Leslie Moonves at CBS Corp. was once a sign of stability and promise. But now, the chairman and chief executive officer are sitting on a flagging media company facing less than a week of uncertainty over sexual harassment and harassment.
It's unclear what fate Moonves will eventually hit once CBS closes an independent investigation of the allegations that were raised by several women in a shocking New Yorker article. On July 30, after a three-hour conference call, CBS's board of directors surprisingly decided not to vote on whether or not Moonves should be suspended. The director is said to have participated in certain parts of the discussion from his Los Angeles office.
The directors simply discussed the parameters of the investigation and opted for a second time to postpone the annual meeting of the company that had been set. You should not set a date for the future.
Despite the board's lack of action, few in the industry believe that Moonves is clear, as he is hampered by the damn New Yorker July 27 report. Six women, including actress Illeana Douglas and producer Christine Peters, described disturbing encounters and physical threats made against her by Moonves over a 30-year period. The allegations suggest that Moonves has become embroiled in a pattern of abuse and has made a habit of using his influence to intimidate women into professional relationships.
If more women make similar allegations, one person familiar with the procedure The board would probably call a special session and vote on the status of Moonves. Meanwhile, the mood in CBS is one of despondency, this person says.
Moonves, 68, acknowledges making sexual approaches and "having made some women uncomfortable" but denies threatening the careers of those who reject him. He also denies Peter's account of their encounter.
The exposé of investigative journalist Ronan Farrow also paints an ugly portrait of CBS's workplace culture for women, especially in the CBS News. Few in the industry expect Moonves to stay at the helm longer ̵
Moonves is the latest entertainment hit since Harvey Weinstein was hounded as a serial hunter last October. Other victims of the #MeToo and Time's Up era, in which women have courageously argued for the naming of perpetrators, include the former top players in the industry such as Roger Ailes, Matt Lauer, Charlie Rose, Bill O & # 39; Reilly and John Lasseter. 19659002] But Moonves is the first CEO of a listed media giant, who is being investigated and potentially dismissed by allegations of sexual misconduct. Although most of the alleged incidents occurred more than 20 years ago, last year's cultural coverage forced many of the biggest names in the entertainment industry to be held accountable for past behaviors during the #MeToo and Time's Up era. In November, at Variety's Innovate summit, when Moonves was asked to comment on the sexual harassment scandal, he responded, "It's obviously influenced our business, it's affecting Silicon Valley, it's really affecting Washington It's a turning point. "He added," It's important that companies educate – have the ability to engage in dialogue to know what's going on … It's important that the corporate culture does that does not allow. "
The severity of Moonve's allegations of misconduct is compounded by the other corporate drama currently surrounding CBS. The legendary broadcaster is involved in a long-held effort to wrest control of CBS from dominant shareholder Shari Redstone – a fierce lawsuit led by Moonves. It's an all-or-nothing strategy that will surely lead to a massive restructuring of CBS management when a Delaware judge teams up with Redstone.
Should Moonves lose their job or resign in the face of allegations, sources close to The Situation says a scenario is being considered to bring an experienced media professional as temporary CEO. Redstone has used its turnout to win former Time Warner chairman Richard Parsons to the CBS board and now sees Parsons as a potential temporary CEO candidate. Parsons is formally elected to the board at the annual CBS meeting. It was originally scheduled for May 18, but was postponed after the lawsuit filed by CBS against Redstone and National Amusements Inc.
Other candidates that could be tapped in an emergency situation are CBS alumni Nancy Tellem and Nina Tassler. The unpredictable nature of CBS and Viacom will make it difficult for Redstone to recruit a key player – Fox Television Group chairman Dana Walden or NBC Entertainment chairman Bob Greenblatt to permanently follow Moonves at CBS.
The dizzying turn of events is over CBS insiders in a state of shock.
"It has not really fallen," says a longtime CBS manager, the day after Farrow's story was broken. Some were still denying the possibility that Moonves would be fired or forced, given the heightened sensitivity to sexual harassment and abuse allegations. The explosive story was released before CBS announced its second-quarter results on August 2. And on August 5, the network will spend the day promoting its new fall lineup at Television Critics Assn. Press Trip in Beverly Hills
Even before the story was published, CBS was badly damaged. News of the forthcoming synopsis dropped CBS's share price by 6% on July 27, losing $ 1.4 billion in market value.
Early July morning shares fell another 5%, but announcement of board came to completion
The CBS Board has announced that it will hire a law firm to investigate the CEO. On July 27, a majority of CBS directors expressed their full support for Moonves and his management team. The statement of support surprised many observers, as it was announced before the publication of New York history – before they became aware of the extent of the allegations in Farrow's report.
After the story was broken, it became clear that Redstone would not have to wait much longer to make changes to CBS. The pressure on Moonves and the danger that CBS will be further destabilized by a leadership vacuum – and potential emigration of other top executives – will test Redstone's ability to take the company out of the crisis.
The turbulence at CBS will determine if she has the courage to follow the mogul traces of her father, well-known media investor Sumner Redstone. She is now challenged to lead her empire through a thicket of problems ranging from the personal scandals surrounding Sumner Redstone and now Moonves to the seismic disruptions in traditional media business.
Shari Redstone and Moonves have vanished from ally to fierce enemies within a year. But the weakening of Moonve's position is not good news for Redstone as an investor. CBS is in danger of losing its longtime boss, especially when the company needs a strong operator and strategic leader the most, as the broader entertainment industry is quickly transformed by the impact of technology and the entry of Netflix, Amazon, Apple, and other technology giants. # 39; s Wheelhouse
Despite Moonve's unwavering bravado, CBS has become a smaller player in the global media world – one of Redstone's arguments for the reunification of CBS and Viacom. Redstone started pushing this idea for the second time in two years, late last year, when AT & T swallowed Time Warner and Disney ended its historic deal with 21st Century Fox.
Moonves also has great ambitions to put CBS forward for the future -merger, but not with Viacom, who has been fighting for years. CBS has performed excellently on Moonves & # 39; and now Redstone faces the possibility that the company's fortune could be shaky if Moonves and key members of his team are out soon.
A charismatic and determined leader, Moonves has been supported for years by the good will of the CBS base and the great loyalty of his inner circle. Moonves has cast a long shadow over every aspect of CBS operations, from famous micromanagers to casting for supporting roles in comedy pilots. His larger-than-life personality and the success of the company provided a kind of isolation that made CBS look like a family business.
But even the biggest fans of Moonves could not ignore the view of legal experts, the CBS, The Board of Directors has a slim chance of successfully trying to get the parent company of Redstone, NAI, out of control of the majority of the voting shares To hold CBS. Many expected that Moonves and Redstone will find their way to relaxation before the start of the process, which will begin in early October.
The legal battle that erupted in May is grounded 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 whether CBS joins Viacom or becomes a freelance agent in a seller's market is a big change on his horizon.
The pressure on Moonves will only accelerate the beginning of a new chapter for CBS.
The quality of assets should be more important than management, "writes Todd Jünger, an analyst at Bernstein Co., in a memo published on July 30." As good as the market thinks is the current CBS management, it is impossible to believe that there is no other human being on earth who could guide CBS with some skill. We also believe that if CBS loses its CEO, it increases the likelihood that CBS will be sold. Any change in the corporate regime favors the comings and goings, but the bitterness between Moonves and Redstone could complicate the environment for those who were closely associated with it for many years. "The 14-member board includes Redstone and two others Members – David Andelman and Robert Klieger – who are considered non-independent due to their affiliation with NAI.
The other eleven members, who are considered independent, have demonstrated considerable faith in the leadership of Moonves, supporting the CBS strategy to issue a special dividend to all shareholders, which dilutes the Redstone voting shares from 80% to 20%, while the stock value of NAI's holdings remains at approximately the same level, approximately 10 (19659002) Independent board members include Martha Minow, former Dean of the Harvard Law School (whose endorsement of CBS's legal strategy as a participant in d he was honored) and notables such as former Secretary of Defense William Cohen, Bank Charles Gifford, President Emeritus of the American President, and former NAACP President Bruce Gordon. However, Redstone and others have criticized the board for making light in directors with a hands-on media experience and with Moonves despite its undeniably strong track record.
Moonves named CEO of CBS after Sumner in January 2006 Redstone decided to divide the former Viacom into separate companies. Redstone's Viacom had the CBS Corp. swallowed in 2000 when Mel Karmazin was CEO. Karmazin had a rocky relationship with Sumner Redstone and was out in mid-2004. Moonves has effectively led CBS, Showtime, and related units since being named Co-Chief Operating Officer of Viacom, along with Tom Freston, following Karmazin's dismissal.
As Scandal envelops Moonves, Shari Redstone's next move is hampered by the existence of CBS. CBS argues that Redstone, at the expense of CBS shareholders, is attempting to pursue its own agenda in reuniting CBS with Viacom, which would be better if CBS's soldiers are on their own or become cautious drawn by a larger player for a high price. CBS claims that Redstone unlawfully scared off potential acquirers – notably AT & T and Verizon – because it does not want to sell CBS without Viacom.
NAI has responded that Moonves is simply "the reality that CBS has" CBS and Viacom made dissatisfied acquisition talks earlier this year, but the sites were in trouble about pricing and management plans for the combined company.
There is no precedent in securities law to an investor of voting rights in the absence of criminal activity. But Redstone and NAI must still be careful because their actions are now being scrutinized by a Delaware Chancery Court judge. Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, says the allegations of sexual misconduct per se are unlikely to interfere with the litigation control of CBS, but certainly put a strain on the CBS team which is in the trenches of the suit's discovery and deposition phase. It was increasingly speculated that the sites reluctantly focused on negotiating the negotiations after both had the opportunity to get a selection of what the other one wants to bring to justice.
"Everything that dampens [Moonves’] responsiveness will make life a little easier [NAI’s]," says Elson. "If distracted by that, it will make her efforts a little easier, but I do not think it's dispositive for one or the other situation."
Redstone can not merge CBS for its entire election force and Viacom happens overnight, nor can they simply install Viacom CEO Bob Bakish as CBS's new leader. Bakish's role in the upcoming CBS and Viacom reunification was a source of tension between Moonves and Redstone in the merger talks. Moonves shied away from calling Bakish his No. 2 in the combined company, arguing that he would have to keep his core management team intact if he successfully turned over Viacom's cable channels and Paramount Pictures.
Some see the situation as an opening for a buyer to make Redstone an offer to CBS, can not refuse.
There was market chatter about investor John Malone, who reaches Redstone with possible creative ways to help her fight the CBS-Viacom divide
"We think CBS could still be an attractive takeover bid, depending on What happens in Delaware in court, "says CFRA Research media analyst Tuna Amobi.
CBS's crisis scenario is the last thing Moonves wanted when he began tracking his legacy in the industry. Sources say that in all aspects of the business in recent months, Moonves has subtracted a few degrees from its characteristic omnipresence when the corporate drama followed. One source familiar with Moonve's concerns says he had hoped to limit his run by running a megabucks sale or a megabucks takeover that would position CBS well for the future. Now, the chief executive is facing the prospect of being fired for good cause and forgoing the massive severance package (estimated at $ 150 million or more) that he would otherwise have claimed if he resigned on his own terms.
CBS and its leader have a lasting success that is rare in the entertainment business. Moonves has long been one of the country's highest paid executives, not least thanks to the company's strong share price. Last year, he earned $ 69.3 million in total compensation
The glitter that has surrounded the company and its frontrunner for so long is another reason why last year's turmoil hit CBS so hard, insiders said. On July 27, when the industry was caught up in Farrow's history, sources said that some CBS executives pointed out that they were entering the halls and recognizing the shocks in individual or small groups. There was no official internal communication about the allegations beyond the statements of Moonves and CBS to the media. Two prominent female CBS executives – ad salesman Jo Ann Ross and daytime / syndication programming boss Angelica McDaniel – spoke on July 27 in support of Moonves.
"My experience with him on a professional and personal basis never had any indication of the behavior that this story refers to," Ross Variety said.
Other employees privately expressed a mixture of dismay and shock at the allegations that Moonves was violent and threatening to women while making sexual advances, and that he quickly threatened those who rejected him. Actress Douglas told Farrow that Moonves was pinning her on a couch while trying to kiss her during a 1997 meeting, and then pushing her against a wall as she tried to leave the room. Douglas claims that she was excluded from working at CBS.
Timing is particularly bad for morale as the CBS network prepares for the busiest time of the year – starting in the fall of September. Sources say, despite the disturbing allegations, there was still, among many, a spirit of loyalty to the company. "Keep your head down and work hard on your shows," the words of a veteran said to help the company survive the storm. "We want to do that [Moonves]," says the source.
Moonves has been reacting to CBS for so long that it's hard for insiders to imagine a future without him. But the one-two-three shock from the forces of digital disruption, the collision with Redstone and the national billing with sexual misconduct forces the company to grapple with the fact that the post-moonves future for CBS will arrive earlier could later.