As the animosity between the former corporate cousins Les Moonves and Tom Freston escalates, a showdown looms between the pair over a lucrative movie deal between pay-TV channel Showtime and the Paramount Pictures movie studio.
The relationship – strained since each exec took the helm of his own public company when Viacom split earlier this year – has turned even chillier recently, according to numerous associates of both men. Part of the rivalry stems from a widespread belief on the Viacom side that Moonves, chief of CBS, constantly takes potshots at Viacom boss Freston.
People close to Viacom say the situation is “bizarre,” especially given that both companies share the same chairman and controlling shareholder, Sumner Redstone.
These people chalk up Moonves’ motivation to his competitive nature as well as the actor-turned-mogul’s well-known desire to run Paramount – which was put under Freston’s control in 2004.
“It’s a little surprising because it’s gotten a little edgy,” said one media executive who is close to both Freston and Moonves. He described the recent level of tension as “DEFCON 3.”
Another associate of both men said, “It’s ugly. But you never hear Tom taking shots at Les.”
Spokespeople for CBS and Viacom declined to comment.
One source close to the matter insisted that Moonves was solely focused on running CBS, and had even gone so far as to issue a companywide edict that there not be any “public or private sniping at the other side.”
Given the tension, many media and Hollywood insiders are wondering if Moonves will continue purchasing movies from Viacom’s Paramount Pictures studio to run on CBS-owned Showtime.
An important tie between the two sides is a long-running output deal between Showtime and Paramount.
The deal, in which Showtime annually pays millions of dollars to air Paramount movies, expires next year, and Moonves has made no secret of his aim to radically alter the deal – either by cutting back on the number of films CBS buys or killing the arrangement outright, according to Hollywood and media executives.
Losing the Showtime deal would be a blow to Paramount which, like all movie studios, relies heavily on pay-TV deals to finance film production.
But sources close to Paramount insist that studio execs are confident a pay-TV deal will be in place – whether it’s with Showtime or another channel.
“This is not a Les and Tom thing, it’s an industry thing,” insisted one source close to the CBS side. “Everybody is looking to see if these output deals are the way to go.”