It’s hard to imagine CBS without Leslie Moonves, but that’s what it will be. CBS and National Amusements, the corporation’s top shareholder, officially announced Moonves’ departure on Sunday evening.
CBS chief operating officer Joe Ianniello, who joined CBS in 1997 and has been COO since June 2013, will now serve as president and acting CEO. Moonves’ official exit came just hours after the publication on Sunday morning of another damning report in New Yorker magazine, in which reporter Ronan Farrow detailed allegations of sexual assault by six more women in the ’80s and ’90s. Although terms of his exit package weren’t announced, reports late last week had originally said it would be worth more than $100 million. Now, with CBS Corp. parting ways with Moonves, he will not immediately receive any compensation.
As part of his exit, CBS Corp. announced that “Moonves and CBS will donate $20 million to one or more organizations that support the #MeToo movement and equality for women in the workplace. The donation, which will be made immediately, has been deducted from any severance benefits that may be due Moonves following the Board’s ongoing independent investigation led by Covington & Burling and Debevoise & Plimpton. Moonves will not receive any severance benefits at this time (other than certain fully accrued and vested compensation and benefits); any payments to be made in the future will depend upon the results of the independent investigation and subsequent Board evaluation.”
It’s a stunning fall from grace for the mogul. Not only does it tarnish his legacy as one of the most powerful figures in the entertainment business, but it now casts a shadow over the entire CBS Corporation, including Moonves’ chief lieutenants. With Moonves gone and chief shareholder National Amusements Inc., led by Shari Redstone, much more in control, a lot could change in the coming years.
But there won’t be any immediate plan to reunite CBS and Viacom, an idea that Redstone had earlier championed, but more recently has reportedly lost interest in. As part of the a legal settlement between National Amusements and CBS, there will be no attempt to merge the companies for at least two years.
Moonves, whose most recent deal with CBS was through 2021, had an annual compensation around $70 million and has run the network for more than two decades. Moonves had been negotiating his exit with the CBS board over the weekend when Farrow’s latest bombshell of a story hit.
According to Farrow’s story, Phyllis Golden-Gottlieb, who worked with Moonves in the 1980s at Lorimar, “filed a criminal complaint late last year with the Los Angeles Police Department, accusing Moonves of physically restraining her and forcing her to perform oral sex on him, and of exposing himself to her and violently throwing her against a wall in later incidents.” Another woman, writer Jessica Pallingston, said Moonves “coerced her into performing oral sex on him when she worked as his temporary assistant, in the nineties.” CBS News chairman Jeff Fager has also been at the center of the stories by Farrow about a culture of sexual harassment inside the Eye’s news division.
“These allegations speak to a culture of toxic complicity at CBS, where the safety of women was continuously ignored to protect the careers of powerful men and the corporation,” the industry group Time’s Up, formed in the wake of published sexual assault allegations against industry figures like Harvey Weinstein, said in a statement. “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.
“CBS, as you sit in a room debating next steps to rectify the damage done, remember that the world is watching. 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,” the group added. (UPDATE: Time’s Up responded to the news via a statement on Twitter: “A $20 million donation is a first step in acknowledging that you have a problem, CBS. But it is far from a solution. You have $180 million set aside to pay Moonves. Use that money instead to help women. Cleansing the company of this toxic culture demands real systemic change.”)
“Crazy Ex-Girlfriend” star Rachel Bloom, whose show is produced by CBS TV Studios, wrote on Twitter, “As an employee of CBS, I would just like to say that Les Moonves should be fired without getting a f—ing dollar. The actions described in this article are those of sexual assault and shame on anyone else in the corporation who knew about his crimes.”
Already, Moonves was enmeshed in a power struggle over corporate control. Earlier this year, under National Amusements’ Redstone, CBS and Viacom began discussions of potentially reunifying the two companies, which were separated in 2005. But as a debate began over how much power Moonves would have in running a merged team and selecting his successor, those talks began to sour. Moonves was keen on elevating his No. 2 at CBS, Ianniello, while Redstone was said to be pushing for Viacom CEO Bob Bakish, whose star has been on the rise as the comeback engineer for Viacom’s cable properties.
Concerned that Redstone was trying to force the merger, CBS filed suit against the Redstones and National Amusements, arguing a transaction wasn’t in the best interest of CBS shareholders. The CBS board also attempted to dilute Redstone’s voting control of CBS, which triggered a National Amusements countersuit. With the CBS lawsuit set to go to trial next month, timing played a role in negotiating a settlement there. As part of the agreement, talk of reuniting CBS and Viacom has been put on ice, satisfying concerns inside the CBS board.
Boardroom drama aside, the first Moonves report report by Ronan Farrow published August 6 in New Yorker magazine helped hasten the exec’s exit. That article alleged sexual misconduct and assault against several individuals, including actress Illeana Douglas. The CBS board launched an investigation, and Moonves issued a statement denying the serious allegations but admitting some transgressions: “I recognize that there were times decades ago when I may have made some women uncomfortable by making advances. Those were mistakes, and I regret them immensely. But I always understood and respected—and abided by the principle — that ‘no’ means ‘no,’ and I have never misused my position to harm or hinder anyone’s career.”
(UPDATED: Moonves responded to the news with a statement: “For the past 24 years it has been an incredible privilege to lead CBS’s renaissance and transformation into a leading global media company. The best part of this journey has been working alongside the dedicated and talented people in this company. Together, we built CBS into a destination where the best in the business come to work and succeed. Untrue allegations from decades ago are now being made against me that are not consistent with who I am. Effective immediately I will no longer be Chairman and Chief Executive Officer of CBS. I am deeply saddened to be leaving the company. I wish nothing but the best for the organization, the newly comprised board of directors and all of its employees.”)
Besides the appointment of Ianniello, the CBS board has also been restructured, with five current independent directors and one NAI-affiliated director have stepped down from the Board, and six new independent directors lected to the Board. Fresh faces include Time Warner alum Richard Parsons and industry vet Strauss Zelnick. Under the revised CBS board, a search will commence for a permanent CEO to replace Ianniello, and the corporation is about to undergo a major shift.
“CBS is an organization of talented and dedicated people who have created one of the most successful media companies in the world,” Redstone said in a statement. “Today’s resolution will benefit all shareholders, allowing us to focus on the business of running CBS – and transforming it for the future. We are confident in Joe’s ability to serve as acting CEO and delighted to welcome our new directors, who bring valuable and diverse expertise and a strong commitment to corporate governance.”
Moonves has been so synonymous with CBS’ success that the tumult initially sparked some unease among investors, and it seemed perhaps that the exec might even survive the initial outrage over the first Farrow story. But over the course of a month, that sentiment changed: On September 7 reports of a potential Moonves settlement, Wall Street responded positively as CBS stock rose three percent.
When CBS hired Moonves as entertainment president in 1995, the executive arrived after a successful decade as president of Warner Bros. TV and Lorimar Television, capped by the launches of the studio’s megahits “Friends” and “ER.” CBS, on the other hand, was a new challenge: The House that Paley built was a mess. Moonves inherited a schedule that reflected an ill-advised attempt to attract younger audiences with shows like the soap “Central Park West” and the Gen X comedy “Dweebs.” Another problem: The defection of several key affiliates to Fox in the previous year damaged the network.
Moonves performed triage. He initially focused on bringing eyeballs back to the network, including the older viewers it had recently attempted to discard. He also instilled discipline inside the network, famously rattling off an angry memo to staffers one Friday afternoon when he saw too many empty offices inside CBS’ then-Television City headquarters. He quickly made a few deals to populate the network with big stars and talent, including a two-season deal for Bill Cosby’s return to TV (an unfortunate choice in hindsight, but a get at the time).
“If you want to play in the big leagues, sometimes you have to step up to a commitment,” Moonves said at the time. “That was a significant event — it said to the world that we were back, that we were prepared to compete.”
It didn’t take long for Moonves to get the Eye network back on track, steering it through major changes like its acquisition by Westinghouse, and later the CBS Corp. merger with Viacom. Moonves was co-president and co-COO of Viacom between 2004 and 2006, until CBS separated from Viacom, and he’s been president and CEO of the CBS Corp. since, overseeing the network, CBS TV Studios, its 50 percent stake in The CW, Showtime Networks, Simon & Schuster, CBS Films, Network Ten Australia, CBS Interactive, and other divisions.
Given Moonves’ reputation as a hands-on executive (he still has ultimate say in many programming decisions), it’s hard to imagine CBS without him. Most CBS divisions are led by long-time accomplished execs, such as CBS Entertainment president Kelly Kahl, CBS TV Studios president David Stapf, CBS president and chief advertising revenue officer Jo Ann Ross, CBS marketing president George Schweitzer, Showtime Networks CEO David Nevins, and CBS chief communications officer Gil Schwartz. Many have worked with Moonves for decades, more or less serving at the mogul’s pleasure.
Moonves relishes showmanship, and is considered one of the last remaining larger-than-life TV executives. A former actor, he would frequently pop up in cameos on his own shows, and still thrilled at stepping on New York’s Carnegie Hall stage every May to open CBS’ upfronts presentation to advertisers where he would tout the strength of the CBS audience rather than its competitors’ younger-skewing demos. CBS has been the most-watched network for 15 out of the past 16 TV seasons.
CBS heads into the fall with several high-profile entries that also rely on the company’s heritage, including a revival of “Murphy Brown,” and a reboot of “Magnum P.I.” with an all-new cast. But like all broadcast networks, CBS faces more audience erosion and fierce competition for talent from well-financed streaming services. More immediately, the network also faces the impending exit of “The Big Bang Theory,” which will end its run next May.
Despite those challenges, CBS has managed to thrive in recent years as a small, pure-play media conglomerate. The broadcast business remains valuable as an outlet to build programming assets, and the advertising business remains lucrative. For its upcoming primetime lineup, upfront dollars for CBS are believed to be between $2.3 billion-$2.6 billion.
Of the networks, the Eye remains the most traditional. Its biggest shows are still a procedural drama (“NCIS”) a multi-camera sitcom (“The Big Bang Theory”), and a reality juggernaut that first hit it big in 2000 (“Survivor”). More recently, CBS successfully transitioned its late-night hosts, from David Letterman to Stephen Colbert, and launched its own streaming service, CBS All Access, which aims to grow its subscription base via original content like “Star Trek: Discovery.” Showtime, which also reports to Moonves, has also succeeded by expanding its offerings under Nevins.
Elsewhere, the rise in digital behemoths like Netflix, Amazon, Apple, and Facebook has forced traditional companies (think AT&T/Time Warner and Disney/21st Century Fox) to bulk up. And as the behemoths squeeze the smaller outlets in chasing down talent and viewers, things will become more challenging for a smaller company like CBS; even with a Viacom reunification, that may not be enough of a behemoth. Moonves was said to be more in tune with setting CBS up for acquisition by a much bigger entity.
“We continue to believe the logic from combining Viacom and CBS is compelling, and not just for cost-savings alone,” writes analyst Rich Greenfield of BTIG Research. “We foresee significant revenue synergies, not to mention greater scale would enable the combined Viacom/CBS to make meaningful acquisitions that are needed to compete in a world of giants (think AT&T Time Warner and Disney/Fox, let alone Google, Facebook, Amazon, Apple, etc).”
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