Cillian Murphy in Oppenheimer and Margot Robbie as Barbie
Julien De Rosa | AFP | Getty Images; Stuart C. Wilson | Getty Images
“Barbenheimer” is off to a red-hot start at the domestic box office.
One-half of the viral internet meme, “Barbie,” snared $22.3 million in Thursday night preview tickets, the most of any film released so far in 2023 – topping the $17.4 million bow of Sony’s “Spider-Man: Across the Spider-Verse.”
Heading into the weekend, Warner Bros.’ “Barbie” is expected to capture upwards of $140 million, if not more, over its first three days in theaters. Meanwhile, Universal’s “Oppenheimer” appears destined to snare between $40 million and $60 million. Thursday night numbers for “Oppenheimer” weren’t immediately available.
The two films could together generate $200 million over their opening frame. With additional ticket sales from “Mission: Impossible — Dead Reckoning Part One,” “Spider-Man: Across the Spider-Verse” and “Sound of Freedom,” it could be the highest-grossing weekend of the year so far.
This excitement is much needed for the domestic box office after a string of recently released big-budget movies, such as “The Flash” and “Indiana Jones and the Dial of Destiny,” fell short of expectations.
Major movie chains have indicated that ticket sales are strong for both films this weekend and additional shows have been added to accommodate demand.
Some 40,000 AMC Theatre loyalty program members have purchased tickets to see Barbie and Oppenheimer on the same day and the National Association of Theatre owners project that more than 200,000 moviegoers will attend same-day viewings of the two films.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
This is a developing story. Check back for updates.
SpaceX, Twitter and electric car maker Tesla CEO Elon Musk looks on as he speaks during his visit at the Vivatech technology startups and innovation fair at the Porte de Versailles exhibition center in Paris, on June 16, 2023. (Photo by Alain JOCARD / AFP) (Photo by ALAIN JOCARD/AFP via Getty Images)
Alain Jocard | Afp | Getty Images
Tesla and SpaceX CEO Elon Musk, who is also CTO and executive chairman of Twitter, said early Saturday morning that cash flow remains negative at the social media company because of a nearly 50% drop in advertising revenue coupled with “heavy debt.”
“Need to reach positive cash flow before we have the luxury of anything else,” Musk wrote in response to a tweet.
Musk took over Twitter in October of last year in a deal valued at around $44 billion, including about $13 billion in debt. He sold billions of dollars worth of his Tesla shares in part to finance that deal.
By January, hundreds of advertisers had reduced or halted their ad spending on Twitter in response to Musk making steep staff cuts at the company, and implementing changes to the platform, especially restoring previously banned accounts and changing its approach to content moderation.
In April, Musk told a BBC reporter that “almost all” advertisers had resumed buying ads on Twitter. He also claimed at that time that the company was “roughly breakeven,” and expected to become cash flow positive within the next quarter.
His statement about Twitter’s cash flow problems today comes a little over one month since Linda Yaccarino, who previously ran global advertising for Comcast’s NBCUniversal, took on the role of Twitter CEO. NBCUniversal is the parent company of CNBC.
Yaccarino’s appointment inspired hope among media industry insiders that Twitter would address immediate challenges to its ad business.
In recent days, Twitter began doling out a share of its ad revenue to select content creators on its platform. Musk’s remarks were made in response to followers who wanted to know why that revenue-sharing program was so limited in scope.
A number of widely followed accounts on Twitter posted that they were dismayed they did not qualify to earn income from the program yet. As The Verge previously reported, the revenue-sharing program was available only to users who paid for a Twitter Blue verified subscription, and amounts paid were “driven by ads placed in the replies to tweets.”
Influencer Andrew Tate — who espouses misogynistic views online, and faces a trial on charges of rape, human trafficking and forming a criminal gang to sexually exploit women in Romania — posted that Twitter paid him more than $20,000. Tate has sued the accusers who made those charges.
Several right-wing influencers also posted about receiving Twitter payments, along with fans and promoters of Tesla stock and products, including Omar Qazi (who uses the handle “@WholeMarsBlog” on Twitter) and Sawyer Merritt, who each posted about netting more than $5,000.
Mainstream and other influencers who shared details about their Twitter income included Brian and Ed Krassenstein, Mr. Beast and the account @interneth0f (which stands for Internet Hall of Fame). The Internet Hall of Fame posts screenshots of other people’s popular posts from social media and re-circulates them.
It’s not clear how much Twitter paid creators in total in this first round of payments. Twitter sent an automated reply with a crude symbol in response to CNBC’s request for comment on Saturday. The parent company of Twitter, X Corp., is facing myriad lawsuits from former employees and vendors over non-payment of bills and severance.
Bob Iger, CEO of The Walt Disney Company, left; David Zaslav, CEO and president of Warner Bros. Discovery, center; and Bob Bakish, president and CEO of Paramount Global.
Getty Images
Companies and industries have ups and downs. The legacy media industry is in a valley.
The first half of 2023 has been a colossal disappointment for media executives who wanted this year to be a rebound from a terrible 2022, when a slowdown in streaming subscribers cut valuations for Netflix, Disney, Warner Bros. Discovery and Paramount Global roughly in half.
Instead, investors have once again become excited by Netflix’s future prospects as it’s cracked down on password sharing, potentially leading to tens of millions of new signups. Netflix shares have surged the past five months, outpacing the S&P 500.
Meanwhile, the legacy players can’t get out of their own way.
Netflix vs the S&P 500 over the past five months.
“When it rains it pours,” said LightShed media analyst Rich Greenfield. “It just keeps getting worse.”
It’s been a bumpy ride for Disney Chief Executive Officer Bob Iger since he returned to lead the company late last year. Disney recently finished laying off 7,000 employees. Chief Financial Officer Christine McCarthy stepped down last week. The company is pulling programming from its streaming services to save money. Its animation business is in a major rut, with its latest Pixar movie, “Elemental,” recording the lowest opening weekend gross for the studio since the original “Toy Story” premiered in 1995. Shares have struggled in the past five months.
Disney vs. the S&P 500 over the past five months.
Warner Bros. Discovery vs. the S&P 500 over the past five months.
Paramount Globalcut its dividend last quarter as streaming losses peak this year and a weak advertising market exacerbates a terminally ill cable network business. Wells Fargo released an analyst note Friday saying the bull case and the bear case for the company were the same: selling for parts. Warren Buffett, perhaps the most acclaimed investor in history, told CNBC that Paramount’s streaming offering “fundamentally is not that good of a business.”
Paramount Global vs the S&P 500 over the past five months.
Fox Corp. vs the S&P 500 over the past five months.
NBCUniversal has weathered the storm the best, shielded by its parent company, Comcast, which gets its revenue from cable and wireless assets. It’s also taken advantage of missteps from the aforementioned. MSNBC became the No. 1 cable news network this month for the first time in 120 weeks, dethroning Fox News for a week amid coverage of former President Donald Trump’s federal indictment. Universal’s “The Super Mario Bros. Movie” is by far the biggest box office hit of the year, yet shares haven’t moved much.
Comcast vs the S&P 500 over the past five months.
All of this is happening with an extended Hollywood writers’ strike going on in the background with no end in sight. The writers know the longer the strike lasts, the more pain will be inflicted on media companies, who will eventually run out of already-made scripted content. Zaslav recently gave a commencement address to Boston University and was drowned out by boos and chants of “pay your writers.”
This week may bring even more bad news. Film and TV actors are set to join writers on strike unless they reach a deal with Hollywood studios by Friday.
The beneficiary of Hollywood work shutdowns will likely be YouTube, TikTok, and Netflix, which continues to churn out international content that is unaffected by the strike, said Greenfield.
Legacy media may get a small reprieve if advertising jumps back as the 2024 U.S. presidential campaign heats up. But there’s still scant evidence investors will reward media companies for simply cutting costs. There’s currently no strong growth narrative for legacy media, and consolidation prospects are murky as regulators block media-adjacent deals such as Microsoft’s acquisition of Activision and Penguin Random House’s proposed purchase of Simon & Schuster.
The industry just wrapped up its annual advertising gala in Cannes, France. Legacy media executives still spent company dollars to make the trip to hang out on yachts and drink rosé. The backdrop was as beautiful as ever.
But the landscape is bleak.
Disclosure: Comcast owns NBCUniversal, which is the parent company of CNBC.
WATCH: WPP CEO Mark Read on the state of the advertising market, from Cannes Lions 2023
“I am excited to welcome Linda Yaccarino as the new CEO of Twitter!” Musk tweeted. He said she “will focus primarily on business operations, while I focus on product design & new technology.”
He added, “Looking forward to working with Linda to transform this platform into X, the everything app.”
The announcement comes a day after Musk said via Twitter that he would step down from the role and that there would be a new CEO of the social media website, although he didn’t name the new person. Musk said in his tweet the person would start in about six weeks.
Yaccarino joined NBCUniversal in 2011 and had risen to the top of the company’s global advertising business. On Monday, the ad chief was slated to take part in NBCUniversal’s Upfront event at Radio City in New York – the sales presentation the company, along with its media peers, makes to the advertising industry every year in May.
The longtime ad executive brings a wealth of relationships with top chief marketing officers and other advertising executives to Twitter at a time when the platform has seen advertisers flee – therefore losing billions of dollars – after Musk’s takeover last year.
Musk completed his $44 billion acquisition of Twitter in October of last year. Soon after, he fired the company’s top brass and laid off thousands of employees.
Many companies halted their ad spending on the platform since Twitter has seen an increase in offensive speech and rhetoric, as several advocacy groups have documented. In an attempt to make up for the loss of ad revenue, Musk created a new subscription service, Twitter Blue, which offers features such as the ability to compose longer tweets.
Yaccarino and Musk sat together in a keynote interview at a marketing conference in Florida in mid-April. During the conversation, the two discussed the role marketers play in the future of Twitter, as well as its position in the cultural conversation.
During the conference, Musk reportedly tried to reassure advertisers that Twitter was a respectable place for their brands.
Yaccarino’s exit from NBCUniversal comes weeks after Jeff Shell was ousted as the company’s CEO after admitting to an inappropriate relationship with an employee. Rather than replacing Shell, NBCUniversal’s top executives will report to Mike Cavanagh, president of parent company Comcast.
On Friday, NBCUniversal said Yaccarino would leave the company, effective immediately, and Mark Marshall, the current president of advertising sales and client partnerships would become interim chairman of the company’s advertising and partnerships group.
Marshall will report to Mark Lazarus, chairman of NBCUniversal Television and Streaming. Lazarus and Marshall are likely to take part in NBCUniversal’s Upfront presentation on Monday, CNBC’s David Faber and Julia Boorstin reported Friday.
Disclosure: NBCUniversal is the parent company of CNBC.
NBCUniversal CEO Jeff Shell is leaving the company after an outside investigation “into a complaint of inappropriate conduct,” its parent company Comcast announced Sunday.
Shell will depart effective immediately in the wake of an investigation led by an outside counsel.
“Today is my last day as CEO of NBCUniversal. I had an inappropriate relationship with a woman in the company, which I deeply regret,” Shell said in a statement. “I’m truly sorry I let my Comcast and NBCUniversal colleagues down, they are the most talented people in the business and the opportunity to work with them the last 19 years has been a privilege.”
The brief statement did not specify who the woman was or include any other details about the investigation. CNN has reached out to Comcast and NBCUniversal.
Shell had been named CEO in January 2020 after leading content creation, programming and distribution for NBCUniversal Film and Entertainment.
Shell had expressed confidence in NBC’s streaming service, Peacock, which surpassed 20 million paid subscribers at the end of 2022 and “nearly tripled” its revenue to $2.1 billion, according to its fourth quarter earnings report, which ended at the end of 2022. Its adjusted earnings loss, however, was wider.
“There’s no question the whole television landscape is changing,” Shell said in an interview on CNBC “Squawk on the Street” last October. “If you have the right content, and you offer a broad distribution platform, your consumers are going to find you and that’s what we’re doing with Peacock.”
Comcast is set to report its first quarter earnings on Thursday.
Jeff Shell left his role as NBCUniversal CEO on Sunday after he admitted an “inappropriate relationship” with a woman in the company, corporate parent Comcast announced.
“Today is my last day as CEO of NBCUniversal. I had an inappropriate relationship with a woman in the company, which I deeply regret. I’m truly sorry I let my Comcast and NBCUniversal colleagues down, they are the most talented people in the business and the opportunity to work with them the last 19 years has been a privilege,” Shell said in a statement.
Comcast hired outside counsel to begin an investigation following a complaint. The complaint was filed by the woman with whom Shell said he had an “inappropriate relationship,” according to people familiar with the matter. They declined to be named due to the sensitive nature of the developments.
A company email said Shell’s team will report to Comcast President Mike Cavanagh. The company hasn’t been interviewing or searching for a replacement, and has no plans to do so immediately, said a person close to the matter. Shell, as well as other leaders at NBCUniversal, have already been reporting into Cavanagh for some time and he knows the business well, the person said.
“We are disappointed to share this news with you. We built this company on a culture of integrity. Nothing is more important than how we treat each other. You should count on your leaders to create a safe and respectful workplace. When our principles and policies are violated, we will always move quickly to take appropriate action, as we have done here,” Cavanagh and Comcast CEO Brian Roberts said in a separate statement Sunday.
Roberts will also get more involved with the NBCUniversal business alongside Cavanagh, the person said.
Shell, who is married, took over as CEO of NBCUniversal in January 2020. He oversaw the company’s theme parks, its Peacock streaming service, sports production operations, television stations group, and entertainment and news television networks like NBC News.
Much of his time as CEO was shaped by the Covid pandemic, which forced the U.S. and much of the world to shut down weeks into his new position. During that time theme parks and movie theaters were shuttered, and the entertainment industry was upended as film and TV production shut down.
Shell, who succeeded Steve Burke, ushered in the launch of Peacock in mid-2020, NBCUniversal’s answer to the streaming wars. While Peacock was formulated under Burke, the streaming service grew and added more subscribers and content with Shell at the helm.
Peacock’s losses have weighed on NBCUniversal’s overall business. During the company’s last earnings call, Cavanagh said Peacock’s 2022 losses were in line with its earlier outlook of $2.5 billion. Comcast has said it expects Peacock’s losses to be up to around $2 billion in 2023. Comcast is due to report earnings Thursday. Shares of Comcast are up about 8% so far this year.
Just months after taking the CEO post, Shell reshaped NBCUniversal’s business and broke down the fiefdoms in the TV segment, with the aim of streaming and traditional TV working more closely together.
As part of the restructuring, layoffs took place that had been expected to effect less than 10% of the then-35,000 full-time employees. Cuts had been made across all of NBCUniversal’s business segments.
NBCUniversal has also assessed its portfolio of cable TV networks under Shell. In 2021, the company shut down NBC Sports, shifting much of its sports programming to USA Network and Peacock. Peacock has also become the streaming home of the Olympics.
During the same time, longtime NBCUniversal executive Ron Meyer left the company after disclosing he was under extortion threat due to a private settlement he reached with a woman after an extramarital affair.
At the time, Shell informed employees of Meyer’s exit, saying, “Ron Meyer informed NBCUniversal that he had acted in a manner which we believe is not consistent with our company policies or values.”
Shell had risen through the ranks of Comcast and NBCUniversal over the years.
One of his earliest roles was as president of Comcast’s programming group, where he managed national and regional TV networks, including E! He had also previously served as the chairman of NBCUniversal International, and later served as the chairman of the Universal Filmed Entertainment Group from 2013 to 2019. Before taking the helm as CEO, Shell was chairman of NBCUniversal Film and Entertainment.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
BuzzFeed CEO Jonah Peretti stands in front of the Nasdaq market site in Times Square as the company goes public through a merger with a special-purpose acquisition company on December 06, 2021 in New York City.
Spencer Platt | Getty Images
When a marriage or an engagementfails, it’s common for the participants to take time to work on themselves.
That’s where the digital media industry finds itself today.
After years of focusing on consolidating to better compete with Google and Facebook for digital advertising dollars, many of the most well-knowndigital media companies have abandoned consolidation efforts to concentrate on differentiation.
“What you’re finding is companies are trying to find a non-substitutable core,” said Jonathan Miller, the CEO of Integrated Media, which specializes in digital media investments. “The era of trying to put these companies together is over, and I don’t think it’s coming back.”
A 90% decline in BuzzFeed shares since the company went public in 2021, a failed sales process from Vice, the collapse of special purpose acquisition companies, and a choppy advertising market have made digital media executives rethink their companies’ futures. For the moment, executives have decided that more concentrated investment is better than attempts to gain scale.
“Right now, everyone’s trying to get through a tougher market by focusing on their strengths,” BuzzFeed CEO Jonah Peretti said in an interview with CNBC. “We’re in this period now where we should just focus on innovating for the future and building more efficient, stronger, better companies.”
What’s happening in the digital media space echoes trends from the biggest media companies, including Netflix, Disney and Warner Bros. Discovery. After losing nearly half their market values, or more, in 2022, those companies have emphasized what makes them different, whether it be distribution, brand or quality of programming, after years of global expansion and mega-mergers. Disney CEO Bob Iger said the word “brand” more than 25 times at a Morgan Stanley media conference this month.
“I think brands matter,” Iger said. “The more choice people have, the more important brands become because of what they convey to consumers.”
Making strategic decisions based on consumer demand rather than investor pressure is a pivot for the industry, said Bryan Goldberg, CEO of Bustle Digital Group, which has acquired and developed a number of brands and sites aimed at women, including Nylon, Scary Mommy, Romper and Elite Daily.
“Too many of the mergers were driven by investor needs as opposed to consumer needs,” Goldberg said in an interview.
From late 2018 to early 2022, the digital media industry had a shared goal. Pushed by venture capitalist and private equity investors who had made sizeable investments in the industry during the 2010s, companies such as BuzzFeed, Vice, Vox Media, Group Nine, and Bustle Digital Group, or BDG, were talking to each other, in various combinations, about merging to gain scale.
“If BuzzFeed and five of the other biggest companies were combined into a bigger digital media company, you would probably be able to get paid more money,” Peretti told The New York Times in November 2018, kicking off a multiyear effort to consolidate.
The rationale was twofold. First, digital media companies needed more scale to compete with Facebook and Google for digital advertising dollars. Adding sites and brands under one corporate umbrella would boost overall eyeballs for advertisers. Cost-cutting from M&A synergies was an added benefit for investors.
Second, longtime shareholders wanted to exit their investments. Large legacy media companies such as Disney and Comcast‘s NBCUniversal invested hundreds of millions in digital media in the early and mid-2010s. Disney invested more than $400 million in Vice. NBCUniversal put a similar amount into BuzzFeed. By the end of the decade, after seeing the value of those investments fall, legacy media companies made it clear to digital media executives that they weren’t interested in being acquirers.
Vice Media offices display the Vice logo in Venice, California.
Mario Tama | Getty Images
With no strategic buyer available, merging with each other using publicly traded stock could give VC and PE shareholders a chance to cash out of investments that were well past the standard hold time of seven years. Digital media companies eyed special purpose acquisition companies — also known as SPACs or blank-check companies — as a way to go public quickly. The popularity of SPACs picked up steam in 2020 and peaked in 2021.
BuzzFeed, generally thought by industry executives at the time to have the strongest balance sheet with the best growth narrative, successfully went public via SPAC in December 2021. Shares immediately tanked, falling 24% in their first week of trading. The coming weeks and months were even worse. BuzzFeed opened at $10 per share. The stock currently trades at about $1 — a 90% loss of value.
BuzzFeed’s underwhelming performance coincided with the implosion of the SPAC market in early 2022 as interest rates rose. Other companies that planned to follow BuzzFeed shut down their efforts to go public completely. Vice tried and failed. Now it’s trying for the second time in two years to find a buyer. BDG and Vox, meanwhile, abandoned considerations to go public. Vox instead sold a 20% stake in itself in February to Penske Media, which owns Rolling Stone and Variety.
Consolidation was always a flawed strategy because digital media could never become big enough to compete with Facebook and Google, said Integrated Media’s Miller.
“You have to have sufficient amount of scale to matter, but that’s not a winning formula by itself,” Miller said.
Vice’s deal for Refinery29 is a prime example of a deal motivated by scale that lacked consumer rationale, said BDG’s Goldberg.
“The digital media rollup has proven successful only when assets are thoughtfully combined with an eye toward consumers,” Goldberg said. “In what world did Vice and Refinery29 make sense in combination?”
Vice is engaged in sale talks with a number of buyers that fall outside the digital media landscape, CNBC previously reported. It’s also considering selling itself in pieces if there’s more interest in parts of the company, such as its TV production assets and its ad agency, Virtue.
Vice is a cautionary tale of what happens to a digital media company when its brand loses luster, Miller said. Valued at $5.7 billion in 2017, Vice is now considering selling itself for around $500 million, according to people familiar with the matter, who asked not to be named because the sale discussions are private.
A Vice spokesperson declined to comment.
“In the old days of media, with TV networks, if you were down, you could revive yourself with a hit,” said Miller. “In the internet age, everything is so easily substitutable. If Vice goes down, the audience just moves on to something else.”
Companies such as BuzzFeed, Vox and BDG are now trying to find an enduring relevancy amid a myriad of information and entertainment options. BuzzFeed has chosen to lean in to artificial intelligence, touting new AI-generated quizzes and other content that fuses the work of staff writers with AI databases.
BDG has chosen to primarily target female audiences across lifestyle categories.
Vox has focused on journalism and information across a number of different verticals. That’s a strategy that hasn’t really changed even as the market has turned against digital media, allowing Vox CEO Jim Bankoff the opportunity to continue to hunt for deals. Just don’t expect the partners to be Vice, BDG or BuzzFeed.
“We want to be the leading modern media company with the strongest portfolio of brands that serve their audiences on modern platforms — websites, podcasts, streaming services — while building franchises through multiple revenue streams,” Bankoff said. “There’s no doubt M&A is part of our playbook, and we expect it will continue to be in the future.”
While executives may be making strategy decisions with a sharper eye toward the consumer, the problem of finding an exit for investors remains. Differentiation may open up the pool of potential buyers beyond the media industry. BuzzFeed’s emphasis on artificial intelligence could attract interest from technology platforms, for instance.
It’s also possible that there will be an eventual second wave of peer-to-peer mergers. While Integrated Media’s Miller doesn’t expect a future industry rollup, BuzzFeed’s Peretti hasn’t closed the door on the concept if market conditions improve. As executives invest in fewer ideas and verticals, the end result could be healthier companies that are more attractive merger partners, he said.
“If everyone invests in what they’re best at, if you put them back together, you’d have that diversified digital media company with real scale,” Peretti said. “That helps drive commerce for all parts of a unified company. I think it’s still possible.”
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
WATCH: Axios’ Sara Fischer on BuzzFeed’s continuing struggles
The TikTok logo is displayed outside TikTok social media app company offices in Culver City, California, on March 16, 2023.
Patrick T. Fallon | AFP | Getty Images
TikTok is at risk of being banned in the U.S. if Chinese parent ByteDance won’t sell its stake. Millions of Americans who use the popular video app are left wondering what that means for them.
Some fans of the service may turn to virtual private networks (VPNs) to try and connect to TikTok should a ban take place, a workaround that can make it seem like their internet connection is coming from a different country. But that loophole may not be so easy to exploit.
related investing news
It’s not an issue yet, as there are still some ways a TikTok ban could be avoided or accessed legally in the U.S. Here are the key things under consideration.
The Committee on Foreign Investment in the U.S. (CFIUS) is the interagency body evaluating national security concerns around the app to determine how to minimize risk if it continues to operate domestically. The group can recommend to President Joe Biden that ByteDance’s 2017 acquisition of Musical.ly, a TikTok precursor, be unwound, forcing a sale of those assets.
TikTok has recommended a mitigation plan as an alternative to a forced sale. But that’s a longshot solution as CFIUS already threatened a ban if ByteDance won’t sell its stake.
A forced sale would be a complex step, requiring a years-old transaction to be unwound. The Trump administration pursued that route once before to no avail. The Chinese government would likely oppose it again, but it would need to be careful in its protests because the heart of its argument to the U.S. is that TikTok operates independently.
“That would be part of the calculus and how aggressively China would want to respond,” said Lindsay Gorman, a senior fellow for emerging technologies at the German Marshall Fund’s Alliance for Securing Democracy. Gormany previously served as a senior advisor at the Biden White House.
Should the U.S. ban TikTok, the mechanics on what happens from there get murky. Oracle is the cloud hosting service for all of TikTok usage in the U.S. Internet service providers like Comcast (NBC Universal’s parent company) and Verizon direct traffic to end users. And the app stores controlled by Apple and Google are the primary places for consumers to download the TikTok app.
Shannon Reaves, a partner in Stroock’s CFIUS compliance group, said any requirement on a third party would not come from CFIUS, which is tasked with evaluating foreign investments alone.
“There won’t be action from CFIUS as a result of this review that will be taken against third parties that are not a part of this transaction,” Reaves said. “So your Apples and your Googles and so forth, that that will not happen.”
The government may have to turn to legislation or executive orders to get app distributors, ISPs and cloud services to block access to TikTok.
While there will likely always be cracks that can be exploited by a subset of computer literate users, the typical consumer would find it difficult to access a government banned service, said Douglas Schmidt, an engineering professor at Vanderbilt.
“There will almost always be ways around this,” Schmidt said. “It would just be a lot more difficult for the average person to do it without getting an advanced degree in computer security or something.”
In other words, a VPN won’t be enough, in part because going that route would still likely require app store credentials, which will indicate a user’s location. Gerald Kasulis, a vice president at NordVPN, said there’s also technology available to detect when a user is trying to access an app with a VPN.
TikTok has sought to reassure the U.S. government that U.S. user data is stored outside of China. The company has developed an elaborate plan known as Project Texas that includes the vetting of its code in the U.S. and a separate board of directors for a domestic subsidiary, with members reviewed by the U.S. government.
TikTok CEO Shou Zi Chew, who’s set to testify before a U.S. House panel next week, told The Wall Street Journal that Project Texas would do just as much as divestment to resolve any security concerns.
But the mood in Washington isn’t moving in TikTok’s favor, and legislators have lost whatever trust they once may have had in China and its motives. That issue resurfaced earlier this year, when a suspected Chinese spy balloon was spotted flying across a large swath of the U.S. Biden ordered the military to shoot down the balloon last month.
When it comes to consumer technology, users have no idea what information is making its way to the Chinese government. And the U.S. government has a lot of work to do to provide clarity on what would happen if the app was to be banned.
“Even for someone who studies this stuff, it’s not easy to detach and detangle all these apps,” said Gorman. “As a society, we have not made the decision that the app stores, the Apple App Store or the Google Play Store, should be restricting apps based on the amount of information they collect. It can’t be put on any individual and it really does need to be addressed by governments.”
While many users may think their casual social media use would be of little interest to a foreign government, Schmidt said that data can have a surprising amount of value to bad actors.
“Having information about your habits and your interests and your interactions and where you go and what you do could be used for things like either phishing attacks to get access to more information, or for things like blackmail, if you’re doing things that you might not want other people to know about,” Schmidt said.
It’s unfamiliar territory for U.S. companies, in contrast to China, which blocks access to all sorts of content, including most major U.S. internet services.
“Trying to police data access is very, very difficult, especially when there’s suspicion that the folks who are doing this have a reason to do it,” Schmidt said. “And they’re heavily incentivized to collect this information and use it for all kinds of purposes.”
Andrew Ross Sorkin woke up early Monday morning, long before the crack of dawn, after managing to sneak in a handful of hours of sleep.
The New York Times columnist had been up late into the night working on his DealBook newsletter. And now he needed to rise for a special edition of “Squawk Box,” the CNBC program he has co-hosted since 2011.
The special 5am edition of “Squawk” had been tasked with covering the continuing fallout stemming from the sudden collapse of Silicon Valley Bank, a massive financial news story that has drawn some eerie comparisons to the beginnings of the 2008 financial disaster.
It is a story Sorkin described covering as “a balancing act, a little bit like walking a tight rope.” On one hand, he said, journalists must avoid sparking panic and causing a catastrophic run on the banks. But, on the other hand, journalists also owe it to their audiences to deliver them a clear-eyed assessment of the state of affairs.
“Our job as journalists is to tell the public what is happening — and if you believe in transparency, we should all want that,” Sorkin said. “The downside of transparency in real-time is sometimes news that may not be positive can pile on itself in a way. And so I think it is really just about trying to contextualize what we’re seeing.”
“You don’t want to cause a run on a bank,” Sorkin added, “but then at the same time, if everyone is running and they have reason to run, I think it’s important that the public understands what’s happening.”
The approach to delivering the news and covering the implosion of SVB that Sorkin described stands in stark contrast to some of the commentary saturating the internet and at other media outlets.
Over the weekend, some venture capital influencers amplified fear and suggested the entire US banking system was on the verge of collapse. The investor Jason Calacanis, who hosts a podcast and commands a Twitter audience of nearly 700,000 followers, tweeted, “YOU SHOULD BE ABSOLUTELY TERRIFIED RIGHT NOW.” On the right-wing talk channel Fox News Monday morning, “Fox & Friends” co-host Ainsley Earhardt suggested Americans needed “to go to our banks and take our money out.”
Unprecedented in its sheer speed and volume, SVB’s collapse is “fascinating,” Sorkin said, causing a meltdown only now possible in the “true age of social media, as well as what might be described as digital banking.”
“The ability for information to spread rapidly, both good information and bad, and for people to act on that information and then going to a bank app and transferring funds from one place to another, makes the responsibility [for journalists] even greater,” Sorkin said.
Sorkin said banking is ultimately a “confidence game,” explaining that it is “genuinely about whether people have confidence in leaving their money in a particular institution.” And in this current environment where social media influencers and other irresponsible voices thrive, Sorkin said it “inherently makes things less stable.”
“You have a lot of people who are on social media who don’t necessarily feel the same responsibilities to contextualize the news in the same way I might try,” Sorkin said. He suggested that in the case of SVB, there may have been “a little smoke in the corner of the theater” that could have been addressed before a fire burst out and prompted danger.
“If you scream ‘fire,’ everyone runs out of the theater,” Sorkin said. “Could the smoke have been put out before everyone ran out of the theater? Maybe.”
Ethan Hawke stars in Blumhouse and Universal’s “The Black Phone.”
Universal
The world of video games is about to get scarier.
Blumhouse, the powerhouse horror movie and TV production company, said Tuesday that it is launching Blumhouse Games.
“For some time we have been looking to build out a team to start accessing the growth opportunity in interactive media,” said Abhijay Prakash, president of Blumhouse. “When we sat with Zach and Don they articulated an approach that resonated with Blumhouse’s model and we knew it was a perfect place for us to start our push into the interactive space.”
Blumhouse Games will partner with independent game developers and target indie-budget games of under $10 million. This is a similar strategy to how the company handles its filmed content production. Blumhouse typically operates under small production budgets and then sees large gains at the box office.
The company has revolutionized the horror genre in the last decade, turning small budget flicks into huge box-office hits. The studio has been responsible for the profitable and popular “Paranormal Activity” films as well as the Academy Award-winning “Get Out.”
“Paranormal Activity,” which was released in 2009, had a budget of just $15,000 and went on to make more than $107 million in the U.S. and nearly $200 million worldwide.
The company plans to invest in horror-themed games for consoles, PCs and mobile devices.
To lead Blumhouse Games, the company tapped video game industry veterans Zach Woods as the group’s president and Don Sechler as chief financial officer.
Wood has been a video game producer for more than 25 years and published games on every platform including Game Boy, Playstation and Xbox. He has worked on indie projects like “Sound Shapes” and “Hohokum” as well as bigger projects like “Prey: Mooncrash” and “Redfall” for Arkane and Bethesda.
Sechler, who will head the finance department, has previously worked for Sony and helped reform PlayStation’s relationship with third party game creators.
Blumhouse is also working to merge with “The Conjuring” director James Wan’s Atomic Monster production company. The deal is expected to close this summer.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal has a distribution deal with Blumhouse.
A general view of the “SUPER NINTENDO WORLD” entrance at Universal Studios Hollywood on February 16, 2023 in Universal City, California.
Rodin Eckenroth | Getty Images Entertainment | Getty Images
Enter the iconic green warp pipe and snake your way into Universal Studios Hollywood’s newest theme park land: Super Nintendo World.
Nearly a decade in the making, this expansion to Universal’s California-based park is part of a broader partnership with video game company Nintendo that encompasses movies and merchandise. The area, a carved out section beyond Universal’s Jurassic World and Transformers areas, opened Friday to the general public.
Super Nintendo World features an augmented reality Mario Kart ride, a Toad-inspired restaurant and a stocked-up merchandise hub filled with shirts, hats, plush and themed popcorn canisters. There are also meet-and-greets with Mario, Luigi and Princess Peach.
The land, sequestered away from other parts of the park, is small, but packed with eye candy and the constant ding of parkgoers tapping question mark adorned bricks. Part of Universal’s lower studio lot was demolished to make room for the new world and new soundstages were erected or relocated to other areas on the expansive backlot.
“What we were able to do was actually have the size work for us,” said Jon Corfino, vice president of Universal Creative. “If you take a look around, I think we are successful at creating this very immersive, enclosed and yet intimate environment where you really feel like you’ve stepped into the game. Because you don’t really see anything else around you and you’re totally contained.”
Mario poses at the “SUPER NINTENDO WORLD” welcome celebration at Universal Studios Hollywood on February 16, 2023 in Universal City, California.
Rodin Eckenroth | Getty Images Entertainment | Getty Images
It’s unclear how much Universal invested in the project, which opens less than two months before the company’s movie studio releases its animated “The Super Mario Bros. Movie,” but it seems confident in its launch.
“The parks business … it’s never been better for us,” NBCUniversal CEO Jeff Shell said in January. “We had a record year last year.”
Shell noted that growth is slow domestically, but that the company has “found our footing” in Japan, where it opened a Super Nintendo World in March 2021. Last December, Shell told investors during a UBS conference that the Nintendo land in Japan was driving a lot of attendance to the international park and that those results are encouraging considering the big bets the company made for several Nintendo lands, including the one in Universal Studios Hollywood.
The company has plans to bring similar lands to its much-anticipated Epic Universe in Florida and Universal Studios Singapore in 2025.
Here’s a look at Universal Studios Hollywood’s new Super Nintendo Land:
As guests exit the warp pipe, they find themselves inside Princess Peach’s Castle. The area is mostly a photo opportunity, but also sets the backdrop of the encased and immersive land.
Across the way, for about $40 parkgoers can purchase power-up bands that can be used to play mini-games within the land and unlock digital coins and badges on the Universal Studios Hollywood app.
Princess Peach’s castle in Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
The bands come in six styles based on major characters from Super Mario Bros. — Mario, Luigi, Princess Peach, Yoshi, Toad and Princess Daisy. The band character you choose coincides with with “team” you are on during your time in the land and all of your digital coin collection goes towards your own personal score and the team score.
The bands are an extension to the land and not required for guests to enjoy the ride or dining options within the park.
Essentially, the story line is that Bowser Jr. has stolen golden keys from the Mushroom Kingdom and guests need to collect three in order to gain access to a final boss battle with the little Koopa. Guests can participate in physical mini-games to get these keys including: Goomba Crazy Crank, Koopa Troopa POWer Punch, Piranha Plant Nap Mishap and Thwomp Panel Panic.
Collecting three keys allows guests to enter into Bowser Jr.’s lair and compete in a special mini-game.
The main attraction in Super Nintendo World is Mario Kart: Bowser’s Challenge.
To get to the ride, parkgoers must pass through Bowser’s Castle. The queue winds through different corridors and showcases a collection of trophies, memorabilia and Bowser’s plans to defeat Team Mario in the upcoming race.
Universal Studios Hollywood employees await guests outside Mario Kart: Bowser’s Challenge in Super Nintendo World.
Sarah Whitten | CNBC
The ride itself is multifaceted. At its most basic, it is a race of Team Mario vs. Team Bowser. Layered over a traditional racing coaster is an augmented reality shooter game.
Racers are prompted to turn the steering wheel to navigate the racing course and encouraged to shoot shells at rival racers and obstacles. Pay attention to the pre-show which indicates the racers you should target and the ones you should let breeze by on the raceway.
Statue of Bowser in Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
Corfino explained that the team decided to use AR technology because it was more of a social experience. Guests could wear clear plastic visors on the ride and see their friends and family as well as the immersive animation of the Nintendo racers.
He called the AR “transparent technology,” something that would disappear and allow guests to be completely immersed in the experience.
Pre-show animation guides guests on how to wear a specialized Mario visor that will be used during the ride. There is a toggle on the back to tighten or loosen the apparatus.
Mario Kart visors from Mario Kart: Bowser’s Challenge at Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
For the most part, the experience is seamless. Racers turn their head to see fellow racers, question-mark boxes filled with shells and upcoming obstacles.
However, those with glasses may find it difficult to see throughout the ride. The visor fits snuggly to the forehead. There isn’t a lot of room for eyewear between the visor and the plastic shield that attaches in the ride vehicle.
View of onboarding for Mario Kart: Bowser’s Challenge in Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
Additionally, Universal has faced criticism for size restrictions on several of its theme park rides domestically. Mario Kart: Bowser’s Challenge, too, saw some blowback for guidelines that stated the right may be unsuitable for riders with waistlines over 40 inches.
Merchandise available at 1-UP Factory inside Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
Riders exit through the gift shop filled with Nintendo character merchandise.
Super Nintendo World’s signature restaurant is called the Toadstool Cafe and its entryway is shaped like a giant red-capped mushroom.
Chef Toad oversees the kitchen which makes a collection of themed salads and burgers as well as spaghetti and meatballs and a short rib special.
Toadstool Cafe located insider Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
Guests order their food, receive their drinks and are whisked away by the dining team to their seats.
There are video screens throughout the space that act as windows into the Mushroom Kingdom. Throughout your stay you may see multi-colored Mushroom People pass by the frames or battle it out in the skies against enemy invaders.
Toadstool Cafe during a media preview of Super Nintendo World theme park at Universal Studios Hollywood in Universal City, California, US, on Thursday, Feb. 16, 2023.
Bloomberg | Getty Images
The restaurant’s signature drink is called the Super Star Lemon Squash. It contains honey lemon soda and tropical boba with mango stars on top.
For dessert, guests can choose from a question block shaped tiramisu, a Mr. Beanpole cake, which is a twist on an Italian cake, or a Princess Peach cupcake.
A Princess Peach cupcake inside Toadstool Cafe during a media preview of Super Nintendo World theme park at Universal Studios Hollywood in Universal City, California, US, on Thursday, Feb. 16, 2023.
Bloomberg | Getty Images
Super Nintendo World is open to the general public and will not require advanced virtual queuing in order to enter.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
Comcast on Thursday reported fourth-quarter earnings that topped analyst expectations despite persistent softness in broadband subscriber growth and mounting losses from its streaming service, Peacock.
The company’s top-line growth was fueled by higher revenue from its broadband and wireless businesses, as well as its theme parks segment.
Here’s how Comcast performed, compared with estimates from analysts surveyed by Refinitiv:
Earnings per share: 82 cents, adjusted, vs. 77 cents expected
Revenue: $30.55 billion vs. $30.32 billion expected.
The Philadelphia company reported Thursday its fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization declined nearly 5% to $8 billion compared with the same period last year, particularly because of higher severance expenses.
Comcast said it lost 26,000 total broadband customers during the period, particularly due to the impact of service interruptions from Hurricane Ian, which struck Florida and South Carolina in September. Excluding the impact of the hurricane, Comcast said it would have added 4,000 customers.
Yet even that number was a sign that cable broadband subscriber growth has slowed – especially compared with the early days of the Covid pandemic. The slowdown in subscriber growth has been hitting the cornerstone business of cable companies like Comcast and Charter Communications in recent quarters as they face heightened competition from telecom and wireless providers.
The companies have also said recently that the U.S. housing market slowdown – and a declining rate of moving between homes – has contributed to the lack of new customers. Still, Comcast’s broadband subscriber base has remained stable and revenue for the segment increased nearly 6% during the quarter due in part to price hikes.
Comcast’s Xfinity Mobile continued to grow with 365,000 net additions in the quarter, bringing its total wireless customer count to more than 5.3 million. Mobile customer growth has remained consistent for cable providers since jumping into the business in recent years.
The cable TV business lost 440,000 subscribers during the quarter as consumers continue to cut their traditional TV bundles in favor of streaming services.
NBCUniversal saw revenue increase about 6% to roughly $9.9 billion during the fourth quarter, buoyed by revenue from the 2022 FIFA World Cup, which was aired on its Spanish-language Telemundo TV network and Peacock.
However, Peacock weighed on NBCUniversal’s business – which is made up of film, tv, streaming and theme parks – as its adjusted earnings fell more than 36% to $817 million, due to Peacock losses and higher severance expenses. NBCUniversal recorded an adjusted loss of $978 million related to Peacock compared with a loss of $559 million in the same period last year.
The company said Thursday that Peacock added 5 million net paying subscribers during the fourth quarter, its best quarterly record since its 2020 launch. Peacock surpassed 20 million paying customers and its revenue nearly tripled to $2.1 billion.
The theme parks business remained a bright spot for NBCUniversal, with revenue for the segment increasing 12% to $2.1 billion during the fourth quarter, fueled by higher attendance and customer spending at locations in the U.S. and Japan.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.
Disney is facing a proxy fight as Nelson Peltz’s activist firm Trian Fund Management pushes for a seat on its board.
Peltz spoke on CNBC’s “Squawk on the Street” on Thursday, making his case for the fight his firm has picked with Disney, raising issues with Disney’s $71 billion acquisition of Fox in 2019 and how the company has eroded shareholder value in recent years.
“Fox hurt this company. Fox took the dividend away. Fox turned what was once a pristine balance sheet into a mess,” Peltz said Thursday.
On Thursday, the activist firm filed a preliminary proxy statement looking to put Peltz on Disney’s board.
To preempt what could be a messy proxy battle and opposing Trian, Disney on Wednesday announced that Mark Parker, the executive chairman of Nike, would become the new chairman of the board. Disney’s board will now have 11 members.
The activist firm said it owns about 9.4 million shares valued at approximately $900 million, which it first accumulated a few months ago. Trian said Wednesday it believes Disney “lost its way resulting in a rapid deterioration in its financial performance.”
Peltz also said he wants to be on the board so he can get access to internal numbers and tell other members if they’re missing out on opportunities.
“I don’t need to overwhelm them,” Peltz told CNBC. “I don’t need more than one person on the board.”
Trian called out what it viewed as poor corporate governance on Disney’s part, including failed succession planning, “over-the-top” compensation practices and Disney’s lack of engagement with Trian in recent months.
In public filings Thursday, Trian listed its numerous meetings with Disney and its board members, beginning with then-CEO Bob Chapek, Peltz and their wives over lunch in July. Meetings and correspondence between Trian and Disney ramped up in frequency in November, according to the filing.
Peltz on Thursday said he only had a meeting with Disney’s board that spanned about 45 minutes, but he never heard a response from them. A Disney representative didn’t immediately respond to comment.
Peltz also noted that Disney was open to making him a board observer, allowing him to sit in on meetings and give advice on operations, but without voting privileges.
“I don’t need to overwhelm them. I just need to speak reasonably to these people and explain to them where they went wrong or what opportunities they’re missing,” Peltz said Thursday, noting companies other where he’s sat on the board.
People close to Disney told CNBC’s David Faber they disputed Peltz’s version, saying instead the company offered him the opportunity to enter into an information-sharing pact under a nondisclosure agreement, along with opportunities to meet with management and the board each quarter. Disney did not offer him the ability to sit in on board meetings, the people added.
In November, Bob Iger made a surprising return to Disney’s helm, ousting Chapek – whom Iger chose as his successor – following a poor earnings report. Trian has said it doesn’t want to replace Iger, but rather work with him to ensure a successful CEO transition within the next two years.
Parker will take over as chairman from Susan Arnold, and will be tasked to lead succession planning, according to Disney’s announcement on Wednesday.
In Thursday’s filing, Trian also called out Disney’s streaming strategy, saying it is “struggling with profitability, despite reaching similar revenues as Netflix and having a significant IP advantage.” The firm also criticized what it believes is Disney’s lack of cost discipline and overearning at its theme parks business to subsidize streaming losses.
Disney’s stock had a rough 2022, coming out of the early days of the pandemic, when theme parks and movie theaters were shut down. However, as subscriber growth for streaming slowed and investors raised questions about profitability, while cord-cutting ramped up, most media stocks fell last year.
On Thursday, Peltz said Disney either needs to get out of the streaming business, or buy Hulu. “They must buy Hulu, that unfortunately means the company will have a debt load going forward for several years,” Peltz said.
While Disney+ is the company’s main play in streaming, Disney also owns two-thirds of Hulu and has an option to buy the remaining stake from Comcast as early as January 2024.
Last year, Disney also announced it would proceed with cost-cutting measures, including a hiring freeze that Iger has upheld.
–CNBC’s David Faber contributed to this report.
Watch on CNBC’s full interview with Nelson Peltz on PRO:
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.
On paper, Cesar Conde is the chair of NBCUniversal News Group. But on Wednesday he also appointed himself as the effective president of NBC News.
After Noah Oppenheim — who has led the network during a tumultuous period in the media industry and through Donald Trump’s chaotic presidency — told staff that he would vacate the role of NBC News president in favor of returning to screenwriting, Conde disclosed his succession plan.
But the NBCU News Group boss notably declined to select a single successor to oversee the sizable portfolio of Oppenheim. Instead, Conde moved to split the role up amongst a team of three executives.
Rebecca Blumenstein, a deputy managing editor of The New York Times, will assume a swath of Oppenheim’s duties, taking on a newly created role as president of editorial at the network. Blumenstein has a lengthy history working in print, but glaringly lacks experience in television news. She will oversee some of NBC News’ television portfolio, such as “Meet the Press,” but will not have purview over the two cornerstone programs, the “Today” show franchise and “NBC Nightly News.”
Those duties will fall to the other two executives that Conde has elevated to run the NBC News portfolio: Libby Leist and Janelle Rodriguez, two longtime network executives who both received promotions to executive vice president. Leist will continue to oversee “Today” and Rodriguez will oversee “Nightly” and NBC News NOW.
All three executives — Blumenstein, Leist, and Rodriguez — will report directly to Conde, making him the ultimate network boss.
“The appointments of Rebecca, Libby and Janelle provide a powerful foundation for the News Group as it continues to grow its leadership position,” Conde said in a press release announcing the news, adding that “the extraordinary accomplishments of Rebecca, Libby and Janelle and their visions will keep us on the path of continued success.”
Inside NBC News, the announcement puzzled some staffers, according to people familiar with the matter. “It is certainly leading to some head scratching around the newsroom,” as one person put it.
Of course, there is another way to look at the decision to divide Oppenheim’s portfolio amongst three executives: linear television is dying and the days in which a heavyweight, singular television news executive reigned over a fiefdom are rapidly coming to a close.
As one former television news executive put it Wednesday evening, the industry has a case of the “incredible shrinking news president.”
World Wrestling Entertainment Inc. Chairman Vince McMahon is introduced during the WWE Monday Night Raw show at the Thomas & Mack Center August 24, 2009 in Las Vegas, Nevada.
Ethan Miller | Getty Images
Vince McMahon has returned to the World Wrestling Entertainment board of directors to facilitate potential sale talks ahead of the company’s media rights renewal.
Owning IP allows streaming services to exclusively offer content without the annoyance of winning licensing rights in an auction every few years. WWE also has value to offer in merchandising and theme park businesses.
WWE has hired JPMorgan to help the company advise on a potential sale, according to people familiar with the matter. JPMorgan declined to comment. A WWE spokesman couldn’t immediately be reached for comment.
If a deal occurs, it would likely occur in the next three to six months, said the people, who asked not to be named because the discussions are private. WWE plans to talk to potential buyers before it makes a decision on TV rights renewal agreements.
McMahon’s return should help a sale process go smoothly, though there could still be hiccups.
The former CEO and chair is 77 years old and the controlling shareholder of WWE. He stepped down after an investigation found that he had paid nearly $15 million to four women over 16 years to quell claims of alleged sexual misconduct and infidelity. Returning to the board will give potential buyers confidence he’s supportive of the details of any transaction.
“My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder,” McMahon said in a statement Thursday.
Mansoor (bottom) competes with Mustafa Ali during the World Wrestling Entertainment (WWE) Crown Jewel pay-per-view in the Saudi capital Riyadh on October 21, 2021.
Fayez Nureldine | AFP | Getty Images
Whether a buyer would be comfortable with McMahon taking a more hands-on role at the company is unknown. But WWE is McMahon’s life work. It’s possible a sale may only happen with at least some strings attached.
WWE has a market capitalization of more than $6 billion after rising nearly 17% percent on Friday, buoyed by heightened sale speculation.
There are three categories of likely buyers for WWE — the legacy media companies, the streamers and the entertainment holding companies. Here’s who might be interested.
Comcast, which owns NBCUniversal, is a potential fit as a buyer for WWE. McMahon’s company already has an exclusive streaming deal with Comcast’s streaming service, Peacock, and a cable TV deal with NBCUniversal’s USA Network. Comcast has a market capitalization of more than $160 billion and can easily afford the company — especially with a $9 billion (or more) check coming as soon as January 2024 from Disney for a 33% stake in Hulu.
Comcast can lock up WWE in perpetuity without having to pay upcoming rights renewal increases and can use the company’s IP for theme parks, movies and other spinoff series.
Returning CEO Bob Iger may want to make a splashy acquisition as he retakes the throne at Disney. WWE fits Disney in the same ways that it fits Comcast. It would bolster Disney’s streaming ambitions (perhaps ESPN+), it would support the linear network business, and it would add some heft to merchandizing and theme park businesses.
Disney CEO, Bob Iger attends the European film premiere of ‘Star Wars: The Rise of Skywalker’ at Cineworld Leicester Square on 18 December, 2019 in London, England.
Netflix has long shied away from sports and other live events, but it’s recently become open to the idea of owning a league outright or taking an ownership stake. Owning a sports league would give Netflix the ability to create video games and spinoff series without friction. Netflix found success in its Formula 1 “Drive to Survive” documentary series, giving co-CEO Reed Hastings faith that certain sports properties will resonate with Netflix’s huge global audience. But Netflix doesn’t own Formula 1, limiting its future options.
Acquiring WWE or another sports league would be a path toward offering live entertainment without renting content — similar to Zaslav’s thinking.
Emanuel bought UFC to increase the scope of the talent agency’s business to live events. WME-IMG, now just a part of Endeavor, represents many UFC athletes — as well as WWE superstars. The UFC deal has been a success for Endeavor, which paid about seven times 2016’s $600 million revenue in 2016. UFC generated more than $1 billion in revenue in 2022.
Ari Emanuel speaks onstage during the 2017 LACMA Art + Film Gala Honoring Mark Bradford and George Lucas presented by Gucci at LACMA on November 4, 2017 in Los Angeles, California.
Stefanie Keenan | Getty Images Entertainment | Getty Images
Endeavor’s enterprise value of just about $11 billion makes WWE a huge swing for the company. The company’s relatively small balance sheet would likely prevent Endeavor from winning a bidding war against media giants. But McMahon’s outsized personality may fit with the brash Emanuel and UFC President Dana White.
Selling to a third party would also allow WWE to increase rights renewals every few years. That may or may not be a positive for the long-term future of the company as the media distribution ecosystem changes.
While Endeavor owns UFC, Liberty’s Formula One Group owns Formula 1. John Malone, Liberty’s controlling shareholder, and CEO Greg Maffei, along with Formula 1 CEO Stefano Domenicali, have figured out how to globally market the car racing league, including cracking American culture after decades of obscurity.
Malone and Maffei have extensive track records at maximizing media valuations and acquiring media assets for less than $10 billion, including Formula 1, Sirius XM and Pandora. The global success of Formula 1 could provide a roadmap for a future WWE strategy.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
WATCH: Jim Cramer gives his take on how Disney could perform this year
In this photo illustration, the Cox Communications logo is displayed on a smartphone screen.
Rafael Henrique | SOPA Images | Lightrocket | Getty Images
Cox Communications is ringing in the new year with the official launch of its mobile business.
The privately held cable and internet operator plans to announce the national launch of Cox Mobile Thursday at the Consumer Electronics Show in Las Vegas.
Cox has trailed peers like Comcast, Charter Communications and Altice USA, which started offering mobile service to their customers in recent years and have been adding customers at a fast clip.
Like Comcast and Charter’s services, Cox Mobile will only be available to new and existing customers. Cox has 7 million customers in 18 states, and has started quietly offering mobile service in certain markets in recent months.
Cable operators began offering mobile service with the aim of giving customers another reason not to leave their broadband plans. This holds true now more than ever, as profitability for these business units is in sight.
“I think now they’re reusing wireless as a way to reinforce their broadband business. There’s not much profitability in it yet, but that’s not their concern. The concern is holding on to broadband customers,” said John Hodulik, an analyst at UBS.
Although wireless companies like AT&T, Verizon and T-Mobile hold the large bulk of wireless customers in the U.S., Comcast and Charter’s mobile businesses have been growing at a faster rate due to cheaper and more flexible plans.
Charter’s Spectrum Mobile offers a $30 unlimited data plan, or $14 by the gigabyte of internet used in the month plan. Similarly, Comcast’s Xfinity Mobile starts at $30 for unlimited data, or $15 by the gigabyte.
The cheaper options stem from their ability to rely heavily on home broadband Wi-Fi and hotspots for data usage. When their mobile customers leave Wi-Fi and rely on a network, they’re offloaded to the cable companies’ partner operator — Verizon for both Comcast and Charter — still giving the wireless company a piece of the pie.
Cox Mobile will offer similar plans, unlimited at $45 a month or $15 by the gig. Cox is also reportedly using Verizon as its network partner, which the company is expected to confirm at Thursday’s event.
A wrench was thrown in Cox’s plans to launch its mobile business when T-Mobile sued the company in 2021, saying Cox was obligated to pursue a partnership with them. Earlier this year, a Delaware court judge reportedly ruled in Cox’s favor.
Charter said it had 4.7 million wireless customers as of Sept. 30, while Comcast said it reached 5 million.
“We started off with this reimagined mobile service because we knew customers would spend a significant amount of time on Wi-Fi,” said Danny Bowman, chief mobile officer at Charter, adding Spectrum Mobile customers spend about 85% of their time on Wi-Fi.
“By keeping the mobile package simple, we have exponential growth,” Bowman added. Charter and Comcast also allow customers to bring their own devices, an option Cox won’t yet offer. Currently, customers must purchase Samsung phones through Cox for service.
Smaller cable operators are also seeing the value in offering a mobile plan to customers.
The National Content and Technology Cooperative, or NCTC, an industry group made up of more than 700 cable and broadband providers, has been in discussions to create a mobile offering for its members.
“It’s become such a focal point. It’s the thing everybody seems to think is what you need to have,” NCTC President Lou Borrelli said of mobile offerings. “I’ve seen it referred to as the new bundle. I don’t dispute that.”
Since NCTC’s membership includes small providers — many in rural areas — the cooperative started discussions with wireless operators last year on behalf of its entire base.
Borrelli said NCTC hadn’t been in a rush to offer mobile until it saw how Charter and Comcast did in net additions in 2021. “I remember getting calls from some of our board members saying, ‘You know, maybe we should look at this,’” he said.
NCTC’s negotiations should wrap up this year, Borrelli said. Some have already added mobile. Colorado-based WOW! Internet, Cable & Phone unveiled a mobile plan in July through a partnership with Reach Mobile.
Borrelli said consumer research in certain markets showed companies had no choice in the matter. “Members have told us they don’t care what the results are, we need to do this.”
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.
Los Angeles Chargers running back Austin Ekeler, center, runs for extra yardage while Tennessee Titans linebacker Monty Rice, left, and safety Andrew Adams (47) attempt a tackle during the second half at SoFi Stadium on Sunday, Dec. 18, 2022 in Los Angeles, CA.
Allen J. Schaben | Los Angeles Times | Getty Images
The National Football League had a streaming service in mind when it was looking for a new home for the rights to its “Sunday Ticket” subscription game package.
The league got its desired outcome in a deal with Google‘s YouTube. Traditional TV networks got what they wanted out of it, too.
Beginning next season, “Sunday Ticket” will be offered in two ways through YouTube: either as an add-on to its YouTube TV service, a digital TV bundle that mirrors the traditional pay-TV package, or a la carte through YouTube’s Primetime Channels.
YouTube is paying about $2 billion annually for residential rights over the next seven years, CNBC reported. The process concluded this week after months of negotiations with potential winners like Apple, Amazon and Disney, which operates ESPN streaming service ESPN+.
While pricing hasn’t been determined, consumers will likely get more bang for their buck by subscribing to YouTubeTV and adding on “Sunday Ticket,” which shows out-of-market NFL games on Sunday afternoons. It’ll also give them access to nearly all NFL games in one place. Google’s YouTube TV bundle includes broadcast stations like CBS, Fox and NBC. Fellow tech giants Apple and Amazon don’t provide a similar bundle offering with broadcast or pay-TV networks, such as ESPN and NFL Network.
Sports, and particularly the NFL, have long been considered the glue holding the traditional TV bundle together. Sports networks, and those that offer live games, attract some of the highest fees from pay-TV operators, and they score some of the highest ratings. The NFL makes large sums for the airing of live games.
For this reason, executives at longstanding broadcast and pay-TV networks, who declined to to be named because they weren’t permitted to talk publicly, found the deal with YouTube a favorable outcome over Apple or Amazon getting the package.
Paramount‘s CBS and Fox broadcast weekly Sunday afternoon games. Comcast‘s NBC is the home of “Sunday Night Football,” and Disney, which owns ESPN and ABC, holds the rights to “Monday Night Football.”
Each has paid hefty sums for those rights. Last year, collectively, the four agreed to pay more than $100 billion over the course of 11-year-long packages to air NFL games.
For networks like NBC, CBS and ESPN, they are simultaneously airing NFL games on their fledgling streaming platforms for the audience that has turned away from the pay-TV bundle.
All of those games are available through Google’s YouTube TV package, with the exception of “Thursday Night Football,” which now streams exclusively on Amazon Prime.
“YouTube in many ways is a very unique and interesting platform,” Dhruv Prasad, the NFL’s senior vice president of media strategy and strategic investments, said on a call with media this week, “because we have chosen a partner that actually supports, in many ways, our existing distribution with Sunday afternoon and night, and Monday night. We actually think this is a model where this will result in a real benefit with existing partners.”
While deals with traditional operators are wildly lucrative for the NFL, the league has been open about wanting more streaming partners. NFL Commissioner Roger Goodell said long before the outcome of the negotiations the league saw a streaming partner as the future of “Sunday Ticket,” which has only been offered through satellite-TV operator DirecTV since 1994.
Although YouTube is streaming only, it offers a package that keeps the TV bundle alive – by paying similar rates as typical distributors, which has in turn caused a spike in the price of subscriptions. YouTube TV had more than 5.3 million subscribers as of the third quarter, putting it above its competitors like Disney’s Hulu Live TV+, Fubo TV and Dish’s Sling, according to data from MoffettNathanson.
“This is a win for YouTube TV as it serves a larger goal for them getting more subscribers. And in the end, it helps a package of linear channels,” said sports media consultant Pat Crakes, noting YouTube also secured the rights “at a good price,” to help them bolster their streaming service.
Adding another NFL property to the equation to make a TV bundle stickier with customers is a positive for networks, executives told CNBC.
The streaming business, particularly for legacy media companies, has most recently been under pressure. While companies raced to form and bulk up their own services, trailing Netflix, rabid competition is now weighing on subscriber counts, and content costs are soaring. Although streaming remains a priority, some media CEOs are rethinking how much content to take away from the traditional bundle and put on streaming.
For some in traditional media, however, YouTube becoming the home of “Sunday Ticket” wasn’t welcome news.
For pay-TV operators, this could lead to more customers cutting their traditional bundles and replacing them with YouTube TV, said people close to the distributors.
In the third quarter, cord-cutting hit all-time worst levels, according to research firm MoffettNathanson.
“The linear model won’t die of old age, it will instead die of neglect,” analyst Craig Moffett said in a recent note. “If lynchpin content – read: marquee sports programming – is exclusively available on linear platforms, then the linear model will be preserved, at least for a time, and at least for a segment.”
Driving customers toward YouTube TV subscriptions, or simply a la carte options, only amplifies the bleeding of pay-TV customers from traditional cable and telecommunications operators, like Charter Communications, Comcast and Dish. Executives on that side of the industry had hoped for Apple to win “Sunday Ticket” rights, people close to some distributors said, as it wouldn’t provide another linear bundle option.
One positive for distributors is that while YouTube TV has broadcast and pay-TV networks that offer sports and NFL games, the streamer still doesn’t offer regional sports networks as part of its package. For an all-around sports fan, this still makes the traditional bundle a better bet.
Still, that could change. This week, Sinclair’s regional sports networks signed a deal with Fubo TV, putting its portfolio of networks on a digital pay-TV bundle. Such a deal with YouTube TV may not be far behind given the recent “Sunday Ticket” package.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
Group of cheerful people laughing while watching movie in cinema.
Zoran Zeremski | Istock | Getty Images
Gen Z has been an enigma to the entertainment industry for years. But now there’s more insight into what they like.
The short answer: Minions and Dwayne “The Rock” Johnson, according to new data from decision intelligence company Morning Consult.
The long answer: Generation Z fits into some of the same molds as previous young generations, namely sharing a love for comedy and horror, but this current demographic is also very conscious about how they spend their time, preferring shorter episodes of TV and shorter feature films. They also spend less time consuming news from traditional media sources.
Aged 13 to 25, this cohort grew up with the internet and social media and was set to inherit a strong economy with a near record-low unemployment rate.
Then the pandemic hit.
Studios were already struggling to reach this tech-savvy group before Covid-19 shuttered movie theaters and pushed audiences toward streaming options and social media entertainment like TikTok. Now, Hollywood is scrambling to not only ramp up production, but also to adapt to this younger generation of viewers. And it will be vital for showbiz to understand the generation’s tastes as it matures.
“It might not be too much of a surprise that Gen Z is all over social media,” said Saleah Blancaflor, the business of entertainment reporter at Morning Consult. “Our Morning Consult research found that the majority of Gen Z hear about upcoming releases from people posting about them on social media.”
Blancaflor pointed to the “#GentleMinions” trend, which gained popularity on TikTok during this year’s release of Universal and Illumination’s “Minions: The Rise of Gru,” as a prime example of how Gen Z hears about film releases and can rally to drive box office ticket sales.
The trend saw groups of young moviegoers dress in formal attire to attend showings of the film. The film grossed $107 million domestically on its opening weekend, with people aged 13 to 24 accounting for 56% of box office receipts, according to PostTrak data from Comscore.
“Minions: The Rise of Gru” is the sequel to the 2015 film, “Minions,” and spin-off/prequel to the main “Despicable Me” film series.
Universal
The Despicable Me franchise that includes “Rise of Gru” has a larger fan base among American Gen Zers than any other entertainment property, according to Morning Consult.
Sony’s “Jumanji” franchise is second, buoyed by Gen Z’s love of The Rock — Morning Consult said 73% of respondents had a favorable opinion of the action star.
Next come Disney’s Marvel Cinematic Universe and “Pirates of the Caribbean,” and then Universal’s “Jurassic Park.” Netflix’s “Stranger Things” is sixth, and the DC Universe, owned by Warner Bros. Discovery, ranks 10th.
Gen Z has grown up with the Minions. The first “Despicable Me” was released a little more than 12 years ago.
“A lot of the properties that are mentioned in the survey that we did tend to be a little more popular with millennials,” Blancaflor explained. “Lord of the Rings and Star Wars were a little bit lower on the list than Minions or Jumanji. Those films, and even a lot of the Marvel movies, came out a little bit before Gen Z was starting to come to age.”
This likely means Universal is on the right track greenlighting more Minions content. “Despicable Me 4” is slated for release in July 2024.
In addition to enjoying comedy content, Morning Consult determined that Gen Z likes horror movies significantly more than the general public.
The firm’s data shows that 1 in 3 Gen Z adults saw a horror movie in theaters this fall, a significant turnout considering Hollywood studios and movie theaters have found it difficult to bring back audiences on a consistent basis since the pandemic.
“Gen Z is becoming a more reliable audience,” Blancaflor wrote in her report on the cohort. “Particularly, for scary stuff.”
She noted that recent original horror releases like Sony Pictures’ “Barbarbian” and Paramount Pictures’ “Smile” have surpassed expectations at the domestic box office on the strength of this younger audience.
“Message to studios: more horror, comedy and horror-comedy Gen Zers’ taste in genres is versatile,” Blancaflor wrote. “They want films and TV shows to scare them almost as much as they want them to make them laugh.”
As Hollywood looks to lure moviegoers, particularly younger ones, back to theaters, Morning Consult suggests they put marketing dollars toward advertising on platforms like TikTok where Gen Z lives.
Data shows the majority of the generation hears about upcoming film and television shows from social media posts. More than half of Gen Zers saw, read or heard about the #GentleMinions trend on TikTok and were encouraged to see the film in cinemas and record themselves dressed up in suits and sunglasses.
Similar results were seen for the social media marketing of “Smile,” which saw hired actors attending televised MLB games, among other locations, and giving creepy smiles in view of cameras.
Additionally, apps like TikTok have shaped how much Gen Z wants to spend watching TV or sitting through a film, Morning Consult reported.
While prestige TV ushered in the age of lengthy TV shows, like hour-plus-long episodes of “Game of Thrones” on HBO, and blockbusters have evolved to run in excess of three hours, Gen Z is balking at this trend.
Gen Z wants TV episodes to be 45 minutes or less, Morning Consult reports, with 35% of respondents calling it an ideal runtime and 34% preferring 30-minute episodes. For films, Gen Z said they prefer them to fall between two and two and a half hours in length.
While some streaming services, like Netflix, have experimented with show length, others have course-corrected too far, Blancaflor said. She pointed to Quibi, the failed short-form entertainment app that tried to make 10-minute episodes of television.
While Quibi may have understood that younger audiences enjoy more condensed content, its execution was lacking, Blancaflor said, leading the app to shut down after just a few months.
“How this generation spends their time is important and precious to them,” she said.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
Argentina’s 2-0 win over Mexico was the most-watched Spanish-language World Cup group stage broadcast in U.S. history, draw 8.9 million viewers on Telemundo television and the streaming services of Telemundo and Peacock
DOHA, Qatar — Argentina’s 2-0 win over Mexico was the most-watched Spanish-language World Cup group stage broadcast in U.S. history, drawing 8.9 million viewers on Telemundo television and the streaming services of Telemundo and Peacock.
The game, which started at 2 p.m. EST Saturday, topped the previous group stage mark of 5.7 million set in Brazil’s 2-0 win over Serbia, a 2 p.m. EST kickoff on Nov. 24. The overall U.S. Spanish-language record is 9.2 million on television for the Netherlands’ 2-1 win over Mexico in a round of 16 game on June 29, 2014, a Sunday match that kicked off at noon EDT.
The Argentina-Mexico match set a record with 2.08 million viewers of the streams on Telemundo and Peacock, topping the 1.35 million for Mexico’s 0-0 draw against Poland on Tuesday, the networks said.
Telemundo and Peacock are part of NBCUniversal, which is owned by Comcast Corp.
Fox has U.S. English-language television rights.
———
AP World Cup coverage: https://apnews.com/hub/world-cup and https://twitter.com/AP—Sports
Netflix has a message for investors: start focusing on revenue and profit, and stop obsessing about subscriber growth.
Netflix made its argument with several pointed comments in its quarterly shareholder letter. The world’s largest streamer said it will stop forecasting paid subscriber adds. The company’s rationale behind the change is to get investors focused on revenue instead of customer growth.
“We are increasingly focused on revenue as our primary top line metric,” Netflix wrote as it reported third quarter earnings Tuesday. “This will become particularly important heading into 2023 as we develop new revenue streams like advertising and paid sharing, where membership is just one component of our revenue growth.”
Netflix will continue to provide guidance for revenue, operating income, operating margin and net income — traditional metrics of profitability — and it will still report subscriber adds each quarter. It just won’t forecast what’s to come.
Part of the change is motivated by the increasingly wide array of revenue per user. A given subscriber could be paying $6.99 per month for Netflix’s new advertising tier, which debuts in the U.S. on November 3, or $19.99 per month for Netflix’s premium, no-ad service.
“Focusing on subscribers in our early days was helpful, but now that we have such a wide range of price points and different partnerships all over the world, the economic impact of any given subscriber can be quite different,” Spencer Wang, Netflix’s vice president of finance, said during the company’s earnings call Tuesday. “That’s particularly true if you’re trying to compare our business with our streaming services.”
Theoretically, Netflix’s advertising tier and coming crackdown on password sharing should reinvigorate subscriber growth. But Netflix, which gained 2.4 million subscribers in the third quarter on an “especially strong” content slate, led by “Stranger Things 4,” may see quarters with 10 million or more subscriber adds as a relic of the past.
Instead of operating in a world filled with comparisons to a pandemic era fueled by surging growth, Netflix is attempting to steer investor focus to the fact that its streaming service actually makes money. Netflix directly addressed this point in the “Competition” section of its shareholder letter.
“It’s hard to build a large and profitable streaming business – our best estimate is that all of these competitors are losing money on streaming, with aggregate annual direct operating losses this year alone that could be well in excess of $10 billion, compared with our +$5-$6 billion of annual operating profit,” Netflix wrote.
In other words: Netflix is saying it has built a great streaming business, while Disney, Warner Bros. Discovery, Comcast‘s NBCUniversal, Paramount Global, and others want to build a great streaming business. Netflix acknowledged some of their competitors may get there, through consolidation and price hikes.
Netflix shares surged after hours, rising 14%. The company is once again adding subscribers after losing customers in the first and second quarters. Next quarter, Netflix said it will add 4.5 million more customers.
But Netflix says we’re not supposed to be focused on that anymore. The question is whether investors will listen.
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
WATCH: Pleasant surprises in this market are most welcome, says Netflix investor
