It’s early November, during an especially brutal week for the economy and the media industry in particular, and there he is: the legendary mogul, holding forth at a glitzy New York charity dinner as if it were the best of times. “The market is off a little today, but Viacom is way up!” Sumner Redstone crows. Then he ­proceeds to indulge in one of his seemingly favorite pastimes, bad-­mouthing his rivals: “Disney is getting killed!” Now he’s positively giddy. “News Corp. is down a lot!”

Redstone, who controls two of the planet’s best-known media-and-entertainment conglomerates, Viacom and CBS, has just jetted in from Los Angeles on his long-range Bombardier Global Express, to be honored by a cancer organization with the help of his friend Bill Clinton. Enthroned at a corner table in the rococo vastness of Cipriani 42nd Street, the onetime headquarters of a defunct savings and loan, Redstone acknowledges a steady stream of acolytes, notably Viacom chief executive Philippe Dauman, CBS head honcho Leslie Moonves, and even crooner Tony Bennett. The scene around Redstone is an apparently warm family tableau that includes his petite 47-year-old second wife, Paula, and his pretty granddaughter Kimberlee Korff, a recent Cardozo law school graduate. Redstone is nursing a tumbler of cranberry juice, diet tonic, orange juice, and vodka.

“I have one of these every night,” he informs me in his Boston accent, “because it’s loaded with antioxidants. Every day at lunch, I have half a glass of red wine, a really good Clos de Vougeot burgundy. Tons of antioxidants!” He can’t resist boasting, “I feel as good as I did when I was 20 years old!”

In fact, Redstone is 85 and facing a financial meltdown, his position on Wall Street measurably worse than his competitors’. Viacom’s stock that day wasn’t exactly “way up”—it was up more like 10 cents, to $18.87, a tiny uptick in a long and terrifying slide from December 2007, when it had peaked at $45. Ten days later, Viacom’s price would dip below $12, a loss of more than 70 percent for the year. As for CBS—which Redstone had acquired nine years earlier for $37.3 billion—its market capitalization had plunged into the $4 billion range, a fall of about 75 percent from the previous year.

Despite a leonine intensity and improbable strawberry-tinged hair, he looks his age. His face is mottled; fleshy folds of neck skin sag over his knotted tie. He braces himself against the table to push his 6-foot frame into a more or less upright posture and, walking with a pronounced limp, cautiously makes his way to the press area to pose in his rumpled pinstriped suit with fellow honoree Brooke Shields—who towers over him in glamazon heels—before slipping into a curtained-off holding area to greet the former president. (View a slideshow featuring some of Sumner Redstone's famous friends.)

Even the loving family snapshot is a mirage. A long-simmering feud with his 54-year-old daughter, Shari—who is notably absent from the party—has flared anew over issues of power, money, and succession. In 1999, ­Redstone had installed her as president of the family’s private holding company, National Amusements—he’s the chairman and C.E.O.—which owns a 1,500-screen theater chain as well as controlling interests in Viacom and CBS. For years, he had indicated Shari was his heir apparent, but lately he has suggested she’s not even a credible candidate, questioning her management decisions and telling me the two “don’t always see eye to eye.”

As for Paula—the former New York City public-school teacher with whom Redstone had had a widely publicized, storybook May-December romance—Redstone had just announced plans to divorce her after five years of marriage.

Even worse for a tycoon apparently obsessed with his image as a business visionary, National Amusements had stunned Wall Street just a few weeks before the dinner with a confession that it was in far worse shape than anyone had imagined—primarily because the shares it held in Viacom and CBS had collapsed with the rest of the market. A group of banks was demanding that National Amusements repay half of a $1.6 billion loan that it hadn’t previously disclosed, so Redstone dumped a massive block of Viacom and CBS stock to raise cash and sold off a videogame company—into which he’d poured an estimated $800 million—for an embarrassing $100,000. Most humiliating of all is a recent news report’s suggestion that Redstone might not even be a billionaire any longer.