Suddenly one of broadcasting’s biggest boosters, Leslie Moonves is out, leaving CBS looking small and its future out of focus.
One of the country’s highest-paid executives with $69.3 million in total compensation last year, Moonves leaves behind a unique company, one driven by his creativity and salesmanship, but one that remained a relatively small yacht competing against battleships and aircraft carriers in a swelling sea and a changing multimedia climate.
“Investors will be concerned that the CBS Network will not perform as well without Les' leadership, though will be encouraged if National Amusements (the Redstones) agrees to not pursue a Viacom merger,” said Doug Mitchelson, analyst at Credit Suisse, offering one perspective from Wall Street.
Moonves leaves behind a team of executives that have mostly worked together for decades and will soon be looking at a new boss, with the family of media mogul Sumner Redstone re-asserting its grip on CBS after being rebuffed when it suggested a merger of CBS with Viacom, the other media company it controls.
COO Joe Ianniello was named interim president and CEO. Ianniello's compensation for 2017 was $22.1 million. But he may not last long if, as analyst Richard Greenfield of BTIG Research points out, things play out the same way they did in 2016 when the Redstones' won a similar battle against Philippe Dauman, Viacom's former CEO. Dauman was replaced on an interim basis by COO Tom Dooley, who was gone the following year.
It’s not clear which other members of Moonves’ band will stay under a new conductor.
One reason Moonves was forced to leave was losing the battle for control with Shari Redstone, daughter of Sumner Redstone, who founded National Amusements as well as its subsidiary companies, CBS and Viacom. CBS sued National Amusements over a plan to dilute the Redstones' ownership. That suit was settled and the Redstones will maintain their 80% voting stake.
But Moonves' exit, less than a month before his 69th birthday, was hastened by accusations of sexual misconduct with women over the course of his career.
Though some of CBS' top female executives supported Moonves, the company will have to address the situation.
As part of his separation agreement, Moonves and CBS are donating $20 million to Time's Up and other organizations that support the #MeToo movement for equality for women in the workplace. The $20 million is being deducted from any severance Moonves might get --and for now, he’s not getting any pending the completion of the company’s investigation into the accusations.
Moonves’ contract called for severance of $180 million if he was dismissed without cause. Reports last week that exit negotiations between Moonves and CBS could result in Moonves collecting $100 million on his way out drew an angry reaction from Time's Up.
“The CBS Board of Directors has an obligation to move swiftly and decisively to create a safe work environment for all and rid the company of this toxic culture,” the Time’s Up organization said in a statement “We will accept nothing less than full transparency of the investigation’s findings, a commitment to real change across all levels of CBS management and no reward for Les Moonves.”
Charges against Moonves ranging from unwanted touching to sexual assault first came to light in a July 29 article in TheNew Yorker by Pulitzer Prize-winning reporter Ronan Farrow. It details accounts by six women --actresses, producers, executives -- who encountered Moonves over the course of his career.
On Sunday, another Farrow article in TheNew Yorker brought six additional women with more charges.
Farrow told CNN that "these women are coming out now" because "they have been extraordinarily frustrated by what they perceive to be inaction on the part of CBS and its board. And that really is integral to what prompted this follow up story."
The new charges include:
- A TV executive, Phyllis Golden-Gottlieb filed a criminal complaint last year with the Los Angeles Police accusing Moonves of forcing her to perform oral sex. The complaint wasn’t prosecuted because the statute of limitations had expired.
- A writer, Jessica Pallingston, alleges Moonves coerced her into performing oral sex and became hostile when subsequent advances were rebuffed.
- When Moonves was at 20th Century Fox, a VP there, Linda Silverthorn, says she had a consensual affair with Moonves. After she stopped it, they had a meeting at which Moonves kissed her and exposed himself. She “manually manipulated him, and just got it over with,” according to the article. Moonves told her the studio didn’t have any opportunities for her, she said.
The New Yorker also had allegations by massage therapists at The Four Seasons Hotel in Washington, who accused Moonves of misconduct.
In a statement to the New Yorker, Moonves acknowledged three of the encounters, but said that they were consensual: “The appalling accusations in this article are untrue. What is true is that I had consensual relations with three of the women some 25 years ago before I came to CBS. And I have never used my position to hinder the advancement or careers of women. In my 40 years of work, I have never before heard of such disturbing accusations. I can only surmise they are surfacing now for the first time, decades later, as part of a concerted effort by others to destroy my name, my reputation, and my career. Anyone who knows me knows that the person described in this article is not me.” Moonves declined to specify which three encounters he considered consensual, the New Yorker noted.
The ugly allegations are now overshadowing what has been considered to be a brilliant career.
Moonves famously started in show biz as an actor in forgettable roles in TV series such as Cannon and The Six Million Dollar Man.
He got studio jobs at Twentieth Century Fox and Lorimar before becoming president and CEO of Warner Bros., where he earned acclaim for green-lighting hits such as Friends and E.R.
Moonves joined a struggling, aging CBS in 1994 as president of CBS Entertainment and, with hits such as CSI, Survivor, Cold Case, NCIS and Big Bang Theory turned it into America’s Most Watched Network.
When CBS was separated from Viacom in 2005 by the Redstones, Viacom was expected to be the growth company rather than CBS, since that company was dominated by an old- fashioned broadcast network and radio.
Moonves led CBS to financial success by reducing its dependence on slowly growing advertising revenues. Instead, he aggressively got increases in retransmission fees from cable operators and reverse compensation for programming from affiliates. He increased the number of shows on the CBS-owned broadcast network, then generated revenue by selling those shows to international broadcasters and streaming video on demand services such as Amazon and Netflix. More recently, he led CBS’s push into over-the-top, direct to consumer streaming businesses. CBS All Access is now the home of franchises such as Star Trek and the Twilight Zone.
CBS has told Wall Street it expects those businesses to generate hundreds of millions of dollars in revenues over the next few years.
As part of its agreement with CBS, the Redstones' have agreed to not combine CBS with Viacom for two years. But many on Wall Street see CBS being gobbled up in the ongoing consolidation of the media industry.
National Amusements, the Redstones’ holding company says it “will give good faith consideration to any business combination transaction or other strategic alternative that the independent directors believe are in the best interests of the Company and its stockholders.”
Which hardly sounds like the Hollywood ending Moonves would have wanted.
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