Greetings from Los Angeles, and welcome to the weekend. I’m en route to New York. In tonight’s email, news and notes on Mark Thompson’s ever-impending CNN digital transformation on the occasion of his one-year-ish anniversary, including new details on a soon-to-be-unveiled, very Times-ian vertical video innovation.

In the Room will be dark on Wednesday, but I’ll be back next Friday with more news. Send me a text if you’re in New York and have time to get together.

But first, an update on the DirecTV-Disney showdown from John Ourand…

• 🏈 A DirecTV-Disney prediction: Judging by their media interviews, DirecTV and Disney executives appear prepared for a protracted skirmish that could deprive the satellite service’s customers access to ESPN channels for a long time. (The ESPN nets have been dark on DirecTV since the weekend.) But the consensus among my best sources is that DirecTV and Disney will reach an agreement by early next week, probably before the Jets-49ers Monday Night Football game, which will be simulcast on ABC and ESPN. The truth is that Disney can stand to hold out longer than DirecTV.

  What would an agreement look like? I expect that Disney will allow DirecTV to market smaller packages, like a sports bundle with the ESPN channels and ABC. In fact, ESPN chairman Jimmy Pitaro told CNBC that Disney already offered that package to DirecTV. I also expect that the deal will be finalized once Disney moderates its minimum penetration requirements for other channels. In his own CNBC interview, DirecTV chief content officer Rob Thun said that Disney attached too many conditions to its skinny bundle offer, including minimum penetration requirements. “That’s not what they gave themselves in Venu,” he said, invoking the original sin of the au courant bundling wars. [Sign up for The Varsity here.]

And a note from Matt Belloni on Paramount’s change of ownership…

• 💰 Ellison’s secret Shari loan deal: The Paramount sale’s massive F.C.C. change-of-ownership application hit the media yesterday, and some outlets seemed surprised that a Larry Ellison entity will own 77.5 percent of controlling shareholder National Amusements Inc. (Gerry Cardinale, head of backer RedBird Capital, will own the rest, and David Ellison will have operational control.) We knew that, but what wasn’t reported yesterday, and what I found most interesting in the document, was a clause dropped into Section 7.3 that requires Ellison & Co. to loan NAI up to $277 million if Shari Redstone needs the money before the transaction closes.

  Shari’s about to make bank in the sale, why would she ask for a loan? Neither side would comment, but it’s known that NAI/Paramount has obligations due before the transaction is expected to close sometime next year, so this is almost certainly a float until everything is approved and the Ellisons’ big check clears. Which would say a lot about why Redstone sold in the first place. [Sign up for What I’m Hearing here.]

Not that we’re counting, but Licht also mostly ignored the future-facing digital business while attempting an aesthetic reimagination of the shrinking linear asset—new sets, new graphics, other superficial stuff—that his charges quickly abandoned the moment he left the building. Oh, and he made a total ass of himself in the pages of The Atlantic, hastening his own inevitable defenestration. After a year in the wilderness, his best available option may be to return to his alma mater, the S.I. Newhouse School of Public Communications at Syracuse University, where he’d presumably teach weightlifting. (Don’t worry, Chris is being paid out well for troubles.)

Thompson has taken a considerably lighter touch than Licht—too light in the eyes of the CNN veterans who initially celebrated his arrival, and who’ve long since grown impatient with the pace of change. Indeed, Thompson has all but left the linear product alone, abandoning the standard flagship morning show strategy and leaving the low-rated and undifferentiated primetime slate intact. To its credit, CNN secured the historic Biden-Trump presidential debate and Kamala Harris’s first interview as the Democratic standard-bearer, but has done nothing to improve the daily product in a way that might drive consistent audience growth. CNN’s ratings, which have only recently been buoyed by the campaign cycle—and, frankly, not by all that much—hit an all-time nadir this year.

Of course, Thompson’s negligence toward the legacy platform reflects the fact that the linear business is dying, and his well-founded belief that there is no point in investing more, now, in an area where CNN will be investing a lot less, soon. (Many CNN executives like to say that they don’t measure themselves against MSNBC and Fox, even as they continue to send out ratings releases touting artfully massaged ‘wins’ over the very same competitors.) In any event, what has been so frustrating for so many CNN insiders is that while neglecting the core linear asset, Thompson has seemingly done nothing in a year to change the digital product, either. The crowded and clickbait-y app and website, despite their enormous traffic and influence, still look like they were created in another era—and, certainly, like they serve a far less influential audience these days.

Alas, like it or not, change takes time. Finally, however, Thompson & Co. are nearing the point when they will unveil some of their long-awaited new digital features and products. These include the talent-centered subscription verticals I’ve previously alluded to—the Dr. Sanjay Gupta health vertical, the Bill Weir climate vertical, etcetera—which will test whether general-interest audiences are willing to pay for a slightly more specialized version of the kind of news they currently get for free, both at CNN and elsewhere, at a scale that drives meaningful revenue. To put it generously, the broad consensus is that they won’t—or, at the very least, that the revenue from willing subscribers won’t amount to a fraction of the revenue that CNN needs to accumulate to make up for the decline of its linear business.

More significantly, I’ve also learned that MacCallum’s team has been developing a number of new product features, including a vertical video integration that is likely to make video the centerpiece of the CNN app. The ambition, of course, is to make the digital experience feel more akin to the TikTok or Instagram experience, and to leverage CNN’s strength in video—live, packaged, and so forth—as a differentiator from competitors like the Times. Yes, the Times itself has already introduced a vertical video feature where its own reporters discuss their work. Indeed, in the mobile era, the Maggie Habermans and Jonathan Swans of the world no longer need to pass through a CNN green room to get themselves on-screen.

In any case, what’s really notable about the vertical video push is what it signals about the sheer scope of impending change coming to CNN’s business. Form follows function, and the investment in mobile video signals a different kind of content production that almost certainly won’t require the expertise of the network’s more veteran producers. The future CNN will instead lean on fewer producers—and the journalists themselves—to create and edit and file content that historically went through several layers of editing and review. Undoubtedly, Josh Tyrangiel will have a hand in the aesthetics of all that, as well as the rest of the digital experience, if and when he signs a contract.

As I noted earlier this week, some inside the building have welcomed the idea of Tyrangiel but suggested that he might clash with the existing leadership structure, particularly Virginia Moseley. But Thompson, who promoted Moseley not long ago, is smarter than that. In reality, one suspects that Tyrangiel and MacCallum would be tasked with the challenge of conceiving a future state of CNN that the Moseleys of the world are probably unbothered by, perhaps because they can’t yet conceive of it.