Welcome back to a jam-packed Sunday edition of What I’m Hearing.

Before we start, thanks to New York magazine for the profile this week on me and the What I’m Hearing community. (No, I did not think my bare feet would be in the photo!) Journalists are typically the most annoying subjects to write about, and I didn’t love everything (especially the Nikki Finke comparisons, which I hate), but writer Nick Quah took the time to hang with me in L.A. and Toronto and talk to a bunch of readers and others in town, so I can’t complain.

Programming note: This week on The Town, Lucas Shaw and I debated the wisdom of a merged Peacock and Paramount+, and Dr. Stacy Smith parsed the new inclusion data for film releases (while kinda suggesting a Puerto Rican Oppenheimer?). Subscribe here and here.

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Discussed in this issue: Reese Witherspoon, David Ellison, Jeff Shell, David Zaslav, Bill Weinstein, Jenna Ortega, Brian Robbins, Bradley Cooper, Tom Staggs, Gerry Cardinale, J.K. Rowling, Ben Affleck, Reinaldo Marcus Green, Todd Boehly, Shari Redstone, Ted Sarandos, and… Barbra’s party photo police.

But first…

Honorable mention: Barbra Streisand, who—I shit you not—had a guy standing beside her roped-off area at the SAG Awards afterparty last night shining a flashlight at anyone attempting to take a phone pic of her, thus ruining their shots. That’s next-level dedication to vanity.

A little more on the SAG Awards…

I thought Netflix showed some uncharacteristic restraint in its first awards show broadcast. Other than shoehorning Maestro’s Bradley Cooper into the Streisand tribute, and showcasing Queer Eye star Tan France as the interviewer of winners, you’d hardly know the show was being broadcast on Netflix. (Well, the unbleeped swearing was a new and welcome addition!) That’s smart, of course—who wants to watch a two-hour infomercial for one platform?—but I’d have thought co-C.E.O. Ted Sarandos couldn’t help himself and would insist on intrusive Netflix branding and a parade of its stars as presenters. Next year, maybe…

Now a little news from the finance world…

Candle confirms it hired Moelis “to explore specific potential acquisitions in the live-action content space in order to give the company greater scale and operating efficiencies.” But a rep is downplaying the connection to the Hello Sunshine troubles, insisting that more scale “is the only reason Moelis was hired.”

Okay, but Bloomberg reported in October that Candle, led by former Disney execs and current Disney consultants Kevin Mayer and Tom Staggs, was expected to deliver only about half of its projected 2023 earnings, due in large part to problems at Hello Sunshine (and Cocomelon owner Moonbug Entertainment, but the new push is in live action, not animation). Hello Sunshine, producer of shows like Amazon’s Daisy Jones & the Six and Witherspoon vehicles like the Netflix film Your Place or Mine, was way down from a projected $80 million in profit last year. “It was a disappointing year for sure,” Mayer said in October, citing the strikes and a pullback in spending. “But we like our position.”

Maybe, but few in the investment community have much confidence in Blackstone’s $4 billion bet on independent producers, which was launched at the height of a content bubble that has since burst amid rising interest rates and a general contraction. That $900 million valuation on Hello Sunshine never made sense, especially since Witherspoon wasn’t required to put her hefty personal acting fees into the company. But a silver lining: At least now Candle won’t need to pay the substantial performance-based earn-outs baked into the acquisition.

Runner-up: “The studio has really been underperforming, including the end of the year, where we had some real struggle.”
—Warner Discovery C.E.O. David Zaslav, criticizing his Warners studio and its year-end slate, which included the bombs Aquaman and the Lost Kingdom and The Color Purple.

A little more on Zaz’s disastrous earnings…

All the while, free cash flow, the metric upon which bonuses for Zaslav, C.F.O. Gunnar Wiedenfels, and others in the C-suite will be calculated, spiked 86 percent to $6.2 billion in 2023, even as the share price dropped 45 percent. That means, unless the board steps in, Zaz could take home a pay package far larger than his $39.3 million for 2022 despite having driven WBD shareholders off a cliff. Hopefully, he’ll hire a new communications leader by the time the number is made public, because spinning that will require a full team effort.

Speaking of spinning, Zaz expects us to believe that his streaming business is now “profitable”? Investors clearly saw those trade headlines and laughed. He’s cut billions of dollars in content and employee costs, but Gunnar not only includes revenue from all that licensing of content into the direct-to-consumer unit, he also includes linear subscription revenue for HBO, which is decidedly not a D-to-C business. “HBO used to make more than $2 billion in profit a year,” Lucas Shaw noted today. “The direct-to-consumer business didn’t clear $200 million.”

So no, Zaslav’s streaming business is not profitable. His linear TV business is bad, and it’s not gonna get better. His studio business is down and, despite this week’s Dune: Part Two, is looking at a brutal ’24, with fewer tentpoles and tough summer comps to Barbie. (This is one reason, along with cost-saving in ’23, why I kept hearing that Zaz wanted Warners to push one of its three holiday movies to ’24, a request the studio politely declined.) And Gunnar refuses to offer guidance for this year, never a sign of confidence in a business.

Warner Discovery isn’t the lone wildebeest that has been wounded by the streaming revolution and separated from the herd. Paramount Global was put on credit watch by S&P on Friday, a sign of worry that owner Shari Redstone will not be able to service its debt. But unlike Redstone, who is trying to salvage a faltering business she inherited, Zaslav created this company; he chose to mash his troubled Discovery Communications with AT&T’s WarnerMedia, knowing the thin tightrope he would walk. So whatever happens, it’s on Zaz alone.

Fitting that a week without a major movie release also gave us the “Who TF did I marry” phenomenon on TikTok. [WaPo]

When I used to book magazine covers, we would talk about potential “gets” by asking this question: Who needs it more: them or us? If the answer is them, it’s not a get. This year’s Vanity Fair Hollywood issue cover has eleven actors, none of them a get. They’re either in full awards season ubiquity mode (enough, Bradley!), or they’re TV people happy to be invited. Jenna Ortega is borderline, but even she’s pretty available to the media. We can talk about the decline of both star power and print media, and whether anyone cares about something that used to be a cultural touchstone. But the sad reality is the current VF probably needs these people more than they need VF. [VF]

Former Amazon content chief Roy Price argues that the only path to long-term viability for the studios is not to cut costs but to spend more, “about $1 billion per year, even if that may agitate analysts for a period of time. The path to $5 billion in EBITDA at the streamer must be credible, which now it is not.” [Substack]

An interesting tidbit in this story on the desperate, decade-long
effort to make what will likely be a superfluous TV remake of the Harry Potter books: J.K. Rowling’s right to veto new Potter projects
extends beyond her death, when a trust will take over. [WSJ]

Joe Adalian points out the insanity of trying to compare new shows to library titles using Nielsen’s minutes-watched data. [Vulture]

Not a great look for Oprah: WeightWatchers’ attempt to
lure influencers to plug Ozempic-based diet plans backfired spectacularly. [Bloomberg]

Now our box office expert Scott Mendelson looks at the latest musical biopic phenomenon…

On some level, perhaps this isn’t a total surprise. Bob Marley was a world-famous cultural icon who died prematurely in 1987. The music-focused biopic has been a theatrical winner since before Covid. Also, despite conventional wisdom, live-action musicals are also often winners (from Moulin Rouge to Mamma Mia!, Les Miserables, La La Land, and recently, Wonka). But Marley is also an example of how films not squarely aimed at young white men can achieve economic success through clever marketing tactics.

While Paramount’s first-weekend domestic demos were skewed toward Black audiences (43 percent on that blowout $14 million Valentine’s Day opening), the film actually played 44 percent white and 32 percent Black on its second Friday, earning $3.7 million. And despite the recent cratering of The Color Purple musical overseas, the solid foreign figures for Marley rebut conventional wisdom about films for underrepresented audiences not traveling. Would a studio prefer the typical 45-55 domestic/international split of Madame Web or the overall grosses of One Love?

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“You’re exactly right. We are making the best of [Disney’s S.B.E.] system, and there is real money to be made in success, but you should ask the Only Murders team how much they would have made if that show had been this kind of hit in the ’90s or 2000s. A home run that would generate revenue for decades as opposed to a solid double now.” —A talent lawyer

“One quick point on the S.B.E. bonus system. These are separate from and in addition to guild-mandated residuals due the creators. As one example, when Only Murders aired on ABC, the credited writers of each episode became due the network reuse formula. So, far from being anachronistic, a bunch of the [collective bargaining agreement] clauses that once seemed dated are still relevant.” —A writer-producer

“[The Verve partners] basically nuked their own company to get rid of Bill [Weinstein]. Every client is in play, every agent and assistant is looking, every mention of the company will focus on whether it can survive when its rainmaker is fired. In this environment, that feels like the beginning of the end. Hope it was worth it.” —A rival agent

“The Apple TV+ viewership numbers are low because there is no library content. Those old titles eat up viewership hours and serve as feeders to the originals (and vice versa). Nobody will take Apple seriously in the content space until they invest in getting a critical mass of content on the service.” —An analyst

“‘RIP Oakwood Pool Parties.’ I literally spit out a mouthful of wine. Thanks for a much-needed laugh. (And memories of days long past.)” —A former acting coach

“Thanks for the reminder that Max customers already get Discovery+. Made sure to cancel this morning!” —An educator

Got a question, comment, complaint, or some decent footwear? Email me at Matt@puck.news or call/text me at 310-804-3198.