Sumner Redstone’s Black Friday Sale: Unloads Midway Games for Spare Change, Tax Benefit
You think you got a good deal on an HDTV last week? Talk to Mark Thomas, who just picked up videogame company Midway games for 99 percent off on Friday. The seller: Sumner Redstone, who is desperately trying to sell off everything except his shares in CBS and Viacom in order to restructure a looming debt load.
The Wall Street Journal reports that Redstone’s National Amusements holding company has sold its 87 percent stake in Midway (MWY) for $100,000, plus the assumption of $70 million in debt, to Thomas. On Friday, that stake was worth something like $30 million.
The real upside for Redstone, the paper says, will be a tax loss of some $800 million, though it’s unclear how he will be able to use that to help restructure his debt. Over the years, Redstone invested an estimated $500 million in the game maker. Redstone still has a few other assets that aren’t CBS (CBS) or Viacom (VIA), but those are by far his most valuable properties.
What does Thomas get out of this? It’s not entirely clear. Midway is best known for its “Mortal Kombat” franchise, which was once considered controversial because it allowed players to rip out the still-beating hearts of their opponents. But that’s old hat these days, and even new iterations like “Mortal Kombat vs. DC Universe” haven’t been able to sustain the company, which has lost $494 million in the last five years and has been under constant threat of losing its NYSE listing in recent months.