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Wednesday, April 19, 2023

Hello, once again, from New York City! Disney preps to execute layoffs, Matt Walsh gets hacked, Elon Musk readies to eradicate legacy verification, Frank Ocean drops out of Coachella, and so much more. But first, the A1.

THE A1

Scrambling to Settle

CNN Photo Illustration/Julio Cortez/AP

Veteran mediator Jerry Roscoe was on a relaxing river cruise from Budapest to Bucharest celebrating his 70th birthday on Sunday when he received an urgent phone call.

The voice on the other end asked Roscoe if he would serve as an eleventh-hour mediator in the massive defamation lawsuit filed by Dominion Voting Systems against Fox News. The start of the trial was hours away, and Dominion planned to force Rupert Murdoch and Tucker Carlson onto the witness stand soon after opening statements.

As Roscoe sailed aboard the cruise ship, he didn't hesitate to accept the unexpected task of brokering a deal to avoid the media law trial of the century. "I said yes," Roscoe said by phone Wednesday, recalling advice his father gave him at the age of 16 about accepting work assignments on vacation. "My dad told me that if someone needs you, they call you, and if they need you, you go."

This account of the whirlwind events that transpired in the days leading up to the stunning settlement is based on an interview with Roscoe, as well as multiple people with direct knowledge of the out-of-court deal who spoke to me and my colleague Marshall Cohen.

The lead trial attorneys – Justin Nelson for Dominion and Dan Webb for Fox – had negotiated for a settlement over the weekend before Roscoe was brought in, but they were "really far apart" and no deal had materialized.

Over the next day, Roscoe familiarized himself with the historic defamation case, poring over thousands of pages of documents. Then there was intensive "shuttle diplomacy," with Roscoe oscillating between the two sides, before eventual phone calls and Zoom meetings with everyone together.

On Sunday, Delaware Superior Court Judge Eric Davis was notified that the parties had hired Roscoe. Davis announced a surprise one-day delay to the trial's commencement that evening, giving Roscoe a shot at clinching a deal.

On Monday, the frantic negotiations got underway.

In the 24 hours that followed, the talks culminated in a historic deal, which was hammered out shortly after 2 p.m. ET Tuesday, averting what would have been a high-wattage trial that would have forced the right-wing talk network to reckon further with the election lies it aired in the wake of the 2020 contest.

"It went down to the wire," Roscoe candidly acknowledged.

And after the jury was sworn in Tuesday morning, all signs pointed to trial. Dominion lawyer Stephen Shackelford was seen eating at the Subway restaurant in the courthouse's basement cafeteria during the lunch break, immediately before he was set to deliver opening statements. Members of the newly empaneled jury ate their first – and only – court-provided lunch as well.

Meanwhile, on the other side of the world, Roscoe was finalizing the historic deal. "Presence in the courtroom often tends to crystalize the focus of the risks and benefits of litigation," Roscoe told us. "Once the jury sits down and you're looking at people who are going to decide your fate, it's an awakening experience."

Buzz of a settlement reached new heights on Tuesday afternoon, after the opening statements that were scheduled for 1:30 p.m. were inexplicably delayed. After the deal was finalized in the 2 p.m. hour, lawyers quickly drew up the paperwork, which was signed moments before Davis entered the courtroom around 4 p.m.

Davis then announced that a resolution had been reached, eliciting audible gasps of astonishment from reporters inside the courthouse. Davis then dismissed the jury – and the case was over.

A deal wasn't easy to reach. Roscoe, a world-renowned mediator who has even resolved wartime disputes in the Balkans, said that it was among the toughest assignments he has ever faced.

"It was one of the more challenging cases because of the magnitude of the dispute and the visibility," he said, adding, "I would not characterize any aspect of this mediation as easy."

——— BELOW THE FOLD ———

CNN Photo Illustration/Eduardo MunozAlvarez/VIEWpress/Getty Images

The Fallout at Fox: The legal troubles are far from over for Fox — and some of them stem from the company's own shareholders. As Reuters' Alison Frankel wrote Wednesday, shareholders "are now poised to bring lawsuits accusing Murdoch and other Fox board members of breaching their fiduciary oversight duties by failing to block the network's flawed reporting, despite red-flag warnings."

On Wednesday night, I spoke with Jeffrey A Sonnenfeld, the renowned professor and senior associate dean for leadership studies at the Yale School of Management. Sonnenfeld told me that as a result of the legal action Fox could face, leadership changes should be expected. "What always happens in these shareholder suits is that they want some sort of governance changes and a part of it is a different form of managerial leadership," Sonnenfeld said. He suggested that Fox Corporation chief legal officer Viet Dinh or Fox News chief executive Suzanne Scott could be in danger. All of this indicates heads could roll after the massive settlement, given that the board of directors answers to investors and those investors will demand some form of accountability.

IN THE FOX HOLE

"Naturally investors might have questions as to what the Dominion settlement means for the ongoing $2.7 billion Smartmatic case filed in Feb. 2021," MoffettNathanson analyst Robert Fishman writes in a Wednesday research note. (Variety)
Indeed, I think it's fair to say that there are questions about whether Murdoch will now move to quickly settle the Smartmatic case and put these election lies lawsuits behind him and the company. Surely he won't drag this process out until 2025, when that case is scheduled to go to court?
The renewed focus on the Smartmatic lawsuit had Fox News — again — defending its coverage of the 2020 election. The network said Wednesday that it "will be ready to defend this case surrounding extremely newsworthy events when it goes to trial." (CNBC)
"Even though the American cable universe is shrinking, [Rupert] Murdoch and his son Lachlan Murdoch are still extracting billions": Brian Stelter reports that "in the negotiations that are taking place this spring between Fox and the likes of Comcast, Fox wants to break past the three-buck mark—meaning three dollars per cable household per month." (Vanity Fair)
Justin Baragona explores how the settlement "could spell doom for Newsmax and OAN," right-wing media companies that have far shallower pockets. (Daily Beast)
Jack Shafer says Murdoch has won, yet again: "Like the phone-hacking scandal, like the sexual harassment cases, like the Seth Rich case, like the coupon case, this settlement will allow the Fox media machine to return to cruising speed and even continue its sleazy ways." (POLITICO)
Jake Tapper presses Dominion boss John Poulos about why the company didn't demand as part of the settlement an on-air retraction from Fox News: "Why not get them to acknowledge it?" (CNN)
Michael Grynbaum reports that for some of Fox News' critics, Dominion's decision to settle didn't go over so well. (NYT)
Gretchen Carlson, who didn't want to see a settlement, tells Anderson Cooper she was not surprised that Fox settled the case. (CNN)
"It's reasonable to be disappointed that Fox wasn't forced to apologize on-air. But if you're looking for justice in an American court, you're in the wrong place," Daniel Novack writes. "The civil legal system, like love, means never having to say you're sorry. Courts make claimants whole with one thing: money." (THR)
"We shouldn't think that defamation suits are going to solve our problems with mass disbelief in the fairness of the 2020 election": Patrick Marley and Jeremy Barr report that "election falsehoods will persist" after the historic settlement. (WaPo)
David French writes that after the settlement, the "assault on media protections is likely to continue." (NYT)

THE BUSINESS

CNN Photo Illustration/Octavio Jones/Reuters

Dark Days at Disney: Anxiety is high – yet again — at Disney. The entertainment giant "plans to cut thousands of jobs next week, including about 15% of the staff in its entertainment division," Bloomberg's Thomas Buckley and Lucas Shaw reported, citing sources. Per the duo, the cuts "will span TV, film, theme parks and corporate teams, affecting every region where Disney operates." CNBC's Alex Sherman reported Wednesday that ESPN will be impacted by the cuts, which he said will "include some on-air talent and management."

► "Truth is if you're not operating a ride at the parks, you could be on the chopping block," one source told Deadline's Lynette Rice, Dade Hayes, and Nellie Andreeva. "Maybe the worst part is still not knowing who is being let go, no matter how much time you put in." One employee, the trio reported, even "begged' one of the journalists to determine whether their job was safe.

IN THE INDUSTRY

Wednesday marked the third week that Wall Street Journal reporter Evan Gershkovich has been detained in Russia.
Jason Rezaian urges people not to forget about Gershkovich: "He is now a member of a select community of unfortunate souls who are unjustly subjected to abuse by those wielding unchecked power." (WaPo)
McKay Coppins points out that Gershkovich's detention "is part of a disturbing global phenomenon." (Atlantic)
First in Reliable | Peter Kafka on Thursday will kick off a special series of Recode Media that focuses on A.I. The first episode features an interview with Microsoft's chief technology officer, Kevin Scott.

MEDIA MOVES

WaPo announced Sarah Ellison will take on a new role as a national enterprise reporter. (WaPo)
Tribune Magazine hired Taj Ali as a correspondent. (Twitter)

THE INFO WARS

Matt Walsh's Mail: A hacker not only compromised right-wing personality Matt Walsh's Twitter account this week, but also gained access to two decades of his emails. That's according to Walsh's boss, Daily Wire co-founder and co-chief executive Jeremy Boreing, who made the disclosure on Twitter Wednesday. "The attack went well beyond Twitter," Boreing said, vowing to take no action as a result of whatever embarrassing information might be revealed as part of the attack. "What scandalous information will the hackers find in Matt's email? I do not know," Boreing said. "I'm sure I said things in my twenties that I wouldn't feel great having aired publicly." Boreing said he is "looking forward to pressing charges" on the culprit.

► WIRED's Dell Cameron spoke to the purported hacker, who goes by the alias "Doomed." The hacker told Cameron that the attack was carried out via a technique known as SIM swapping. "Doomed" indicated it was done out of boredom and to sow chaos on Twitter.

► After Cameron tweeted out his story, Twitter permanently suspended his account. WIRED managing editor Hemal Jhaveri released a statement noting "neither Dell's story nor his Twitter feed contained hacked materials" and requested Twitter to reinstate Cameron's account. We'll see what happens.

IN THE BATTLEFIELD

Ron DeSantis' allies have "threatened on Wednesday to hike taxes, raise utility rates and develop land around the entertainment giant's Central Florida theme parks as retribution for the company's efforts to avoid a state takeover," Steve Contorno reports. (CNN)
Beth Kowitt writes about how Disney is embracing its role "as hero to DeSantis' villain." (Bloomberg Law)
The New York Post has deleted a Tuesday story about Tucker Carlson's new $5.5 million home. (Mediaite)
Tucker Carlson gave a passionate endorsement for anti-vaccine conspiracy theorist Robert F Kennedy Jr. (MMFA)

THE VALLEY

CNN Photo Illustration/Jonathan Ernst/Reuters

Vanquishing Verification: Is it a 4/20 joke or not? Elon Musk's Twitter reiterated on Wednesday that it intends to strip accounts verified under its legacy program of their blue checkmarks on April 20. Musk's social media platform had previously indicated April 1 (April Fools Day) would be when the blue badges would be wiped out, so it is uncertain how serious the company is with this announcement. And even if Twitter does begin removing the symbols of a bygone era, it's not clear whether it will occur instantaneously or be a rolling process. The Verge's Jay Peters has more.

TOO MANY TABS

Another round of Meta's previously announced layoffs occurred Wednesday. (CNN)
"Why should we stay at Meta?": The latest layoffs continued to underscore the low employee morale at 1 Hacker Way. (Reuters)
"Montana is on its way to becoming the first state to ban TikTok, which, according to one computer-security expert, is a little like saying it's the first state to allow humans to flap their arms and fly around in the clouds without an airplane," Caroline Mimbs Nyce writes. (Atlantic)
Snapchat announced its A.I. chatbot is now accessible by all users. (CNN)
Meanwhile, Snapchat is expanding its revenue sharing program. (THR)

CURTAIN CALL

CNN Photo Illustration/Andy Abeyta/The Desert Sun/USA Today Network

Ocean Out: Sorry, Coachella attendees. After suffering a leg injury, Frank Ocean announced Wednesday he is backing out of performing as a headliner at the annual music festival. The singer was scheduled to perform during weekend two. A statement said that Ocean had fractured and sprained his left leg. Rolling Stone's Charisma Madarang has more.

OFF STAGE

Amid fear of a writers strike, on-scene television production has dropped about 36% in Los Angeles during Q1 of 2023, per a report from FilmLA. (Deadline)
Elaine Low reports that there is "an exodus into gaming and other industries" that is underway in Hollywood "as entertainment wobbles." (Ankler)
"As Jonathan Majors prepares for a May 8 court appearance on domestic violence charges, his PR problems are about to get bigger," Tatiana Siegel reports. (Variety)
It was only a matter of time. A "Twilight" television series is in early development by Lionsgate TV. (THR)
Natasha Rothwell's character Belinda is set to return for "The White Lotus" season three. (Variety)
The penultimate installation of "Fast and Furious" will be directed by Louis Leterrier. (Variety)
ABC has renewed "The Good Doctor" for a seventh season. (The Wrap)

Thank you for reading! This newsletter was edited by Jon Passantino and produced with the assistance of Liam Reilly. Have feedback? Send us an email here. We will see you back in your inbox tomorrow.