Theaters a millstone for Redstone
According to a Bloomberg report, Sumner Redstone’s movie theater company, National Amusements, is having such a poor year that it’s living off dividend money from other famous Redstone companies by the names of CBS and Viacom.
The theater group just suffered a downgraded outlook from stable to negative based on $385M in debt. It is said to be suffering from the lack of solid blockbuster draws during the summer of 2014, and on top of that is underperforming its peers, who are said to have invested more in improving the movie-going experience.
With box office receipts down, Bloomberg noted that NA is relying on dividends from CBS and Viacom to maintain positive discretionary cash flow.
The speculation is that NA will start selling off some of that stock to gain liquidity. And it has plenty that it could sell, with shares said to be worth $5.1B.