Media landscape shifts
With Moonves gone, takeover of CBS possible
NEW YORK — The resignation of longtime CBS chief Les Moonves won’t likely lead to drastic changes in network programs, but a related deal could make the company ripe for a takeover as traditional media companies compete with upstarts such as Netflix and Amazon.
Moonves was ousted Sunday, just hours after New Yorker writer Ronan Farrow detailed more sexual misconduct allegations against him. A dozen women have alleged mistreatment, including forced oral sex, groping and retaliation if they resisted him.
CBS would be obliged to pay $120 million in severance if its investigation, being conducted by two outside law firms, finds no evidence of wrongdoing. Moonves has denied any wrongdoing. CBS has also agreed to donate $20 million to groups supporting women’s rights and #MeToo causes.
Julie Chen, wife of Moonves, was absent from her talk show on the network The Talk a day after his departure.
In what was supposed to be a celebratory season premiere Monday for The Talk, its four other panelists walked out somberly without Chen, who acts as host and moderator and whose absence had not been announced.
Sharon Osbourne choked back tears as she announced Chen would be taking time off to be with her family, and expressed support for her co-star and friend, a sentiment seconded by the other three women at the table.
All four also expressed vehement support for the women who came forward about Moonves, with Osbourne saying he had clearly ruined the life of one of the accusers.
Chen, who also hosts the CBS series Big Brother and married Moonves in 2004, publicly supported him when a first round of sexual allegations emerged last month.
Even before the latest New Yorker article came out, Moonves was already facing pressure to leave. His departure was brokered as part of broader talks with CBS’s parent company, National Amusements, over the network’s future. Under settlement terms with CBS, National Amusements chief Shari Redstone conceded not to push for combining CBS with sibling company Viacom for at least two years, a merger Moonves had opposed. National Amusements also agreed to a board shakeup that increased the power of independent directors.
The network was struggling when Moonves took over as entertainment chief in 1995. He quickly turned things around and churned out shows appealing to the older, more tradition-bound CBS audience — broad-appeal sitcoms such as Two and a Half Men and The Big Bang Theory and procedural dramas such as CSI: Crime Scene Investigation and NCIS. Survivor was an early reality show hit, and continues to this day.
His temporary replacement, chief operating officer Joseph Ianniello, has steered top projects such as stand-alone streaming services for CBS and the Showtime cable channel. But he doesn’t have a creative or sales background, which might make him an awkward long-term leader for the company.
For now, Ianniello is unlikely to make drastic changes in programming, particularly since CBS’s formula has been working. Programming changes could be more substantial if CBS chooses someone outside the company as a permanent replacement.
To better compete with tech companies such as Netflix, companies that have traditionally distributed TV shows and movies have been buying the producers of such programs. The producers, themselves, have been consolidating as well. AT&T bought Time Warner for $85 billion in June, while Disney is in the process of acquiring the entertainment assets of Fox for $71.3 billion (figures in U.S. dollars).
That makes CBS a hot commodity. With the shakeup of its board, there are 11 independent directors and two affiliated with National Amusements, down from three. One of the new directors, Candace Beinecke, is a lawyer with expertise in mergers and acquisitions. National Amusements agreed to give “good faith consideration” to any offer the new board deems good for shareholders.
Crockett said possible suitors include AT&T “doubling down” and attempting to buy CBS to complement its recent Time Warner acquisition. Or Verizon, which was rumoured to be a suitor in the past, could make an offer as a way to “deepen its content presence and close a content gap with AT&T,” he said.
Offers from Amazon, Apple or Google might be possible as well, if those companies wanted to expand their sports offerings and “vault into a leadership position in production of top tier TV content,” Crockett said.
Leslie (Les) Moonves, president and chief executive officer of CBS Corp., speaks before a Bloomberg Television interview in New York.