Ronn Torossian
Ronn Torossian

While other TV networks continue to deal with ongoing public relations fallout related to the #MeToo movement, CBS is struggling to manage internal strife that now has the corporation suing controlling shareholder Shari Redstone.

Redstone is one of the most prominent supporters of the proposed CBS-Viacom merger, a position that sets her at odds with CEO Leslie Moonves and the CBS board, who aren’t nearly as supportive of the proposal. The board has now taken what some are calling an extreme measure: suing Redstone’s holding company, National Amusements Inc.

In a media statement, NAI called the lawsuit “outrageous” and promised to defend their position “vigorously in court.”

CBS was not moved by this statement, telling the media it intends to take steps to “sharply dilute Redstone’s control” of the company through a dividend declaration. According to CBS, this provision is allowed in the corporate charter. CBS says the move will “prevent Redstone from interfering” in any moves or decisions made by the company.

National Amusements characterized CBS’ actions as unnecessary, because NAI isn’t trying to interfere, though it’s clear where Redstone is on the issue in question.

Both sides agree that Redstone is encouraging officials at both Viacom and CBS to explore merger possibilities. This would be a reversal of a decision made by Redstone’s father, Sumner, more than a decade ago. Despite this, both companies appeared initially amenable to the merger, with one source of contention: who would lead the recombined company?

Moonves asserted a desire to pick his own leadership team, while Redstone would like to see Viacom CEO Bob Bakish onboard, with an eye toward Bakish eventually taking over as CEO of the joint enterprise. The committee balked, and now the issue is headed to court, offering a statement that included the following:

“The Special Committee members, all independent directors of the Company, unanimously believe that the CBS Board has a fiduciary duty to act now to protect all stockholders and prevent Ms. Redstone from further breaches of her fiduciary duties …”

From an industry perspective, this is a very bad time for CBS to be having a crisis of leadership and vision. With NBC and Fox distracted by ongoing PR issues, CBS could be taking an opportunity to make some gains in the marketplace. Instead, the network is in the headlines for these disagreements and the subsequent lawsuit.


Ronn Torossian is CEO of 5WPR, a leading PR firm.