Pressure Mounts for CBS to Wrap Up Moonves Investigation

Leslie Moonves_2 - Getty - H 2018
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"I see no way he gets the $120 million," says CBS shareholder Steven Birenberg, founder of Northlake Capital Management.

Two-and-a-half months.

That’s how long CBS has been investigating allegations against Leslie Moonves, with no word from the entertainment giant that an end is near, despite numerous women on record saying the former CEO sexually harassed them.

The company, though, is facing mounting backlash after yet another exposé, this time from The New York Times, detailed how Moonves allegedly forced his penis into the mouth of a young actress in the 1990s then tried, decades later, to ensure her silence by offering her parts in TV shows.

CBS hasn’t responded to the report, nor has it said anything about the status of its investigation into decades of accusations against Moonves, though an SEC filing indicates investigators will conclude their work by Jan. 31.

Hanging in the balance is $120 million in severance that CBS owes Moonves, depending on the conclusion of its research. Moonves also remains an unpaid adviser to CBS, supplying him an office and security for another year and nine months or so — even though it’s difficult to fathom a scenario where CBS would lean on the disgraced mogul for advice. Nevertheless, he remains an adviser unless that arrangement becomes untenable due to the results of the investigation.

The new report "adds pressure to the CBS board to finish this up and put it behind the company," says Steven Birenberg, founder of Northlake Capital Management. "I see no way he gets the $120 million. As a shareholder, personally and on behalf of my clients, I would be appalled."

As for the public-relations optics surrounding Wednesday’s story and CBS’ decision to remain mum on its investigation, he adds: "I don’t think it makes the board look much worse than it already does."

CBS has been aware of the accusations against Moonves at least since July 27, when Ronan Farrow, writing in The New Yorker, revealed that six women claimed he sexually harassed them years ago. Several more women stepped forward shortly thereafter, and Moonves resigned under intense pressure on Sept. 9.

"This just shows how the board completely failed shareholders," says Richard Greenfield of BTIG, who advocates that acting CEO Joe Ianniello, a former Moonves ally, should not be running CBS.

"Joe’s got to go," adds Greenfield. "He worked with Les to prevent a critical merger with Viacom and to dilute the control of National Amusements. It’s hard to believe that anyone from that time remains on the board."

A large swath of Wall Street remains convinced that CBS and Viacom will merge in the post-Moonves era, as both companies are controlled by Sumner and Shari Redstone, and Moonves is no longer suing to lessen their grip on CBS.

"Look how long it took them to get rid of Moonves even with all of this going on in the background," says Greenfield. "Hopefully, this will be the straw that breaks the camel’s back: Les will get nothing and the companies will merge — two years later than they should have."

The story in the Times on Wednesday detailed a new accusation from Bobbie Phillips, who said that Moonves, while president of Warner Bros. TV in the 1990s, met with her at the studio lot in Burbank promising her parts on TV shows if she’d be his “girlfriend” — then he forced himself on her.

Phillips quit acting for a while and when she recently reentered the business, Moonves, CEO of CBS at the time, allegedly told her agent, Marv Dauer, that, “If Bobbie talks, I’m finished.” He reportedly told Dauer to relay the message to his client that he could get her parts, implying he’d do so if she remained silent about the incident decades earlier, according to the Times.