The fate of CBS chief Les Moonves is unknown as the company's board grapples with what some senior executives inside the broadcasting giant concede are compelling allegations against him of sexual misconduct, versus his importance to the future of the network, FOX Business has learned.
Continue Reading Below
The allegations, published in a lengthy piece in The New Yorker, have also raised new questions about the future of CBS, which is fending off attempts by sister company Viacom, to merge the two media outfits. CBS’s board will reportedly discuss these allegations at its regularly scheduled meeting on Monday, according to Deadline, though it was unclear whether Shari Redstone, who through her family’s National Amusements holding company holds the majority of voting shares in CBS and Viacom, would attend the meeting in person.
If the 68-year-old Moonves, who has been at the helm of CBS since 2006, is let go as a result of the findings from the probe, the company's future would be thrust into disarray. A former senior CBS executive told FOX Business that the chances are significant that Moonves will be replaced given the seriousness of the allegations and the public outrage over sexual harassment which has fueled the #metoo movement.
But he added that internal candidates are “weak," and while Moonves had planned to sell CBS to a larger outfit, people close to the company tell FOX Business, that would be put on hold as well.
Meanwhile, the likelihood that CBS will merge with Viacom will grow. While Redstone, the daughter of National Amusement's founder Sumner Redstone, has pushed to merge the two companies, Moonves has vehemently opposed the move, leading CBS to battle the matter in court, which is ongoing. A trial is scheduled for Oct. 3 in Delaware.
Analysts believe a weakened Moonves could make it more likely that the two companies will eventually merge, an outcome that many investors believe will be bad for CBS shareholders since it’s considered to have far superior programming than Viacom.
CBS programming includes a news outlet, television programming and major sports, like the NFL. Viacom is known for fading franchises such as MTV and Nickelodeon.
Shares of CBS fell 6% on Friday as investors learned of the allegations and the company announced an internal investigation into the matter. The CBS board also noted that “The timing of this report comes in the midst of the company’s very public legal dispute” with Redstone. A representative of Shari Redstone denied she was behind the story.
Moonves, for his part, released a statement saying, “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.”
A spokesman for CBS declined comment to FOX Business.
Despite the allegations of alleged sexual misconduct, Moonves will be able to keep his job amid an internal investigation into his alleged conduct.
That said, his future at the company is in doubt, according to people with knowledge of the situation.
The former top CBS executive, who is both familiar with the company's board and knows Moonves, told FOX Business that directors are facing what could be their worst crisis in years, since Moonves is critical to CBS’s future, including the plans to possibly sell the network once the imbroglio with Redstone is over.
“The board is f--cked,” this former executive said. “You don't know what's in his contract. It may be hard just to get rid of him because these are older allegations. Plus, there isn’t a decent successor to him at CBS. And who knows how much they would have to pay him to leave.”
In The New Yorker piece, written by investigative reporter Ronan Farrow, six women in the entertainment business said that the media executive sexually harassed them over past three decades, with the last incident occurring around 2006.
Four of the women alleged Moonves of “forcible touching or kissing during business meetings, in what they said appeared to be a practiced routine,” while two said he “physically intimidated them or threatened to derail their careers.”
Moonves is considered one of the strongest CEOs in the media industry. Under his tenure CBS has been the most-watched network for 15 of the last 16 years, according to the company. By comparison, Viacom has muddled along with a rotating cast of lesser-respected CEOs.