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Tuesday, August 8, 2023

ESPN gets into the world of online betting, Steven Crowder partners with Alex Jones, Meta faces mounting pressure from Canadian news orgs, and Chris Noth breaks his silence on the 2021 sexual assault allegations against him. Plus, details on the quarterly earnings report from Fox, Endeavor, BuzzFeed, The NYT, and more. But first, the A1.

THE A1

Catching Iger by the Tail

CNN Photo Illustration/Dia Dipasupil/Getty Images

Tinseltown is in suspense.

Bob Iger, the de facto king of Hollywood, is set to deliver remarks Wednesday to investors about the complex set of challenges confronting the Magic Kingdom during Disney's quarterly earnings call — and it's safe to say that he has a lot to address.

The vast fallout from Iger's astonishingly candid interview with CNBC's David Faber continues to beset the Disney boss, despite attempts to clean up the remarks. While Iger's first 15-year tenure at the helm of Disney was celebrated for his creative and business coups, acquiring iconic studios such as Pixar, Marvel, and Lucasfilm, this time around he's contending with a very different media landscape.

Questions persist about Iger's intentions for Disney's linear television assets (which he told Faber "may not be core" to the company) and over what he would like to do with ESPN (is a "strategic partner" somewhere around the corner?). Iger also faces questions about Disney's vaunted creative engine and whether it is faltering after a summer of box office struggles, its plans for Hulu, streaming at large, and the historic dual strikes that have brought Hollywood to a standstill.

And, of course, Iger continues to be bedeviled by intrigue about his succession plan, particularly now that Kevin Mayer and Tom Staggs have returned from exile to the House of Mouse as strategic advisers. Already, Iger's two-year return to Disney has morphed into four. What's Iger's plan for the long-term leadership of the company?

It may not be reasonable to expect Iger to offer answers — especially direct ones — on a number of these issues. But he will certainly need to address the comments he made to Faber about the future and health of ABC and the other major television channels in the Disney portfolio.

"While it's understandable that Iger's positions are evolving amid massive disruption in the media industry, and within Disney's business, investors will be looking for clearer signals on the TV and streaming assets in particular," Paul Verna, an analyst at Insider Intelligence, told me Tuesday. "These calls will be all the more strident if Disney posts results that fall short of Wall Street's expectations, or that otherwise surprise investors."

A knowledgable media executive, who requested anonymity to speak candidly, was far more blunt: "The linear networks are in the ICU. I'd even go as far as to say that they are in hospice care. So the question is, what does Iger do?"

"Hollywood wants to hear Iger walk back the doom and gloom on the linear networks and walk back his harshness on the strike," the executive added. "Hollywood is looking for him to be the disciplined statesman he has always been and show an optimistic way forward."

But with the industry in such a tempestuous state, radiating optimism is more challenging than ever. Iger has a difficult hand to play.

IGER INTRIGUE

"It's been a busy summer for Bob Iger," writes Rachel Jones, adding, he "is on a four-year mission to turn Disney around, but early results are a mixed bag." (Fortune)
"Think your to-do list is packed? Try running a ~$158B entertainment conglomerate," jokes Jacob Cohen. (Hustle)
"It's been a cruel late spring and early summer for Disney," writes Rick Munarriz. "Analysts see revenue clocking in at $22.5 billion for the fiscal third quarter, a modest 5% year-over-year increase. It would be the company's weakest top-line growth in more than two years." (Motley Fool)
Lucas Manfredi and Scott Mendelson: Iger is facing a "heady moment and a heavy burden" during his second round as Disney boss. (The Wrap)
"For years the thriving TV business helped pay for splashy acquisitions that marked Iger's first 15-year tenure, including the hit machines Pixar and Marvel ... But it has now become a drag on the company," Christopher Grimes, Ortenca Aliaj, and Anna Nicolaou write. (FT)

——— BELOW THE FOLD ———

CNN Photo Illustration/G Fiume/Getty Images

ESPN's Big Bet: Once upon a time, Bob Iger shot down the notion of ESPN getting into the world of online betting. Now, it is doing just that. ESPN announced Tuesday a $2 billion licensing deal with gambling companyPenn Entertainment, which will rebrand asESPN BET and launch later this fall in 16 states. In exchange for allowing Penn to use the ESPN name, the casino company will pay ESPN $1.5 billion in cash over the the next 10 years and grant it $500 million in its shares. As part of the arrangement, Penn has also unwound its relationship with Barstool, selling the media company back to its controversial founder Dave Portnoy. "It's back to the pirate ship," Portnoy said in an online video, announcing he owns 100% of the company "for the first time in a decade." CNN's Ramishah Maruf has the details.

► Peter Kafka has a smart piece on the blockbuster deal, answering all your burning questions, including what the deal means for Disney and what it says about the state of ESPN.

THE INDUSTRY

THE MARKET

Fox Corporation shares ended up nearly 6% after beating profit projections. Lachlan Murdoch said the company remains committed to the traditional television bundle, saying it "drives value" and "will for a long time to come." (WSJ)
Endeavor reported a big profit during its Q2 earnings, fueled by its sale of IMG Academy. Shares rose slightly in after-hours trading. (Variety)
Shares in DISH spiked 10% on news that it will merge with EchoStar to form a roughly $6 billion satellite company. (Reuters)
Nexstar shares fell 4% after reporting Q2 earnings. The CW posted a $78 million loss. (Variety)
Shares in iHeartMedia collapsed nearly 17% after reporting Q2 results, which were impacted by continued ad woes. That said, the company said it saw signs of recovery and did see its podcast advertising increase. (THR)
The NYT's revenue rose 6.3% in Q2 over last year, with the Gray Lady adding 180,000 new digital subscribers. Shares in the company ended the day up nearly 9%. (NYT)
BuzzFeed's already dangerously low share price fell 2% as the company missed on Q2 earnings. The one-time darling of digital media reported $77.9 million in revenue. (TheWrap)
Puck raised $10 million in a Series B growth round, Sara Fischer reports. The round was led by J Rothschild Capital Management. (Axios)

THE FOURTH ESTATE

New York University's Arthur L. Carter Journalism Institute will launch a new journalism ethics initiative — funded by OpenAI with a $395,000 grant, Sara Fischer reports. (Axios)
Nikole Hannah-Jones talks to Cori Murray about taking The 1619 Project to television: "We didn't want to sell this documentary to anyone that [would] require us to water certain things down. We have to tell the story that needs to be told." (THR)

MEDIA MOVES

The Associated Press named Nomaan Merchant politics editor. (AP)
Warner Bros. Discovery said executive Priya Dogra will exit the company after 14 years. (THR)

THE INFO WARS

CNN Photo Illustration/Nicole Hester/Mlive.com/AP

Crowded Out: So much for believing in free speech! The embattled far-right talk-show host Steven Crowder "sent draconian non-disclosure agreements to his staff with a $100,000 breach of contract penalty," Mediaite's Diana Falzone reported on Tuesday, adding that four employees had exited his company amid the internal hunt for leakers. The disbursement of the NDAs came following a report from Falzone about allegations of severe workplace misconduct inside Crowder's company. Falzone has more here.

► Meanwhile, Alex Jones announced Tuesday that he is now working with Crowder. "They have just launched a new network system partnered with Rumble ... This is explosive, and I'm going to start a weekly show with them," Jones said, broadcasting from Crowder's studios. Jones described the business partnership as a "match made in heaven."

IN THE BATTLEFIELD

GOP megadonors Rebekah Mercer and Peter Thiel could invest in Tucker Carlson's media company, Brian Schwartz reports. (CNBC)
Fox News sent campaign teams its GOP debate format, which will be moderated by Martha MacCallum and Bret Baier. There will be no opening statements and the debate will run two hours. (TV News Now)
Just another day in the right-wing fever swamps: OAN host Alison Steinberg told Roger Stone that she believes there are "definitely forces in the unseen realm attempting to orchestrate the demolition of America and the world as a whole." (MMFA)
The Cancun-vacationing senator and right-wing talk podcaster Ted Cruz casually engaged in some CNN bashing, imploring the media company to "move" out of the U.S. (Mediaite)
Jesse Watters asserted that climate change is a "psyop" against the American people to deceive them into paying more taxes. (MMFA)
Meanwhile, Bernie Sanders penned a piece for Fox News describing climate change as a real "threat to the planet." (Fox News)

THE VALLEY

CNN Photo Illustration/Yves Herman/Reuters

Meta's Maple Mess: Meta is facing mounting pushback over its move to block news in Canada after lawmakers passed a law that will force Big Tech companies to pay publishers for content. On Tuesday, several Canadian publishers asked Canada's Competition Bureau to investigate the Silicon Valley company for its decision, which they described as "anticompetitive" and "designed to discipline Canadian news companies." In a joint statement, the publishers also noted the move will "significantly reduce" Canadians' access to news. The CBC has more here.

► Meta's POV: "The Online News Act is based on the incorrect premise that Meta benefits unfairly from news content shared on our platforms, when the reverse is true," the company said. "News outlets voluntarily share content on Facebook and Instagram to expand their audiences and help their bottom line. The only way we can reasonably comply with this legislation is to end news availability for people in Canada."

TOO MANY TABS

TikTok has "hired two retail veterans who worked at Amazon and Meta to help oversee its ambitious push to build a giant U.S. ecommerce business," Erin Woo reports. "At the same time, TikTok's U.S. ecommerce general manager, Sandie Hawkins, is leaving the company." (The Info)
Elon Musk is trying to win back advertisers by signing a deal with a new brand safety technology firm, Jonathan Vanian reports. (CNBC)
Max Zahn looks at whether Threads can overtake X. (ABC News)
Google and Universal Music are in talks to license artists' voices for A.I.-generated music, Anna Nicolaou and Madhumita Murgia report. (FT)
IBM researchers tricked ChatGPT into writing malicious code and providing poor cybersecurity counsel, Sam Sabin reports. (Axios)
Researchers aren't the only ones sounding the alarm bell. On Tuesday, Pope Francis warned of the potential risks posed by A.I. (Reuters)
Two state senators from Georgia are looking to pass a bill that would require children to have permission from their parents to create social media accounts. (AP)
Ofcom is looking into whether Snapchat is doing enough to bar underage users from using its app. (Reuters)
Google failed to convince a judge to dismiss a lawsuit that claims the tech giant invaded millions of users' privacy. (Reuters)

CURTAIN CALL

CNN Photo Illustration/Cindy Ord/Getty Images

Porter's Pain: Emmy-award winning actor Billy Porter disclosed in a recent interview how the dual strikes plaguing Hollywood have impacted him: "I have to sell my house," Porter told the Evening Standard's Craig McLean. "The life of an artist, until you make f**k-you money — which I haven't made yet — is still check-to-check," Porter explained. "I was supposed to be in a new movie and on a new television show starting in September. None of that is happening." Read the interview here.

HOLLYWOOD HELL

Porter isn't the only one feeling the financial pinch. "Rank-and-file union members on the picket lines are starting to worry about their savings — and professional options — running out," Daniel Arkin reports. (NBC News)
Ari Emanuel's Endeavor said the strikes will cost it roughly $25 million a month, but that the company "stands with our clients." (THR)
Kathleen Sharp argues the strikes are dragging on because of "studio greed." (Guardian)
"Yes, the strike is saving Hollywood studios money," Ryan Faughnder writes. "But the downsides are more important." (LAT)

OFF STAGE

Rapper Tory Lanez was sentenced to 10 years in prison for shooting and wounding Megan Thee Stallion. (LAT)
Chris Noth is speaking out against the 2021 sexual assault allegations he faced: "I strayed on my wife, and it's devastating to her and not a very pretty picture," he said. "What it isn't is a crime." (USA Today)
Jay-Z's annual Made in America festival has been canceled due to "severe circumstances outside of production control." (AP)
The nominations for the MTV Video Music Awards are out and, for the first time in the show's history, female artists are dominating the award show's top category. (THR)
Warner Bros. Discovery anticipates a $30 million domestic opening for its upcoming DCEU film, "Blue Beetle." (Deadline)
Comedian Adam Devine took aim at Marvel Studios, saying MCU movies have "ruined comedies," adding that they "make those movies kind of funny" but that they're "not real comedy." (Variety)
Ridley Scott told Empire magazine that he regrets not directing "Blade Runner 2049." (Deadline)
A24 announced that a sequel to the studio's 2022 horror hit "Talk to Me" is in the works. (THR)
"Call Her Daddy" host Alex Cooper has launched The Unwell Network, billed as a Gen Z-focused production company. (Variety)

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.