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 Welcome back to What I’m Hearing…
Discussed in today’s email: Daniel Ek, Jeff Zucker, Josh Gondelman, Mary Parent, John Stankey, Bryan Lourd, Michael Rubin, Drake, and Elon Musk’s private jet.
Who Won the Week: Josh Grode and Mary Parent
After years of trying, the Legendary Pictures leaders finally found a deal. With $760 million from Apollo, they greatly reduce the influence of Chinese owner Wanda, gain management control, can shop for acquisitions, and bless the world with more Godzilla movies. I’m told Parent also signed a new contract, which likely takes her out of consideration for any Warner Bros. Discovery job.
Which Super Bowl Party Is Right for You?
It’s funny how many Hollywood people are suddenly NFL fans. Or not funny to the talent agencies overrun by client requests for tickets to next Sunday’s Super Bowl, the first in L.A. since 1993. The party lists I’ve seen are overwhelmingly lame brand orgies (and something called “Shaq’s Fun House Presented By FTX”), so I asked a couple people who care about parties more than I do for what actually matters.
Quote of the Week
“Exclusivity does not equal endorsement.” –Daniel Ek, the Spotify C.E.O., attempting to explain to employees on Wednesday how the company is a “platform” when it exclusively distributes Joe Rogan’s podcast, which it doesn’t own, but a “publisher” when it exclusively distributes pods from Gimlet, which it does own.
Runner up: “The general energy around these Olympics feels like when a network burns off ten episodes of a show in one afternoon because they know it’s not getting renewed, but they’re obligated to put it on the air.” –Josh Gondelman, the comedy writer, in a tweet about NBC
Second runner up: “The decision to resign was Jeff’s decision.” –John Stankey, the AT&T C.E.O., with the week’s most ridiculous obfuscation of what actually happened to CNN’s Zucker, unless you believe that nobody in business is ever technically fired.
That brings me to…
Now that Jeff Zucker is out, most people seem to think that Cuomo has lost whatever leverage he had over CNN. But the legal drama surrounding Cuomo’s case isn’t so simple. So much of the media coverage of Jeff Zucker’s firing this week as CNN president has focused on the network. First it was the shock of rank-and-file staffers; then the impact on AT&T’s spinoff of WarnerMedia to Discovery and the launch of CNN+; then the tantrum that talent like Jake Tapper threw at the network’s D.C. bureau, where they directly confronted C.E.O. Jason Kilar, who dared fire their beloved leader—the leader that, incidentally, had anointed them TV stars and paid them large salaries to anchor mostly third-place shows.
My Puck colleague Dylan Byers has dived deep into the various CNN angles, and he’s got a new report tonight on the post-Zucker succession race. But I’m also interested in the Chris Cuomo story, itself essentially a talent story, and the impact of Zucker’s exit on the legal dispute regarding Cuomo’s ouster. Cuomo, who was fired in December for unethical behavior related to helping his brother, Andrew, fend off sexual harassment allegations, has quickly become the villain in the Zucker saga. As Tapper argued to Kilar, Cuomo is a “terrorist” who didn’t get the $18 million payout he wanted, so he decided to burn the place down. “How do we get past this perception that this is the bad guy winning?” Tapper asked.
Never mind that Zucker admitted he was “wrong” to conceal his romantic relationship with communications chief Allison Gollust, even if everyone (except Kilar, apparently!) seemed to know about it. Employee policies apply to all employees. If Gollust and Zucker were to break up, and she were to raise their imbalance of power to CNN’s H.R. department, WarnerMedia likely would have to write her a fat check. Zucker’s punishment may not have fit the crime, but let’s not forget there was misconduct here. It’s why Zucker resigned.
Now that he’s out, most people seem to think Cuomo has lost his leverage. After all, if Cuomo lawyer Bryan Freedman had hoped to pressure WarnerMedia to pay out his client or face embarrassing questions about Zucker and Gollust, that strategy exited Hudson Yards along with Zucker. WarnerMedia’s investigation into the Cuomo matter by Cravath, Swaine & Moore is now closed, too, meaning that if there are additional bad facts for Warners, either a journalist will need to reveal them, or Cuomo will need to sue or arbitrate to expose them, and that would spill every text and email he’s ever written at CNN. In other words, it seems like it might be curtains for Chris Cuomo.
But I’m not sure it’s that simple. Remember, the crux of Cuomo’s legal argument has nothing to do with Zucker’s personal relationship. Cuomo says he didn’t do anything vis a vis his brother that wasn’t known by Zucker, who was his boss, and either specifically or tacitly directed by him, too. CNN’s standards and practices guidelines urge employees to ask their managers if they have questions about whether something is ethically allowable. If you are transparent, and your superior not only allows the behavior but also engages in the practice himself, that might (at least in theory) absolve Cuomo from responsibility for his actions, and potentially entitle him to the payout.
That argument is contingent, of course, on Zucker counseling the elder Cuomo. Team Cuomo believes there are documents that evidence Zucker’s cozy relationship with the then-governor, including talking points on what to say during press conferences. Jeff and Chris were close friends; they are said to have constantly updated each other about everything, including the travails of Andrew, who was often a big story on CNN. So it’s not hard to see Zucker knowing exactly what Cuomo was up to, and even becoming entangled in some Cuomo family business, himself.
Courting newsmakers is part of any news executive’s job, of course. But did Zucker cross an ethical line in this complicated situation—in which his most highly-rated star was related to the governor of New York, who once seemed like the only adult in the room during the outset of the pandemic, only to be revealed as anything but by its midpoint? Team Cuomo seems to think so. It was Zucker, not Cuomo, who explicitly disregarded the network’s policies to air the infamous “Andrew and Chris Show” during the early days of the pandemic. It was good TV, Zucker knew it, and he wanted it to continue. (WarnerMedia, and reps for Zucker and Cuomo declined to comment.)
Chris’s behavior allegedly went further than just counseling his brother, however. He even reportedly attempted to influence press coverage at other outlets. That would be a big breach of journalistic ethics and CNN policy, for sure. And before Chris was fired, an additional harassment allegation was leveled at him. But at least from Cuomo’s point of view, Zucker and Gollust, the latter of whom briefly worked for Andrew, were encouraging him and exhibiting the exact same behavior. How was Chris supposed to know that he’d be the one fired for doing what his boss told him to do?
That’s been Cuomo’s position from the beginning. He was fired on Dec. 4, and the very next day, Freedman fired off that 6-page “litigation hold” letter to David Vigilante, CNN’s general counsel, and James Meza, who has the same title at WarnerMedia. The letter never actually mentions Zucker’s personal relationship with Gollust or anyone else. It does mention Andrew Cuomo, and it directs CNN staff to preserve any documents related to the investigation of the former governor and “any appearance by Andrew Cuomo” on Chris’ show. Freedman later raised the Gollust situation to WarnerMedia, and that’s what Warners says caused it to grill Zucker about it and ultimately ask him to resign. But it wasn’t the thrust of Freedman’s initial argument.
That’s because the Cuomo team believes Zucker wasn’t fired just for the Gollust relationship. They insist there is evidence that will come out—or they will force it out in a legal proceeding—that shows Andrew Cuomo’s close connection to Zucker. Let’s see if that happens—it’s perhaps telling that Freedman is not speaking publicly about it—but I’m told Andrew is planning to say something soon on this topic. Chris and Andrew have also been mulling plans to do a podcast together, potentially part of Andrew’s image rehab efforts that the Journal wrote about today, and the Zucker relationship could be a topic of conversation. Or that might just be another ploy to extract money from Warners to shut Chris up. We’ll see.
Legally speaking, does any of this backstory matter? Zucker’s potential knowledge of Chris’ behavior (or his own conduct) might not even end up influencing any wrongful termination case brought by Chris. I consulted a couple of employment law specialists, including Peter Rahbar, who has experience with New York talent contracts in media. They were a bit skeptical of what I’ll describe as a “kettle black” argument—meaning you’re at fault, too, so I’m not. Yes, Zucker was Cuomo’s boss, but Cuomo would essentially be arguing that there were two sets of rules at CNN. And remember, Zucker was ultimately fired for his behavior, albeit for different behavior, so it might be tough for Cuomo to argue that the company was protecting Zucker at his expense. More likely, an arbitrator would be told the company policy, then told Cuomo violated that policy—and case closed; it might be that simple.
Still, if Zucker’s behavior is relevant, this would essentially be a he said/he said situation. Zucker would be a key witness, and he doesn’t exactly have an incentive to back up Cuomo’s transparency claims here, or even to participate at all. (In an arbitration, there’s no subpoena power.) So the internal CNN emails and other correspondence would be the key evidence of what happened. And at least for now, we have no idea what those documents show, if anything at all.
Will Cuomo actually sue or arbitrate? Zucker was famous for giving second chances to his talent, and WarnerMedia did not extend him that same courtesy. So it seems unlikely that the company—at least under its current ownership—will make nice with Cuomo. As I said, he’s become the villain in this story, and the anger among the CNN staff if Cuomo scores a payout would likely cause a bigger morale problem than they already have.
Then again, continuing to stonewall Cuomo would leave him no choice but to prolong this sordid saga and initiate a formal (and messy) proceeding, and CNN’s trial attorney Daniel Petrocelli is not cheap. With Cuomo having lit the fuse that blew up CNN, the key number here might not be whatever settlement dollar Cuomo is demanding. It’s probably $43 billion, the value of AT&T’s WarnerMedia spinoff to Discovery. For C.E.O. John Stankey, it might be worth holding his nose, paying Chris Cuomo something to go away, leaving the fallout for the new owners, and getting the hell out of the news business forever.
More on L’Affaire Zucker: I discussed the CNN staff’s confrontation with WarnerMedia C.E.O. Jason Kilar with Kim Masters on The Business (here) and with Puck’s Peter Hamby and Dylan Byers (both CNN alums) on The Powers that Be pod (here).
My Reading List
The Feedback
I got some interesting notes on Thursday’s look at the Department of Justice’s lengthy inquiry into the merger between CAA and ICM Partners. A sampling:
“You’re downplaying the size and influence of ICM, but look at the Penguin Random House merger with Simon & Schuster in the book world. That’s a small deal compared to the tech giants, but regulators care because it impacts authors. Same here. Artists will suffer, and the Biden people know it, even if you don’t.” –A lawyer
“We feel like dead men walking.” –An ICM agent
“As long as the deal closes, a yearlong drag is only to CAA’s benefit: burn off the marginal contracts and clients while they remain on the ICM side of the fence. No need for a mass firing. No press hit. Capture all the revenue they intended with less cost. The people worthy of the hop to CAA will know it and ride through the storm.” –Another agent
“Your [Katherine] Heigl anecdote brought back PTSD. Someday I’ll tell you a great story.” –A lawyer
Speaking of Heigl, her ex-agent Norm Aladjem asked that I “correct the record” and say Heigl and her mother never treated him poorly, and were instead “loyal, gracious, and grateful.” Others would disagree, but I’m including his perspective here as a courtesy to Norm, who is now a manager—and is representing Heigl.
Finally…
Here’s this week’s movie Interest and Awareness chart from Quorum, which shows movement for J.Lo’s Marry Me and Disney’s ensemble Death on the Nile… 
Have a great week, Matt
Got a question, comment, complaint, or a legitimate reason to wake up early for Oscar nominations on Tuesday? Email me at [email protected] or call/text me at 310-804-3198.
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