Sumner Redstone is a veritable deal junkie. Many of his deals have been transformative -- bet-the-house kinds of transactions -- that built a media empire, Viacom
At 80, Redstone is still cutting deals. One of the most interesting forays is his pursuit of Midway Games
Redstone's buying has pushed up the value of Midway to a $1 billion market capitalization. He even named his daughter to the board. But, hey, when you have majority control, you can call the shots. And Redstone has always indicated that his investment is merely personal.
Well, last week Viacom filed a statement with the Securities and Exchange Commission, indicating it set up a special committee of three independent board members. The company is exploring possibilities of buying video game firms or engaging in licensing deals. For example, Viacom already has a licensing deal with THQ
Such a play makes a lot of strategic sense. Video games have exceeded the size of the movie business. Also, video game companies, such as Activision
True, Viacom may be seriously looking at buying Midway or another video game company. Mega companies always explore such possibilities. But that's not a good reason to buy a stock such as Midway, which is already up more than 200% this year. Basically, the only definitive thing an investor can glean from Viacom's filing is that the company is trying to distance itself from the conflict of interest its CEO has created. And, in this age of corporate governance and Sarbanes-Oxley, it was a smart move to, well, not play any games.
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Fool contributor Tom Taulli is the author of The EDGAR Online Guide to Decoding Financial Statements . He does not own any shares of the companies mentioned in this article.