What's Next: Les Moonves' Long, Cold Summer: One week after being accused of sexual misconduct, the CBS chief now faces several weeks if not months of uncertainty as two seasoned attorneys -- Nancy Kestenbaum and Mary Jo White -- review the allegations against him. Sources at CBS anticipate their investigation will last into the fall because it involves a review of the entire CBS culture, not just the company's CEO.
Meanwhile ...
• Moonves tries to run CBS as if nothing happened. On Thursday's earnings call, he spoke about revenue growth and earnings-per-share as though Ronan Farrow's article had never been written. He was aided by supportive analysts who, to the consternation of reporters, didn't ask him about the elephant in the room.
• CBS and Shari Redstone seek detente. Lawyers on both sides of the CBS-Redstone legal battle are expected to seek a settlement to prevent their corporate struggle from going to court in Delaware. If they fail to do that, the trial kicks off on October 3.
• Hollywood awaits one of the most significant decisions of the #MeToo era ... at least, to date.
Some important context, via Janice Min: "The average age of a CBS board member is 73 and there are just 3 women." | | | PACIFIC
The Agenda Good Morning. The CBS earnings call was weird. Not one analyst asked Moonves about the fact that six women have accused him of sexual misconduct, and not one asked about the company's legal battle with Shari Redstone -- two issues of paramount importance to the long-term value of the company.
Axios' Dan Primack: "There were won't be any profiles in courage written about bank analysts covering CBS." | | Life After Les
CBS' 'Key Man' risk
As Les Moonves awaits his fate, Bloomberg's James Ellis considers the risk companies face by becoming too reliant on their CEO:
• "Key man risk" is "a real worry in an age when chief executive officers can be synonymous with the enterprises they lead."
• "If a founder fails to appreciate the importance of privacy to his customers (Mark Zuckerberg) or a leader's death exposes previously overlooked holes in a corporate strategy (Sergio Marchionne), that spells trouble."
• "It's even worse when an executive makes racially insensitive remarks (John Schnatter) or a CEO is accused of inappropriate sexual behavior (Les Moonves). That can send investors heading for the exits."
The Big Picture: "Businesses spend endless hours preparing for external perils such as fires, recessions, or even climate change. But the biggest danger for many companies could sit right in the corner office."
Bonus: Ari Emanuel's latest client is Papa John. The pizza chain says it has hired Emanuel's Endeavor Global Marketing to help redefine the brand as it parts ways with its controversial founder. | | The Trillion-Dollar Club
Why Apple's landmark matters
Apple's rise to a $1-trillion market cap "highlights how a group of enormous companies has come to dominate the United States economy," NYT's Matt Phillips says:
• "Today, a smaller cluster of American companies commands a larger share of total corporate profits than since at least the 1970s."
• "The trend toward corporate concentration ... is especially pronounced in the technology sector, where a group of large, efficient companies now lord over the fastest-growing and most dynamic parts of the United States economy."
• "Economists ... are starting to look into whether the rise of so-called superstar firms is contributing to the lackluster wage growth, shrinking middle class and rising income inequality in the United States."
Curb Your Enthusiasm: Bloomberg Opinion's Shira Ovide says Apple's thirteen-figure valuation may be inflated: "Changes are giving Apple a fundamentally different financial look," she writes, "and investors haven't yet been forced to confront how much this altered Apple should be worth."
Tim Cook to staff:
• "While we have much to be proud of in this achievement, it's not the most important measure of our success. Financial returns are simply the result of Apple's innovation, putting our products and customers first, and always staying true to our values."
Don't Miss:
• The NYT infographic.
• The Bloomberg photos. | | Screen Time
Why less may be more
Like Apple, Facebook and Instagram have introduced new features tracking time spent on their platforms in an effort to help users cut down on screen time.
Instagram's Kevin Systrom talks to Recode's Kurt Wagner:
• "As long as you believe that we're developing products that people love, and that they use them frequently because they're deriving value out of them, not because they're addicted to it, then we're doing our job."
• "I as the CEO of Instagram don't want to make a single person use Instagram more than they want to use it. That's not my intention. So if we can give people the tools to control their time, or be aware of their time, I think that is a very healthy equilibrium."
This isn't necessarily just a PR play to offset concerns about tech addiction. Preventing burnout now could translate to users spending more time with Facebook and Instagram in the long run. | | What Hollywood is Reading "Disney Will Need More than Jedi Mind Tricks to Buy Back Star Wars TV Rights" by Vanity Fair's Laura Bradley: "Turner Broadcasting, which owns TBS and TNT, bought the TV rights to the original trilogy, prequels, and newer titles before Disney firmed up plans for its own streaming service. Now, getting those rights back might cost Disney a pretty penny." | | | At the Movies
Netflix wants Oscars
"Netflix is looking to up its Oscar game after edging out HBO for the most nominations at this year's Emmys," THR's Pamela McClintock and Carolyn Giardina report:
• "Insiders tell The Hollywood Reporter that the streamer, which recently hired top awards strategist Lisa Taback, is eyeing more
than just an awards-qualifying release for upcoming films, including Alfonso Cuaron's Roma and Paul Greengrass' 22 July."
• "Both Cuaron and Greengrass are said to want an expanded theatrical presence beyond a token run. What Netflix offers them could be a template for other A-list filmmakers."
• "Netflix insiders have give no indication that the streamer is ready to give up day and date releases. Amazon Studios, conversely, has actively wooed theaters owners by agreeing to hold off releasing its movies on Amazon Prime."
Meanwhile ... MoviePass is still MoviePass. | | | What Next: The Weekend.
See you Monday. | | | | | |
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