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Having Leslie Moonves at the helm of CBS Corp. was once a sign of stability and great promise. But now, the President and CEO is sitting on a shaky media company that faces an uncertain future due to allegations of sexual assault and harassment against it less than a week ago.
It is unclear what will happen to the fate of an independent investigation into the charges raised by several women in a scandalous New Yorker article. On July 30, after a three-hour conference call, the CBS Board of Directors decided not to vote whether Moonves should be suspended. The executive reportedly took part in some parts of the discussion from his Los Angeles office
The directors simply discussed the parameters of the investigation and chose a second time to postpone the annual meeting of the company , which had been "
Despite the commission's lack of action, few people in the industry think Moonves is safe, hampered by the July 27th's damning New Yorker report. Six women, including actress Illeana Douglas and producer Christine Peters, described the troubling encounters and physical threats that Moonves had them undergo for thirty years or so. The allegations indicate that Moonves has engaged in abusive behavior and has used her influence to intimidate women in professional relationships.
If more women lay similar charges, according to someone who is familiar with the procedures, the board of directors would likely call a special meeting and hold a vote on Moonves' status. Moonves, 68, admits to having made sexual advances and "may have made some women feel uncomfortable," but denies threatening to hurt the career of those who pushed her back. He also challenges Peters's account of their meeting.
The talk by investigative journalist Ronan Farrow also paints an ugly portrait of workplace culture at CBS for women, particularly within CBS News. Few are expecting Moonves to stay at the helm of the company much longer – an extraordinary turnaround for a CEO who has long been one of the most powerful figures of the entertainment industry.
be charged with sexual misconduct since Harvey Weinstein was introduced as a serial predator last October. Among the other victims of the #MeToo and Time & # 39; s Up era, where women have formed to publicly name the authors, include industry players such as the late Roger Ailes, Matt Lauer, Charlie Rose, Bill O. Reilly and John Lasseter. 19659002] But Moonves is the first CEO of a listed media giant to be investigated and potentially removed by charges of sexual misconduct. Although most of the alleged incidents took place more than 20 years ago, the cultural record of the past year has forced many big names in entertainment to be held accountable for pre-dating behavior. #MeToo and Time's Up. 19659010] In November, at the Innovate Summit of Variety, when Moonves was invited to comment on the scandal of sexual harassment that had an impact on the company, he replied, "This obviously affected our business. This is assigned to Silicon Valley. This is very affected in Washington. It is a decisive moment. He added, "It's important that businesses educate – have the ability to have a dialogue to know what's going on. … It is important that the culture of a company does not allow it. "
The seriousness of the allegations of misconduct against Moonves is magnified by the other corporate drama that currently encompasses CBS.The legendary broadcaster is involved in a long-term takeover attempt to snatch the control of CBS from the main shareholder Shari Redstone – a bitter legal fight led by Moonves.It is an "all or nothing" strategy that will surely lead to a massive reshuffle of the CBS leadership if a Delaware judge sided with Redstone.
If Moonves were to lose his job or resign in the light of allegations, sources close to the situation said a scenario at the study is to bring a professional seasoned media as interim CEO.Redstone has used its voting power to push former Time Warner president, Richard Parsons, to join the CBS board of directors, and now, Parsons isconsidered a possible temporary candidate for the position of CEO. Mr. Parsons will be formally elected to the board at the annual meeting of the SCB, whenever it will take place. It was originally scheduled for May 18, but was postponed after the filing of the CBS lawsuit against Redstone and National Amusements Inc.
Among the other candidates who could be exploited in an emergency situation, let's mention Nancy Tellem and Nina Tassler. The unpredictability surrounding CBS and Viacom will make it difficult for Redstone to recruit a major player – Fox Television Group President, Dana Walden or NBC Entertainment Chairman Bob Greenblatt – to succeed Moonves. at CBS
. "This has not really started yet," says a longtime CBS executive, a day after Farrow's story broke out. Some were still in denial of the possibility of Moonves being deported or deported in the midst of increased sensitivity to sexual harassment and allegations of abuse. The explosive story was published a few days before CBS reported its second quarter results on Aug. 2. And on August 5, the network should spend the day promoting its new fall programming at Television Critics Assn. press tour in Beverly Hills.
Serious damage was caused to CBS even before the story was published. The rumor of the impending announcement caused CBS's stock price to fall by 6% on July 27, losing $ 1.4 billion in market value
On July 30, stocks fell still 5% early in the morning.
The CBS Board of Directors announced its intention to hire a law firm to conduct the investigation into the allegations made against the chief executive officer. As of July 27, the majority of CBS directors expressed their "total support" to Moonves and its management team. The statement of support surprised many observers because it was announced before the publication of the New Yorker story – before they were aware of the magnitude of the allegations contained in the report of Farrow
. have to wait much longer to make changes to CBS. The pressure on Moonves and the threat that CBS is still destabilized by a leadership void – and the potential exodus of other senior leaders – will test Redstone's ability to help the company. company out of the crisis.
She will determine if she has the courage to follow in her father's footsteps, the renowned media investor Sumner Redstone. She is now challenged to lead her empire through a series of problems ranging from personal scandals that have enveloped Sumner Redstone and now Moonves to the ongoing seismic disruption in the traditional media sector.
Shari Redstone and Moonves left allies to bitter enemies in the space of a year. But the weakening of Moonves' position is not exactly good news for Redstone as an investor. CBS runs the risk of losing its longtime leader just when the company needs an operator and a strategic leader, the entertainment industry being rapidly transformed by the company. The impact of technology and the arrival of Netflix, Amazon, Apple and other technology giants. The Hollywood Wheelhouse
Despite the unwavering bravado of Moonves, CBS has become a smaller player in the global media arena – which is one of Redstone's arguments for bringing CBS and Viacom together. Redstone began pushing this idea for the second time in two years at the end of last year, when AT & T engulfed Time Warner and Disney reached a historic deal with 21st Century Fox
Moonves also great ambitions. -merger, but not with Viacom, who has struggled for years. CBS has delivered a remarkable performance on the Moonves watch, and now Redstone faces the possibility that the company's fortunes will be fragile if Moonves and key members of his team are soon on the doorstep.
A charismatic and decisive leader Moonves for years has been carried by goodwill among the CBS Foundation and the fierce loyalty of his narrow circle of senior executives. Moonves cast a shadow over all aspects of CBS operations, including micromanaging operations to find support roles for comic pilots. His larger than life character and business success provided a kind of insulation that made CBS look like a family business.
But even the biggest fans of Moonves could not ignore the opinion of legal experts that the CBS The board of directors has a slim chance of succeeding in its efforts to strip the parent company of Redstone, NAI, control of the majority of the voting shares of CBS. Many expected Moonves and Redstone to find their way to relaxation through a pre-trial settlement scheduled to begin in early October.
The legal battle that erupted in May is anchored in conflicting visions of CBS's long-term future. a moment of monumental change in the media and a rush of M & A activity among traditional entertainment titans. But if CBS ends up merging with Viacom or becomes a free agent on the seller's market, big changes are looming on the horizon.
The pressure on Moonves will only speed up the start of a new chapter for CBS.
"Asset quality should be more important than management," wrote Todd Juenger, an analyst at Bernstein Co. in a note published July 30. "As good as the market thinks the current direction of CBS is, it is impossible to believe that there is no other being on the earth that could run CBS with some degree of skill.We also believe that if CBS loses its CEO, it will increase the likelihood that CBS will be sold. "
Any change in business regime stimulates the comings and goings, but the acrimony between Moonves and Redstone could make the environment difficult for those who him were closely related. , some for many years. The 14-member board includes Redstone and two other members – lawyers Sumner Redstone David Andelman and Robert Klieger – who are considered non-independent because of their links with NAI.
The remaining 11 members, who are considered independent, have demonstrated a remarkable faith in Moonves' leadership. The group endorsed CBS's strategy of distributing a special dividend to all shareholders, which would reduce Redstone's voting shares from 80% to 20% while keeping the value of NAI shares at the same level, about 10%. Independent members of the board include Martha Minow, former dean of Harvard Law School (whose support for CBS's legal strategy as a participant in the court proceedings) and notable such as the former Defense Secretary William Cohen. Charles Gifford, president emeritus of America, and Bruce Gordon, former president of the NAACP. Redstone and others, however, have criticized the board for being light on directors with hands-on media experience and for being too comfortable with Moonves despite its undeniably strong track record.
Moonves was named CEO of CBS in January 2006 after Sumner Redstone decided to divide what was then Viacom into separate companies. Redstone's Viacom had engulfed CBS Corp. in 2000, when Mel Karmazin was CEO. Karmazin had a rocky relationship with Sumner Redstone and was released in mid-2004. Moonves has effectively led CBS, Showtime and related entities since he was appointed co-chief operating officer of Viacom, alongside Tom Freston, after the ouster of Karmazin
. scandal surrounds Moonves, the next step of Shari Redstone is complicated by the existence of CBS. a prosecution accusing it of having breached its fiduciary duty to other shareholders of CBS.
CBS contends that Redstone seeks to pursue its own program by merging CBS with Viacom, to the detriment of CBS shareholders, who would be better off if CBS soldiers alone or is picked up by a bigger player for a hefty price. CBS maintains that Redstone has illegally ousted potential acquirers – notably AT & T and Verizon – from trading because it does not want to sell CBS without Viacom.
NAI replied that Moonves is simply trying to "disregard the reality that CBS has a CBS and Viacom had uneven acquisition talks early in the year, but the parties disagreed on the prices and management plans of the amalgamated company.
There is no precedent in securities law to strip an investor of voting rights, absence of criminal activity, but Redstone and NAI must however, be cautious because their actions are now being reviewed by a Delaware Chancery Court Judge. "Charles Elson, director of the John L. Weinberg Corporate Governance Center at the University of Delaware, says that allegations of sexual misconduct per se will probably not be considered in legal argumentation for the control of CBS, but it will certainly be a burden for the CBS team, which is in the trenches of the discovery phase and the deposit of the combination. There had been more and more speculation that the parties were reluctantly moving towards settlement negotiations, after the two had been fortunate to get a sample of what the other was doing. intention to bring to justice
. make life [NAI’s] a little easier, "says Elson. "If he is distracted by that, it will make their efforts a little easier, but I do not think it's decisive for the situation one way or another."
For all its electoral power, Redstone can not merge from CBS and Viacom happen overnight, nor can it simply install Viacom's CEO, Bob Bakish, as the new CBS leader. Bakish's role in the future meeting of CBS and Viacom was a source of friction between Moonves and Redstone in the merger discussions. Moonves was reluctant to name Bakish as his number two in the combined company, arguing that he had to keep his base management team intact if he managed to straighten the cable channels of Viacom and Paramount Pictures.
Some see the situation as an opening for a buyer to make an offer to Redstone for CBS that she can not refuse.
There have been market rumors about investor John Malone with potential creative options to help him fight the CBS-Viacom division.
"We believe that CBS could potentially be an attractive takeover offer, depending on what happens in the Delaware court," says Tuna Amobi, an analyst at CFRA Research.
The CBS crisis scenario wanted him to start paying close attention to stretching his legacy in the industry. Sources say that Moonves has pulled some degrees of its characteristic ubiquity in all aspects of the business in recent months as the corporate drama ensued. A source familiar with Moonves' thought says that he had hoped to cap his run by pulling a sale or an acquisition of megabucks that would position CBS for the future. Now, the CEO faces the prospect of being fired for cause and forgoing the massive severance pay (estimated at $ 150 million or more) that he would otherwise have claimed he had to resign on his own terms.
CBS and its leader have enjoyed a sustained level of success that is rare in the entertainment industry. Moonves has long been one of the highest paid corporate executives in the country, largely thanks to the company's high share price. Last year, he received $ 69.3 million in total compensation.
The glow that has so long surrounded society and its leading ruler is another reason why the turmoil of the past year has hit CBS hard. On July 27, while the industry was seized with anticipation of Farrow's story, sources said some CBS executives took the plunge to walk down the halls and recognize the tremors head-to-head or in small groups. There was no official internal communication about the allegations beyond the statements that Moonves and CBS issued to the media. Two women executives of CBS – advertising chief Jo Ann Ross and Angelica McDaniel, head of day programming / syndication – spoke on July 27 in favor of Moonves
"My experience with him on the professional and staff never "Ross tells Variety
Other staff members privately express a mixture of dismay and shock at allegations that Moonves was violent and threatening to women while making sexual advances, and that he was quickly threatening those who rejected him. "Actress Douglas told Farrow that Moonves had pinned her to a couch while trying to kiss her during a 1997 meeting. , then leaned against a wall when she tried to leave the room. Douglas maintains that she has been blackballed from working at CBS ever since.
The timing is particularly bad for morale while the network CBS is gearing up for the busiest time of the year – the launch of the fall season in September. Sources say that despite the disturbing allegations, there was still, among many, a spirit of allegiance to the company. "Stay headlong and work hard on your shows," in the words of a veteran, to help the company weather the storm. "That's what [Moonves] would like us to do," says the source.
Moonves calls the shots at CBS for so long that insiders have trouble imagining a future without him at the helm. But the thunderbolt of the digital divide forces, the shock with Redstone and the national judgment on sexual misconduct are forcing the company to become aware of the fact that the post-Moonves future of CBS could arrive earlier than expected. later.
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