Welcome back to What I’m Hearing...

Happy Thursday. Thanks to Puck’s Inner Circle members who joined my private conference call yesterday with my colleague Eriq Gardner. Eriq gave an update on a few potentially impactful legal cases, and we predicted which big media deals will survive government review. We’ll do more of these calls, so if you want to upgrade your membership, email us at fritz@puck.news.

First, a big congratulations to the two winners of my Super Bowl ratings contest. Taylor Mucaria, an accountant, and a humble P.R. executive, who prefers not to be named, both guessed 112 million viewers, just under the final tally of 112.3 million across NBC’s linear and streaming platforms. Congrats! They both win status-defining Puck tote bags. I got hundreds of submissions, so thanks to everyone for participating, even the people who guessed 36 million and 167 million.

Also, one programming note: Thanks to the long weekend, the next What I’m Hearing will hit inboxes on Monday evening, rather than Sunday. Happy President’s Day.

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Thursday Thoughts (Supersized Edition)…

 – Is it 2022 or the 1980s?: TV’s hottest writer is arguably David E. Kelley, and just this week, I’m told, Amazon Studios committed to a huge film project written by Lethal Weapon wunderkind Shane Black, and produced by the apparently unsinkable Joel Silver. Robert Downey, Jr. is starring and producing with his wife, Susan, and it’s based on the Parker crime novels by Richard Stark. Big deals for all involved, with the potential for a spinoff series and movies.  
 

 – Kaluuya tells CAA to get out: An update to my item last month on Oscar winner Daniel Kaluuya and Heir Holiness, the self-described “life strategist” and “Head Mistress” for “The International Alma Mater, Blessed University,” who claimed on her LinkedIn to be Kaluuya’s “personal manager” (though she deleted her profile after I wrote about it). Holiness’ behavior during the filming of Jordan Peele’s Nope, in which Kaluuya stars, caused people on set to be concerned about her influence over the British actor. Those same people might like to know that, just this week, Kaluuya abruptly fired CAA. Management360 still reps him, though. (CAA declined to comment.)   

 – Agents in the incoming call business: Speaking of CAA, the D.O.J. probe of the agency’s purchase of ICM Partners has hit New York, with several book agents receiving subpoenas and requests for interviews in recent days, I’m told. Some of these same agents are also being asked separately about the Penguin Random House-Simon & Schuster deal, which the Biden administration is already challenging. Crazy times.  

 – From binge mode to intermittent fasting: With Ozark and now Stranger Things debuting new seasons in two chunks spread out over several months, it seems that we’ve found Netflix’s answer to the weekly episode drops that have been more effective at preventing subscriber churn elsewhere. Love Eleven and her pals? Gotta subscribe in May and July now (and we’re betting you won’t cancel in June, either). Plus, two Emmy eligibility windows (until the TV Academy cracks down). 

 – Will Jeff or Allison sue?: Congrats to Jeff Zucker, who managed to attend the Super Bowl with his son last weekend in L.A. and go largely unnoticed by the media tracking his every move these days. A few people have asked if I think the former CNN president might sue to clear his name after WarnerMedia C.E.O. Jason Kilar announced Wednesday (without factual details, of course) that Zucker—along with his partner and ousted marketing chief Allison Gollust, and fired anchor Chris Cuomo—violated “company policies, including CNN's News Standards and Practices.” 

Those are fighting words, given that Zucker had become a martyr to his CNN staff after exiting over what was supposedly just an employee romance that everyone seemed to know (and not care) about. Zucker has been represented in the CNN split by the tenacious L.A. litigators Patty Glaser and Kerry Garvis Wright at the Glaser Weil law firm, as well as his usual deal lawyer Craig Jacobson. (Glaser, ironically, repped Conan O’Brien in his NBC exit after Zucker put in motion the infamous Leno-O’Brien Tonight Show succession plan when running NBC Universal.) And while Team Zucker isn’t talking, I doubt he will poke the WarnerMedia bear, given his desire to move on and find a new gig. He’s especially eager for potential opportunities in the sports world, I’m told.

Gollust, who has her own employment lawyers in New York, might be the more likely litigant, since she used the loaded phrase “retaliate against me” in her statement describing Kilar’s handling of the situation. And, of course, the most likely to sue or arbitrate would be Cuomo, who still wants the $18 million on his contract, despite the new revelation in the Times about his sexual assault accuser and the segment he is said to have aired on CNN to placate her. (Cuomo denies the allegations.)

I still think AT&T’s John Stankey will pay him something to go away, despite the uproar it would cause at CNN and elsewhere, just to avoid noise around the closing of the $43 billion spinoff to Discovery. But if the problem is passed to incoming C.E.O David Zaslav, I think he’ll be much less likely to settle.

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Oscar Hosts: Is This the Best We Can Do Now?   

How exactly did we go from hoping for Zendaya and Tom Holland to reading about Regina Hall, Amy Schumer, and Wanda Sykes? All funny women, of course, but none who will move the needle in any of the four key categories: TV ratings, digital buzz, global appeal, or industry cache. That’s a problem. No disrespect, but these hosts will benefit from the Oscars platform far more than the Oscars will benefit from them, which is the definition of a bad pick.

Schumer lobbied hard for the gig, I’m told, and Hall was the choice of Oscars producer Will Packer, who made Girls Trip with her. I’m not sure how Sykes got in there, other than her being hilarious, but the trio of hosts fits into Packer’s vision of a show “in three acts.” Get it? Like a film. It sounds a lot like last year’s producer Steven Soderbergh, who claimed that his show would “feel like a movie.” It didn’t, and only 9.2 million people bothered to watch.  

I know nobody wants to host this show, but still, it’s all pretty sad to watch the Oscars slowly and awkwardly transform into the Tony Awards in both ambition and cultural relevance. The latest Hail Mary, a Twitter poll presented live on stage, only makes the Academy seem more out of touch. 

And, as I suggested might happen, there was strong pushback among members to the lack of a vaccine mandate at the event, hence tonight’s announcement that only performers and presenters will be exempt from a mandate. Still, I’m told Packer is trying to “reunite” famous movie casts as presenters, which would tap into the culture’s current nostalgia obsession and lead to a ton more famous people on stage. A smart plan, but it means a bunch more potential pushback to vaccine leniency for presenters. Lose a big star from a beloved cast and the whole reunion falls apart. But require vaccines and you lose other stars. A no-win situation, much like the show itself. 

Shari Redstone Stares Into the Streaming Abyss

Paramount+ did what Wall Street asked—and investors responded by urinating all over the parent company’s stock. As ViacomCBS becomes Paramount Global and the economics of streaming fall to earth, is chasing Netflix a winning model after all?

It’s like ViacomCBS chair Shari Redstone and C.E.O. Bob Bakish whipped out the Big Media ‘22 handbook, flipped to the “Netflix for Beginnerz” section, and started checking the boxes that analysts and investors all want checked these days:

1. Steer your content to streaming to juice subscribers. Check! Paramount+, flush with NFL games, first-run kids movies and the Yellowstone prequel, added more than 7 million subs last quarter to reach 32.8 million, or 56 million across all its services.
   
   
2. Make a bold projection for your subscriber numbers. Done! Bakish told investors Tuesday that the company is on track for 100 million subs by 2024, up from the previous 70 million prediction.
   
   
3. Consolidate your offering on one digital interface. Yep, Showtime will soon be available on the Paramount+ platform for $12 total ($15 without ads). Showtime will still exist as a standalone service, but for how long?   
   
   
4. Throw out your lucrative “pay one” home video revenue. Not a problem! Paramount movies will go directly to Par+ after theaters, starting in 2024.
   
   
5. Expand the service overseas, and do it fast. Gotcha. Par+ will be in 60 markets this year, thanks to a new deal with France's Canal+ Group.
   
   
6. Most important, unleash an unholy machine-gun spray of new content, preferably spinoffs and sequels of existing franchises, and then spinoffs and sequels of those spinoffs and sequels, and so on. Yessir! The Tuesday presentation was overwhelming, with everything from Sonic and SpongeBob “universes” to yet more Taylor Sheridan shows, to taking over South Park worldwide, to launching a global version of my favorite show, The Challenge, to the promise of a new Star Trek movie before the cast has even entered negotiations. (An agent texted me “$$$$$” over that news.)  
   
   
7. And finally, if they’re still not convinced you’re serious about streaming, change the name of the whole goddamn company to match the service. After all, the parent of Netflix is just Netflix. Same with Disney+. So now, we have Paramount Global, home of the Paramount+ service and, oh yeah, a 110-year old movie studio that also happens to use that name. R.I.P. Viacom, which was synonymous with Shari’s father, Sumner Redstone, who took ownership of the cable TV company in the mid-80s, outdueled Barry Diller for Paramount Pictures, bought CBS in 1999, then split the two companies in 2006, and declined mentally and physically until Shari took control and reunited them as ViacomCBS just before Sumner’s death in 2020. I’m omitting his many scandals, blood feuds, abrupt firings and much-younger girlfriends along the way—not to mention the iPad that said “yes,” no,” and “fuck you”—but suffice to say it’s the end of a quite eventful era.

Redstone and Bakish played the game, so all good, right? Ha. Investors and analysts responded to the Tuesday announcements by urinating all over New Paramount, sending the share price down about 20 percent in a day. Bank of America's Jessica Reif Ehrlich downgraded the stock. Analyst Michael Nathanson lowered his price target. The drumbeat to simply give up and sell the company grew louder. You can almost hear Shari, in her Boston Brahmin accent: But we did everything you asked of us!

It’s striking how the narrative on streaming has changed so dramatically in the past few months. For years, Netflix and others would rise and fall solely by the subscriber numbers. Now, terrifyingly, the market is paying a lot more attention to the business fundamentals, and—I hope you’re sitting down for this news—the streaming wars are really f-ing expensive.  

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Paramount says it will spend $6 billion on content in 2024, but that’s apparently not enough—or it’s too much—or, maddeningly, it’s both. The market has created an awful Catch-22 for Redstone. Her core cable TV business is dying, so she needs to shift to streaming. But streaming expenses drain the company’s coffers, and it’s clear that investors don’t believe Paramount can ultimately compete for a seat at the adults table with Disney, Netflix, Amazon and Warner Bros. Discovery. When Disney invests more in streaming, for instance, investors believe that’s smart because Disney can be a winner. But Viacom? “People think it’s throwing good money down a dark hole,” analyst Rich Greenfield told me today. Nathanson warned his clients he doesn’t see how Paramount’s streaming push can “become big enough to return the total company on a path to growth within the next five years.” That’s stark. What is Shari supposed to do now?

She controls the company, so she can stay the course. And if you talk to people at Paramount, they say that’s the strategy: Keep spending to grow, hope to survive this crazy period of transition in one piece, and keep an eye out for a potential sale opportunity.

But the problem is, a sale to who? Netflix could do a lot with the Paramount content and its ad-driven PlutoTV service, especially as Netflix growth lags and competitors rise. But so far the company hasn’t undertaken major M&A (this open job notwithstanding). And nobody else has seemed to want to pay a decent price for all of Paramount, especially those linear assets, which would weigh any buyer down like a steel anchor. Plus, the regulatory environment is such that potential Big Tech acquirers might be scared off, especially if Biden’s antitrust bulldog Lina Khan shuts down Amazon’s proposed deal for MGM, which is still pending.

The scary reality is that the market is no longer convinced that streaming is a good model for anyone, even Netflix and Disney. Yes, the entertainment business is transforming, it just might be a smaller, less profitable business than the cable TV cash cow of the past 30 years. And there might be far fewer players that can withstand those new economics. The challenge for Shari Redstone, Bob Bakish and every top executive in entertainment over the next couple years will be to convince the market that a compelling streaming service can be profitable and sustainable long-term. Of the current products, which one would you bet on? Paramount+?  

Correction: I mixed up Adam Rapp (the writer) and Anthony Rapp (the actor) in my Sunday item about Kevin Spacey targeting a Variety reporter in the Anthony Rapp civil litigation. Apologies to both Rapp brothers. 

Have a great holiday weekend. I’m back on Monday,

Matt

Got a question, comment, complaint, or an unpublished manifesto? Email me at Matt@puck.news or call/text me at 310-804-3198.