Welcome back to What I’m Hearing, and a big welcome to all the new WIH readers. We just had our biggest month of signups in 2023, so thanks to all the new and continuing members.

Let’s begin…

• Strike update: Enough, everyone!: The rumors bouncing around town today were insane. So many people were convinced that a deal had been reached between the writers and studios—there was even a supposed time set for a WGA announcement. It’s true, talks between the guild and AMPTP have finally made progress, and at around 5pm, the studio side thought they had a deal, we’re told. But no, so despite a CNBC report saying a deal would likely be done today, negotiations continued tonight and will re-start tomorrow.

  We’re hearing that minimum staffing in writers rooms remains a tough issue, even as yesterday’s joint press release, announcing only scheduled talks, sent a signal simply because it was a joint release. To be sure, both sides are now under pressure to deliver a deal during this negotiating session, with Gov. Gavin Newsom checking in on progress today. The personal, in-person participation of the C.E.O.s with power to make a deal—Disney’s Bob Iger, NBC Universal’s Donna Langley, Netflix’s Ted Sarandos, and Warner Bros. Discovery’s David Zazlav—is enormously positive, even though they should have been in the room months ago. —Matthew Belloni and Jonathan Handel

• CAA’s updated financials: As I suspected, the 2022 numbers for CAA that I cited on Sunday ($1.5 billion in revenue last year, $181 million in operating income, $50 million in net income) were lower than the projected fiscal 2023 numbers that generated the $7 billion valuation in the recent sale of TPG’s stake to François-Henri Pinault. (That was likely due to the ICM Partners acquisition or the effects of Covid.) A well-placed tipster notes that 2023 revenue is set to come in at more than $1.7 billion, and EBITDA for the agency is more than $500 million. That would translate to a valuation of about 14x EBITDA, which is much more in line with reasonable expectations. (CAA declined to comment; TPG is an investor in Puck.)
• Box office over/under: Lionsgate’s Expendables 4 (I refuse to put a number within a word) is tracking to about $17 million or $18 million, which seems very high for a glorified geezer teaser VOD play, even with Stallone. I’ll take the under, and then never think about this movie again.

Amusingly, it all started with a 2016 Wolff article that I edited at Hollywood Reporter, where he was our media columnist. Trump was doing Jimmy Kimmel Live! in advance of the California primary, and Wolff had secured a sit-down with the long-shot candidate, first in the Kimmel green room, and then, when that was too loud, at a Trump home in Beverly Hills that was stocked only with Häagen-Dazs ice cream—a detail I insisted on placing high up in the story. It wasn’t a particularly flattering piece, but for some reason—maybe it was the sunglasses we adorned on him in the cover illustration—Trump liked it. And so Steve Bannon ended up inviting Wolff to hang out in the White House during the transition. Millions of books later…

Anyway, among the many comical/alarming Trump moves in those early days, Wolff witnessed how the president that Fox News elected would interact with Fox hosts and with Murdoch, who didn’t much care for Trump. In fact, he hated him. That dynamic between Fox, Trump, and Murdoch has always fascinated me—a cynical, unhappy, arranged marriage of mutual financial-political-narcissistic benefit, maintained at the expense of Murdoch’s conservative principles and, for a time there in late 2020 and early 2021, possibly American democracy. Predictably, Fox’s dependence on the Trump audience caused it to overcorrect after the Arizona call for Biden, to the point where the election lies cost it dearly in the Dominion Voting Systems lawsuit. A tragicomic result for Murdoch—one of many in a career highlighted by as many scandals as industry-defining wins—with more pain almost certainly still to come from the Smartmatic case.

This particular media circus could only come to town in Murdochland. The Fall describes a wholly dysfunctional Fox, with its general counsel, Viet Dinh, often drunk at lunch; primetime Fox News host Laura Ingraham too inebriated to board Sean Hannity’s private plane to Roger Ailes’ funeral, and C.E.O. Suzanne Scott unable to control Hannity and Tucker Carlson, and constantly on the verge of getting fired. But the product, Fox News, is a media unicorn, making billions in profit, and it put Trump in the White House.

In other words, Rupert’s hand has been a defining feature of Fox—and all his media properties—despite his son, Lachlan, being co-chair of both Fox and News since 2019, and carrying the C.E.O. title at Fox. So if you’re someone who believes that Murdoch is truly stepping away from Fox and News Corp., as he announced today, I’ve got a few voting machine conspiracies I’d like to pitch you. No, the most powerful man in media is not, even at 92 and in apparently worsening health, simply checking out and retiring. Don’t be fooled: Rupert isn’t going anywhere.

And not just because he told us he’s not. Yes, Murdoch emphasized like four or five separate times in today’s announcement that he’s giving up his chairman title at both Fox and News Corp, but he isn’t exactly absconding to Bel-Air with the girlfriends, Sumner Redstone-style. “In my new role, I can guarantee you I will be involved every day in the contest of ideas,” Murdoch insisted to employees, all but promising to continue pulling the strings at Fox News, the U.K. papers, the Wall Street Journal, and his other outlets, sending those late-night ALL CAPS emails, and lingering in the office with an eye on who bailed early.

Even if he’s not chairman along with Lachlan, Rupert still controls both companies via about 40 percent of the voting stock. He dictates the board, and, judging from Lachlan’s hyper-deferential comments about his father (not to mention the giant photo of Rupert that Lachlan displays in all his offices), he pretty much controls his son when he wants to, despite Lachlan having been the face of the company to investors and the public.

So many rumors are flying around: Rupert must be sick; he’s trying to avoid testifying in the Smartmatic case (that wouldn’t work, anyway); the family wants Rupert out so investors won’t panic-dump the stock when he does die; Lachlan prefers to move the companies’ headquarters back to Australia so he can be closer to his yacht. Maybe some of those are true or half-true; I’m betting they aren’t.

What’s most likely, based on my reading of the situation and conversations today with a couple people in Murdochland, is that this announcement is meant for an audience of two: Liz and Prue. Think about it: Murdoch can basically do what he wants with his companies while alive, but upon death, the Murdoch trust will hold the assets, and each of the four adult siblings carries an equal vote. There are no tiebreakers.

This hilarious, Succession-like situation—a result of Murdoch’s contentious divorce from Anna, his second wife and the mother of the three kids in the media business—sets up quite the showdown. I teased this out today on The Town with Wolff. Lachlan, 52, after years of estrangement from the family business and retreating from L.A. to Australia during Covid, is firmly, politically, and philosophically Rupert’s conduit. I’ve been in meetings with Lachlan; when you say Fox News might be poisonous, he says “differentiated.” When you say it’s brainwashing our grandparents, he counters that it’s No. 1 in cable news and the only alternative to the liberal elite monopoly. Lachlan, by most accounts, wants to stay the Murdoch course.

On the contrary, James, now 50, despises Fox News, his wife Kathryn hates it more, and they don’t speak to Lachlan, Wolff writes. When asked about the U.S. media after the Jan. 6 riot, James said, “Those outlets that propagate lies to their audience have unleashed insidious and uncontrollable forces that will be with us for years.” So, yeah. James is said to want to take over Fox and reinvent it as a “force for good,” whatever that means. And he’s willing to torpedo the billion dollars in profit Fox made last year to do so.

That leaves Liz, 55, who Wolff describes as sort of a mess personally but who maintains a relationship with both brothers. (Fun detail: Rupert hated Liz’s second husband, the communications expert/fixer Matthew Freud, and called him “Fraud.”) Liz is savvy about the television business and realizes that cable TV is never going to be more profitable than it is today. She also considers herself more liberal and doesn’t like Fox News. So Liz wants to sell Fox and cash out, Wolff writes.

And what about Prue, 65, who lives in Australia and has never been involved in the company? “She tends to side with the two votes,” Wolff told me today. “So, in other words, whatever the majority is, that’s where she tends to be.” I then did some kindergarten math: If Lachlan and James are opposed, and Liz doesn’t like Fox, she probably is more aligned with James, meaning Prue will side with her two siblings to create a three-against-one situation. “So given that, it does not look very good for Lachlan Murdoch,” Wolff concluded.

Is this speculative? Hell, yes. Is it also reasonable, given what’s known about the family dynamic? Also, yes. So, I followed up: Does that mean that within a year or two after Rupert dies, we will see either the end or the sale of Fox News? “Yes, I think inevitably, indubitably,” Wolff said. “There is no situation in which Lachlan can maintain control over a right-wing U.S. network.”

Now, if Prue and Liz side with James and his supposed plan to blow up Fox News into a “force for good”—one that would almost certainly cost the company, and the family, billions of dollars in profit—they would be formally rebuking their father, rather than simply installing someone to replace Rupert. Same goes if an outsider is chosen to run the company—the Tom Wambsgams option, let’s call it. Lachlan is now already sitting there alone atop the empire, why would his siblings dare change that against the wishes of their dead father?

Politics, money, and personal rivalries, of course. Murdoch already tried to bolster Lachlan by combining Fox and News last year, the shareholders balked, and he abandoned the plan. Indeed, I asked a friend of mine who interacts with James what he thought of today’s news, and he responded, “Good luck”—meaning best wishes to Lachlan if he thinks this succession question is now resolved.

Maybe, but the Murdoch empire is a shell of its former self. Rupert knew exactly when to get Disney’s Bob Iger to overpay for the film studio and most of the TV assets, and Comcast bid up the price to $71 billion. Even though he stayed in sports, Murdoch even knew to dump the regional sports networks right before they tanked in value. But the result is that Fox is now a has-been company, especially in Hollywood. Quick: Name the head of the Fox broadcast network. No, Charlie Collier left last year for Roku. It’s Rob Wade, which I bet you couldn’t remember, because outside of reality, its animated staples, and a couple scripted plays each season, Fox doesn’t make many shows. It doesn’t make any theatrical movies at all. And its FAST streamer, Tubi—while a bright spot and growing—is sitting in a company that doesn’t seem to have a real plan to transition to digital.

Fox News certainly doesn’t. Rupert is one of the great, and maybe the last, of the true media moguls. He won’t be done until he’s dead or incapacitated, retirement or no retirement. But it’s tough not to agree with Wolff that the end is coming soon. When that Murdoch trust eventually kicks in, that’s when the real action begins.

Got a question, comment, complaint, or a Carol Lombardini sighting at the Sherman Oaks Galleria? Email me at Matt@puck.news or call/text me at 310-804-3198.