CBS Details Board Room Debate Over Wyman Ouster

It was not major shareholder Laurence A. Tisch but rather CBS’ other outside directors who proposed that Tisch become acting CBS chief executive at the network board’s tumultuous Sept. 10 meeting, CBS contended Wednesday in a filing with the Federal Communications Commission.

In papers filed to support its claim that Tisch has not taken control of the company, CBS said Tisch’s 24% stake has not given him the ability to determine the composition of the board. And the majority of CBS’ board members has maintained its control, as was demonstrated in the ouster of former Chairman and Chief Executive Thomas H. Wyman after he proposed a sale of the company.

The FCC sought CBS’ comments in response to an allegation by the conservative advocacy group Fairness in Media that control had already been won by Tisch, who is also chief executive of Loews Corp. The Raleigh, N.C.-based organization, led by Sen. Jesse Helms (R-N.C.), contends that the CBS network has a liberal bias, and last year the group sought to win control of the network. The commission could force CBS to sell some or all of its broadcast properties if it finds that control has been shifted improperly.

In its filing, CBS reproduced a portion of the minutes of the Sept. 10 meeting to show that Wyman’s dramatic ouster was not the product of a Tisch power play. The minutes show that while Tisch and Paley both criticized Wyman’s performance as chief executive during the session, Tisch did not propose that he replace him.

(Tisch and Paley felt Wyman’s shortcomings “included a record of unsuccessful acquisitions, inattention to the talent and creative aspects of the business, particularly in the flagship news division, inability to control overhead costs, failure to anticipate declines in operating earnings, and other factors,” according to the minutes.)

Tisch was chosen by the other outside directors after they rejected an earlier proposal by CBS founder William S. Paley that the company be run temporarily by an “executive committee” chaired by Tisch and including a majority of the outside directors.

According to the minutes, Wyman told the board that CBS had been approached by Coca-Cola about its possible interest in purchasing CBS. Coca-Cola spokesman have said that CBS executives approached Coca-Cola about a possible acquisition.

In the filing, CBS contends that the FCC has in the past judged that a company or individual doesn’t have control of another firm until it has the power to choose board members; Tisch has no such power, CBS contended. In an attached cover letter, Paley observed that the company’s directors were all chosen before Tisch gained his seat on the board and that “the future financial security of these directors is in no way dependent on currying favor with management or individual shareholders.”

The FCC’s staff should reach a recommendation for commission action “very soon,” said James McKinney, head of the agency’s mass media bureau. “It’s not good to have a cloud hanging over the head of a big public company like this,” he said.