With the fall of a kingmaker, CBS is punished on Wall Street
NEW YORK (AP) — Sizing up a future of a network without its kingmaker, Wall Street sent shares of CBS down sharply Monday, the first day of trading since the departure of Les Moonves.
CBS said late Sunday, as more allegations of sexual abuse surfaced, that Moonves would be replaced and that the company was shaking up its board of directors.
Shares are down more than 8 percent this year, and suffered their biggest downturn in nearly 7 years in July when details of the accusations surfaced.
The stock tumbled close to 4 percent Monday.
The #MeToo movement fighting sexual misconduct had already claimed one of Hollywood’s top movie moguls in Harvey Weinstein. Now it has done the same for Moonves, one of the television industry’s most powerful executives.
CBS, just hours after The New Yorker magazine posted a story Sunday with a second round of ugly accusations against Moonves, said that the company’s chairman would step down. A total of 12 women have alleged mistreatment, including forced oral sex, groping and retaliation if they resisted him. Moonves denied the charges in a pair of statements, although he said he had consensual relations with three of the women.
CBS said $20 million will be donated to one or more organizations that support #MeToo and workplace equality for women. That sum will be deducted from any severance due Moonves, a figure that won’t be determined until an outside investigation, led by a pair of high-profile law firms, is completed.
The network’s chief operating officer, Joseph Ianniello, is taking over as president and CEO until the reshaped board of directors can find a permanent replacement, CBS said.
It has been nearly a year since Pulitzer Prize-winning articles by The New York Times and the New Yorker exposed a pattern of misconduct by Weinstein, who now faces sex crime charges in New York. Matt Lauer, Charlie Rose and Kevin Spacey are among other figures that lost jobs after men and women came forward with their own stories, often on social media with the hashtag MeToo, about sexually inappropriate behavior by powerful men.
Moonves ruled first the programming, then the full network and other corporate entities such as Showtime for two decades. CBS has consistently been the most-watched network on television, even as changes transformed the industry, first with cable networks investing in shows and then streaming services like Netflix. He’s been paid handsomely for his success, earning just under $70 million in both 2017 and 2016.
Those paychecks made Moonves the second-highest paid executive in the S&P 500, according to an analysis by The Associated Press and Equilar, an executive data firm.
Accusations emerged against the affable, raspy-voiced former actor last month, when six women accused him of misconduct similar to what came out Sunday. CBS announced an internal probe yet Moonves, who was also involved in a separate power struggle that threatened his future control of the company, remained in charge. In recent days, however, reports leaked that the CBS board and Moonves, 68, were formulating an exit plan. Reports that the severance could include a multi-million dollar payout provoked online anger.
In a regulatory filing published Monday by the Securities and Exchange Commission, CBS said that $120 million will be placed in a grantor trust. If an internal investigation finds that Moonves employment cannot be terminated for cause, the money will be forwarded to him.
Any decision could be subject to arbitration, according to CBS.
One of the accusers who came forth in the New Yorker’s article on Sunday, Phyllis Golden-Gottlieb, also filed a complaint with the Los Angeles police last year, but no charges were filed because the statute of limitations had expired. She said Moonves, while an executive at the Lorimar production studio in the late 1980s, pushed her head into his lap and forced her to perform oral sex.
At another time, she said an angry Moonves pushed her hard against a wall. When she resisted later advances, she began to be frozen out at the company, she said.
“He absolutely ruined my career,” she told The New Yorker.
Another woman, Jessica Pallingston, said Moonves forced her to perform oral sex on her first day working as his assistant at Warner Bros. productions. Other women told the magazine of unwanted touching or advances.
The latest allegations were not addressed when CBS announced Moonves departure.
In a statement to the magazine, Moonves said the “appalling accusations” are untrue, but he acknowledged consensual relations with three of the women before he started working at CBS. Moonves was married at the time; he divorced his first wife and married CBS on-air personality Julie Chen in 2004.
“I have never used my position to hinder the advancement or careers of women,” he said. “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. Anyone who knows me knows that the person described in this article is not me.”