During CBS Corp.’s quarterly earnings call last Thursday, Les Moonves sounded like his usual über-confident self, making his typical boasts to investors about “record results,” “another very strong quarter,” “another terrific upfront” and “another great schedule this fall.” But the CEO and chairman was only able to maintain his braggadocio because no one on the earnings call—not Moonves himself nor any analysts who questioned him—brought up the elephant in the room: Ronan Farrow’s explosive New Yorker story in which six women, including actress Illeana Douglas, accused Moonves of sexual harassment and intimidation over several decades.
That CBS earnings call was just about the only time since Farrow’s story was published on July 27 that the topic of Moonves and his future at CBS didn’t come up in an industry conversation. Last Thursday, the CBS board hired two law firms to investigate The New Yorker’s allegations, which extend beyond Moonves to include misconduct at CBS News and an indictment of the overall company culture, but took no further action against their leader. So Moonves—who admitted in Farrow’s story to “making advances” “decades ago” that “may have made some women uncomfortable,” but insisted “I have never misused my position to harm or hinder anyone’s career”—remains on the job as the face and voice of the company he arrived at in 1995.
Buyers said that they are sticking by CBS, at least for now; the company said no clients have pulled their advertising from the network as a result of the Moonves allegations. One buyer cautioned that advertisers could change their minds if the investigation, which could take months, determines that “he has done what has been reported and is not punished for it. There would be some advertisers that would be concerned about supporting a network that doesn’t take this seriously.”
Marketers could also get spooked if additional allegations surface against Moonves, or there is mounting public pressure for them to justify being in business with the CEO and his company. However, one buyer noted that “it’s easier to pull out from one show” when a star or showrunner does something objectionable; it would be far more complicated for a client to withdraw all of its advertising from an entire broadcast network. “It’s easier when it was Roseanne, or all those Fox News people.”
Some buyers question the timing of Farrow’s story because CBS is in a legal battle with controlling shareholder Shari Redstone and her family’s holding company, National Amusements, over its future. (Farrow has said his story was in the works long before CBS filed suit against Redstone in May.)
Of all the allegations against Hollywood heavy hitters during the #MeToo movement, none have had the potential seismic impact in the TV industry as these. “I’ve been to more than 20 upfronts, and Les has spoken at every one of them. There’s no one else I can say that about,” said one buyer.
While Moonves certainly did not carry himself on the earnings call as someone who was nervous about his future, most buyers and TV execs who spoke with Adweek said they don’t think the CEO will be able to keep his job. “He’s a unicorn in our business and he’s got a lot of power … but actions have consequences,” said one.
Wall Street seems to agree. “If these accusations are correct, it would be impossible for Les Moonves to continue running the company,” MoffettNathanson senior analyst Michael Nathanson wrote in a note to clients after CBS’ earnings call, adding that “CBS stock, at this point in time, is simply uninvestable.”
If Moonves does end up leaving the company—whether because of the allegations or a result of CBS’ lawsuit with Redstone—buyers said his absence shouldn’t dent their media spend at the network. “As an advertiser, I want to be in good shows that have good content and get good ratings. I don’t think that one man decides that,” said one buyer of Moonves. Added another, “Anybody, Les included, is replaceable. Companies are larger than individuals.”