By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

NEW YORK — Sumner Redstone should enjoy watching his arch-rival Rupert Murdoch squirm. There’s no love lost between the 88-year-old chairman of Viacom and CBS and the News Corp boss. Last year, Redstone even presciently ridiculed his 80-year old competitor’s fondness for newspapers. But as Murdoch grapples with the scrutiny brought about by the misdeeds of one of his UK tabloids, Redstone can delight in only so much Murdochfreude. He has plenty of costly governance problems of his own.

Redstone and his deputies have managed to overcome some of them. Under Les Moonves CBS has been riding an advertising rebound and capitalizing on digital TV opportunities with Amazon and Netflix. Meanwhile, MTV’s unexpected cultural phenomenon “Jersey Shore” and Paramount Pictures’ Oscar-nabbing “The Fighter” have helped propel Viacom, which reported better-than-expected earnings on Friday. So did CEO Philippe Dauman’s decisions last year to pay a dividend and buy back stock.

As a result, shares of CBS and Viacom have outperformed rivals over the past year. Even over a five-year span, roughly since Redstone separated the older broadcast TV business from the supposedly hipper cable network operations, Viacom’s total shareholder return of around 40 percent is on a par with Disney’s and more than twice Time Warner’s. News Corp has lost shareholders around a tenth since mid-2006.

Yet Redstone’s empire has plenty in common with Murdoch’s. There are dual-class share structures with unequal voting rights giving them control; unspecified succession plans; children on the boards who have squabbled with dad; and an F grade from governance watchdog Corporate Library. While News Corp’s board is packed with Murdoch cronies, the average age of non-executive directors at Redstone’s companies makes them old enough to have watched Ed Sullivan’s 1948 debut on CBS.

Despite the operational improvements, the market hasn’t overlooked these flaws. According to Barclays Capital forecasts for 2012, CBS currently trades at around a 20 percent discount to the sum of its parts and Viacom trades at nearly 30 percent less than it is worth. As News Corp’s shareholders have recently discovered with a bang, governance can make a difference. It’s a lesson Redstone’s people should not overlook.