April 16, 2025

Greetings from Los Angeles, and welcome back to In the Room. In tonight’s issue, news and notes on CBS’s mishandling of its Wheel of Fortune and Jeopardy! distribution rights, a perplexing tale of Hollywood naïveté that stands to cost the company hundreds of millions of dollars, and has rankled the powers that be at both Paramount and Skydance. 🍸 Plus, on the latest edition of The Grill Room, the inimitable Michael Wolff stops by to discuss his new profile of “accidental media mogul” David Zaslav. Wolff digs into Zaz’s head-spinning financial incentives, the challenges WBD faces from tech giants like Amazon and Netflix, the future of the media business—and CNN’s place in the shifting landscape. Follow The Grill Room on Apple, Spotify, or wherever you prefer to listen. Also mentioned in this issue: Larry Ellison, David Ellison, John Malone, Mark Zuckerberg, Shari Redstone, George Cheeks, Wendy McMahon, Alex Trebek, Pat Sajak, Tony Vinciquerra, Tony Dokoupil, and many more… Let’s get started…

Zuck around and find out: Mark Zuckerberg is back in Washington this week for his latest perp walk, this time testifying in the F.T.C. antitrust case that seeks to unwind Meta’s acquisitions of Instagram and WhatsApp. Not to state the obvious here, but it seems extremely unlikely that that will happen. First, the F.T.C.’s attempt to define Meta as a monopoly relies on a woefully (or willfully?) naive definition of its market, failing to account for its competitors across the business. (Yes, the F.T.C. lost me when it failed to acknowledge YouTube and TikTok as competitors.) Meanwhile, despite the myriad ills that social media has wreaked upon society—believe me, I’m not here to defend Mark—I don’t see the merits of the argument that consumers are worse off because Meta acquired these two services. Finally, while Meta’s critics seem concerned about the precedent set if the F.T.C. loses, the business community is far more concerned about the precedent set if it wins. Indeed, it’s hard to build a long-term acquisition strategy if the F.T.C. feels emboldened to unwind deals that it’s already approved.

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F1 and done: John Malone’s Liberty Media, which was charging ESPN about $90 million a year for U.S. media rights to Formula One, is now reportedly seeking between $150 million and $180 million from its next media partner. As the Journal recently reported, big players like Netflix and Amazon are balking at that price. What gives? Over at The Varsity, my partner Julia Alexander pointed to stagnating ratings, time zone inconveniences, and, most importantly, the jitters of streaming companies who “want to optimize the efficiency of their content spend as they compete for incremental viewership, stronger customer retention, and sizable ad rates.”In other words: Guess what? The companies with the most money are also the smartest and most ruthless. So “who’s the right partner for F1,” Julia asked, “and what do these realities suggest about creative deal-making?” Julia’s piece is available exclusively to members of Puck’s Inner Circle, which you can join here. You should sign up before you’re replaced by someone who did.
Programming note: Julia will be back on The Grill Room this Friday to discuss the F.T.C. case against Meta, the F1 negotiations and all of the latest headlines emanating out of the media industry. Come join us.

Wendy’s Double Jeopardy

CBS News C.E.O. Wendy McMahon’s tenure was already beset by controversies that have antagonized both the network’s current owner, Shari Redstone, and its future owner, David Ellison. Now, she’s taking heat for a Wheel of Fortune/Jeopardy! miscalculation that could cost Paramount eight-figure annual profits.

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In December 2023, Sony Pictures Television approached CBS with a nine-figure offer to buy back the distribution rights for Wheel of Fortune and Jeopardy!, the still-popular primetime twin bill that, even in the post-Trebek/Sajak, late-stage linear era, continues to generate a half-billion-plus in annual revenue for its stakeholders: Sony, which produces the shows; CBS, which has distributed them for three and a half decades; and the myriad local stations that license them. The JFK-LAX crowd may think of Wheel and Jeopardy! as ABC shows, but in certain markets you have to swap from NBC to CBS to get the full double-feature experience. Indeed, this whole affair offers a window into the confoundingly complex nature of Hollywood distribution arrangements. Sony’s buyout offer landed on the desk of Wendy McMahon, the CBS News and Stations C.E.O. who, in addition to that plum assignment, also oversees CBS Media Ventures, the studio’s syndication and distribution arm. McMahon, of course, has spent much of her tenure at CBS mired in a cascading shitstorm of controversies that have managed to confound both CBS’s current owner, Shari Redstone, and its future owner, David Ellison. The most notable of these—Trump’s baseless $20 billion lawsuit against CBS over benign but regrettable editing discrepancies at 60 Minutes—wasn’t her fault, nor is she to blame for Shari’s pitiful eagerness to settle that dispute. But in most cases, from her ill-advised overhaul of Evening News (where ratings continue to decline), to the mishandling of the Tony–Ta-Nehisi contretemps (which pissed off Shari), to her failure to preempt a controversial 60 Minutes segment on Gaza (which pissed off Shari, and the Ellisons, and the ADL), McMahon has indisputably exacerbated CBS’s reputational challenges. The adverse effects of bad P.R. can be hard to quantify; the Wheel/Jeopardy! deal, on the other hand, was very quantifiable. Sony says that CBS has made more than $1 billion in profit over the 35-year period, which would translate to an average of more than $28.5 million in profits each year. Based on the back-of-the-napkin math, the nine-figure buyout offer would conceivably have covered at least four years of those profits, all at a time when linear is declining and CBS is downsizing and preparing for a sale to Skydance. Most importantly, however, Sony executives (from former C.E.O. Tony Vinciquerra to current chief executive Ravi Ahuja) had long argued that CBS was failing to honor the terms of their 35-year distribution agreement. By the time of the buyout offer, they’d made clear to McMahon and her bosses, including CBS C.E.O. George Cheeks, their feeling that CBS was licensing both Wheel and Jeopardy! at below-market rates, bundling them with less popular shows, and failing to maximize advertising revenue. They also chafed at the international deals that CBS had made in Australia and New Zealand without compensating Sony. And they believed that rounds of layoffs and budget cuts at CBS had negatively affected marketing and distribution, even as Sony itself was continuing to invest and spending tens of millions to develop new sets for the shows. In essence, they were signaling that if CBS didn’t relinquish distribution rights, they might be forced to claw them back.

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Cheeks and McMahon made a counteroffer in June and again in October, both of which Sony declined. In October, Sony instead sued CBS over the distribution rights, largely based on the arguments outlined above. In February, Sony attempted to take back distribution, and last week, after much back and forth, a Los Angeles judge rejected CBS’s attempt to overturn that move. Pending a review by California’s 2nd District Court of Appeal, which on Wednesday put a temporary pause on last week’s ruling, Sony is likely to maintain full and irrevocable control over distribution of the assets without having to pay so much as a penny to CBS. (Yes, CBS’s lawyers still believe they can win this case, to which I say, good luck! But I’m sure the billable hours are more than worth the flier.) Needless to say, CBS’s failure to anticipate this outcome has not garnered the national attention that a Trump-related or even a Ta-Nehisi–related controversy commands (indeed, my partner Eriq Gardner was the sole reporter in the courtroom last week when the ruling was handed down, and the only one to observe CBS’s outside counsel imploring the judge to change his mind). But from a business perspective, losing lucrative distribution rights to broadcast’s most popular syndicated shows, while leaving more than $100 million on the table, is inarguably the bigger deal. Did the leadership not understand that Sony wasn’t merely some producer-for-hire, and that it actually owns these shows? Did they just assume that, after 35 years, CBS could cut corners on the terms of the deal without consequence? Whatever the case, the whole episode has once again put McMahon in hot water with Shari and Ellison, alike. Of course, the fact that she is taking more heat for this than her bosses may speak to the preexisting frustrations of the current and future owners. In any event, back in February, I reported that the leadership group at Ellison’s Skydance had already decided to defenestrate McMahon once the merger closes (none of that’s “official,” of course, because it can’t be “official” before the merger closes… if it even closes at this point… right?). I’d hazard a guess that forfeiting Wheel and Jeopardy! for free is unlikely to inspire a change of heart. And yet, on some level, the snafu is really just a metaphor for this ineptitude-filled stage of the Paramount saga—two once-great companies, belatedly rolled into one, still mangled by an equivocating heiress with Freudian issues who is about to hand it all over to a generational nepo baby. It’s not a surprise that CBS whiffed on the Wheel/Jeopardy! deal and really a minor miracle that any of these people are still doing their jobs amid this elongated merger project. On Monday, my partner Kim Masters unveiled a potential reporting structure at Paramount in which all the creative executives will report to Ellison and incoming president Jeff Shell will serve as a Frank Wells–type consiglieri. Well, if this thing ever closes, he’s going to have his hands full.

Finally, a media podcast about what’s actually happening in the media—not the oversanitized, legal-and-standards-approved version you read online. Join Dylan Byers, Puck’s veteran media reporter, as he sits down with TV personalities, moguls, pundits, and industry executives for raw, honest, sometimes salacious conversations about the business of media and its biggest egos. New episodes publish every Tuesday and Friday.

A professional-grade rundown on the business of sports from John Ourand, the industry’s preeminent journalist, covering the leagues, players, agencies, media deals, and the egos fueling it all.

Sony’s Jeopardy Shocker

ERIQ GARDNER

Tariff Red Flags

PETER HAMBY

F1’s $100M Headache

JULIA ALEXANDER

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