Good morning. David here again, filling in for Alan (who will be back Wednesday) from Berlin.
CBS CEO Les Moonves’s future is in doubt after a bombshell New Yorker piece presented detailed allegations of his sexual misconduct against actor Illeana Douglas, screenwriter Janet Jones and four other women. In the cases of Douglas and Jones, Moonves is alleged to have threatened to derail the careers of the women, after they turned down his advances. He allegedly followed through on such threats in multiple instances.
CBS said it would investigate the allegations, which would “be taken seriously.”
Moonves told The New Yorker he recognized that there were times “decades ago” when he “may have made some women uncomfortable by making advances.” But he says he “always understood and respected—and abided by the principle—that ‘no’ means ‘no,'” and he denies misusing his position to harm people’s careers.
Ronan Farrow’s article is not just damning about Moonves—it sets out extensive evidence of a pervasive culture of “harassment, gender discrimination, or retaliation at the network.” But most immediately, CBS’s board is now desperately trying to figure out what to do with its chief executive.
It complicates matters that Moonves’s fate partly lies in the hands of Shari Redstone, the head of CBS parent National Amusements, which wants to re-merge CBS with Viacom but faces legal pushback from Moonves and others on the board. The timing has forced Redstone to deny having anything to do with the New Yorker article, but, leaving that complex drama aside, the allegations are in themselves deeply disturbing.
Moonves is someone who has publicly backed the #MeToo movement, calling it a “watershed moment” and stressing how important it is that corporate cultures “will not allow” for such behavior—contrast that with the description of CBS News in Farrow’s piece as a “frat house” with a “very toxic culture toward women.” Moonves is even involved with the Commission on Eliminating Sexual Harassment and Advancing Equality in the Workplace; a fact that held Douglas back from telling her story to people there.
The #MeToo cultural event has given men the chance to step up and show their support for the countless women affected by misogyny’s pernicious effects in the workplace. It’s certainly no time for people to sit on the fence and try to stay quiet. But at the same time, signaling alliance is no penance for past misdeeds. All it does is add hypocrisy to the list as those offenses come to light—as will no doubt continue to happen across industries.
More news below.
Tech stocks had a catastrophic time last week, but is the broader U.S. stock market worried? For the most part, it has held up, finishing the week within 2% of a new record high. After all, Facebook and Twitter’s precipitous drops—and let’s not forget Intel falling almost 9% after missing forecasts—are somewhat balanced out by good results from Alphabet and Amazon. Let’s see what Apple’s earnings look like tomorrow. Wall Street Journal
Malaysia Airlines Flight 370 was probably deliberately steered off course, the Malaysian government has said in its safety report into the plane’s 2014 disappearance, with 239 people on board. The report suggests there was no system failure, making it “more likely that such [the change in course was] due to the systems being manipulated.” No bodies were ever recovered. Bloomberg
BMW Price Hike
BMW is raising the prices of two of its U.S.-made SUVs in China, in order to deal with tariffs on U.S. car imports into the country. The retail prices of the X5 and X6 models will rise by 4-7%, suggesting BMW will absorb most of the impact from the extra 25% tariffs imposed earlier this month in retaliation for U.S. tariffs on Chinese imports. Fortune
Secretary of State Mike Pompeo will reportedly announce a series of Asian investment initiatives today, with a focus on energy, infrastructure and the digital economy. This is apparently a continuation of President Donald Trump’s “Indo-Pacific strategy” that comes at a time when the U.S. and China are at loggerheads over trade, and China’s “Belt and Road” investment initiative is serving to extend its own influence in the region. Reuters
Around the Water Cooler
Tesla makes surfboards now? Elon Musk’s company, which is having serious cash flow issues, put up a product page Saturday for a limited-edition surfboard at $1,500. It quickly sold out, as only 200 were available. Fins were not included, but apparently it fits really well on a Tesla vehicle. Fortune
President Trump and New York Times publisher A.G. Sulzberger met on July 20. What happened at the meeting? Depends who you ask. “Spent much time talking about the vast amounts of Fake News being put out by the media & how that Fake News has morphed into phrase, ‘Enemy of the People.’ Sad!” tweeted Trump, about a meeting that was supposedly off the record. “I told him that although the phrase ‘fake news’ is untrue and harmful, I am far more concerned about his labeling journalists ‘the enemy of the people,'” Sulzberger then said. “I warned that this inflammatory language is contributing to a rise in threats against journalists and will lead to violence.” NBC
Microsoft is gaining on Amazon in the cloud infrastructure market, with its Azure platform growing 3 percentage points to 14% in the second quarter, and Amazon Web Services staying flat at 34%. Google’s Cloud gained one percentage point to achieve a 6% market share. Microsoft said its Azure revenue is up 89%, while Amazon’s cloud revenue increased almost 49%. CNBC
Vice President Mike Pence reckons Brett Kavanaugh will be confirmed as a Supreme Court justice by the fall. The Democrats hope to delay his confirmation vote until after the November midterms, when they intend to retake the Senate, but Pence said the White House is confident they’ll get their man in place sooner rather than later. Fox Business