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08.24.10

Sumner's $1 Million Payoff

The billionaire chairman of Viacom and CBS has settled with a deputy who accused him of loutish behavior. Peter Lauria on the latest of Sumner Redstone’s costly antics.

CBS Corp. spared its billionaire chairman Sumner Redstone the potential embarrassment of a harassment trial by settling with one his deputies in return for dropping the case, The Daily Beast has learned.

According to a source with knowledge of the situation, CBS, which is controlled by the 87-year old mogul, recently agreed to pay Karen O’Rourke Zatorski in exchange for her agreeing to not bring harassment charges against Redstone, and resigning her post with the company. While the exact figure is unconfirmed, the source says that, based on her position and length of service with the company, it’s likely in the neighborhood of $1 million.

Though Zatorski retained powerhouse sexual-harassment attorney Anne Vladeck, her allegations weren’t sexual in nature.

Though Zatorski retained powerhouse sexual-harassment attorney Anne Vladeck to represent her, sources previously told The Daily Beast that her allegations weren’t sexual in nature. Instead, Zatorski’s claims centered on Redstone’s temper, which allegedly manifested itself in verbal abuse and violent outbursts such as throwing dishes.  

After investigating the charges internally, CBS apparently decided that throwing cash at the problem to make it go away was preferable to going to court. “They’ll do anything to not cause problems for Sumner,” says the source.  

A representative for CBS confirmed that Zatorski resigned but declined to comment further. Calls to Vladeck were not returned. Zatorski did not respond to a message left on her Facebook page.  

Zatorski worked in the corporate relations department of Viacom from 1994 until its split in 2006, at which point she went over to the CBS side of the business, where she most recently served as vice president of corporate relations. (Redstone owns both Viacom—which counts the Paramount Pictures movie studio and cable networks MTV, VH1, Comedy Central, and Nickelodeon among its stable of assets—and CBS, which controls the eponymous television network, CBS Radio, Showtime, and book publisher Simon & Schuster.)  

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Whether corporately or personally, Redstone’s recent antics with the opposite gender have become costly. The billionaire octogenarian, whose net worth is estimated at $9 billion by Forbes, personally spent about $500,000 squiring around a raunchy all-girl band dubbed the Electric Barbarellas to meet with record label heads and MTV executives with the aim of developing a reality show about the band. He also personally gifted band frontwoman Heather Naylor with Viacom stock valued at around $77,000. In addition, Redstone also gifted stock worth roughly $100,000 to Rohini Singh, a publicity representative that he forced onto payroll of CBS’ Showtime unit.

Peter Lauria is senior correspondent covering business, media, and entertainment for The Daily Beast. He previously covered music, movies, television, cable, radio, and corporate media as a business reporter for The New York Post. His work has also appeared in Avenue, Blender, and Media Magazine, and he's appeared on CNBC, Bloomberg, BBC Radio, and Reuters TV.