The decision will leave E!, its hosts, and the celebrities set to walk the red carpet in a difficult position on an occasion that marks both the culmination of Hollywood's award season and the first Academy Awards since the #MeToo and Time's Up movements forced the entertainment industry to address its issues with sexual harassment and gender-related inequity.
"I don't think [Seacrest is] going to have a great time on the carpet," one longtime Hollywood publicist tells CNN.
News that Seacrest was facing workplace misconduct allegations first came to light in November, when Seacrest released a preemptive statement denying the accusations and revealing that E! was conducting an investigation.
E! concluded its probe in early February, saying in a statement at the time that outside counsel "found insufficient evidence to substantiate allegations against Seacrest."
The allegations received new steam on Monday, when in an interview with Variety, Seacrest's former stylist, Suzie Hardy, detailed instances where she said he groped and sexually harassed her.iPhone transfer software
In response, Seacrest's attorney, Andrew Baum, claimed the witness who spoke with "Today" had also participated in E!'s third-party investigation.
"He was interviewed and his claims were fully evaluated," Baum said in a statement to CNN.
On Tuesday, Seacrest again denied Hardy's allegations in a statement to CNN, saying in part, "I don't want to accuse anyone of not telling the truth but in this case, I have no choice but to again deny the claims against me, remind people that I was recused of any wrongdoing, and put the matter to rest."
Insistent as Seacrest is about his innocence, it may not be enough to clear the air before Sunday.
"It's probably easiest for some [celebrities] to avoid E!," the veteran publicist added.
When asked whether executives at E! were concerned Seacrest's presence could deter celebrities from participating in the network's Oscars coverage, an E! spokesperson told CNN, "It's business as usual. Ryan will be hosting as scheduled on Sunday."
At January's Golden Globes, which took place after the allegations were first known but before E! had concluded its investigation, Seacrest seemingly had no trouble getting famous faces to join him on air.
Eva Longoria, Debra Messing and Laura Dern were among those who called out E! while being interviewed at the Golden Globes.
"I'm sure a few will still stop and talk to Ryan, but I would assume that there are several celebrities that will confront him based on this and/or build on the E! situation with Catt [Sadler]," the veteran publicist added. "Some will avoid [speaking with E!] all together. There are a lot of cameras on the carpet and one isn't going to make that big of a difference."
E! is arguably the most visible -- and therefore popular among publicists -- red carpet broadcaster.
Last year, E! averaged 2.03 million viewers during the first three hours of its Oscars red carpet coverage and 1.74 million in the last half hour, per Nielsen data.
Though a fraction of ABC's preshow numbers (15.9 million viewers from 7-8:30 p.m.), it's a solid ratings result for E!, whose top-rated program, "Keeping Up with the Kardashians," pulls in about 1.5 million viewers per episode.
With hours of preshow programming to fill, E! is one of the few entertainment-focused outlets that pay exorbitant fees to broadcast live. Competitors like Entertainment Tonight and Access Hollywood record interviews on the red carpet to air on their syndicated shows the following day.
E! places correspondents in multiple positions around the site, including a bridge that overlooks the scene at the Dolby Theater.
Ryan Seacrest interviews actress Tilda Swinton at the Academy Awards in 2008
On the red carpet, few hosts can compete with the weight Seacrest's name carries among influential circles in the entertainment industry, the sector that controls where celebrities make stops during promotional tours and appearances. In addition to contributing to E!'s red carpet coverage for more than a decade, his gigs as host of a syndicated radio program, host of "American Idol," and co-host of "Live with Kelly and Ryan" have left him with plenty of goodwill and friends in the industry.
Two former colleagues of Seacrest who worked with him at E! News told CNN they never witnessed any harassment and described him as a "consummate professional."
Another top film publicist calls the accusation against Seacrest "a bit of a witch hunt," acknowledging too that they were "definitely sympathetic to every woman's horrific experience."
"There has to be a better way to deal with past transgressions and make sure they don't happen