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Viacom couldn't afford to let Blockbuster get away, because Redstone needed the video chain's financial clout to defeat Diller and then help pay interest on the debt after the Paramount merger. So Greenhill, whose firm earned $12.5 million for advising Viacom, resorted to a game of high-stakes financial chicken. He allowed the Blockbuster talks to break off rather than accede to Berrard's demands. At the same time, Greenhill instructed Levitt to maintain contact with his pal Berrard. The strategy paid off on Christmas Day, when Levitt, calling from New Jersey on his Jeep Cherokee car phone, got Berrard on the line at a golf resort in Arizona. Also hooked up at various times were Biondi, who was in Scottsdale, Arizona, and two other members of the Viacom camp in Houston and Long Island's Hamptons. "Steve," said Levitt, "let's talk."
In the ensuing conversation, Levitt asked, "How can you guys not agree on this?" Retorted Berrard: "What would you say if you were advising Blockbuster?" That gave Levitt the opening he needed to persuade Berrard to * start talking again to Viacom. The upshot: Viacom finally agreed to a revised collar that would compensate Blockbuster shareholders for any drop in Viacom stock over a one-year period. That satisfied Blockbuster, which had originally insisted on compensation for any stock drop at the closing of the merger.
Still, some Blockbuster shareholders continued to grumble last week over the steep decline in the value of Viacom stock. But with Huizenga and other corporate insiders holding 23% of Blockbuster shares, dissidents could be hard pressed to put together enough votes to block the Viacom-Blockbuster combination. "The stock sucks right now," concedes John Melk, a Blockbuster director. "But this is a tremendous deal." In the long run, that is.
It might also be a personal coup for Huizenga, 56, who may yet play a dominant role in the sprawling new company. While Biondi, 49, will remain Viacom's chief executive officer, industry leaders who know Huizenga well say he could swiftly become the real power. "He is lightning quick, a classic trader and a gambler," says an entertainment-industry executive. "He looks at Sumner, who is 70. He eats Biondi instantly. He comes out on top." In a sign of Huizenga's likely clout, Redstone flew to Blockbuster headquarters in Fort Lauderdale, Florida, last week to confer with his new partner. Says the Viacom chairman: "I've been down here telling Wayne that the more roles he plays in this, the happier we're going to be." Adds Huizenga: "We're in the middle of the conversation. We haven't buttoned it all down yet."