"I think he's toast," says one expert as company investigators dig into the CEO's relationship with an actress he promoted and reconcile two previous probes that cleared him of wrongdoing. Will new text-message evidence lead to a different outcome?
Call it the trilogy that no studio head wants.
For the third time in a 16-month span, Warner Bros. chairman and CEO Kevin Tsujihara is the subject of an internal investigation about his relationship with British actress Charlotte Kirk. And with the recently promoted chief's fate hanging in the balance, parent company WarnerMedia is being asked uncomfortable questions about how thorough the first two were.
A WarnerMedia representative says the prior investigations it conducted did not find impropriety in Kirk's casting in two Warner Bros. films: the 2016 New Line comedy How to Be Single and the 2018 Sandra Bullock-led caper Ocean's 8. But according to a knowledgeable source, the company is treating text messages between Tsujihara, 54, and Kirk, 26, first reported by THR in a March 6 exposé that revealed the CEO was lobbying his employees on behalf of the actress with whom he apparently was having an affair, as "new information." WarnerMedia declined to comment further.
It remains unclear whether the texts are being considered new because WarnerMedia was not made aware such evidence exists, or because of the actual content of the exchanges, which show that Tsujihara made introductions for Kirk with film and TV underlings to help her.
Either way, the revelations present the first embarrassing scandal since AT&T's $85 billion acquisition of Time Warner cleared regulatory hurdles in February. New WarnerMedia CEO John Stankey recently expanded Tsujihara's domain to include children's content like the Cartoon Network and the iconic Warner Bros. animation studio. Adding to the chagrin, perhaps, is the fact that Stankey was seated next to Tsujihara at a WarnerMedia town hall in New York just before the Kirk story broke; the pair also sat together at this year's Oscars.
According to two sources, it is not a violation of company policy for a rank-and-file Warner Bros. staffer to have an undisclosed consensual relationship with someone who is not in his or her direct line of report. But an executive of Tsujihara's station is believed to have more restrictive language in his contract that references bringing the company into ill repute as grounds for dismissal. Even if he didn't violate any specific policy, if Tsujihara lied during the previous investigations, that would be a fireable offense, say lawyers (employees are typically required to sign statements they make during a formal inquiry).
Time Warner first launched an investigation by an undisclosed law firm in November 2017 as reporters, including some from THR, began calling about Tsujihara and Kirk's relationship. At that point, Ocean's 8 had wrapped, and rumors about Kirk's casting had begun to swirl. The company, in the midst of the merger, found no wrongdoing.
The issue reared its head again nearly a year later when a letter penned by someone going by the moniker "Social Justice Warrior" was sent to Stankey in September and raised a series of explosive questions about a top Warner Bros. executive who promised speaking roles to an actress it identified only as "CK." In response, WarnerMedia retained the respected law firm Munger Tolles & Olson to investigate (it was not involved in the first investigation and is not involved in the current one). Again, no wrongdoing was found.
"That may be because the scope of their investigation was narrow," says Ann Fromholz, an attorney who specializes in workplace harassment. In other words, the investigators had a limited, constricting mandate from WarnerMedia. "Or it may be because people didn't give information to them and they had no other way to get it."
If so, that withholding could itself be problematic for Tsujihara. Fromholz says it's common for executive contracts to include broad statements requiring that the person follow the board's orders, and withholding information from investigators could be interpreted as a violation. "The difficulty of investigations is you only know as much as people will tell you or that you can find via email," Fromholz says. Meanwhile, the other players in the scandal — like director Brett Ratner and his billionaire producing partner, James Packer, who introduced Tsujihara to Kirk — would have had little incentive or mandate to even participate.
As to what comes next for Tsujihara, sources assert he will either stay or go — no suspensions or half-measures. One source, who thinks he is unlikely to remain, says WarnerMedia is looking to wrap up the investigation by the end of March. Industry chatter has moved on to possible replacements, including calls for a woman to get the job.
"I think he's pretty much toast," says Kerry Fields, a USC professor of law and ethics. "This information should have been presented to the law firm that previously investigated. He undoubtedly did not fully cooperate. … They had competent outside legal counsel, and I surmise they weren't given direct responses. It was either intentionally concealed or he used others to buffer the information to protect himself."
Whether Tsujihara remains in his job, WarnerMedia is taking a PR hit given that it promoted him knowing there were questions about his behavior.
"Whether a CEO needs to go higher than HR and inform the board [about an affair] is debatable," says Gene Del Vecchio, USC adjunct professor of marketing. "The best course of action is for the CEO to never engage in a romantic relationship at work, especially in cases where he or she has direct influence over the partner's career. Since most relationships end, it is ripe for lawsuits and blackmail."
Ashley Cullins contributed to this report.
This story first appeared in the March 13 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.