CBS outlines post-CEO production deal with Leslie Moonves
CBS Chief Executive Leslie Moonves has nearly three years remaining on his employment contract, and after that, he will be entitled to a lucrative CBS-financed television and movie production deal.
CBS and Moonves this week signed an agreement that sketches out Moonves' tentative producer agreement, according to a filing Friday with the Securities and Exchange Commission.
The proposed arrangement borrows from a particularly rich production deal that former News Corp. President Peter Chernin exercised when he left the executive suite of Fox in 2009. Last week, private equity firm Providence Equity Partners invested $200 million in Chernin's company -- demonstrating the potential value of a company headed by one of the biggest names in the entertainment business.
But, unlike Chernin, Moonves may choose not to trade in his executive stripes to run a production company. The filing did not rule out the possibility that Moonves, 62, could extend his employment agreement with CBS, keeping him at the CEO controls beyond the current February 2015 expiration of his contract.
Last year, Moonves received compensation of $69.9 million for his CEO role, making him the highest-compensated executive in Hollywood.
Under the proposed contract, Moonves could trigger the production deal once he steps down. CBS would be required to finance the enterprise for at least four years and invest as much as $3 million a year to cover the operation's overhead for staffing and a development fund to buy projects.
CBS would be obligated to buy at least three TV series projects over the life of the deal. CBS would have to pay Moonves license fees for TV shows equal to the highest amount paid to other producers who do business with the network or with CBS Studios.
CBS also would be required to pay Moonves a guaranteed fee of $1.5 million a year.
"This fixed fee is offset and reduced dollar for dollar by all executive producing fees earned for shows ordered from Mr. Moonves," the agreement states. "Mr. Moonves will earn fees for each hour and half hour scripted series and for each alternative series that are accepted by CBS, subject to pre-defined terms and at rates generally consistent with those paid to other top producers with Mr. Moonves’ skill, experience and record of success."
CBS would also be required to pay Moonves a "penalty fee" if the network failed to order the agreed-upon number of TV shows. Chernin's agreement with Fox contains a similar provision.
Under the terms of the deal, CBS has a first look at all of his movie projects. If CBS gave its blessing to a movie, Moonves would receive a producer fee, plus "certain contingent compensation if, and only if, the film achieves profitability." He would be entitled to the same profit-sharing agreements that the company's current CBS Films extends to other producers.
-- Meg James
Photo: Leslie Moonves, right, president and chief executive of CBS Corp. at the National Assn. of Broadcasters convention in 2011. Credit: Julie Jacobson / Associated Press