EXCLUSIVE: With a new round of sexual assault allegations against Les Moonves being reported by the New Yorker today, the clock is ticking even faster and more furious in the final hours of the CBS CEO’s reign, and when the end soon comes it won’t be with as rich a payout as expected.
In anticipation of an official announcement on Moonves’ pink slipping and a resolution likely tomorrow to the bitter legal battle between CBS and the Redstone-dominated National Amusements, negotiations for the check the once all-powerful corner office pitchman will receive have now gone into a brand new and far less generous territory, we hear.
“The lawsuit stuff is basically wrapped up, but the $100 million being discussed last week for Leslie is off the table,” an insider says. “Board members are looking at these New Yorker claims and there are now talks of him leaving for cause, which changes everything.”
Currently in what is an extremely fluid and bumpy situation, with legal and corporate potholes galore, we’ve learned a figure of around $25 million to $35 million is in play for the very well compensated Moonves. Added into the increasingly bottoming out bottom line for Moonves is “substantial information,” as one corner office source termed it, with regard to the on-going investigations into previously reported sexual misconduct by the CEO and within the culture at CBS.
Having accelerated in the past 24 hours, the talks by CBS independent board members led by former Viacom exec Bruce Gordon are still aiming for the “all-encompassing settlement.” Exclusively reported by Deadline last week, the move to end the lawsuit for corporate control and on the future of a possible merger with Viacom (as once advocated by CBS vice chair and NAI de facto boss Shari Redstone) are now running parallel with the push towards the door for the damaged-goods Moonves.
Among other details in those overall talks, we hear that NAI maintains it will not instigate a renewal of the merger discussions. However, the NAI board will also not be opposed to other parties exploring the option or other possible sale prerogatives.
Reps for CBS, its board and NAI all had no comment today on the state of talks and Moonves’ status.
Whatever the final figure is in the exit deal, Moonves’ contractual compensation was lurching near $300 million when you factor in stock and other elements. That was a key component in the circumstances leading up to the spring lawsuit with NAI. Rejected by the Moonves-led CBS in its desire to merge with Viacom, the holding company and Shari Redstone fretted that the sums the CEO could command held them over a barrel in terms of succession, among other elements.
Now that is simply paper on fire.
To show how fast things are burning up, Moonves just re-upped his contract with CBS in May 2017, extending it through 2021. He had already been one of the top-paid CEOs in media, taking home $69.3 million in 2017, according to SEC filings.
Last spring, as Moonves sparred with Shari Redstone, there were reports of him being willing to be fired by the daughter of the once much feared Sumner Redstone. That scenario could have seen Moonves walk away with $280 million, depending on the performance of CBS stock, for being fired “without cause.”
The question now, especially for shareholders, is what his takeaway will be if he is fired for cause. In CBS’ annual proxy statement, the company lists two scenarios that appear to apply to the current Moonves situation: “termination for cause,” or “voluntary termination without good reason.” Either one, according to the proxy, would not provide for any cash or stock payment. But Moonves has enlisted veteran attorney Daniel Petrocelli to represent him, and his two-plus decades of service are unlikely to amount to zero in the end.
Wall Street has seemed to look favorably on the recent developments at CBS. While Moonves for years persuaded most of them, backed up by many solid financials, that the company was on the right track, sentiment has shifted slightly as the summer has worn on. CBS stock gained 3% on Thursday and again on Friday to end the week at $56.06, its highest level since late July, just before The New Yorker published its first damaging expose. One longtime media fund manager told Deadline, “People respect his legacy, but in terms of making money from here on out, they are ready to move on from Les.”
Michael Nathanson, one of the most respected media analysts on Wall Street, published a blog post late last week in which he called a likely Moonves exit “a mixed outcome for CBS shareholders.”
He expects in the near term CBS stock will be “range-bound” given National Amusements’ level of control. “We see no evidence that potentially new CBS management will be empowered to act independently to sell this company to the highest external bidder,” he wrote.
The $100 million payout figure that CBS board members were contemplating as recently as September 7 caused a declaration of outrage from the Time’s Up organization. “Les Moonves walking away with a $100 million settlement sends a message to survivors everywhere that powerful men can act without fear of consequence,” the Hollywood group declared on Friday, suggesting that the cash would be better spent on a legal defense fund.
Today, Rachel Bloom, the star and co-creator of Crazy Ex-Girlfriend, offered another blunt and burning response to the latest New Yorker article that could become a common chorus over the next few hours:
As an employee of CBS, I would just like to say that Les Moonves should be fired without getting a fucking 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. https://t.co/1ItYyeLGmH
— Rachel Bloom (@Racheldoesstuff) September 9, 2018