M&A Mania, Silicon Valley Infighting, and the F.B.I.'s Secret Epstein Files
Happy Thursday. You're reading The Daily Courant, our afternoon guide to the latest and most provocative new journalism at Puck.
Today, we lead with Dylan Byers' inside-the-room reporting on the high-stakes dealmaking surrounding Microsoft's whopping $69 billion acquisition of Activision. Back in November, after the WSJ published an inflammatory article accusing C.E.O. Bobby Kotick of ignoring sexual-misconduct allegations at Activision, Microsoft gaming chief Phil Spencer issued an internal memo condemning the “horrific” events at Kotick's company. Behind the scenes, however, as Activision's share price plummeted, Spencer and Satya Nadella reached out to Kotick with an offer he couldn't refuse. (To receive all of Dylan's reporting directly in your inbox, you can sign up for his private email here.)
Plus, below the fold, catch up on Teddy Schleifer's prescient exploration of the Silicon Valley donor war behind Democrats' doomed voting-rights push. And stay tuned for a new episode of our The Powers That Be, hitting Spotify and Apple Podcasts overnight.
How a peace offering from Phil Spencer, Microsoft’s gaming chief, led Activision’s Bobby Kotick to a $69 billion deal. In business, success can sometimes come down to making the best of a bad situation. Knowing when to hold ‘em, when to fold ‘em, et cetera, and knowing how to fold said cards in the most advantageous way for your company, your shareholders, and yourself. In mid-November, Bobby Kotick, the chief executive of the gaming giant Activision Blizzard, had endured a year of production delays, workplace controversies, a federal investigation and state lawsuit, extremely bad press, and an intensifying unionization effort—all of which had pushed $ATVI stock down 45 percent from an all-time high in February. Some in the Sun Valley potluck set were fearful for his future.
Suitors were circling, meanwhile, looking to buy the video game empire at a massive discount. But even then, Kotick showed no indication that he planned to cash in, according to sources familiar with his thinking. He still had the support of his board, these people said, and he had just been authorized to issue a $4 billion stock buyback that he hoped would fuel the company’s growth.
Then a curious series of events unfurled. After the Wall Street Journal published an inflammatory article alleging, among other things, that Kotick had tried to cover up sexual harassment claims at his company, Microsoft gaming chief Phil Spencer sent a note to his employees stating that he and his executive team were “disturbed and deeply troubled by the horrific events and actions” at Activision, and that Microsoft’s Xbox unit was “evaluating all aspects” of its relationship with the company. Spencer’s note came on the heels of a similar missive from Sony PlayStation chief Jim Ryan, but Spencer’s note must have hit particularly hard given that he and Kotick were friends...
FOUR STORIES WE'RE TALKING ABOUT 
It's amazing in retrospect that the CW lasted as long as it did. Here's who wins, and who loses, in the streaming era sale. MATTHEW BELLONI 
Inside Silicon Valley's furious, noble, predictably doomed pressure campaign to get Manchinema to “yes” on voting rights. TEDDY SCHLEIFER 
Gaming, like Hollywood, is experiencing a wave of M&A action. Will the White House intervene to stop Microsoft's $69 billion deal? JULIA ALEXANDER 
One lawyer’s quest for ten thousand pages of documents surrounding the F.B.I.’s investigation of the now-deceased predator. WILLIAM D. COHAN 
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