On late Friday, the New Yorker published an extensive piece alleging decades of sexual harassment and abuse on the part of longtime CEO Leslie Moonves, as well as larger cultural problems at the network, which dismissed Charlie Rose over similar allegations. CBS has had little time to react, and the piece is already eating into the company’s stock price. And it may have a wider-reaching effect as CBS faces a potential merger Moonves is fighting tooth and nail.
Over the weekend, various CBS corporate officers went on the record, although some statements were seen as more ambivalent than others. But the stock market’s reaction was fairly stark. Variety is reporting CBS has lost a fortune, and more losses may be on the way:
CBS shares were down more than 4% in early trading, dropping to the $52 range. The company has shed more than $1.5 billion in value since Friday, when the New Yorker publishing a damning expose featuring accusations from six women about sexual misconduct involving Moonves. The CBS board of directors is set to meet later today to consider its options amid the growing crisis. The board on Friday said it would initiate an investigation into the allegations made about Moonves and the culture of CBS…
The stock reaction is about more than the accusations against Moonves. CBS is currently fighting an attempt by one of its major shareholders, Shari Redstone, to force the company to merge with entertainment giant Viacom, which she also largely controls. The argument is Viacom, which is struggling, would hamper the successful CBS. The dispute has been contentious, with a board member allegedly grabbing Redstone’s face.
Moonves is the main person blocking Redstone’s plans, so if the board fires him, it likely will have to accept Redstone as its de facto leader. But if it retains Moonves, it will have to explain why it’s keeping him on despite the allegations. It’s a question media watchers will monitor closely, and one that might have enormous consequences for CBS and even broadcast TV.