.

When media mogul Sumner Redstone last week pledged $35 million to Massachusetts General Hospital, the largest gift in the history of that exceptional hospital, and $70 million to two other health care initiatives, the story got exactly seven paragraphs on page B 4 of this newspaper. If you missed it, there were two people who definitely did not: Redstone's daughter, Shari, and his ex-wife, Phyllis. And they weren't amused.

Redstone has gotten fabulously wealthy in the entertainment business -- Forbes estimates his worth at $7.5 billion, number 35 on its list of richest Americans -- but the family's long-running internal battles are as intriguing as anything coming out of CBS or Paramount these days. The various generations of Redstones have been suing one another over money for at least 35 years.

While no one has sued anyone yet this time, the latest dust-up is worth watching for its sheer amusement value as well as what it may say about the current state of relations between father and daughter, and what that could mean about who will eventually run the 83-year-old Redstone's vast media empire.

Here is the story, as related by several people directly involved.

Redstone's pledge to MGH, Cedars-Sinai Prostate Cancer Center in Los Angeles, and Michael Milken's FasterCures/The Center for Accelerating Medical Solutions is an incredibly generous gift. But rather than write a check, Redstone turned to the privately held National Amusements that his daughter, and presumed successor, runs. That's when things got sticky with Shari and Phyllis.

Redstone owns 80 percent of National Amusements, the Dedham-based theater operator, and his daughter the other 20 percent. Redstone wanted a special distribution of $16 million of stock in WMS Industries, a slot machine maker whose largest shareholder is National Amusements, that would be used as the first installment on the $105 million pledge. Both mother and daughter objected -- in writing.

According to people involved in the process, neither woman opposed the charitable giving. Both, however, objected to how Redstone was doing it.

In a letter circulated to the National Amusements board, Shari Redstone argued that if her father was using National Amusements' assets, the gift should be from National Amusements, not his own foundation, or that she was entitled to a similar distribution that could also be used for charitable purposes. In a separate letter, Phyllis Redstone's lawyer warned the board should be careful with any such distribution because she could be entitled to a portion of it under their divorce agreement. The board sided with Sumner Redstone and approved the WMS distribution to him.

Redstone's lawyer, David Andelman, called the contributions "modest and highly tax-advantaged" and in the best interest of National Amusements. Shari and Phyllis Redstone both declined to comment.

What, if anything, happens next is unclear. Redstone could return to National Amusements to fund the balance of his pledge or go elsewhere for the money. It is, for now anyway, but a blip compared to the animosity that has torn the family for years.

Redstone's son, Brent, for instance, sued National Amusements last year, charging his father with favoring Shari and shutting him out of the company. That suit was settled this year with Redstone agreeing to repurchase Brent's stake for an undisclosed sum. Redstone's nephew Michael, who lives in Needham, is also suing him.

Succession remains the issue to watch. In the past, Redstone has said that family trusts make it "extremely likely" that Shari, who is 52, will follow him. But he has been hedging lately. In an interview with CNBC last year, Redstone said his second wife, 44-year-old Paula Fortunato, a former third-grade teacher he married four years ago, "is closer to me these days than my daughter." And in a recent Vanity Fair profile, when asked if his daughter was his heir apparent, Redstone balked: "Now you are putting me on the spot."

Bet on the lawyers to make a bundle on this before it is done.

Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902.