DIS Walt Disney Co

Ex-operations chief at Disney emerges as a top candidate to succeed Moonves

By Joe Flint and Emily Glazer 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (December 19, 2018).

Former Walt Disney Co. Chief Operating Officer Tom Staggs has emerged as a top candidate to become CBS Corp.'s new chief executive, people familiar with the matter said, as the network tries to move past months of uncertainty and upheaval since the departure of Leslie Moonves over allegations of sexual harassment.

The interest in Mr. Staggs has been informally conveyed to the executive, who left Disney in 2016 when it became clear he wouldn't succeed Robert Iger as Disney's chief executive, the people said.

Mr. Staggs is first on the list -- which includes about 10 people -- "by a reasonably wide margin," one of the people said.

Wooing him could be challenging. When he was approached weeks ago, Mr. Staggs expressed reservations but remained open to further discussions, people close to the parties said.

Other potential candidates for the CEO position include Hasbro Inc. CEO and CBS director Brian Goldner and Starz Chief Operating Officer Jeffrey Hirsch, a person close to the process said. Mr. Goldner's contract with Hasbro expires in 2022, and a noncompete agreement prevents him from moving to an entertainment company that is primarily directed toward children and families.

CBS interim CEO Joe Ianniello is also a candidate. CBS interim Chairman Strauss Zelnick took himself out of consideration earlier this month.

Former senior Time Warner executives John Martin and Olaf Olafsson are also among those who have had informal contact about the job, people familiar with the matter said. HBO Chief Executive Richard Plepler also was sounded out but indicated he wasn't interested, the people said.

The CEO search comes in the aftermath of busted merger talks between CBS and its sister media company Viacom Inc. Shari Redstone, president of National Amusements Inc., the controlling shareholder of CBS and Viacom, has previously pushed for a merger. Earlier this year, she agreed to not seek a combination as part of a settlement with CBS, which had moved to break free of National Amusements.

If the two companies do combine, that would seemingly force either Viacom CEO Bob Bakish or the new chief of CBS to relinquish their title.

The CBS board is considering how to sweeten an offer for Mr. Staggs, one of the people familiar with the matter said. One possibility that could appeal to Mr. Staggs and other candidates of his stature is if the position was executive chairman and CEO, a person close to the company said.

The CEO and chairman jobs have been open since Mr. Moonves's exit in September. Mr. Ianniello, CBS's chief operating officer, is currently serving as interim CEO. Mr. Zelnick, the CEO of Take-Two Interactive Software Inc., is serving as interim chairman.

Mr. Staggs hasn't met with Ms. Redstone, who is also vice chairman of CBS, people familiar with the matter said.

Mr. Staggs had seemed Mr. Iger's most likely successor at Disney when Mr. Staggs stepped down in 2016, after learning that Mr. Iger and the rest of the board had decided to widen the search for Mr. Iger's successor to include more candidates, The Wall Street Journal reported at the time.

CBS's board, which has six new members since Mr. Moonves was forced out, retained the search firm Korn Ferry to find a permanent chief executive.

CBS's board said Monday that Mr. Moonves wouldn't receive any of his $120 million severance package because he breached his employment contract and failed to cooperate fully with a probe into the matter. The board is now seeking to pivot to the successor search with hopes of naming a CEO in next year's first quarter, a person with knowledge of the board's thinking said.

The investigation that led the board to deny Mr. Moonves his $120 million severance payment also looked at CBS's overall culture. While the CBS board on Monday said investigators determined that harassment and retaliation aren't pervasive at CBS, they found the company's "historical policies, practices and structures have not reflected a high institutional priority on preventing harassment and retaliation."

The investigation's findings were presented orally to CBS board members on Dec. 10. The board held a conference call a week later to vote on the circumstances of Mr. Moonves's termination.

Directors who have been appointed since Mr. Moonves's departure were "incredibly adamant and had been for weeks that they cannot pay [Moonves] a cent," a person familiar with the board's deliberations said.

Mr. Moonves's exit package allows him to pursue arbitration. A spokesman for Mr. Moonves didn't respond to a request for comment on Tuesday about what actions the former CEO might take in pursuit of some or all of his severance package.

Mr. Moonves's lawyer Andrew Levander said Monday the CBS board's conclusions were "foreordained and without merit." He reiterated that Mr. Moonves "vehemently denies any nonconsensual sexual relations and cooperated extensively and fully with investigators."

In a memo to staff on Monday, Mr. Ianniello said the conclusion of the probe "does not mean that our work is done, or that we don't have significant improvements that will continue to be made. Our commitment to a safe, collaborative and inclusive workplace is ongoing, and remains a top priority for us."

The investigation also looked into CBS News in the wake of "CBS This Morning" anchor Charlie Rose's firing last year after allegations of harassment and improper behavior during his career. Mr. Rose said he had behaved "insensitively" at times but also said he did not believe "that all of these allegations are accurate."

"60 Minutes" executive producer Jeff Fager was also investigated after allegations of misconduct were made in a New Yorker article that he denied. Mr. Fager was let go by CBS after sending a message to a CBS reporter covering the story that was interpreted as threatening.

CBS News President David Rhodes is in the process of naming new leadership for "60 Minutes" and the network's morning show, which has seen ratings decline since Mr. Rose's departure. Mr. Rhodes's own contract with the network is up at the end of February, people familiar with the matter said.

Since Mr. Moonves's departure, Mr. Ianniello has made several leadership changes including promoting Showtime Networks Chief Executive David Nevins to chief creative officer for the entire company, giving him programming oversight of the broadcast network as well as its cable channels.

--Shalini Ramachandran contributed to this article.

Write to Joe Flint at joe.flint@wsj.com and Emily Glazer at emily.glazer@wsj.com

(END) Dow Jones Newswires

December 19, 2018 02:47 ET (07:47 GMT)

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