N.Y. Attorney General Letitia James Secures $30.5 Million Settlement From CBS, Former CEO Leslie Moonves for Insider Trading and Concealing Sexual Assault Allegations

New York Attorney General Letitia James Nov. 2 announced that the state prosecutor’s office secured a $30.5 million settlement from CBS and former CEO Leslie Moonves for concealing sexual assault allegations against the executive, misleading investors about those allegations, and insider trading.

CBS, which remerged with Viacom to become Paramount Global in February, is required to pay $28 million, $22 million of which will go back to CBS shareholders and $6 million to strengthening mechanisms for reporting and investigating complaints of sexual harassment and assault. In addition, any stock trade made by a senior executive of CBS must be specifically approved by the company’s chief legal officer.

Moonves is required to pay $2.5 million, which will go to CBS shareholders. In total, CBS shareholders will receive $24.5 million. Additionally, for the next five years, Moonves is not allowed to serve as an officer or director of any public company doing business in New York without written approval by OAG.

The investigation found that CBS and its senior leadership knew about multiple allegations of sexual assault made against Moonves and intentionally concealed those allegations from regulators, shareholders and the public for months. The investigation also revealed that another senior executive at CBS — one of the few people who knew about the allegations — sold millions of dollars of CBS stock in the weeks before the allegations became public.

Moonves, who had been positioning himself to become CEO of  ViacomCBS, resigned in 2018 following the allegations. The company is now headed by former Viacom CEO Bob Bakish.

“CBS and Leslie Moonves’ attempts to silence victims, lie to the public, and mislead investors can only be described as reprehensible,” James said in a statement. “As a publicly traded company, CBS failed its most basic duty to be honest and transparent with the public and investors. After trying to bury the truth to protect their fortunes, today CBS and Moonves are paying millions of dollars for their wrongdoing. Today’s action should send a strong message to companies across New York that profiting off injustice will not be tolerated and those who violate the law will be held accountable.”

According to OAG, at the height of the #MeToo movement, CBS and Moonves became aware of several sexual assault allegations against the longtime executive and tried to conceal them from the public. The investigation also unearthed information about an LAPD captain’s direct and repeated interference with the investigation.

Specifically, on the day an individual filed a confidential criminal sexual assault complaint against Moonves at an LAPD station in Hollywood, the LAPD captain informed a CBS executive of the confidential complaint. The captain shared an unredacted police report with the executive, who shared it with Moonves and other executives at CBS.

As CBS allegedly tried to hide the allegations, OAG disclosed that the media company authorized its former chief communications officer, Gil Schwartz, who was aware of the allegations and the LAPD police report, to sell his shares. Six weeks before the first news article about the allegations became public, Schwartz sold 160,709 shares of CBS stock at an average price of $55.08 for a total of $8,851,852. The stock dropped almost 11% in value from the day before the news broke to the trading day after.

The settlement also requires CBS to continue its obligations under OAG’s Civil Rights Bureau’s agreement, which requires CBS to conduct annual employee surveys about the work climate within CBS, submit its sexual harassment training to OAG for review, enhance its outreach and recruitment efforts to hire more women at all levels of management, and financially commit to fund human resources reforms within CBS.

CBS, Viacom Re-Merger Nearly Complete; CBS Eyeing Higher Price Point for International ‘All Access’ Rollout

As expected, the Viacom and CBS re-merger could reportedly be announced as early as next week, pending last-minute stock exchange issues.

Fox Business’ Charlie Gasparino Aug. 9 on Twitter said the deal reuniting CBS with parent Viacom after a 13-year split is in the hands of the companies’ respective boards.

Viacom and CBS are majority owned by family-owned National Amusements, which is operated by Shari Redstone on behalf of her ailing 96-year-old father, Sumner Redstone.

Shari Redstone has pushed for the merger, claiming media consolidation is a perquisite for navigating the rapidly changing media landscape and over-the-top video distribution. She also wants Viacom CEO Bob Bakish to lead the combined companies.

Redstone’s strategy was initially rebuffed by former CBS CEO Les Moonves, who wanted the top job. With Moonves out following #MeToo issues, consummation of the merger seemed a formality.

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Separately, CBS says it will have 25 million combined CBS All Access/Showtime OTT subscribers by 2022.

To get there the media giant is rolling out All Access internationally in attempt to borrow a page from Netflix’s subscriber growth playbook.

All Access, like Hulu, is available with limited ads for $5.99 monthly, or ad-free for $9.99 ($11.99 for Hulu).

Speaking on the Aug. 8 fiscal call, acting CEO Joe Ianniello said the company would target Latin America and Europe with the more expensive $9.99 price point.

“Two-thirds of the All Access subs are taking the limited commercial option,” he said. “So obviously, the vast majority of that is the $9.99 price point.”

Ianniello contends there is strong demand for premium content delivered via broadband in the international marketplace.

“I just look at the number of people in the consumption of Netflix,” he said. “I’m very encouraged that this is single-handedly the largest opportunity that we have in front of us.”

Ianniello said CBS targets international distribution of proprietary content on franchise-per-franchise basis. Characterizing the U.S. market as “limited” to 325 million people, the executive contends a global audience in the billions satisfies long-term fiscal goals.

“Our thought is if [international is] willing to pay us [$9.99], we’re going to look at that hard,” Ianniello said. “But if they’re not, we’re going to put it through our own [domestic] infrastructure.”

With Disney announcing it would bundle pending SVOD service Disney+ with ESPN+ and Hulu, Ianniello said CBS is content limiting its OTT bundling to All Access and Showtime.

“I can understand why others want to kind of do that together because people will subscribe for different reasons,” he said.

With All Access nearly five years old, Ianniello says the company understands its appeal and marketing with Showtime.

“It’s an opportunity we don’t force consumers to do it,” he said. “They can buy part; if they want to buy them together, we obviously discount that. We think again those are different offerings and complementary as well.”

Report: CBS, Viacom to Rekindle Merger Discussions

Media giant Viacom (parent to Paramount Pictures) and CBS reportedly are set to begin in June renewed discussions about a possible merger — nearly 20 years after Viacom created CBS Corp. through a spin-off.

CNBC, citing sources familiar with the situation, say the two companies controlled by Sumner Redstone and his daughter Shari Redstone’s National Amusements corporate umbrella are seeking to “bulk up” the balance sheet in a rapidly evolving media landscape underscored by mergers and acquisitions.

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National Amusements has twice tried unsuccessfully to merge CBS back into the fold — efforts largely rebuked by former CBS CEO Les Moonves, who sought the top position in the merged companies. Sharri Redstone preferred Viacom CEO Bob Bakish in that role.

Moonves was forced out of CBS following multiple allegations of inappropriate workplace behavior toward women.

Scuttlebutt about a possible merger grew after Joseph Ianniello, acting CEO at CBS, had his contract renewed only to the end of the year, and search for a permanent executive was cancelled.

CNBC said the merger would likely be a stepping stone to further M&A activity, including a renewed bid for Lionsgate-owned Starz and SVOD platform Starz Play, and possibly Discovery Communications, home to HGTV, Food Network and DIY Network, among other properties.

CBS Extends Joe Ianniello as ‘Acting CEO,’ Suspends Search for New Chief Executive

CBS April 23 announced it has extended Joe Ianniello’s role as acting CEO until Dec. 31. The contract extension would appear to be permanent as the CBS board said it would suspend its search for another CEO.

Ianniello, who was COO under former CEO Les Moonves, was named interim CEO in 2018 after Moonves was forced to resign following allegations of inappropriate behavior in the workplace.

Les Moonves and Joe Ianniello

“Joe has demonstrated exceptional leadership during this time of unprecedented transition at CBS,” the board said in a statement. “He steadied the ship with some key appointments and a commitment to cultural change and steered it forward by focusing CBS’ operations around its growing direct-to-consumer strategy.”

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As COO, Ianniello developed spearheaded the company’s monetization strategy across platforms, including retransmission consent fees and reverse compensation from affiliates, as well as the licensing of the CBS content for digital streaming and broadband services. He was also instrumental in launching SVOD service CBS All Access, which has developed into one of the company’s fastest growing initiatives.

He led the Company’s acquisition of Network 10 in Australia and the split-off of CBS Radio (CBSR) through a merger with Entercom. In addition, he led the conversion of CBS Outdoor into a real-estate investment trust, marking a first for an outdoor advertising business.

Prior to being COO, Ianniello was CFO (2009-2013), overseeing the company’s financial operations across all business units. He joined CBS in 1997.


CBS CEO: Diversity of Distribution Driving Original Programming

With more than 8 million combined subscribers for CBS All Access and Showtime OTT expected by next year, CBS Corp. interim CEO Joe Ianniello says over-the-top video distribution is driving original content production.

“We put [content] originals on [All Access and Showtime OTT],” Ianniello said on the fiscal call — his first since replacing the ousted Les Moonves. “We saw it was working. We saw the consumers wanted more. So, we’re putting more on it. We’ve raised the [subscriber] targets. We’ve accelerated them. [And] we’re going internationally [Canada].”

CBS Studios currently produces four series for Netflix — “Insatiable,” “Dead to Me,” “American Vandal,” and “Unbelievable.” It also produces new drama, “Your Honor,” for Showtime, and psychological thrillers, “Tell Me a Story,” and “Why Women Kill,” for All Access.

As previously, reported CBS produces “Star Trek: Discovery” for All Access, and has 2018 Oscar winner Jordan Peele (Get Out) rebooting “The Twilight Zone.”

“An All Access subscriber watches twice as much content as [someone] who watches on CBS.com,” said Ianniello.

“We have nice diversity in terms of the consumption of the content. And that’s why we’re putting more originals on both of these services, because it’s really driving again the intent to subscribe and it’s reducing churn. And those are the two things we’re really toggling back and forth as we make these investments.”

CFO Christina Spade said OTT video is allowing Showtime to expand beyond its 26 million pay-TV households and reach consumers untethered to traditional cable bundle.

“The world of OTT has opened up so many options with what we can do with data analytics and really unlock and target our marketing,” said Spade. “So, two years into it, we have a lot of great uses of the data, but even as we get further educated and learn even more about our consumer, the scale of the business is huge.”


Former Time Warner CEO Richard Parsons Named CBS Interim Chairman of the Board

CBS Sept. 25 announced it has named former Time Warner CEO Richard Parsons interim chairman of the board of directors – replacing chairman/CEO Les Moonves, who exited the company following allegations of inappropriate behavior in the workplace. The board unanimously approved the appointment, which was recommended by the board’s nominating and governance Committee.

“Dick Parsons has a combination of deep industry knowledge and unmatched corporate and board experience,” Candace Beinecke, chair of the nominating and governance committee, said in a statement. “We are fortunate to have Dick in this leadership role.”

Parsons, who stepped down as CEO of Time Warner in late 2007 – replaced by Jeff Bewkes  – has worn many corporate hats (including Citigroup) in a lengthy career that included a stint as interim CEO of the Los Angeles Clippers NBA franchise after former owner Donald Sterling was forced out following allegations of racist behavior.

CBS also announced that Bruce Gordon and William Cohen, who have served on the board of since CBS became a stand-alone public company in 2006, have decided to step down from their posts to focus on other personal and professional priorities. The board unanimously adopted a resolution to express its thanks and appreciation to Gordon and Cohen for their long and dedicated service to CBS, and to wish them well on their future endeavors.

Joseph Ianniello Acting CEO at CBS Following Moonves Exit, Settlement with National Amusements

Joseph Ianniello, current COO at CBS Corp., is now acting CEO following the Sept. 9 departure of beleaguered boss Les Moonves in the aftermath of additional accusations of inappropriate behavior in the workplace. Moonves had been the head of CBS for 24 years.

Ianniello, who joined CBS in 2005, has been COO since June 2013. The chairman position will remain open pending the appointment of a permanent CEO.

Moonves and CBS will donate $20 million to one or more organizations that support the #MeToo movement and equality for women in the workplace. The donation, which will be made immediately, has been deducted from any severance benefits that may be due Moonves following the board of directors’ ongoing independent investigation.

Moonves will not receive any severance benefits (rumored to be around $120 million) at this time (other than certain fully accrued and vested compensation and benefits); any payments to be made in the future will depend upon the results of the independent investigation and subsequent board evaluation.

Moonves’ high-profile exit was in part triggered by a follow-up story in The New Yorker by Ronan Farrow that detailed additional accusations from six women alleging sexual misconduct by Moonves over a 20-year period.

In a statement late Sunday night, Moonves said “untrue allegations from decades ago” are not consistent with “who I am.” Moonves said he was “deeply saddened” to be leaving the company and wished nothing but the best for the organization.

CBS also announced a settlement with corporate parent National Amusements (and Viacom), which includes dismissing their pending litigation and previous corporate bylaw amendments.

In addition, five current independent directors and one National Amusements-affiliated director have stepped down from the board, and six new independent directors have been elected. The new board will be comprised of 11 independent directors and 2 NAI-affiliated directors.

Ad-Lite ‘CBS All Access’ Now Available on Amazon Channels

After generating millions of subscribers for Showtime OTT and CBS All Access through Amazon Channels, CBS has inked a deal with the ecommerce behemoth for access to All Access with fewer advertisements.

All Access – which includes CBS catalog, primetime and original programming such as “Star Trek: Discovery” and “The Good Fight” – costs $5.99 monthly with advertisements; All Access with fewer ads costs $9.99.

Amazon Channels, which affords Prime members access to third-party over-the-top video services, has been a godsend for All Access and other. During the CBS fiscal call, CEO Les Moonves said Amazon would contribute to All Access and Showtime OTT reaching 8-million combined subs a year early in 2019 instead of 2020.

“Amazon has been absolutely amazing in terms of growing our subs,” Moonves said on the Aug. 2 call. “They’ve been at the top of the list, and we like what they’re doing. And we would say we get more with them than any of our other partners, although some of the other ones are more recently in the ballgame.”

CBS believes both platforms can now reach 16 million subs by 2022.






CBS Says It Will Investigate Sexual Misconduct Claims Against CEO Les Moonves

The board of directors at CBS Corp. July 27 said it will investigate claims of sexual misconduct by longtime CEO Les Moonves disclosed in an expose by Ronan Farrow in The New Yorker.

Farrow’s article  alleges Moonves engaged in unwanted touching and kissing of female subordinates over the past 20 years.

Read Ronan Farrow’s article in The New Yorker here.

“All allegations of personal misconduct are to be taken seriously,” the board said in a statement. “The independent directors of CBS have committed to investigating claims that violate the company’s clear policies in that regard.”

The board noted the timing of the expose coinciding with CBS’ ongoing legal battle with corporate parent National Amusements, headed by Shari Redstone and her ailing father Sumner Redstone.

“While that litigation process continues, the CBS management [which includes Moonves] has the full support of the independent board members,” said the statement.

Farrow won a Pulitzer Prize for another expose that outed Harvey Weinstein’s long history of sexual harassment. The story led to Hollywood’s #MeToo movement, and subsequent criminal indictments against Weinstein.

CBS, Shari Redstone Clash Gets Oct. 3 Court Date

The legal skirmish between CBS and corporate parent National Amusements, which is led by co-owners Sumner Redstone and his daughter Shari Redstone (who runs the company in place of her ailing father), will gets its day in court on Oct. 3.

On that day, the Delaware Chancery Court will begin proceedings to determine whether CBS has the legal authority to flood shareholders with a dividend issuance that would reduce National Amusement’s voting power from 79% to 17%. The issuance would not undermine NAI’s stock ownership or market cap.

Shari Redstone responded to the CBS move by changing the company’s bylaws and requiring 90% approval vote by the board of directors on such matters.

At issue is Ms. Redstone’s desire to meld CBS with Viacom, whose assets include Paramount Pictures, BET, MTV, Nickelodeon and Comedy Central, among others.

Les Moonves, who heads CBS, has been lukewarm to the idea. Moonves, who would head the combined company, wants to install his own management team, including COO Joseph Inniello as his second-in-command.

Redstone wants to put Bob Bakish, current CEO of Viacom, in that position.

CBS, which delayed its annual shareholder meeting due to the conflict, has rescheduled it for August 10.