Good evening, I'm Dylan Byers.

Welcome back to In the Room, my biweekly private email on the intrigue and inside story behind what’s going on in the media industry. 

In today's email: What I'm hearing about the NYT's quintuple-bylined report on the CNN-Jeff Zucker imbroglio; the fallout from Jason Kilar's new memo; an update on Chris Cuomo's legal case; and a $10 million payday.

The Zucker-Cuomo-Kilar Love Triangle Enters Act II

An extensive report from The Times, a damning statement from Gollust, and a fortuitously-timed liquidity event. This Warner Bros. Discovery deal really can’t close soon enough.

Shortly before dusk on the east coast, on Tuesday evening, journalists began chattering about a New York Times piece that was soon to drop and perhaps gesture toward the next front in the Jeff Zucker-CNN-Jason Kilar imbroglio. And then there it was—a quintuple-bylined investigation that laid out the now-familiar timeline of events and added one critical new dimension to the story: in the heat of the #MeToo uprising, Chris Cuomo had used the CNN platform to try to placate a would-be accuser. His journalistic malpractice contributed to Zucker’s decision to fire him and helped set into motion the series of events that would ultimately lead to the ouster of both Zucker and his top aide and romantic partner, Allison Gollust.

The interest in the Times piece was short-lived, however. Less than an hour later, Kilar dropped his own bomb. In a memo to all CNN staff, Kilar said the investigation into the Brothers Cuomo had unearthed violations of company policies, “including CNN's News Standards and Practices,” not just by Cuomo, but by Zucker and Gollust, as well. Gollust had resigned from the company, he announced. Kilar signed off with the now familiar refrain that he had “taken the right actions” and made “the right decisions,” but offered no further details about the violations in question. And so the staff at CNN, the broader media industry and the general public were left with nothing but questions and assumptions about an already vexing scandal. 

It was the latest curious twist in a saga filled with them. Kilar had ascribed guilt to all three individuals, without specifying the crime. The memo had seemingly been lawyered within an inch of its life, sure, but it also effectively besmirched their reputations without procuring the receipts. The second shoe has dropped, some staffers exclaimed, and yet no one seemed to be able to say what that shoe was. 

Hours after Kilar’s memo went out, Gollust shot back. “WarnerMedia's statement tonight is an attempt to retaliate against me and change the media narrative in the wake of their disastrous handling of the last two weeks.” If you read between the lines of her statement—and particularly the use of the word “retaliate”—you can begin to see the early formation of a legal dispute. And indeed, I have been told that Gollust intends to sue WarnerMedia and is lawyering up as we speak.

Two weeks after Zucker’s shocking ouster, this crisis is entering a new phase. First, there was the Shock and Awe stage, as demonstrated by Warner’s swift action, and CNN anchors’ and executives’ expressions of homage toward their ousted boss via leaked audio and on-air grievances. That was followed promptly by the realization that, even in cable news, the show must go on—and, perhaps, the grudging recognition that Kilar behaved like a responsible adult in a no-win situation. Zucker was seen at the Core Club, in New York, and at the Four Seasons, in L.A. Now, welcome to the dawn of Act II: The Litigate Stage.

How did we get here? A week ago, if you recall, Kilar told CNN staffers that the case against Zucker was closed. After an internal investigation into Cuomo’s firing kicked up the revelation of the CNN president’s relationship with a direct report, WarnerMedia forced Zucker to resign. As I was told by someone very close to the matter, the company then put the case to bed. Kilar told senior-level CNN staff, in fact, that the Cravath-led investigation was “complete,” and that they should expect no further revelations from WarnerMedia. 

But Kilar’s memo to staffers on Tuesday, ostensibly announcing Gollust’s long-rumored resignation, opened up the possibility of a mysterious pivot. First, Kilar announced that Gollust had resigned in the wake of the company's investigation into “issues associated with Chris Cuomo and former Governor Andrew Cuomo.” Then he said that the investigation, which was based on interviews with more than 40 individuals and a review of more than 100,000 texts and emails, had “concluded this weekend.” What accounts for the discrepancy? I've been told by sources familiar with the matter that WarnerMedia did indeed consider the case closed two weeks ago, as I was told, and then recently opened it up again to investigate a matter pertaining to Gollust, specifically. 

No one I've spoken to in the Zucker-Gollust orbit, however, knows how to make sense of that revelation. Did new information come to light in the eleventh hour, or did Kilar go looking for a reason to get rid of Gollust, despite the fact that she was planning to leave the company in a matter of weeks anyway? (Representatives for WarnerMedia, Zucker, and Gollust declined to comment.)

It's impossible to handicap Gollust's legal case without knowing the specific circumstances of her ouster, of course. One thing I do know, per sources familiar, is that the Cuomo camp believes Zucker and Gollust were just as cozy with the governor’s office as Chris Cuomo himself, and offered the former governor advice. They believe the texts and emails bear that out, and want to use that to prove that Cuomo was wrongfully terminated. (Cuomo’s lawyer Bryan Freedman could not be reached for comment. Risa Heller, a spokesperson for Zucker, says “Jeff was never aware of the full extent of what Chris Cuomo was doing for his brother, which is why Chris was fired.”)

If the charge against Gollust does center on a too-cozy relationship with Gov. Cuomo, that may be a welcome field of play for Gollust and her lawyers. It turns out that relationships with people in power are instrumental to the business of running CNN. Earlier this week, and well before last night’s drama, one of CNN’s notable on-air personalities reached out to offer the following perspective on Zucker: “When Clarissa Ward is crossing ISIS territory, he was on every security check and she knew he had the Secretary of State on speed dial. When a producer got arrested during BLM protests, he was on the phone with the Minnesota Governor in the middle of the night.” It will require significant proof to show that the CNN executives’ relationship with Gov. Cuomo went beyond the standard dark arts of television journalism.

Whatever the charge, it's fair to say that neither WarnerMedia nor Discovery want to get into a legal battle with a miffed former CNN executive as they head into a merger—especially a prominent female executive who had a romantic relationship with her boss, and especially a person so intimately familiar with the inner workings of the joint. And if they settle, who foots the bill for that? Presumably David Zaslav will demand that AT&T assumes the costs. Though given all the extraordinary fees that have been wrung up in this $43 billion combination—including, as my partner Bill Cohan recently noted, JPMorgan Chase’s $140 million advisory bill—a Gollust settlement would probably be a rounding error, the cost of doing business. (As my fellow partner, Matt Belloni, has also noted, Cuomo might get paid off by the same logic.)

Meanwhile, Zucker loyalists once again find themselves bewildered by Kilar's handling of the matter and bereft by the sudden ouster of yet another leader. Zucker-Gollust loyalists were distraught last night, and could barely contain their resentment for both Kilar and Cuomo. The overwhelming feeling among this group is that Zucker and Gollust gave their all to the company, defended the network and its journalists through some of the most trying years in the company’s history, and had their backs when no one else did. They accuse Kilar of trying to burn the building down on his way out the door—he is expected to leave at the close of the merger—and accuse him, not the CNN executives who violated company policy, of tarnishing the brand.

Last night, as this drama was unfolding, it was also brought to my attention that Kilar had just become $10 million richer. It turns out, per the terms of his contract, that February 15 is the day every year on which Kilar vests an additional 400,000 shares of AT&T stock, which is currently valued at $24 a share. 

And so at the same time that Kilar was hitting send on a cryptic memo to CNN staff about Zucker and Gollust's unspecified violations of company policy, he was also taking in a financial windfall from a company that he, too, will abandon in a matter of months. In his now infamous memo, Kilar wrote that news of Gollust’s departure was “troubling, disappointing, and, frankly, painful.” But the $10 million may have assuaged things a bit. During the darkest moments of this drama, some have suggested that Kilar, who famously clashed with Zucker, might be enjoying the schadenfreude. He hasn’t yet dispelled the myth.

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