Greetings from Los Angeles, and welcome back to In the Room. In tonight’s email, fresh reporting on the NBA rights fight between David Zaslav and Brian Roberts. Plus, more news and notes on Kim Godwin’s forced resignation and the path forward for ABC News.

But first…

📺 The A.G. Sulzberger Award… for legacy media’s first one-on-one Biden interview of the election cycle goes to CNN’s Erin Burnett, whose chat with the president airs tonight on CNN. I broke the news of this interview on X last night, and I can’t even count the number of schadenfreude-laden A.G. Sulzberger- and New York Times-related responses I’ve been getting. Of course, A.G. has been very adamant about his desire to see the president sit down with the mainstream press—and, really, let’s be honest, the Times—not just Howard Stern and Chiquibaby and the guys from Smartless. Still, the sheer volume of memes and quips is a real testament to how closely X users are following that whole micro-saga.

🎥 CNN’s Vice-ification: CNN C.E.O. Mark Thompson is a big Vice News fan, as readers of this email know, and he’s now recruited at least two more of their correspondents to join his ranks: Isobel Yeung, a London-based journalist whose hire was announced on Wednesday, and Meena Hart Duerson, an Emmy-winning New York-based correspondent. For months, Thompson has privately cited Vice as the style of field reporting he’d like to see on his own network, noting the correspondents’ casual dress and authentic engagement with their subjects. (Indeed, these were key features of the Shane Smith-Josh Tyrangiel Vice era.) He has also given ample production support to correspondents like Elle Reeve, another former Vice reporter, and Donie O’Sullivan to produce raw documentary packages from the front lines of deep-red MAGA America. Now, let’s see if Thompson also invests in producers who have the Vice sensibility. Because most CNN producers are operating on very different muscle memory.

🔎 Spotted at Milken: Chris Licht, who since his defenestration from CNN has also been spotted at the Saudi Future Investment Initiative Conference, the Dealbook Summit, and the Super Bowl. I admire the hustle.

💨 The Nich Carlson exit: Business Insider editor-in-chief Nich Carlson has announced that he will step down this summer, as anticipated. I reflected on Carlson’s tenure in a previous email, as well the true catalyst for his departure. (No, it wasn’t voluntary, despite his exit note.) Now, the very affable B.I. C.E.O. Barbara Peng will start the search for Carlson’s successor. I’ve noted that former Journal editor Matt Murray is on the market. Any other guesses?

Since the merger, WBD stock is down 68 percent. Last year, Zaz’s compensation package—which is now tied to free cash flow, not stock performance—was $49.7 million, up 26.5 percent from the year prior. So when Zaz laid out his thesis, and subsequently claimed that such stock-to-comp alignment “has been the focus for me over the years,” many people in the audience frankly had no fucking clue what he was talking about. “Seriously, is he delusional?” one veteran media executive asked me. “WTF, is he on drugs?” asked an investor.

Zaz is a battle-tested veteran of the awkward interview and the uncomfortable earnings call, and has thus mastered the self-preservational art of vacant circumlocution. But even by those standards, his remarks at Milken betrayed a stunning lack of self-awareness. At one point, for instance, he claimed to have personally started CNBC and MSNBC—a remark that the networks’ true architects, Tom Rogers and Bob Wright, would no doubt take issue with.

In any event, Zaz’s most highly anticipated remarks pertained to his latest headache, which is the now very real possibility that he may lose TNT’s NBA rights. My partner John Ourand’s recent reporting on the terms of the league’s deals, as currently penciled, highlights just how misguided Zaz’s handling of the whole renegotiation has been. At present, he’s paying $1.2 billion annually for a package that includes one conference final per year, some first- and second-round series, the postseason play-in games, the in-season tournament and the All-Star weekend, along with a slate of regular season games. Now, Disney has wrangled the “A package,” Amazon is in the mix to pay $1.8 billion a year for a League Pass-ish framework, and Comcast’s Brian Roberts has put forward a $2.5 billion a year offer for the “B package” for which Zaz is now vying.

Long story short, Zaz will now be required to pay at least $2.5 billion a year to keep a smaller package that includes a conference final every other year and no postseason play-in games or in-season tournament (both of which will go to Amazon). And if WBD doesn’t retain these rights, its cable networks will suddenly become even more vulnerable and command less value from distributors. On a sentimental note, it would also likely mark the end of Inside the NBA, the beloved Emmy-winning studio show featuring Charles Barkley, Shaq, Kenny Smith, and Ernie Johnson. Over the years, this group has achieved Madden-Summerall-like status.

On this issue, Zaz was relatively curt: “We continue to be in constructive negotiations with the NBA,” he said. “It’s a great league, the TNT team does a terrific job, and we love the NBA.” He also waxed poetic about how sports, like storytelling, brings people together, and “reminds us that we have so much more in common than what differentiates us.” This last bit of sermonizing called to mind Zaz’s penchant for employing F.D.R.’s famous “rendezvous with destiny” quote, whether to refer to CNN’s journalism or the broader WBD strategy.

Zaz’s failure to anticipate NBCU’s interest in the NBA, or at least fully contemplate the ramifications of Roberts tendering a market-making offer, has genuinely stunned the senior media executive class with whom I speak regularly. These people tend to cite two unforced errors: Zaz’s slightly boneheaded and at the least un-partnerly comment, two years ago, that WBD didn’t “have to have the NBA”; and, more recently, his failure to exit his exclusive renegotiating window with a handshake deal. By comparison, ESPN C.E.O. Jimmy Pitaro now looks prescient by agreeing to terms with NBA commissioner Adam Silver on the “A package,” which includes the Finals, for $2.6 billion a year—only $100 million more than Roberts is hoping to pay for a less desirable slate.

Behind the scenes, there’s also some poetic justice to how Zaz arrived at this moment. The leagues and their media partners are a clubby bunch, and relationships are paramount. Less than a year after the WBD merger, Zaz pushed out Lenny Daniels, the president of Turner Sports since 2014, and a 27-year veteran of the network. He would later push out Turner Sports E.V.P. and general manager Tina Shah as well. (Jeff Zucker, the former head of WarnerMedia Sports and, of course, CNN, had already been defenestrated before Zaz’s arrival, as you may have heard). In Daniels’ place, Zaz appointed Luis Silberwasser, a Discovery veteran and former Telemundo president who lacked any remotely comparable dynamic with the league. Meanwhile, at NBCUniversal, Roberts’ top sports executive was none other than Mark Lazarus, the former Turner Sports and then Turner Entertainment president. Thus, Zaz now finds himself in the unenviable position of bidding against not just Roberts’ formidable balance sheet and broadcast distribution, but also a Turner alum with deep ties to Silver and the NBA. (Inside NBC Sports, the shorthand for their preferred outcome is “Laz not Zaz.”)

Of course, Zaz’s failure to anticipate this moment also suggests a broader misreading of the business itself. Back in 2022, around the time of his “We don’t have to have the NBA” remark, I’m told that Zaz was also privately telegraphing to the Turner team that he didn’t want to pay more than $2 billion a year to sustain TNT’s package. Apparently, he thought he was only bidding against himself, and sustained the delusion right through the exclusive negotiating window. Now he’s bidding against Roberts and Lazarus, and he’ll have to pay more than twice as much as he’s currently paying for a lot less—unless he wants to lose the NBA and see his stock tank even further. (Zaslav declined an invitation to address the current negotiations.)

In the event that Zaz does lose the NBA, some anticipate he would try to rationalize the setback by trumpeting savings of roughly $25 billion over the next decade—reflecting his larger debt-slashing modus operandi since the immaculate conception of WBD. Indeed, on Wednesday, Bloomberg reported that Zaz has “ordered his lieutenants to find additional opportunities for cost-cutting in order to hit financial targets for the next couple years,” which will inevitably translate to even more layoffs.

The trouble with this rationale is that, at least when the terms are advantageous, WBD probably makes about $1 billion a year in free cash flow from its NBA deal—which is why Zaz is now scrambling to pay more to keep it in house. The bigger problem, as I noted last week, is that debt servicing only works so long as you don’t cut so close to the bone that you neuter the value of the asset, itself. If he loses the NBA, he undermines the entire Turner business. Right now, despite the report of impending cost cuts, WBD is still trading below $8 a share. “Without the NBA,” one media veteran speculated, “that’s a $6 stock.” The good news for Zaz, at least, is that his comp is aligned with another metric.

In a way, the FAMU assignment was the perfect coda to Godwin’s embattled tenure, which effectively ended on Friday night after Disney Entertainment co-chair Dana Walden and news group president Debra OConnell decided there was no longer any point in delaying the inevitable. By that point, a spate of recent news reports on the internal frustrations, including my previous email, seemed to have accentuated the need for a swift reorganization.

Still, OConnell had spent years observing Godwin from her perch as president of networks, and nearly three months more closely reviewing the matter as president of the news group. One of OConnell’s preoccupations, I’m told, was Godwin’s allocation of resources; another was her personal expenses, which had ballooned as a result of her affinity for corporate travel (and the occasional need for a tailor and makeup artist). So it was perhaps fitting that Godwin had managed to seize one final opportunity to leverage the power of ABC News for her own personal gain.

By that point, of course, Godwin had been forced to address the far more complex task of trying to spin her exit as a voluntary retirement. On Sunday night, she informed staff that she had “decided to retire from broadcast journalism.” “[T]his was not an easy or quick decision,” she wrote in a lengthy memo. “But after considerable reflection, I’m certain it’s the right one for me as I look to the future and prioritize what’s most important for me and my family.” Meanwhile, on Instagram, Godwin’s husband called on friends to “celebrate the retirement of perhaps the most decorated journalist in the world.” Declaring that his wife’s “walk and purpose have been and will continue to be ordained by God,” he summoned friends to share their own “heartfelt expressions of support” on social media. (FAMU, which her husband referred to as “our internationally renowned alma mater,” was mentioned three times between the two notes).

In actuality, Godwin had been let go because Walden and OConnell had determined she was a bad leader who had long ago lost the newsroom. In addition to spending and expenses, OConnell had also been disturbed by Godwin’s decision to unceremoniously fire well-regarded newsroom veterans whom she perceived as critics, like Wendy Fisher and Chris Vlasto, under the cover of company-wide cost cuts. (“Wendy and Chris built this place,” one ABC News veteran had told me at the time.) Godwin had also fired her talent strategy department and then went more than a year without replacing them. And more recent personnel missteps, such as her attempt to fire Washington bureau chief Jonathan Greenberger, which precipitated his defection to Politico, also left OConnell scratching her head.

In any event, OConnell’s own note to staff on Sunday was the more relevant bellwether for ABC’s future. After some cursory words about Godwin’s contributions, and the enduring strength of the network’s reputation and credibility, OConnell announced that she would temporarily run things while “working with the leadership team as we forge a new path forward together.”

In fact, I’m told that several members of the existing ABC News leadership, whom Godwin had dubbed “the keys,” are unlikely to be a part of the network’s future. Stacia Deshishku, the executive editor, is said to be likely to leave, though she has told at least one colleague that Disney will need to “back up the Brinks truck” in order to make that happen. Derek Medina, another E.V.P. and the business affairs chief, may also be on the outs. Finally, Jose Andino, a human resources chief who Godwin had brought with her from CBS News, has already told some of his former CBS News colleagues that he is not long for the network. (A Disney spokesperson declined to comment.)

As for who takes over Godwin’s chair, there’s only speculation. The names being bandied about include Chad Matthews, the ABC stations chief; Tom Cibrowski, the head of ABC’s San Francisco station; and Simone Swink, the executive producer of Good Morning America. Of course, whoever gets the job will be inheriting a significantly smaller role than Godwin’s predecessors, given ABC News’ diminished place in the Disney portfolio. Meanwhile, down on the newsroom floor, the mood this week is far from jubilant. Indeed, it’s quite akin to the mood at CNN upon Chris Licht’s ouster last year. “On the one hand, I’m relieved,” a longtime ABC News producer told me. “I’m also sad for all the damage that’s been done.”