The battle between executives at CBS and Viacom, two houses divided under controlling company National Amusements, was already the broadcast boardroom scandal of the century — and it just took a turn as allegations of sexual misconduct against CBS chairman and CEO Les Moonves surfaced. It’s been called “Wall Street’s best soap opera” and a “squabble over leadership,” with workplace harassment at the highest levels and a backstory so fraught with family tension that the HBO show Succession is partially based on it.
Moonves is widely considered one of the most successful and long-running executives in broadcasting, having worked at CBS for 20 years, racking up promotion after promotion while maintaining a high return for shareholders in the company at a time when broadcast TV is floundering. National Amusements holds the majority shares in CBS and Viacom and is owned by the extremely powerful Redstone family. Moonves is currently locked in a legal battle against the Redstones, and Ronan Farrow’s New Yorker exposé about alleged harassment and a toxic work environment at CBS may mean the scales have tipped in the family’s favor.
Sumner Redstone inherited National Amusements from his father. It was a drive-in movie theater company decades ago, and it still owns theaters. In the ‘80s and ‘90s, he went from investor in media to owner of media conglomerates. He purchased Viacom in 1999 and merged it with CBS, only to split them once again in 2005. After a series of high-profile lawsuits involving his romantic life and questions about his mental acuity, he disappeared from public life around 2012 and hasn’t spoken publicly since. He still owns National Amusements and is the company’s chairman, but his daughter Shari Redstone stepped in when her father resigned his position as executive chairman of CBS when issues of his mental fitness were raised. She is currently the president of National Amusements and the vice chairman of both CBS and Viacom.
Shari Redstone has tried to orchestrate a merger between CBS and Viacom, ostensibly to sell them as one company for a higher profit (which would also benefit the Redstone family) and stop a buyer from cherry-picking among the various properties owned by the companies. CBS has been performing well in a tough market for years, while Viacom has floundered throughout the last two decades as young audiences leave their suite of networks (MTV, Nickelodeon, and VH1, among others) for streaming options. For awhile, it seemed like Moonves would accept the merger, so long as he could lead the combined companies. But on May 14, 2018, CBS filed a lawsuit against National Amusements, its largest shareholder, that claimed the merger was against the best interest of both companies. Keach Hagey, a Wall Street Journal reporter and the author of a book on Sumner Redstone called The King of Content, characterized the attack against Shari Redstone’s control of CBS as “unprecedented,” telling The Daily Beast, “I have never seen a company attack its controlling shareholder.”
Redstone filed a countersuit, alleging that the complaint was not filed due to any impending threat, but “Les Moonves has tired of having a controlling shareholder.” Among other issues with stock dividends that would cause National Amusements to lose its controlling interest in the company, the complaint details a few items that fit into a toxic culture at CBS (which is detailed further in Farrow’s story). The first is Moonves’ apparently strong dislike for Viacom CEO Bob Bakish, and his concerns about Bakish’s role after the proposed merger. The second is a fight over the removal of CBS board member Charles Gifford, who reportedly grabbed Redstone’s face at the Super Bowl while directing her to listen to him. When he later discovered Redstone did not appreciate that, he told her it was “how he treats his daughters when he wants their attention,” and that he “meant no offense.” According to the suit, Redstone informed him she was not his daughter, but the vice chair of CBS. Moonves reportedly thought the move to oust Gifford, a longtime ally of his, was an attempt to gain more control of the CBS board on Redstone’s part.
Media speculation as to how the New Yorker exposé will affect Moonves at the company is all bad for the corporate bigwig, who reportedly earned nearly $70 million last year in his role at the helm of CBS. Bloomberg asserted on July 27, “It’s hard to see how Moonves remains at the company,” positing that this clears the path for Redstone to get her merger. The Hollywood Reporter says that CBS’s stock dip on Friday ahead of the New Yorker publishing its story is investors “signaling how important Moonves is to the future of CBS, not to mention Viacom” (the implication being that CBS is worth less without Moonves), but that it also “indicates that Wall Street has doubts that Moonves can survive at CBS.”
Per a report from Deadline, the CBS board is expected to meet about the allegations against Moonves on Monday, July 30. He is anticipated to stay in his job while an independent investigation is conducted. In a statement released on Friday, July 27, CBS said, “All allegations of personal misconduct are to be taken seriously. The Independent Directors of CBS have committed to investigating claims that violate the Company's clear policies in that regard.” National Amusements has not released a statement, but Shari Redstone did through a spokesperson, and addressed rumors that she somehow orchestrated the reports. “The malicious insinuation that Ms. Redstone is somehow behind the allegations of inappropriate personal behavior by Mr. Moonves or today’s reports is false and self-serving,” spokeswoman Sara Evans said. “Ms. Redstone hopes that the investigation of these allegations is thorough, open, and transparent.”
For the viewing public, who pay for the airwaves that broadcast networks like CBS air on, the ousting of Moonves could mean significant changes in the programming you watch. CBS has long been a target for a notable lack of diversity in its programming, with allegations that its diversity showcase is racist ending with the firing of its director. Some new blood in the company, under the direction a new vice chairman (or, with Moonves out of the picture, Redstone could finally take the chairman title) might be the solution to that very public problem. Farrow’s piece paints a picture of a company with top-down culture problems. The removal of Moonves and execution of Redstone’s vision could offer huge changes there as well.