After months of bitter legal battles with National Amusements and two waves of sexual-misconduct allegations, Les Moonves is officially out as chairman and CEO of CBS, enabling NAI chief Shari Redstone to declare victory again.
The exit of Moonves marks the end of his 24-year run at the company as one of media’s most imposing chief executives. As part of the settlement, he and CBS are donating $20 million to one or more organizations that support the #MeToo movement.
The company was silent on the terms of a possible settlement with Moonves, who had been negotiating a $100 million exit package. However it said the charitable donations have been deducted from any severance benefits Moonves would receive, pending the outcome of the ongoing investigation into alleged misconduct.
Moonves’ departure comes as part of a sweeping series of agreements that formally end hostilities between CBS and the media company’s controlling shareholder.
CBS agreed to drop its lawsuit against Redstone and the family’s holding company, National Amusements. The CBS board unanimously rescinded the dividend it previously approved which sought to dilute the Redstone family’s control over the company.
National Amusements will appoint six new independent directors to the CBS board, including former Time Warner CEO Richard Parsons. The other newcomers are: Candace Beinecke, an attorney the firm Hughes Hubbard & Reed who is known for her expertise in mergers and acquisitions, Barbara Byrne, retired vice chairman of Barclays investment bank, Brian Goldner, chairman and chief executive of Hasbro, Susan Schuman, CEO of the consulting firm SyPartners, which works with businesses undergoing cultural transformations, and Strauss Zelnick, CEO of Take-Two Interactive Software and a former Fox and Columbia Pictures executive.
They join the following independent directors who remain: Bruce Gordon, William Cohen, Gary Countryman, Linda Griego and Martha Minow.
As part of the agreement, National Amusements said it would not propose a combination of CBS and Viacom for at least two years. Redstone has twice advocated re-uniting the corporate siblings, arguing that a merger would strengthen both media companies at a time of rapid media consolidation. The Moonves-led CBS had opposed such a deal, leading to an open revolt in the board room and a legal battle to diminish Redstone’s influence over the company.
“Today’s resolution will benefit all shareholders, allowing us to focus on the business of running CBS – and transforming it for the future,” Redstone said in a statement. “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.”
The end had been predicted for days, but negotiations took on a new urgency and intensity after The New Yorker published a follow-on report by Ronan Farrow detailing new allegations by six women spanning the 1980s to the 2000s. These fresh accounts of sexual misconduct include claims that Moonves forced women to perform oral sex on him and that he exposed himself to them without their consent.
Moonves, who has cut a larger-than-life figure in the media business over the past three decades, acknowledged three of the encounters, which he told The New Yorker 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,” Moonves said in a statement. “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.”
Remarkably, with the company under siege and activists and others calling for Moonves’ ouster, he continued to shepherd the company’s day-to-day activities, memorably conducting an earnings call with Wall Street analysts. The call included the briefest of disclaimers saying no one planned to address any legal matters. Insiders say they did their best to focus on the work of running a media company with a $21 billion market cap.
An outside search for a permanent CEO is planned, but Ianniello will remain a serious contender for the job as he is well regarded on Wall Street and analysts who are looking for stability.
Before hitting the rocks in terms of his own personal conduct, Moonves had also encountered fierce resistance across the negotiating table from Redstone, the CEO of National Amusements. Ionniello, in fact, factored heavily into that discord. Moonves wanted him to be designated as the No. 2 of a combined CBS and Viacom, while Redstone was pushing Viacom CEO Bob Bakish.
The disagreement over management and compensation exploded into all-out legal warfare. CBS and National Amusements sued each other and exchanged vitriolic statements on the eve of one of the most important dates on the business calendar: the CBS upfront presentation at Carnegie Hall.
After days of feverish speculation about the event, Moonves walked out onstage to a standing ovation. “So. How’s your week been?” he joked, before offering an observation that would prove prophetic. “For years, I have told you that I will only be out here [onstage] for a short time. This year, for the first time, I might mean it.”
This marks the second time Redstone has triumphed over a CEO who launched a high-stakes legal battle to fight off her control. Such was the case in 2016, when she forced the ouster of Viacom CEO Philippe Dauman.