Good morning,

Welcome back to The Backstory, your weekend digest of the best new work at Puck.

It was an incredible week: Matt Belloni spotlighted the NFL’s power over Hollywood; Eriq Gardner dug into a Bobby Kotick legal war; Julia Alexander revealed Disney’s next worthy M&A target; John Ourand scooped Netflix’s most recent growing pain; Dylan Byers forecasted the A.I. slopfest descending upon the media; Ian Krietzberg pondered whether Anthropic has become too big to fail; Bill Cohan chatted up Leon Black about life after the Epstein files; Lauren Sherman surveyed the Dario Vitale sweepstakes; Rachel Strugatz uncovered Alix Earle’s influencer economics; Malique Morris ran with the District Vision bros; Sarah Shapiro documented the big bag theory; and Marion Maneker identified the latest signs of an art market recovery in Hong Kong.

Meanwhile, down in D.C., Peter Hamby traced Trump’s descent into Katrina territory; Julia Ioffe scooped his evolving antifa fixation; Leigh Ann Caldwell previewed the shortlist to replace Mike Johnson; and Abby Livingston chronicled Abigail Spanberger’s redistricting micro-scandal.

Check out these stories, and others, via the links below. And stick around for the backstory on how it all came together.

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Al data centers shouldn't raise your bills. 

Anthropic will cover electricity price increases from its data centers and invest in grid optimization tools, helping keep prices lower for  

ratepayers.  

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Lauren Sherman unveils Dario Vitale’s options and gathers the Stefano Cantino post-Gucci chatter.
and…
Rachel Strugatz details how Alix Earle sold $5 million worth of pimple cream in a couple hours. (God help us all…)
meanwhile…
Malique Morris assesses the value of anti-scale retail, while Sarah Shapiro documents the season’s biggest trends.

Marion Maneker runs the numbers on the Hong Kong sales turnaround.

Matt Belloni sounds the alarm over how Roger Goodell’s NFL renegotiations will eat into the entertainment business.
and…
Eriq Gardner dissects all the dish from Bobby Kotick’s ongoing legal war.
meanwhile…
Julia Alexander theorizes why Disney C.E.O. Josh D’Amaro should double down on his Epic Games partnership.

Ian Krietzberg studies the latest chess moves in the OpenAI–Anthropic war.

Linda Wells uncovers the latest neuro-hacking obsession of the ultrarich.
and…
Kate Mansey reveals the latest wrinkle in the Harry and Meghan discourse.

Dylan Byers sleuths Politico’s latest executive search.

John Ourand talks to TNT Sports C.E.O. Luis Silberwasser about forthcoming life under CBS Sports rule.

Bill Cohan sits down with Leon Black to discuss the Epstein files and his forthcoming appearance on Capitol Hill.

Leigh Ann Caldwell examines the early jockeying to replace Mike Johnson.
and…
Julia Ioffe depicts the president’s most recent obfuscation.
and…
Abby Livingston remarks on Spanberger’s redistricting-itis.
while…
Peter Hamby diagnoses the Trump slump.

Dylan and former F.C.C. chair Jessica Rosenworcel discuss Brendan Carr’s power-grab fever dreams on The Grill Room.
and…
Ourand and ESPN executive Susie Piotrkowski chew over Bristol’s investment in women’s sports on The Varsity.
and…
Lauren and V.I.C.-influencer Bryanboy yuck it up on Fashion People.
and…
John Heilemann and Sen. Richard Blumenthal lay out the Iran outcomes on Impolitic.
and…
Matt and UTA agent Jason Richman dissect the Belle Burden pipeline on The Town.
and…
Eriq and Peter explore the NFL’s A.I. fantasies on The Powers That Be.

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I vividly remember, years ago, meeting with an investor early one morning at a remote table in the back of the Crosby Street Hotel in SoHo. This guy was a fairly recognizable figure, and he valued his anonymity, but he was effusive with his candor and advice. And during a rambling chat about his various adventures in business and finance, he made a point that has stuck with me ever since.

We were sharing insights about the media industry, in particular, when he made an offhand observation that so much of his career had come down to accurately recognizing business situations that were decidedly zero sum. As he memorably put it, as if quoting Machiavelli’s The Prince or Trump’s Art of the Deal: “Sometimes people need to lose so you can win.”

A MESSAGE FROM ANTHROPIC

Al data centers shouldn't raise your bills. 

Anthropic will cover electricity price increases from its data centers and invest in grid optimization tools, helping keep prices lower for  

ratepayers.  

Learn more 

This thought crossed my mind recently when MoffettNathanson, the renowned equity research firm, released a note regarding Roger Goodell’s scorched-earth campaign to increase the NFL’s media rights deals. Five years ago, the NFL signed a set of 11-year media deals for around $110 billion. And while that’s a ton of money—and serendipitously, pretty much the same amount that the Ellisons and Gerry Cardinale are paying for Warner Bros. Discovery—it’s actually quite under-market when juxtaposed with the NBA’s 11-year, $76 billion agreements that went into effect the following season.

So now, Goodell is offering his largely legacy partners the chance to pay through the nose for the ability to extend their rights beyond the league’s current opt-out date at the end of the decade—thereby ensuring their economic survival as broadcast continues to decline. And the NFL isn’t just asking for a top-off. According to the MoffettNathanson note, the league should be able to take its annual fee from around $10 billion to nearly $16 billion a season by getting the likes of CBS, Fox, NBCU, Amazon Prime, and Disney to throw in another billion or so each. Heavy cake.

Last week, my partner John Ourand adroitly covered the complexities of this live auction. In Is Goodell Overplaying His Hand?, Ourand noted that some network executives haven’t quite appreciated the shakedown—even given the existential stakes of potentially losing NFL rights in less than five years to a multitrillion-dollar competitor. “An interesting question has emerged among network observers and media analysts in recent weeks,” John wrote. “What if the networks and streamers decide to just stand pat? It’s far too early to suggest that the negotiations have hit a snag. But based on the early numbers being floated, network executives have started weighing whether to hold off until the end of the decade rather than reopen deals this summer and extend their runway. After all, they’ve only just completed the third year of the 11-year deals, and historically, the largest value comes toward the back end of these agreements.”

On Thursday evening, our partner Matt Belloni advanced this narrative in a piece that evoked my conversation with that mogul in the back of the Crosby all those years ago. For Goodell to win, his legacy partners would have to cobble together the money by sacrificing different critical expenditures—for starters, according to the analysts, “pulling back spending on other areas of content like scripted entertainment and films.” As Matt put it in his brilliant, must-read piece, Roger Goodell Is Blitzing the Hell Out of Hollywood, this dynamic “likely means less money for Hollywood at a time when so many disruptions are already siphoning money away from Hollywood.”

The NFL is accustomed to getting what it wants, but it shouldn’t expect to roll this set of moguls, who also understand the zero-sum principles at play. Earlier this week, as Matt noted, Rupert Murdoch’s Wall Street Journal published a chilling editorial suggesting that NFL team owners “should consider the backlash building against the antitrust exemption they retain from another era.” The irony, of course, is that Murdoch created this whole ecosystem when his insurgent Fox famously bid up NFL rights back in the ’90s. Indeed, not everyone is going to win here—a plot thickened by the fact that none of these guys are used to losing. It’s one of the great stories of our time, and a true infatuation du jour at Puck.

Have a great holiday weekend,
Jon

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