CBS’s Handling of Les Moonves Accusations Hampered by Battle for Control

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There was nothing to it, they assured Ms. Redstone, president of CBS’s controlling shareholder Nationwide Amusements Inc. She phoned Mr. Moonves, and he advised her the identical, in response to individuals aware of the matter. A supply near Mr. Moonves mentioned Ms. Redstone by no means raised the allegations immediately with him.

Some board members had been skeptical, believing Ms. Redstone was spreading the rumors. She and Mr. Moonves had been at odds over the way forward for CBS: Ms. Redstone wished a merger with sister agency Viacom Inc., and he was resisting.

Across the similar time, Mr. Moonves knowledgeable some administrators, however not the total board, that a sexual assault grievance had been filed towards him within the Los Angeles Police Division, stemming from an alleged incident within the 1980s.

It wasn’t till a number of months later, regardless of these two warning indicators, that the board launched an investigation into Mr. Moonves, and that got here solely after the New Yorker revealed an article in late July detailing accusations that the manager sexually assaulted or harassed a number of ladies. That set in movement Mr. Moonves’s departure this weekend, ending his 12-year reign as considered one of tv’s strongest executives.

“Unfaithful allegations from many years in the past are actually being made towards me that aren’t in line with who I’m,” Mr. Moonves mentioned in a press release Sunday night, including that he was “deeply saddened” to depart.

As these new particulars recommend, CBS’s dealing with of the allegations towards Mr. Moonves was weakened by the company infighting that made each side suspicious of one another, in response to individuals aware of the battle. That hampered CBS’s skill to take significantly and vet rumors about wrongdoing by Mr. Moonves. Either side dug in, as a substitute of working collectively to take away a threat that threatened all events.

Ms. Redstone emerges with a lot of what she wished after the bruising fights. She is going to retain her household’s voting management; she was in a position to choose six new unbiased administrators for CBS’s board, fulfilling a longstanding aim of injecting new blood into the governing physique; and he or she removes Mr. Moonves, her fundamental antagonist who had resisted a merger of CBS and Viacom. She additionally agreed, nonetheless, to not press for a merger for at the least two years.

COO Joseph Ianniello takes over as performing chief govt because the board searches for a everlasting successor.

Massive offers

Ms. Redstone will doubtless be held to account for a way CBS’s story performs out from right here. Rival media corporations have pursued big-ticket offers to compete with tech giants in a quickly altering TV trade, corresponding to Netflix Inc. and Alphabet Inc.’s Google TV. CBS can’t be on the sidelines for lengthy, many Wall Road analysts consider.

For Mr. Moonves, his exit in shame wasn’t the script he had been planning. The 68-year-old govt was getting into the sundown of his profession with a legacy that was the envy of any media titan, having risen from a struggling actor to grow to be considered one of Hollywood’s strongest and rich executives. He was a corporate-turnaround artist who revived the community with hits corresponding to “All people Loves Raymond,” “NCIS,” “Survivor” and “The Massive Bang Principle,” whereas lessening the corporate’s dependence on promoting income.

The scale of Mr. Moonves’s exit bundle might be topic to the findings of the board’s investigation into his alleged misconduct. Based on a public submitting Monday, he may get $120 million or nothing, relying upon what the investigation finds, and CBS is anticipated to maintain the probe’s outcomes confidential.

The saga that unfolded this 12 months bore the hallmarks of many different dramas the Redstone household has been concerned in over time—with litigation, threats, boardroom maneuvers and large names heading for the exits.

Within the fall, a lady filed a legal grievance with the Los Angeles Police Division claiming Mr. Moonves had pressured her to carry out oral intercourse on him within the 1980s. Mr. Moonves disclosed the existence of this grievance, which was dismissed for having handed the statute of limitations, to members of CBS’s nomination and governance committee in January.

By that point Ms. Redstone, who had picked up buzz about Mr. Moonves whereas on the annual Client Electronics Present in Las Vegas, had already gone to 2 CBS administrators, Martha Minow and Bruce Gordon, urging them to research Mr. Moonves’s previous. The complete board, together with Ms. Redstone and her allies, wasn’t alerted in regards to the Los Angeles grievance, in response to individuals aware of the matter.

By April, the rumors a couple of forthcoming New Yorker story detailing allegations towards Mr. Moonves reached such a fever pitch that the CBS board referred to as an emergency assembly on a Sunday to plot out what they might do if the allegations had been severe sufficient to benefit suspending him, the individuals mentioned. When CBS found that Mr. Moonves wasn’t in truth the topic of that specific New Yorker article, the assembly was canceled.

Board factions

Relations between the assorted board factions had been worsening, which inhibited an open dialogue of the Moonves rumors, say individuals aware of the board’s deliberations.

Mr. Gordon, Ms. Minow and three different CBS administrators sued Ms. Redstone and her household holding firm in Could, looking for to dam a merger with Viacom and dilute her household’s overwhelming voting management of CBS—a surprising maneuver that a number of attorneys near the state of affairs known as the “nuclear choice.”

Mr. Moonves had combined emotions about going nuclear. Correspondence that emerged throughout litigation revealed that, proper up till the day that CBS and the 5 administrators filed their shock lawsuit, Mr. Moonves, who wasn’t a plaintiff within the swimsuit, expressed reservations, in response to individuals aware of it. On a number of events, he was urged to return round by his shut lieutenants and board allies, together with CBS Chief Communications Officer Gil Schwartz, then-COO Mr. Ianniello and Mr. Gordon.

In early July, shortly earlier than Mr. Moonves and Ms. Redstone had been each scheduled to seem at Allen & Co.’s annual media convention in Solar Valley, Idaho, Mr. Moonves referred to as her in a transfer that opened the door to settlement talks, in response to individuals aware of the matter. Whereas Mr. Moonves’s preliminary intention was merely to make sure the convention wouldn’t be too uncomfortable—they managed to time their goings and comings from the Solar Valley Lodge so their paths by no means crossed—the gesture of excellent religion was adopted up by Michael Aiello, a lawyer at Weil, Gotshal who was representing the CBS unbiased administrators.

By mid-July talks had been below method to settle the litigation between CBS and its controlling shareholder, in response to individuals aware of the matter. Mr. Aiello negotiated with Rob Klieger, a lawyer for the Redstone household who serves on the CBS board, to resolve the litigation.

Had these talks resulted in a settlement rapidly, Mr. Moonves would doubtless have walked away with an exit bundle a lot nearer to the greater than $180 million his contract stipulated, the individuals mentioned.

A supply near Mr. Moonves mentioned there have been no severe settlement talks till weeks later.

The New Yorker’s article, revealed on-line on July 27, modified the calculus significantly. The CBS board fashioned a particular committee that retained two regulation companies to research the allegations within the article. A second New Yorker article Sunday added extra allegations.

Initially, it appeared Mr. Moonves wouldn’t go away with out a struggle. He didn’t step apart briefly pending the investigation. Main buyers referred to as Mr. Gordon, the lead unbiased director, urging him to not let the New Yorker be the ultimate phrase on Mr. Moonves’s alleged conduct, in response to an individual aware of the matter.

Mr. Moonves didn’t lay low both. Every week after the New Yorker revealed its first story, he addressed analysts about CBS’s second-quarter outcomes, with out acknowledging the probe.

On Aug. 15, Mr. Moonves was by chance copied on an electronic mail to your complete CBS board detailing damaging findings within the regulation companies’ investigations and discussing proceed ought to he must be placed on go away, in response to individuals aware of the matter.

In current weeks, Mr. Moonves appeared to “hit the wall,” as one former affiliate put it. He hunkered down in his Studio Metropolis workplace. A few of his prime lieutenants didn’t seen him.

Intertwined fates

The company feud and the difficulty of Mr. Moonves’s destiny turned step by step intertwined, and the talks on each tracks intensified, main as much as a world settlement this previous weekend.

Transferring previous the Moonves period might be a problem for the subsequent CEO, given the corporate’s efficiency on his watch. The final of the old fashioned Tinseltown titans, Mr. Moonves went into tv manufacturing after giving up on performing, rising to grow to be the top of Warner Bros. Tv, the place he shepherded such hits as “Pals” and “ER.”

When CBS employed him in 1995 it was greatest identified for the staid and ageing exhibits “Homicide, She Wrote” and “Touched by an Angel.” Mr. Moonves gambled on a darkish crime drama referred to as “CSI: Crime Scene Investigation” about forensic investigators that turned a shock hit, spawning two spinoffs. The present “NCIS” a couple of Navy crime unit was an identical success, with a number of spinoffs of its personal.

After rising to chief govt in 2006, he aggressively pushed pay-TV distributors and the community’s personal native station associates to shell out important charges to hold the community’s content material, a income stream projected to hit $2.5 billion by 2020. CBS has additionally been on the forefront of making direct-to-consumer platforms to succeed in so-called cord-cutters who now not subscribe to a standard pay-TV service.

“Les is a singular chief, as a result of he’s each a left and a proper mind individual. Not solely did he information CBS Community creatively for many years, however he reimagined CBS Corp. right into a powerhouse within the digital age,” mentioned Warren Littlefield, a producer and former NBC Leisure chief.

Darker components

The subsequent regime must grapple with the darker components of the tradition Mr. Moonves constructed—not simply the allegations of sexual assault and harassment that surfaced within the New Yorker’s reporting, but additionally his document as a supervisor. Colleagues felt the manager, whose favourite film is “The Godfather,” prized loyalty over all else. Others criticized what they describe as a “boy’s membership” tradition, in response to interviews with a number of present and former CBS executives.

Mr. Moonves had a popularity for a hair-trigger mood. His longtime govt assistant, Suzanne Fickinger, made a “temper dial” to point to guests to his workplace what his temperament was on a given day. “If it was on vivid pink, you most likely wish to come again one other day,” mentioned a former CBS govt.

Some executives who fell out of favor with him mentioned they had been blackballed within the leisure enterprise. “Les advised me I wouldn’t work in Hollywood once more,” mentioned Andy Hill, a former CBS programming govt.

It wasn’t simply robust discuss. Based on Mr. Hill, when he left CBS in 1996 and was up for a job at one other studio, Mr. Moonves advised the top of that studio CBS wouldn’t do enterprise with him if he employed Mr. Hill.

“He’s probably the most vengeful vindictive man in a vengeful vindictive city,” mentioned Mr. Hill.

When the CBS affiliate in Indianapolis was nearing the tip of its take care of the community in 2014, Mr. Moonves wished to extract an enormous improve in funds from the station that it may then use as precedent for different offers. Mr. Moonves met the highest govt of the station proprietor, LIN Broadcasting, on the Masters Event to speak in regards to the deal. Mr. Moonves advised him that if he didn’t agree, he would strip the affiliation, in response to an individual aware of the assembly. LIN mentioned no, and CBS lower ties with the station.

Mr. Moonves had romantic relationships with a number of senior and junior CBS staffers over time, that, whereas consensual, made different executives uncomfortable and led some ladies to really feel the corporate had a misogynistic tradition, former executives say.

A number of feminine former executives say ladies at CBS got a tough time for getting pregnant, anticipated to take notes at conferences and excluded from different key conferences by their male friends and executives. After they went to human sources to complain, the ladies mentioned, they had been ignored.

“You knew that in case you complained, you wouldn’t win, and also you doubtlessly get voted off the island after which by no means work within the city once more,” mentioned one feminine former CBS govt.

Write to Keach Hagey at keach.hagey@wsj.com and Joe Flint at joe.flint@wsj.com



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