What's Next: The Sumner Redstone Tape: The fight between Les Moonves and Shari Redstone for the future of CBS may hinge on a video recording of Redstone's father that was recorded earlier this year, sources on both sides of the legal battle tell me.
The recording of the 95-year-old media mogul was taken in January by Arnold Kopelson, a CBS director and longtime friend of the ailing media mogul, who says he wanted to "memorialize Mr. Redstone's physical state." The Wall Street Journal reports that Shari, who became chairwoman of CBS and Viacom in 2016, tried to have Kopelson removed from the board after she learned of the recording.
Why The Tape Matters:
• Shari Redstone's effort to merge CBS and Viacom rests on her claim that Sumner, who legally controls the family holding company, National Amusements Inc., is aware of and supports her plan to merge the two media properties that he previously separated.
• Sumner's health has been deteriorating since 2014. He is reportedly intubated and incapable of speaking. In 2015, an ex-girlfriend alleged that he was incapable of making decisions about his health and that his signature on legal documents had been forged. (NAI denied this.)
• Shari took effective control of NAI in 2016, despite the fact that she and her father had a publicly contentious relationship until shortly before then. Vanity Fair's William D. Cohan reports that after a meeting with her father in July 2015, Shari sent an email to her son in which she wrote, "Your grandfather says I will be chair over his dead body."
• CBS' lawyers say Kopelson's video recording proves that Sumner is "incapable of communicating his views" on the fate of his company. They argue that NAI must therefore withdraw any evidence about Sumner's intentions from their testimony, as well as any witnesses who can claim to speak to his intentions.
The Big Picture: Kopelson's video recording could upend Shari Redstone's effort to merge CBS and Viacom if a judge decides it proves that the man who legally controls the companies is incapable of expressing his opinions and may not even be aware of the merger.
But ... this is where the accusations of sexual misconduct against Moonves come in: The CBS chief has led the board of director's fight against Shari's merger. Many industry insiders doubt they'll have the will or the capability to continue the fight without him at the helm, especially as Shari starts replacing Moonves' allies with her own.
What's Next, Maybe: The case between CBS Corp and NAI is scheduled to begin the Court of Chancery in Delaware this October. | | | PACIFIC
The Agenda Good Morning. Les Moonves will speak to shareholders on CBS' quarterly earnings call today at 1:30 p.m. PT, as we reported yesterday. He is prepared to address the recent allegations of sexual misconduct, as well as the legal battle with Shari Redstone.
What #TimesUp is talking about: "Six women have courageously shared their stories and accused CBS CEO Les Moonves of sexual harassment and assault. We believe you. We are with you. @CBS We are watching. We expect a full, transparent and expedient investigation. Now. #TIMESUP"
What Moonves' defenders are talking about: The last four paragraphs of Kim Masters' article in THR, in which "Hollywood veterans" say they're "troubled about certain aspects of the [Ronan] Farrow story that don't quite ring true to them." | | The Moonves Affair
CBS taps law firms
The CBS board has selected two outside law firms to conduct the investigation into accusations of sexual misconduct against Moonves:
• Covington & Burling, led by Nancy Kestenbaum, a former senior prosecutor in the Manhattan U.S. attorney's office.
• Debevoise & Plimpton, led by Mary Jo White, the former chairwoman of the U.S. Securities and Exchange Commission and a former U.S. attorney in Manhattan.
The board has also formed a special committee to "help facilitate the investigation," made up of directors Bruce Gordon, Linda Griego and Robert N. Klieger. "Moonves will have no role in the investigation," per the board.
Closer to home ... The USC School of Cinematic Arts has suspended Moonves from its Board of Councilors. The School says it "takes the recent allegations very seriously and will discuss further action when the Board convenes in October." | | What New York is Reading
"CBS staffers wonder about Jeff Fager's fate at '60 Minutes'" by my colleague Brian Stelter: "The accusations of misconduct came as no surprise to '60 Minutes' veterans, who had long suspected that stories might be coming. Now CBS staffers are openly wondering if Fager will be replaced -- a smaller-scale version of the speculation that has enveloped Moonves." | | | Sign of the Times
'The Weinstein clause'
Bloomberg's Nabila Ahmed reports that advisers on mergers and acquisitions are adding a "Weinstein clause" to certain deals "that legally vouch for the behavior of a company's leadership."
• "In some cases, buyers have even negotiated the right to claw back some of the money they paid if subsequent revelations of inappropriate behavior damage the business."
• "In several deals ... sellers have even put money in escrow that buyers can claim if any social issues arise. That can sometimes be as much as 10% of the total value of a transaction."
The Big Picture: "The development is a concrete example of how business is trying to adapt to the #MeToo era, at least in terms of legal liability." | | The Cutting Room
Hollywood's Condé problem
What does a diminished Condé Nast mean for the Hollywood crowd that relied on all its love and attention ... and its parties?
NYT's Ed Lee and Sapna Maheshwari report that "the company lost $120 million last year and plans to put three of its remaining magazines up for sale."
The three magazines are Brides, Golf Digest and W, but Condé's downward spiral has people concerned about the fate of Vogue and Vanity Fair as well.
The biggest concern for Hollywood may be about the power and influence of these brands, and their leaders. As Lee and Maheshwari note, Condé succeeded in creating a mystique where celebrity editors like Diana Vreeland, Tina Brown, Anna Wintour and Graydon Carter "became cultural arbiters who traveled in the same circles as the people they chronicled," and few if any circles mattered more to those editors than Hollywood.
What happens when Condé loses its cultural arbiters? | | Direct to Consumer
The Magnet play
Media and tech executives Betsy Morgan, Brett Bouttier and Jeff Berman have launched a new venture-backed holding company called "Magnet Companies" that seeks to acquire and develop direct-to-consumer brands.
"What is Magnet's play?" Variety's Tod Spangler asks:
• "The partners say they're focused on the intersection of 'content, community and commerce': The idea is to assemble and operate a portfolio of consumer-oriented properties that generate multiple streams of revenue."
Who they are: "Morgan was the first CEO of the Huffington Post and headed Glenn Beck's TheBlaze, after 10 years at CBS Interactive ... Bouttier was president of Awesomeness TV, and led Warner Bros. TV Group's digital division. ... Berman was executive in residence at Greylock Partners." | | The Box Office
Moneyballing Movies
Fun (Long) Read: "Moneyballing the Movies: How the Box Office Became a Sport," by The Ringer's Shaun Raviv: "Every weekend, new releases are graded on their box office returns. How did covering the movie business become a haven for statheads?:
• "Anyone who pays attention knows the greatest [NBA] player of all time is constantly up for debate. ... The same goes for the box office. ... Which movie is [the biggest movie of all time]? The answer isn't so easy to come by."
• "Though film companies are starting to hire analytics gurus from the sports world ... and using machine learning to predict a movie's success from the screenplay alone, long-term box office predictions are still an inexact science. That's because it's not just a numbers game."
The Big Picture: "The movies, like sports ... are for the head and heart." | | | | |
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