Week In Review: Tim Armstrong On His Way Out At Verizon, CBS Says Bye, Bye Moonves
1. Tim Armstrong On His Way Out At Verizon
In a move that wasn’t all that surprising to Verizon observers, and likely long overdue, Tim Armstrong, the former AOL CEO who was heading up Oath, is going to be leaving the company according to a report from the Wall Street Journal.
Why It Matters
The move is likely to be the first of many that new Verizon CEO Hans Vestberg makes as he solidifies his hold over the company. Verizon’s purchase of AOL and Yahoo, two stars of the Web 1.0 era, was always questionable: yes they had some good ad tech and millions of users, but they were like slow leaking balloons, gradually shedding users without gaining new ones, especially younger viewers.
Armstrong was never able to come up with a workable plan for Oath (which sounds like the name of a Christian rock band) to increase viewership or to become relevant again. Given the billions that Verizon paid for Oath, and the semi-related fiasco that was Go90, we can’t blame Vestberg for sending Armstrong on his way. And while there have been rumors that Verizon is looking to sell off Oath, or at least parts of Oath, they’ve continued to deny that and given that any sale would likely be a fire sale, that would seem to be a sound decision.
Verizon appears to be returning to its tech roots anyway, looking to be the company that provides the 5G-powered backbone to the OTT universe, both for delivering programming and for delivering advertising. The zig, if you will, to AT&T’s zag towards becoming a content company.
What You Need To Do About It
If you’re looking to launch an OTT service of any kind, now might be a good time to talk to Verizon and see what their VDMS service can do for you. Ditto that too if you’re an ad agency or demand side platform.
Everyone should keep an eye on what Verizon does with the Oath properties once Armstrong is gone and how much support they continue to give to the more popular segments like Yahoo Sports, Techcrunch and the Huffington Post versus the less popular segments, like pretty much everything else.
The other piece to watch is whether Verizon really is done with trying to buy programming, \ if they’re still looking to partner with or buy a vMVPD (Fubo? Vue?) or if they’re still looking to buy the combined Viacom/CBS property. (More on that in a minute.) We’re thinking they’ll want some sort of pay TV play to support their 5G plans, so a vMVPD deal seems like it would make a whole lot of sense.
2. CBS Allegedly Says Bye, Bye, Moonves
The latest twist in As The Eye Turns has CBS allegedly offering CEO Les Moonves a sizable piece of his promised $180MM payout if he would just take his sexual harassment lawsuits and go TF away, which he did, resigning the day after we first posted this WIR, in light of new sexual harassment allegations, allegations which Moonves, in all fairness, 100% denies. (UPDATE, 09.13;18-- it appears Moonves will get nothing and at least $20MM will go to organizations that support #MeToo.)
Why It Matters
Once upon a time, CBS and Viacom were one company. Then they split up. Then Viacom, which pretty much ruled TV in the 1980s, started crumbling (TL;DR: too many channels and not enough viewers) and Shari Redstone (daughter of Summer Redstone) whose family business, National Amusements, owns majority shares in both companies, decided it would be a good idea to bring them together for a reconciliation.
CBS CEO Moonves was not happy about that, and attempted to engineer a boardroom coup d’etat to prevent the merger. Moonves allegedly felt that the low performing Viacom stations were a millstone around his neck, and scared away unnamed potential buyers. (One of which was allegedly Verizon.) Redstone countermaneuvered to block Moonves, and the result was a lawsuit that’s due to go to trial in Delaware next month.
But wait, there’s more!
In an episode that aired earlier this summer, an exposé in the New Yorker alleged that Moonves had sexually harassed multiple women over the course of his tenure at CBS.
Multiple women.
And so the CBS board set out to figure out what to do with Moonves as the inevitable lawsuits were filed. (For the record, Moonves maintains his innocence.)
But that was only Part One. In Part Two of the same episode, stealthy Wall Street Journal reporters uncovered a secret clause in the trust set up in Redstone pere’s will that greatly limits National Amusement’s ability to sell CBS or Viacom to anyone else. Redstone fille though, claims that clause can be amended.
So in this week’s episode, the CBS board is trying to get rid of Moonves so that it can (a) settle the dispute with National Amusements in a manner that results in them not having to merge with Viacom and (b) move forward without the millstone of all those sexual harassment lawsuits around their necks. And then, on Saturday, yet even more women came forward to claim that Moonves had sexually harassed them, which was apparently the last straw, as Moonves resigned on Sunday, just before the start of the Rosh Hashanah holiday.
What You Need To Do About It
If you’re new Verizon CEO Hans Vestberg, you might want to take another look at what a combined CBS/Viacom could do for you, especially in the new world of 5G. Because, you know, Oath. And because between CBS, Showtime and Viacom, you’d probably have shows lots of people would want to watch, people under the age of 40, in particular.
If you’re whoever takes over CBS, you might want to take another look at Viacom and what their massive library—which includes Nickelodeon—might do to increase the attractiveness of CBS All Access. They’ve made a bunch of other smart moves, as my TV[R]EV colleague David Bloom outlines here.
If you’re everyone else, get your popcorn and think about who should play Les Moonves and Shari Redstone when the inevitable movie comes out.
Take that The Social Network.
