July 27, 2018 / 7:45 PM / 3 months ago

UPDATE 3-CBS probes misconduct allegations against CEO Moonves amid legal battle

(Adds details from New Yorker story)

By Liana B. Baker

July 27 (Reuters) - U.S. broadcasting and media company CBS Corp said it was investigating claims of personal misconduct by its chief executive Leslie Moonves made in a New Yorker magazine article that was published on Friday.

The allegations against Moonves surfaced as he is locked in a legal battle over control of CBS with the company's largest shareholder, National Amusements Inc, owned by Shari Redstone and her father Sumner who also control media company Viacom .

The New Yorker report featured claims against Moonves from six women spanning different time periods over two decades, from 1985 to 2006. The allegations included sexual assault and unwanted advances.

Reuters could not independently verify the accusations against Moonves.

"I recognize that there were times decades ago when I may have made some women uncomfortable by making advances", Moonves said in an emailed statement to Reuters.

"Those were mistakes, and I regret them immensely," Moonves said. "But I always understood and respected – and abided by the principle – that 'no' means 'no,' and I have never misused my position to harm or hinder anyone’s career. This is a time when we all are appropriately focused on how we help improve our society, and we at CBS are committed to being part of the solution."

One of the women in the story was identified as actress Illeana Douglas. Douglas' publicist Danny Deraney confirmed her comments in the story.

"Real change will occur when victims of sexual assaults are not stigmatized as whistle blowers, or people with some kind of agenda for coming forward," Douglas said in a statement.

"Speaking for myself, real change will occur when I can walk through the front doors of CBS and resume the creative and working relationship that was so tragically cut short in 1997," she added.

According to the New Yorker, 30 current and former CBS employees described harassment, gender discrimination, or retaliation for refusing sexual advances at the company.

CBS said in a statement that it takes each report of misconduct very seriously but it does not believe "the picture of our Company created in The New Yorker represents a larger organization that does its best to treat its tens of thousands of employees with dignity and respect." Earlier on Friday, before the New Yorker article was published, CBS said in a statement that its board would promptly review the findings and take appropriate action.

COMBINATION WITH VIACOM

Moonves, 68, joined CBS in 1995 as president of CBS Entertainment and has been CEO since 2006. He is widely credited with turning CBS into one of the top-performing U.S. media companies.

Moonves clashed with Shari Redstone earlier this year over her bid to merge CBS with Viacom Inc, also owned by National Amusements. Moonves resisted that deal because he believed CBS's prospects were better without taking on Viacom's turnaround challenges.

A CBS board committee in May turned down the potential merger with Viacom and sued to strip National Amusements of its control of CBS.

Redstone is challenging a plan by CBS to issue a special dividend aimed at cutting National Amusements' voting power in the company to 17 percent from 80 percent. The trial in a Delaware court is expected to start in October.[nL2N1SO162}

Before the story was published, a spokeswoman for National Amusements Inc said, "(Shari) Redstone hopes that the investigation of these allegations is thorough, open and transparent." The spokeswoman declined to comment further. Viacom also declined to comment.

Combining CBS, which owns cable networks including Showtime as well as the CBS TV Network and CBS TV Studios, with Viacom, whose businesses include Paramount Pictures, Comedy Central, Nickelodeon and MTV, would have more negotiating leverage with cable and satellite companies, analysts said.

Viacom shares ended up 4.5 percent at $29.35 on Friday, while CBS shares closed about 6 percent lower at $54.01, as investors speculated that the chances of a merger between the two companies had increased.

#METOO SOCIAL MEDIA MOVEMENT

Multiple accusations of sexual misconduct against politicians, business leaders and entertainers in the United States have been made in the past year, leading to resignations, often inspired by the #MeToo social movement.

Veteran TV journalist Charlie Rose, 76, was fired by CBS in November after being accused by more than 10 women of sexual misconduct. Rose apologized for inappropriate behavior but questioned the accuracy of some of the accounts. Reuters could not independently verify the accusations.

Moonves has been married since 2004 to Julie Chen, a CBS news anchor and TV host. Chen tweeted on Friday that she stands by Moonves and that he is a "good man and a loving father, devoted husband and inspiring corporate leader."

The author of the New Yorker article, Ronan Farrow, previously has written reports that contributed to the resignation of Hollywood movie producer Harvey Weinstein from his film and TV studio.

More than 70 women, mostly actresses and other women employed in the movie business, have accused Weinstein of sexual misconduct, including rape, in a series of incidents dating back decades. Weinstein has denied the accusations. (Reporting by Liana B. Baker in New York Additional reporting by Vibhuti Sharma and Sonam Rai in Bengaluru and Lisa Richwine in Los Angeles; Editing by Clive McKeef)

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