Author Topic: CBS 2018 LEGAL Conflict and what that could mean for TAR 31 and Beyond  (Read 914 times)

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Offline theschnauzers

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Notwithstanding all of the speculation about what TAR 31 will or won't be, or the casting, there's another matter to cause concern long term.

It's been gradual over these past 17 years, but except for casting honcho Lynne Spillman and CBS CEO Les Moonves, none of the CBS executives who originally greenlighted TAR back in 2000 remain at CBS. So their newer successors are not necessarily as invested in TAR as that group was.
And it gets more precarious because of an ongoing dispute between CBS current management and board of directors and the controlling shareholder, NAI (the Redstone family, who also control Viacom). There's a court hearing TODAY on a preliminary injunction to prevent the Redstones from interfereing with a proposed special dividend that would dilute the Redstones' controlling interest to a minority position and likely preventing a forced merger with Viacom. If the injunction isn't issued, it could lead to the removal of the management (Moonves) and the board of directors, and a new management might have a totally different view of all current CBS programming.
Something to be aware of as it could impact TAR 31 and the long=term survival of TAR
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Offline ilovetoread

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And it gets more precarious because of an ongoing dispute between CBS current management and board of directors and the controlling shareholder, NAI (the Redstone family, who also control Viacom). There's a court hearing TODAY on a preliminary injunction to prevent the Redstones from interfereing with a proposed special dividend that would dilute the Redstones' controlling interest to a minority position and likely preventing a forced merger with Viacom. If the injunction isn't issued, it could lead to the removal of the management (Moonves) and the board of directors, and a new management might have a totally different view of all current CBS programming.
Something to be aware of as it could impact TAR 31 and the long=term survival of TAR

I was wondering about this. It's crazy to think Moonves could just be out of his job that he's had forever. It will be interesting to see what happens.


Offline dryedmangoez

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That's a good point.  But at the same time we could also think of it the opposite way as well. TAR certainly isn't the jewel for CBS it once was and  It has been treated as such. So who knows? The new bosses might actually think more highly of TAR and not feel the need for casting gimmicks or the need to cross promote the Network's other more prized reality shows.

It could go either way. :duno:

Offline theschnauzers

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Afternoon update: The judge has issued a 24 hour stand in place order until he can rule on the CBS management's TRO motion expected sometime tomorrow.
« Last Edit: May 16, 2018, 06:09:47 PM by theschnauzers »
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Offline georgiapeach

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...
"I can't speak for production, but I really like that people see us when we're traveling around the world. If you're a fan of the show, ... you're going to be more excited because you want to see what happens."Phil Keoghan


Offline theschnauzers

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And it gets more precarious because of an ongoing dispute between CBS current management and board of directors and the controlling shareholder, NAI (the Redstone family, who also control Viacom). There's a court hearing TODAY on a preliminary injunction to prevent the Redstones from interfereing with a proposed special dividend that would dilute the Redstones' controlling interest to a minority position and likely preventing a forced merger with Viacom. If the injunction isn't issued, it could lead to the removal of the management (Moonves) and the board of directors, and a new management might have a totally different view of all current CBS programming.
Something to be aware of as it could impact TAR 31 and the long=term survival of TAR

I was wondering about this. It's crazy to think Moonves could just be out of his job that he's had forever. It will be interesting to see what happens.

NAI (i.e., Shari Redstone and her father) is the controlling majority shareholder of the shares that have a vote, and under Delaware corporation law, they can remove and replace any or all of the board of directors at will, and thereby remove any officer of the corporation including the CEO (Moonves). So yes, it could happen in an instant.
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Offline theschnauzers

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Today's developments left nothing resolved but began to set the stage for a return to the courts
* The judge in yesterday's hearing denied the request for a temporary order to restrain NAI from acting.
* The CBS board did meet and voted 11-3 to approve the special dividend. CBS management says that's sufficient for approval; NAI says that its shareholder consents yesterday make the threshhold 90% of the directors and thus was not approved.
*Consequently, the annual shareholder meeting set for tomorrow was postponed to a time and date TBA.
Both parties are now quite likely to take these disputes back into court as early as tomorrow (Friday).
« Last Edit: May 18, 2018, 11:24:34 AM by theschnauzers »
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Offline georgiapeach

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90% would be 13. Wow....
"I can't speak for production, but I really like that people see us when we're traveling around the world. If you're a fan of the show, ... you're going to be more excited because you want to see what happens."Phil Keoghan

Offline theschnauzers

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Here's the latest from Deadline.com on the Redstone-CBS dispute:

I will break up the quote of the article to insert comments.

http://deadline.com/2018/05/cbs-challenge-last-minute-bylaw-change-vote-shari-redstone-viacom-national-amusements-1202396129/

Quote

CBS is preparing to challenge a change in the company’s bylaws that would nullify last week’s board vote to diminish the power of its controlling shareholder, Shari Redstone’s National Amusements.

A filing today with the Securities and Exchange Commission signals the company’s plan to challenge the validity of the bylaw change. It’ll argue that SEC regulations mandate giving stockholders 20 days notice before such a corporate action could be taken.

National Amusements disagrees, arguing that the bylaw change takes immediate effect.

This highlights a distinction between what Delaware corporation law permits for a business corporation and what the SEC can require corporations with publicly-owned shares to do under the federal securities laws.

Quote
The timing is critical. National Amusements, which controls a nearly 80% of CBS’s voting stock, changed the network’s corporate bylaws last Wednesday to require a supermajority of directors to support a dividend payment. This modification came ahead of the board’s 11-3 vote Thursday to grant 0.57 share of Class A voting stock to every shareholder, including those who currently hold non-voting shares.

CBS Corporation has two classes of shares. One has voting rights as shareholders, of which the Redstone/NAI group clearly owns a majority, and a non-shareholder voting class, which are the shares that are mostly traded through the stock exchanges that anyone can buy.

Quote
The board’s action, if upheld by the courts, would lessen Redstone’s control over the company by reducing her voting interest from 80% to 20%. A judge in Delaware ultimately will decide the matter. Expect CBS to file an amended complaint this week.

The ramifications of the dispute is now two-fold. The interests of all shareholders are now involved with the plan to give voting shares to all nonvoting shares, and the duty of the directors and officers to take such actions only when it is in the best interests of all shareholders. The CBS management and special directors committee clearly don't see a merger with Viacom has being in CBS' best interests.

Quote
The long-simmering tensions between CBS and Redstone reached a boiling point early last week, when CBS initially sought a temporary restraining order. The aim was to prevent Redstone and National Amusements from taking any actions that would interfere with its efforts to operate as an independent company. Thus far this week, the waters have calmed somewhat, at least on the surface. Shares in CBS and Viacom have both dipped a fraction on lighter-than-average trading volume.

The independent directors of CBS have raised concerns that Redstone would take actions — including even ousting CEO Leslie Moonves, or replacing board members — to a force a merger with corporate sibling Viacom.

National Amusements has repeatedly said that it would not compel any combination that lacked the support of both companies, though it clearly would not stand for any moves by CBS to diminish its control over the network.

There's also the possibility of trying to bring the director voting threshold to the SEC for review, But that would be more time consuming.
-- theschnauzers

Offline theschnauzers

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Here's the latest from Deadline.com on the Redstone-CBS dispute:

I will break up the quote of the article to insert comments.

http://deadline.com/2018/05/cbs-challenge-last-minute-bylaw-change-vote-shari-redstone-viacom-national-amusements-1202396129/

Quote

CBS is preparing to challenge a change in the company’s bylaws that would nullify last week’s board vote to diminish the power of its controlling shareholder, Shari Redstone’s National Amusements.

A filing today with the Securities and Exchange Commission signals the company’s plan to challenge the validity of the bylaw change. It’ll argue that SEC regulations mandate giving stockholders 20 days notice before such a corporate action could be taken.

National Amusements disagrees, arguing that the bylaw change takes immediate effect.

This highlights a distinction between what Delaware corporation law permits for a business corporation and what the SEC can require corporations with publicly-owned shares to do under the federal securities laws.

Quote
The timing is critical. National Amusements, which controls a nearly 80% of CBS’s voting stock, changed the network’s corporate bylaws last Wednesday to require a supermajority of directors to support a dividend payment. This modification came ahead of the board’s 11-3 vote Thursday to grant 0.57 share of Class A voting stock to every shareholder, including those who currently hold non-voting shares.

CBS Corporation has two classes of shares. One has voting rights as shareholders, of which the Redstone/NAI group clearly owns a majority, and a non-shareholder voting class, which are the shares that are mostly traded through the stock exchanges that anyone can buy.

Quote
The board’s action, if upheld by the courts, would lessen Redstone’s control over the company by reducing her voting interest from 80% to 20%. A judge in Delaware ultimately will decide the matter. Expect CBS to file an amended complaint this week.

The ramifications of the dispute is now two-fold. The interests of all shareholders are now involved with the plan to give voting shares to all nonvoting shares, and the duty of the directors and officers to take such actions only when it is in the best interests of all shareholders. The CBS management and special directors committee clearly don't see a merger with Viacom has being in CBS' best interests.

Quote
The long-simmering tensions between CBS and Redstone reached a boiling point early last week, when CBS initially sought a temporary restraining order. The aim was to prevent Redstone and National Amusements from taking any actions that would interfere with its efforts to operate as an independent company. Thus far this week, the waters have calmed somewhat, at least on the surface. Shares in CBS and Viacom have both dipped a fraction on lighter-than-average trading volume.

The independent directors of CBS have raised concerns that Redstone would take actions — including even ousting CEO Leslie Moonves, or replacing board members — to a force a merger with corporate sibling Viacom.

National Amusements has repeatedly said that it would not compel any combination that lacked the support of both companies, though it clearly would not stand for any moves by CBS to diminish its control over the network.

There's also the possibility of trying to bring the director voting threshold to the SEC for review, But that would be more time consuming.

-- theschnauzers