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Thursday, January 19, 2023

What a day! The Supreme Court has failed to find the Roe v. Wade leaker, the National Press Club is blasting Nexstar for its LIV Golf deal, Steven Crowder is locked in a feud with the Daily Wire, several Big Tech companies are supporting Google in a pivotal case, and Alec Baldwin will be charged in the fatal "Rust" shooting. But first, the A1.

THE A1

What's Next For Netflix

CNN Photo Illustration/Michael M. Santiago/Getty Images

When Netflix executives sat down on Thursday afternoon to discuss the company's fourth quarter earnings report, the first question presented to them had nothing to do with the streamer's financials.

Instead, it was about the explosive news that, after 25 years leading the company, co-founder Reed Hastings would give up his co-CEO post and transition into the role of executive chairman. Hastings announced that Netflix would elevate heir apparent Greg Peters to the position of co-CEO, serving in the position alongside Ted Sarandos.

"We've had a good start," Hastings said during the earnings interview, signaling the first quarter-century was just the beginning for the company that had successfully grown from a mail order DVD service to streaming pioneer.

There's no denying that Netflix has, under Hastings' watch, navigated arduous terrain to become the streaming juggernaut that it is today. But that's not to say that the company is being left to Peters and Sarandos in calm waters.

Like all streamers, Netflix finds itself battling brutal market headwinds, with Wall Street souring on the business and growth slowing. Hastings' move to step aside comes at a pivotal moment for Netflix, which just launched an ad-supported tier — a move that Hastings famously rejected for years before later admitting he was "wrong" for doing so.

"The promotion of Greg Peters to co-CEO alongside Ted Sarandos is an indication of how much the ad business means to Netflix," Insider Intelligence analyst Paul Verna told me, reacting to the leadership moves. "As COO, Peters was one of the architects of that business and a supporter of the move into advertising, which the company resisted for many years."

Verna added: "In the same way that Sarandos' earlier elevation from chief content officer to co-CEO was a sign of Netflix's maturation from a tech company to a film and TV studio, the current shift puts advertising in the center of the picture, alongside content."

In announcing the executive shakeup, Hastings said that succession planning had been ongoing for "many years" and that he had "increasingly delegated the management of Netflix" to Peters and Sarandos.

"It was a baptism by fire, given Covid and recent challenges within our business," Hastings said. "But they've both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth. So the board and I believe it's the right time to complete my succession."

It wasn't a bad time to announce the news.

Netflix on Thursday beat its subscriber forecast by a mile, adding 7.7 million new subscribers when it had previously projected to add 4.5 million. Netflix said it was "pleased with the results" of its cheaper ad-supported tier and credited it for "driving incremental membership growth."

"2022 was a tough year, with a bumpy start but a brighter finish," Netflix said in its letter to investors.

The company's shares were up more than 7% in after-hours trading.

THE SIDEBAR

Netflix's big subscriber gains "were offset by an earnings miss," Sara Fischer points out. (Axios)
"Previously, great news for Netflix was bad news for legacy competitors competing with Netflix. Those days are over," Alex Sherman writes. "Now, the industry bands together. Disney, Comcast, Paramount Global and Warner Bros. Discovery all rose slightly after Netflix's report." (CNBC)
New co-CEO Greg Peters indicated that there are "no big strategy shifts" on the horizon. Peter Kafka's question: "The question we won't have an answer to anytime soon: If Netflix does need to make a shift down the line, which of its three leaders is going to make that call?" (Twitter)
Felix Salmon: "This is ludicrous, you can't have THREE people in charge of a company." (Twitter)
Netflix said it plans to "start rolling out paid sharing more broadly" in Q1 of 2023 as the company clamps down on passwords sharing. (CNN)
Netflix also indicated that it is eying more opportunities to introduce live content to its platform, with Sarandos calling it a "crawl, walk, run scenario." (Deadline)

——— BELOW THE FOLD ———

CNN Photo Illustration/Anna Moneymaker/Getty Images

Supreme's Search: An unprecedented investigation by the Supreme Court has failed to identify who leaked its draft opinion in the landmark case that overturned Roe v. Wade. The court issued its report Thursday and said that investigators had conducted a whopping 126 formal interviews with 97 employees and even went as far as to conduct fingerprint analysis. But, ultimately, no leaker could be identified. CNN's Ariane de Vogue, Tierney Sneed, and Devan Cole have details here.

► While the probe failed to find the leaker, it did prompt an aggressively anti-democratic demand from former President Donald Trump. After the report was published, Trump posted a disturbing message on Truth Social, suggesting that the Politico reporters who obtained the leak document should be imprisoned until they give up their source: "Go to the reporter & ask him/her who it was. If not given the answer, put whoever in jail until the answer is given. You might add the publisher and editor to the list. Stop playing games, this leaking cannot be allowed to happen. It won't take long before the name of this slime is revealed!"

THE BUSINESS

Cnn Photo Illustration/Charles Laberge/LIV Golf via Getty Images

First in Reliable | The National Press Club is blasting Nexstar for striking a deal to broadcast the controversial Saudi-funded LIV Golf league on The CW. "We are deeply disappointed that a company that makes money from news like Nexstar would agree to participate in such a shameful PR stunt as LIV Golf, which is fundamentally designed to rehabilitate the Saudi reputation, tarnished irreparably by the state-ordered gruesome murder of journalist Jamal Khashoggi in October 2018," National Press Club President Jen Judson said Thursday night. "We are left to wonder what if anything Nexstar stands for. You cannot have a brand in news and act this way."

"Saudi Arabia murdered a Washington Post journalist and cut him up with a bone saw. Riyadh wants to use golf to get Americans to forget about murder. We must not let them get away with it," Judson added. "We call on Nexstar employees — many of whom are journalists — to demand management explain why they have partnered with the murderers of a journalist. We urge Nexstar to do the right thing and cancel their bloody golf show. And if they don't drop the program here is what we can do: don't watch it; and write each sponsor asking them not to sponsor."

IN THE INDUSTRY

WWE boss Vince McMahon has agreed to a multimillion-dollar settlement with a former referee who accused him of raping her in 1986, Joe Palazzolo and Ted Mann report, citing sources. (WSJ)
Vice Media "is restarting its sale process after earlier interested bidders balked at the initial price tag," Lillion Rizzo and Alex Sherman report, citing sources. The duo reports that the company is "now likely to fetch a price of below $1 billion." (CNBC)
Jeff Bezos was back at The Washington Post on Thursday, sitting in an editorial meeting. A spokesperson for the newspaper also confirmed that he had a meeting with Sally Buzbee, as we reported last night. The NYT's Benjamin Mullin and Katie Robertson have more. (NYT)
Joe Pompeo goes "inside the George Santos media circus," speaking to Long Island Patch reporter Jacqueline Sweet who is "racking up scoops" on the story. (Vanity Fair)
The BBC is defending a documentary on India's prime minister after the country's government called it "propaganda." (Reuters)
Meanwhile, the BBC has apologized for failing to challenge the views of a doctor who claimed Covid vaccines can damage the heart. (Deadline)

MEDIA MOVES

CBS News has poached ABC News Chief White House Correspondent Cecilia Vega. At CBS, Vega will be a correspondent for "60 Minutes," which she described as a "dream come true." (WaPo)
Disney comms executive Charissa Gilmore is out at after having just been re-upped last year. Gilmore's exit has resulted in the promotions of Naomi Bulochnikov-Paul and Candice Ashton. (Variety)

THE INFO WARS

CNN Photo Illustration/Nicole Hester/Ann Arbor News/AP

Friendly Fire: Some of the biggest names in right-wing infotainment are openly feuding with each other. The drama began when Steven Crowder told his audience that he was offered a contract from a right-wing media company, but accused the outlet of being "in bed" with Big Tech. It quickly became apparent that Crowder was referring to the Daily Wire. On Wednesday night, Daily Wire boss Jeremy Boreing posted an hour-long video responding to Crowder, saying the organization had offered the talk show host a stunning $50 million contract and accusing him of misconstruing key parts of it.

Ben Shapiro then urged his audience to watch Boreing's video, "in which he reads word-for-word the entire non-binding term sheet DW+ offered my friend Steven Crowder ($50M over 4 years), explains every contract term, and encourages people to subscribe to whatever Steven does next." Shapiro said that the Daily Wire wishes "him nothing but the best," but I'd say there's little love lost. The Daily Beast's Justin Baragona has all the details here.

IN THE BATTLEFIELD

Rupert Murdoch is scheduled to sit on Friday for his second — and final — deposition in Dominion Voting System's $1.6 billion lawsuit against Fox News.
Ruth Ben-Ghiat writes about Sean Hannity broadcasting from the U.S. Capitol with a backdrop of Republican representatives: "The party elites who served as extras in this spectacle showed submission not to McCarthy, but to Hannity, whose network had helped them all to get elected." (Lucid)
Far-right outlet One America News "can't quit Kari Lake's electoral revanchism," writes Bobby Lewis. (MMFA)
Climate misinformation is rampant on Elon Musk's Twitter, David Klepper reports. (Associated Press)

THE VALLEY

CNN Photo Illustration/Eamonn M. McCormack/Getty Images

Big Tech's Bounceback?: Advertising mogul Martin Sorrell believes 2023 is the year that Big Tech will make a comeback. Speaking to CNBC in Davos, Sorrell predicted that Meta will "come back extremely strongly this year, on the back of Reels and business messenger, to deal with the competition from TikTok and other short form video competitors." Sorrell went on to say that he believes Google will "have a strong year" and that Amazon "will hit $100 billion" in advertising revenue. CNBC's Elliot Smith has more here.

Section 230 Flurry: A number of Big Tech companies and other organizations are backing Google in a Supreme Court case over Section 230 that could have massive implications for how online speech is regulated. On Thursday, Yelp, Microsoft, Reddit, and other tech companies filed legal briefs in support of Section 230. And it wasn't just tech companies who spoke out in favor of the statute. The Reporter Committee for Freedom of the Press, for instance, wrote, "The protections that Section 230 provides for the free flow of information online are vital to the work of journalists and news organizations around the country." Bloomberg Law's Emily Birnbaum and Anna Edgerton have details here.

TOO MANY TABS

A top EU official is warning TikTok could be banned if it doesn't comply with future rules, saying it is "not acceptable" users can quickly access "harmful and sometimes even life-threatening content." (Bloomberg)
A major setback for Google: The tech titan has lost a bid to block an Indian Android antitrust ruling. (Reuters)
Twitter has officially banned 3rd party apps from accessing the service after prominent apps were blocked without explanation last week. (Engadget)
Meta has told some of its average-rated employees they will have to increase their performance, Sylvia Farnham O'Regan and Lauren Tana LaCapra report. (The Info)
Meta is rolling out a new Accounts Center that allows users to manage settings for its apps in one place. (The Verge)
Social network Post announced the launch of a dedicated News Feed with verified publishers, including the LA Times, Reuters, and more. (Post)

CURTAIN CALL

CNN Photo Illustration/Jim Weber/Santa Fe New Mexican

Charges For Baldwin: Prosecutors in New Mexico on Thursday announced that they plan to charge Alec Baldwin and "Rust" armorer Hannah Gutierrez Reed each with two counts of involuntary manslaughter after the fatal 2021 shooting of cinematographer Halyna Hutchins. Baldwin's attorney called the decision a "terrible miscarriage of justice" and said the actor "will fight these charges" and win. An attorney for Gutierrez Reed called the charges "absolutely wrong." A conviction on the most serious charge could result in a mandatory five-year sentence. CNN's team has details here.

► CNN's Josh Campbell was first to speak to New Mexico DA Mary Carmack-Altwies. "Just because it is an accident doesn't mean that it's not criminal," Carmack-Altwies told Campbell.

OFF STAGE

RIP: Iconic singer and songwriter David Crosby has died at 81. (CNN)
The BAFTA Awards nominations were announced Thursday. Netflix's "All Quiet on the Western Front" led the way with a staggering 14 nominations. "Elvis" followed with nine nominations. And CNN Films' "Navalny" was nominated in the documentary category. (THR)
ABC will air a special episode of "Jimmy Kimmel Live" in prime time to mark the show's 20th anniversary. George Clooney, Snoop Dogg, and Coldplay — all of whom were guests when the show premiered — will join Kimmel. (Variety)
CNN has obtained the rights to air the Kennedy Center's Mark Twain Prize for American Humor, which will honor Adam Sandler this year. It will air March 26 at 8pm. (Deadline)
HBO Max's "Gossip Girl" revival has been canceled after two seasons, with the series finale hitting the streamer on January 26. (Variety)
Judd Apatow will host the 2023 DGA Awards. (The Wrap)
Comedian Mo Amer is hosting the next season of the Doha Debates. (Variety)
A benefit concert honoring Aaron Carter raised more than $150k for a nonprofit focused on children's mental health. (THR)
Leslie Jordan suffered "sudden cardiac dysfunction" before his fatal crash last year in Hollywood, the coroner has determined. (LAT)

Thank you for reading! This newsletter was edited by Jon Passantino. Have feedback? Send us an email here. We will see you back in your inbox next week.