Good afternoon, I’m Dylan Byers.
Welcome back to In The Room, my private email on the inner workings of the American media. In the past few weeks, I’ve reported on Bob Chapek’s vision for Hulu, Joe Scarborough’s pursuit of more MSNBC cash, Bobby Kotick‘s fate at Activision, and more. Today, I’m opening my notebook to respond to some of the biggest stories of the week: Bob Iger‘s final chess moves at Disney; what’s next for ESPN; the fate of Chris Cuomo at CNN; and the changing of the guard at Twitter.
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As Disney’s charismatic leader completes his choreographed exit, the mood inside Burbank approaches a state of dread. Plus: Is Chris Cuomo finito at David Zaslav’s CNN?
Bob Iger likes sailing metaphors, as befits a man who is passionate about his yacht. He also enjoys employing them when discussing his own legacy, or his storied career at Disney, which is about to come to an end next month. Two weeks ago, while hosting a goodbye dinner for friends (Steven Spielberg, Al Michaels), colleagues (Bob Chapek, Peter Rice) and various Disney talents (Jimmy Kimmel, Robin Roberts) in the garden of his stately Brentwood mansion, Iger toasted the “many great sails” that he and the Disney team had been on together, and “all the ports” they’d been in, sources who were there that night told me. Guests dined on swordfish and chicken parmesan and were treated to a mid-dinner medley of Disney songs performed by the famed violinist Caroline Campbell. Then they bid Iger adieu as he sailed off into the sunset.
Back in Burbank, of course, the mood is less sentimental. Some at Disney are in a state of dread about their new boss, and the changing nature of their business. Iger succeeded in casting himself as a charismatic and talent-friendly leader who trusted Disney creatives to run their own show, and go with their gut. Chapek, who was named C.E.O. last February, is seen as a shrewd, data-driven businessman who is laser-focused on the bottom line.
Under Chapek, creative leaders like John Landgraf (FX) and Dana Walden (Disney TV) have been forced to cede control of their fiefdoms (and P&Ls) to distribution chairman Kareem Daniel. The verdict is still out as to whether or not this will improve Disney’s business, but no one seems to be having quite as much fun. Landgraf has publicly conceded that he’s been reduced from a business leader to a brand manager, a blow softened only by the fact that he is being given more money to spend on content. Disney will spend $33 billion on content next year, up from $25 billion last year, to boost the growth of its streaming business, which has flatlined.
Meanwhile, there’s the whole question of what to do with the linear business, which continues to drag down a stock that is currently at its lowest point for the year. As I reported in October, Chapek is seriously exploring whether or not Disney should spin off ESPN—a question that could come up for discussion at the next board meeting in early 2022. The fact that Disney just reported a 10 percent drop in pay-TV subscribers with access to ESPN (down to 76 million) should only hasten this conversation.
And while they’re at it, they might as well discuss the logic of spinning off ABC, as network television is also in steady decline and its heyday is now a distant memory. Here’s a sign of the times: Next week, Good Morning America anchor Michael Strahan is getting in a rocket and blasting off into space—a jump-the-shark moment for morning television that would have been an all-consuming media event in the Charlie Gibson-Diane Sawyer era. Today, it’s a relative afterthought.
Far more consuming in the world of television news this week is the fate of CNN anchor Chris Cuomo, who was suspended “indefinitely” on Tuesday amid new revelations about his efforts to help his brother, former governor Andrew Cuomo, combat sexual harassment allegations. Various media outlets had by that point concluded that it would be untenable for CNN to allow Cuomo to stay on the air in light of his journalistic malpractice.
Maybe, maybe not. Had Cuomo’s ratings been significantly stronger, Jeff Zucker may have found a way to make it tenable, just as he did when the first revelations about Cuomo’s involvement with his brother came to light. The greatest crime in television isn’t being embroiled in scandal, but being beset by ratings declines, and Cuomo has been hitting all-time lows.
Another key factor in determining Cuomo’s longer term fate is the value of the CNN brand, especially as it prepares for its new life as part of David Zaslav‘s Warner Bros. Discovery. By convenient coincidence, Zaslav was at CNN’s Hudson Yards headquarters on Tuesday to meet with Zucker and his direct reports. Did Zucker look to his friend and soon-to-be-boss for a wink and a nod about the Cuomo situation, particularly since Zaslav is now thinking about how to position CNN in his company’s streaming future? (I have no inside knowledge of that, but consider the likelihood of the alternative.)
Under Zucker’s tenure, CNN pivoted from a fading vanilla news service, whose ratings were sometimes eclipsed by HLN, to part of the #Resistance movement. Chances are that Zucker will find a way to pivot back to the middle, and lean into a future of non-controversial topics like extreme weather, marooned cruise liners, and missing persons reports. John Malone, the chairman of Liberty Media and thus Discovery’s largest shareholder, has been very public in recent days about his desire to see CNN abandon its heavily opinionated programming and “evolve back to the kind of journalism that it started with.” That doesn’t sound like a company that wants to inherit a news network with a scandal-plagued primetime host.
All things considered—the ratings, the Discovery factor—it’s hard for me to see how Cuomo comes back from suspension. Does Zucker believe in second chances? Sure, but only if they make good business sense. (See: Toobin, Jeff). Speaking of second chances, you know someone who is really good at television news, embodies the nonpartisan approach Malone wants, and recently became a free agent? Brian Williams. He now appears to have very little appetite for the day-to-day grind, but I imagine he’d entertain the offer, and if the price is right…
Finally, the other big-ticket item this week is Jack Dorsey’s resignation from Twitter, which officially transpired Monday but was set into motion two years ago when activist investor Elliott Management started calling for his ouster. Yes, Dorsey and Elliott reached a cease-fire in March 2020, but as the ever-astute Peter Kafka noted at the time, the deal, which gave Elliott’s Jesse Cohn a board seat, just made Dorsey’s eventual exit more likely.
By that point, Dorsey had largely ceded day-to-day control of Twitter to his direct reports anyway. His focus was elsewhere: on cryptocurrency, on his Tidal deal with Jay-Z, on 10-day silent meditation retreats, and most importantly on Square, the $90 billion mobile payments company that has seen its stock grow 1,400 percent since its founding. Compare that to Twitter, which has grown just 3.6 percent. And that was exactly Elliott’s problem: Dorsey wasn’t working hard enough to grow Twitter’s business.
So, where does Twitter go from here? The new C.E.O., Parag Agrawal, is an engineer who will continue to focus on growing and improving the product, which is exactly what Elliott wants. (Like Dorsey, Agrawal is also a blockchain and cryptocurrency enthusiast.) As Axios’ Dan Primack noted this week, “Elliott had wanted two things: New management and an increased pace of product innovation.” In Agrawal, that’s what they’re likely to get. It should be smooth sailing, as Iger might say.
FOUR STORIES WE’RE TALKING ABOUT
There are big hurdles—including the price tag. But if everything falls in place, Iger could get that gracious Disney exit he has coveted.
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Inside the dynastic politics, boardroom dramas, and M&A land-grabs that are reshaping the media-tech-financial landscape.
WILLIAM D. COHAN AND DYLAN BYERS
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