Welcome to Dry Powder. I’m William D. Cohan.

Tonight, I’ve got a special pre-July Fourth edition of the newsletter, featuring news and notes on the biggest Wall Street stories of the season—whether Apollo or even Zaslav might have the inside track with Shari, the hiring of Darius Adamczyk at Goldman, the Trump V.P. circus, and the Biden donor dilemma—in conversation with my pal and partner, Puck co-founder and editor-in-chief Jon Kelly.

But first: a few updates from elsewhere in the Puck cinematic universe from art market expert Marion Maneker and sport media übermensch John Ourand…

• A Jho Low settlement update: After chasing international fugitive Jho Low for nine years over his alleged $4.5 billion embezzlement scheme, the Department of Justice announced last week that Low, members of his family, and trust entities have resolved two civil forfeiture cases. As part of the agreement, Low forfeits an apartment in Paris and two paintings that he bought for $35 million—Warhol’s Colored Campbell’s Soup Can (Emerald Green) and Monet’s Vétheuil au Soleil. In addition, Low will give up $67 million in property and cash located in Malaysia, Switzerland, and Singapore. In exchange, the Low family will get access to $3.5 million to pay for costs associated with the properties and to pay their lawyers.

  For those who have not been following the saga, Low appeared as an ostentatious buyer of art at auction more than a decade ago, often in the company of Leonardo DiCaprio. Of course, as prosecutors allege, nearly all of Low's money was actually siphoned from Malaysia’s 1MDB economic development fund. He set the record price for a Basquiat when he bought Dustheads in 2013 for $48.8 million. Low subsequently pledged much of his art to Sotheby’s as collateral for a loan he used to build a $250 million yacht, Equanimity. When the scheme collapsed, Sotheby’s and Christie’s both cooperated with the D.O.J. Sotheby’s, in particular, provided evidence that helped the authorities make their case against Low’s enablers at Goldman Sachs. —Marion Maneker

• A new wave of streaming chaos: Michael Nathanson, the respected media analyst, put out a report this week declaring that we’re in the third act of the streaming wars—an era defined by industry consolidation and more spending on live sports rights by traditional media companies and streamers. “From the leagues’ perspectives, there is a delicate balance between reach (e.g., NFL on broadcast TV) and immediate money (e.g., MLS on Apple TV),” Nathanson wrote, neatly summing up the philosophy that guided the NBA’s media rights auction. “In order to stay relevant and grow the game, it is in the best interest of sports leagues to maximize eyeballs.”

  Streamers have different strategies when it comes to sports programming—Amazon wants broadcast-style packages, Apple wants to own everything, and Netflix wants to focus on unique events. But they’ve all shown a willingness to invest in sports rights—even Netflix, which is paying around $150 million for two NFL games on Christmas Day. As readers of The Varsity know well, legacy media companies see live sports as their last chance to save the lucrative cable bundle, setting up a competition for sports rights which Nathanson believes will increasingly be dominated by the streamers. “Going forward, as technology improves and latency comes down, streaming will become a more suitable home for sports than it is today,” he wrote. “In addition, games/matches from smaller leagues may start to pop up on sports betting apps, but there isn’t an expectation that betting operators will be the primary rights holders for top-tier leagues anytime soon.” —John Ourand

William D. Cohan: I have an even better idea, Jon. I think David Zaslav should buy CBS, merge it with CNN, and then seduce Jeff Zucker away from RedBird IMI to run it. It’s a decent solution for all parties. Zaz needs to do something, anything, to help out CNN at the moment, as Dylan has been so brilliantly reporting. And while CBS wouldn’t be the answer to all of CNN’s problems (and vice versa), a hypothetical deal would also give Zaz a lot more NFL games, 60 Minutes, Face the Nation, and CBS News Sunday Morning, all of which are still viable franchises.

We both also know that Zucker would love to get back in the action, and what better action than a combo of CBS and CNN? I think Zucker’s return would be a big morale boost to both workforces, which are in need of a lift. Selling CBS would be a boost for Shari and the Paramount Global stock, too. It would also probably help smooth the way for the aforementioned Sony/Apollo takeover of Paramount, although it would not resolve the issue of five Hollywood studios becoming four, which would be problematic and likely create a regulatory challenge. And Zaz may also have to take on Paramount+ or at least its 65 million subscribers, and somehow eschew its $1.7 billion in losses. As Heraclitus could have said about our domestic media business these days, “All is flux.”

I love the creativity here, and I think we’ll see more out-of-the-box M&A ideas in the media industry as we continue to barrel through the capital optimization era. But bringing Zucker into WBD would likely undermine the momentum that Mark Thompson has worked hard to cement. And I wonder if Zaz would be comfortable with a former major media C.E.O. on his org chart. Nevertheless, Zaz will at some point have to contend with whether to invest further in CNN, perhaps via acquisition, or else contemplate a sale. As Bob Iger once said about Disney, but is more broadly true: “I think pretty much everything is on the table these days.”

But speaking of Zaz: He just hired Robert Gibbs, the former Obama press secretary and McDonald’s spokesperson, to run his comms strategy. There’s no question that Zaz needs a public perception makeover. What story do you think Gibbs should be telling Wall Street and Hollywood?

I think Gibbs has a tough assignment, to be honest. I’m still a Zaz believer, mind you, but now that the WBD stock has a 7 handle on it and the WBD net debt stack still hovers around $40 billion, Robert is going to have to put the silver tongue he developed during the Obama administration to good use again. In my opinion, he should take the lead with journalists (and whoever else will listen) to retell the WBD story with a bit more panache. I’m afraid the Zaz haters and disbelievers have gotten the better part of the narrative at this point.

But the WBD story is still a powerful one. The debt, once $55 billion, is now below $40 billion—still a lot, mind you, but heading in the right direction and up and off the BBB cliff. WBD’s movie studio continues to perform in 2024 after a boffo 2023, and Max and HBO are still adding subscribers and apparently are profitable (depending on how you look at the P&L). Zaz is opening up Europe and Latin America for WBD and just scooped up some NASCAR, some CFP college football games, and the French Open. Whether Zaz needs to litigate with the NBA to get his slice of that product remains to be seen. But even if WBD gets shut out of the NBA in the end, as seems almost certain, it’s hardly fatal. After all, losing out on those rights would free up some $25 billion in capital for Zaz to use for other things, maybe even other things that will make more money for WBD than the NBA did, such as CBS. I know this position, which the WBD executives have put forth, seems like spin. But that doesn’t mean it isn’t true.

And there’s a story here for Wall Street to love, too. I continue to believe the WBD journey is similar to a publicly traded LBO that needs to continue to pay down debt, generate free cash flow, and increase EBITDA, which has been tougher than anticipated. Frankly, I would have thought investors would have climbed aboard the train by now. But they haven’t. (This is not investment advice.) Maybe the catalyst will be a credit rating upgrade. Maybe the catalyst will be the acquisition of CBS or Paramount+, or both. Maybe Gibbs, who did a pretty good job getting Obama’s message out, will refashion the WBD story into one that gets investors hooked.

What do you think, Jon?

I agree with you that the Zaslav narrative has become more emotional than economic. Zaslav came in speaking some hard truths to the media industry about legacy costs, blind Netflix envy, and free cash flow. And yet, the reality of the current predicament is that we’re here by dint of Zaz’s own ferocious appetite.

He was once, after all, the very well compensated C.E.O. of a highly efficient but subscale asset in Discovery Communications. In an alternate reality, Discovery would have been fish food for a much larger media entity. But instead Zaz pounced on AT&T’s frustration with the WarnerMedia assets and created his own ersatz conglomerate. I’m not writing off Zaslav yet, either, but I think the company is a few deals from long-term viability and, either way, it’s his creation—he’s uniquely accountable.

A year ago, Goldman was bleeding top talent. Now, it has once again become a magnet. To that end, can you explain the many meanings of Goldman’s latest big hire, former Honeywell C.E.O. Darius Adamczyk?

I think the message is that the days of easy money in the private equity business—if there ever were any—are over, and that to continue to be productive in that business requires more creativity and even more relationships. Hiring the ex-C.E.O. of Honeywell will give Goldman a bunch more relationships and potential deal opportunities across the industrial sector, including possibly by mining opportunities at Honeywell, itself.

Adamczyk thus becomes the second former Honeywell C.E.O. to have an affiliation with Goldman. My friend Dave Cote, the former Welch-ite, has also formed a partnership with Goldman, through a SPAC, to buy a power business from Emerson Electric. Private equity firms have long had a stable of operating partners—essentially non-finance types—to help them source and execute deals. Often, this gives them a competitive advantage. Even Goldman needs an edge, Jon.

We’ll get to the Biden of it all in a minute. But before we do so, the donor class has been returning to Trump, as we should have inevitably anticipated. Now that the V.P. circus is coming to an end, do you think that the Steve Schwarzman crowd is rooting for one selection over another?

Unless Trump dies in office, I think his choice of vice president is completely irrelevant. It’s patently obvious he doesn’t want a V.P. who is a partner, as Gore was to Clinton, or Cheney was to Bush. He wants a sycophant who will do everything he orders, without complaint, and who won’t upstage him. (And, as our partner John Heilemann has noted, he wants a V.P. who also won't mind being sacrificed to the MAGA gods.) What he wants is a toady. And that’s what he’ll get, I’m sure.

The Schwarzmans of the world don’t like toadies or castrati. They like and respect smart men and women who have the power of their convictions, have original ideas, and aren’t afraid to express them. Of course, they also value the team player over the iconoclast. Once the direction is set and the decision is made, they expect everyone to get on board. I’m sure Trump wants that, too.

I don’t believe the Schwarzmans of the world like Trump one bit, but they do like many of his policies, or prefer them to the alternative. The promise of another corporate tax cut—and, in some cases, personal ambition to get a cabinet post—almost certainly explains his public and private support. The V.P. pick is irrelevant to this calculus, unless Trump’s health becomes an issue at some point.

Robert Wolf, Obama’s former top supporter and the former UBS chairman, joined the chorus of high-profile Democratic donors to support Biden in the wake of the debate catastrophe. Leaving politics aside, I’m surprised and not surprised that so many utter success machines—Hoffman, Katzenberg, etcetera—have become so defensive during the past few days, punting a hard decision and pointing to Biden’s record over an existential failure on a public stage. I agree with Hoffman that those 90 minutes shouldn’t define Biden’s success as president, but they will for millions of voters.

These guys became billionaires by demanding perfect results and not crafting talking points to justify sub-par performances. Do you think that Robert believes what he’s saying, or is it too late? Or does he want to avoid, wittingly or not, looking like a dupe?

For better or for worse, Robert is a loyalist, so I’m not the least bit surprised he is sticking with Biden through thick and thin. He was Obama’s favorite investment banker and a big supporter of the Obama Presidential Library in Chicago. The fact that Obama has come out publicly in support of Biden gives Robert additional cover—if he was looking for any, though I doubt he is. On Wall Street, for every Steve Schwarzman and John Paulson who support Trump, there are plenty more Robert Wolf and Blair Effron types, who will support Biden through thick and thin.

Clearly, the debate was a bad moment, but I think the wave of New York Times opinion columnists and editorial writers are overreacting here. Biden managed to get it together the next day in Raleigh. I’m more in the Philadelphia Inquirer camp than the New York Times camp on this one: It’s the convicted felon and insurrectionist who should resign for the good of the country, not the good man and accomplished leader who fumbled dramatically on the debate stage. I’m old enough to remember the fiasco that was Ronald Reagan’s second term, and I believe the Republicans manage to find a way to revere him as one of their best presidents. I suspect the whole conversation will change on July 11, the day that Trump is sentenced.

In any event, we should know more soon. The Biden family is gathering at Camp David this evening, and I understand that two people whom the president knows and trusts have been urged to also join the family. One would make the case for staying in the race; the other would make the case for abdicating. Then there’s a decision. My bet is Joe stays the course. (The White House denied that any outsiders had been urged or invited to attend the family’s gathering at Camp David today and added that the president is absolutely staying in the race.)

Last, can you offer an update on the clam shack crisis in Nantucket that you recently, and so memorably, detailed? Will this be a happy July Fourth week on the island?

Open for business, Jon! The HVAC duct has been moved to the other side of the building. Charlie Johnson’s viewshed is free of fried clam fumes, and lobster rolls are walking out the door!