September 10th, 2018
As widely reported today the CBS Board has pushed Chief Executive Officer Les Mooves out due to credible reports of sexual harassment of women. What was less widely reported was that CBS and its majority shareholder have settled their competing lawsuits. If the agreement should hold, CBS and Paramount will not be merged which would be a prelude to a sale for at least two years. Still eventually CBS is likely to be sold which would trigger an FCC review and license review. What would be in Chicago’s self interest? What has CBS done for Chicago that they should have a license in Chicago?
June 11, 2018
The dust has yet to settle on the Trib Media sale to Sinclair and it appears another of the old legacy television networks will soon be up for sale. There has been more drama in the CBS boardroom than on the network schedule the last few months. The Chief Executive Officer with the support of some independent board members tried to issue new stock that would dilute the voting strength of the largest voting block. The controlling interest countered by changing the bylaws to require a larger majority of board members for special stock issuance. This led to suits and counter suits. And all of this occurred before the CEO ended up in the crosshairs of the #metoo movement. The corporate lawyers will be busy.
What was noteworthy, is that in the last suit by the controlling shareholder, they noted their purpose for merging Viacom with CBS, the two companies that they control, was to: “better positioning the companies for a larger transaction in which the combined entity could fetch an attractive premium that neither CBS nor Viacom alone could command.” In other words, the owners with the controlling interest think the time is right to cash out and that they can maximize their profit by combining all their assets, Paramount Pictures and the CBS, in one large package instead of selling them individually.
A huge fight involving Paramount and CBS recalls the first big struggle nearly seventy years ago that established the business structure of the television industry for the first three decades of the television era when Paramount tried to sell their license in Chicago to CBS. They thought it would be a three month Government review, but it became a near three year Government battle. Although the outcome would impact Chicago more than any other city, no one in Chicago took the slightest interest in the events as they unfolded.
Ultimately, CBS received the last commercial license in the VHF band which should have gone to a more worthy local based company. Of the three legacy television networks, CBS, NBC and ABC, CBS would have the least commitment to Chicago over the decades. ABC usually produces a local talk show, one of which, evolved into the Oprah Winfrey Show that was a huge boost to Chicago’s status. NBC in recent years have produced a number of prime time entertainment shows in Chicago for national distribution. CBS has never produced or purchased a Chicago-based entertainment program for national broadcast in seventy years. Its capital investment in Chicago has been minimal. Yet when the required hearings occur for a change of ownership, you can expect there will be no protest from Chicago.
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