Les Moonves Exits CBS as Board Settles Ugly Legal Fight With National Amusements

Joe Ianniello will serve as the president and acting CEO

Last Updated: September 10, 2018 @ 8:54 AM

CBS announced late Sunday that it has reached an agreement with longtime CEO Les Moonves that will see the executive exit the company he has led for the last 15 years, effective immediately.

The CBS board also reached a settlement to end its nasty legal fight with its controlling stakeholder, National Amusements Inc. In May, CBS filed a suit against Shari Redstone and National Amusements, a family-run business that controls roughly 80 percent of the voting power in both CBS and Viacom.

Joe Ianniello, who has served as the company’s COO since 2013, will take over as president and acting CEO, while the board searches for a permanent successor. The chairman position will remain open pending the appointment of a permanent CEO.

The announcement came on a day when the New Yorker published accusations of six women accusing Moonves of sexual harassment or assault; the company had hired two firms to investigate accusations by six previous women in a July story in the magazine.

“Untrue allegations from decades ago are now being made against me that are not consistent with who I am,” Moonves said in a statement issued late Sunday, adding that he was “deeply saddened to be leaving the company. I wish nothing but the best for the organization, the newly comprised board of directors and all of its employees.”

In her own statement, vice chair Shari Redstone said, “CBS is an organization of talented and dedicated people who have created one of the most successful media companies in the world. Today’s resolution will benefit all shareholders, allowing us to focus on the business of running CBS — and transforming it for the future. 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.”

Lead independent director Bruce Gordon said, “We thank Les for his 24 years of service. Among his achievements, he established a strong management team, giving us great confidence as we accelerate our succession plans and provide continuity of leadership. This agreement maintains an independent Board that is charged with determining the best course for the future of CBS on behalf of all shareholders.”

Under the terms of the settlement, which have been approved by the Boards of Directors of CBS and NAI, the parties agreed to dismiss their pending litigation in Delaware.

The full board of CBS (following the unanimous recommendation of the Special Committee of the Board) has unanimously rescinded the previously announced Class A share dividend, and NAI has amended the bylaws to undo the previous amendments that it adopted following filing of the Delaware litigation.

In addition, NAI confirmed that it has no plans to propose a merger of CBS and Viacom and has agreed that it will make no such proposal for at least two years after the date of the settlement. NAI reaffirmed that it will give good faith consideration to any business combination transaction or other strategic alternative that the independent directors believe are in the best interests of the company and its stockholders.

In its 8-K filing with the Securities and Exchange Commission on Monday, CBS further stated that the company could pursue a merger with Viacom within the two-year moratorium only if two-thirds of non-NAI affiliated board members request it. “During the same period, NAI has also agreed not to consent to or otherwise approve such a transaction unless at least two-thirds (2/3) of the directors not affiliated with NAI have approved it,” the company further stated.

Moonves’ exit comes two months after Ronan Farrow’s bombshell report in the New Yorker, in which six women accused the longtime media mogul of sexual harassment. On Sunday, a new report from Farrow in The New Yorker outlined accusations of sexual assault and harassment from six additional women.

CBS and Moonves argued that Shari Redstone had shirked her duty to shareholders by pushing for a re-merger with Viacom, which CBS saw as potentially harmful to the value of the company.

Moonves and CBS also laid out a plan to issue dividends that would dilute Redstone’s control of the company altogether. A trial was set to begin on Oct. 3.

In the first story published in July, six women accused Moonves of sexual harassment, with four of them accusing the CEO of forcibly touching or kissing them during business meetings, and two saying he physically intimidated them or threatened to derail their careers.

The report on Sunday included accusations that Moonves forced an additional six women into unwanted sexual situations, including oral sex, and retaliated when they refused.

One veteran television executive, Phyllis Golden-Gottlieb, said that Moonves physically assaulted her in addition to coercing her into oral sex in the 1980s. Last year, she filed a report with the LAPD, but while they found her claim to be credible, they could not press charges due to the statute of limitations expiring.

All of the women, including actress and writer Illeana Douglas, told Farrow that they feared retaliation if they spoke out. CBS had initially kept Moonves as CEO while hiring two law firms to investigate the accusations against him, as well as the larger culture within the company.

Moovnes’ exit ends a 23-year tenure with the company, which started in 1995 when he was named president of CBS Entertainment, joining from Warner Bros. He became chairman in 2003 and was named CEO in 2006, following the split of CBS and Viacom.

Unlike C-suite level executives at other media companies, Moonves was more heavily involved in the day-to-day programming decisions at CBS. During his tenure, CBS has been among the most stable broadcast networks, beating every other network among total viewers for the past 10 years (and 15 of the past 16 years), and spearheaded the launch of CBS All Access, its subscription-based streaming service.