Axios Media Trends

David Zaslav will stay on as Discovery CEO through at least 2027, leading the massive joint venture with WarnerMedia, sources tell Axios.

Driving the news: Zaslav's new contract will be announced next week in conjunction with the name of the new company that he just unveiled with AT&T CEO John Stankey.

• Zaslav's previous contract extended through 2023. He has led Discovery since 2007.

Details: Sources say Zaslav, 61, will bring most of his C-suite executives at Discovery over to take on executive positions at the new joint venture. Discovery will lead the joint venture, although AT&T will have majority ownership.

• Much of that team has worked together at Discovery for over 15 years, including international CEO JB Perrette, chief corporate operating officer David Leavy and chief development, distribution and legal officer Bruce Campbell.
• From a leadership perspective, the deal is structured similarly to Discovery’s 2018 acquisition of Scripps Networks Interactive.

Zaslav will try to keep much of the creative talent in place at WarnerMedia, but business and corporate groups from WarnerMedia are likely to get cut, sources say.

• One WarnerMedia executive who may stay on is longtime Zaslav friend CNN chief Jeff Zucker, Axios' Mike Allen reported Monday.
• WarnerMedia CEO Jason Kilar is likely to depart, roughly a year after AT&T brought him in to run the business. Sources say some of the top leadership from WarnerMedia was caught off guard by the deal’s announcement.
• The deal was tightly brokered between Zaslav and AT&T CEO John Stankey over the past few months. Sources say Zucker was read-in, but Kilar was not.

The big picture: Zaslav is a well-liked figure within the industry. Peers Axios has spoken to describe him as "disciplined," "mature," "humble," and "traditional."

• "He may not be as public-facing, but certainly among his peers, he's a rockstar and everybody knows it," says Hollywood veteran and WndrCo founder Jeffrey Katzenberg.
• "He's not quite the Hollywood insider," one source notes. "He's not press hungry."

Be smart: Zaslav’s peers see his ascension to the top of the media food chain as a brilliant, well-timed maneuver, although some suggest his legacy TV history could get in the way of his focus on streaming.

• "He saw a distressed asset and took advantage of it," a source notes.
• "The ultimate escape act," one peer called it.

Go deeper.

Discovery and AT&T's mega-merger news has already triggered a chain reaction of speculation around which media giants are next to combine.

• "I've got to think that Comcast has a war room in downtown Philly where they're all trying to figure this out," a former WarnerMedia executive tells Axios.
• "Comcast/NBCU and ViacomCBS were already small. They just got smaller," another top media executive said.

Be smart: While legacy media companies play hot potato with washed-up cable networks and movie studios, tech giants continue to grow bigger, and rarely by buying up their legacy competitors.

• Reports surfaced Monday that Amazon is eyeing MGM Studios for $9 billion. Such a deal is the exception, not the rule.
• Tech giants have largely avoided buying media companies to avoid the cultural clashes their telecom competitors have long risked with pricey media deals.

Yes, but: Paul Gallant, one of the top media regulatory analysts in D.C., said in a note to clients on Monday: "Warner/Discovery is stepping into an increasingly aggressive and populist Democratic environment, especially on antitrust." 

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Analysts are calling AT&T's decision to buy Time Warner for $85 billion in 2018 one of the worst transactions ever.

• “It’s not a transformational deal," CNBC's Jim Cramer said Monday. referencing the WarnerMedia/Discovery spin-off.
• "[I]t’s the final act of one of the dumbest mergers in recent history.”

Why it matters: AT&T CEO John Stankey conceded Monday that the telecom giant didn't have the resources necessary to grow HBO Max into a streaming giant that could adequately compete with the likes of Netflix or Disney. AT&T closed its deal with Time Warner less than 3 years ago.

• "AT&T’s balance sheet allowed neither the aggressive investment required for HBO Max nor the 5G wireless push," analysts Craig Moffett and Michael Nathanson wrote to clients.
• "Ultimately, they had no choice."

Be smart: Investors have long been wary of AT&T's big bet on media and have urged the telecom giant to shed non-core to streamline its focus and alleviate debt.

• The Discovery deal will help alleviate AT&T's debt by $43 billion.

The big picture: The Discovery deal marks the latest spinoff for AT&T following failed media ventures.

• Earlier this year AT&T spun off its video assets into a joint venture with private equity giant TPG — a deal similarly structured to the new Discovery joint venture.

TheSkimm, a digital media company catering to millennial women, has hired JPMorgan Chase & Co. to evaluate deal offers, sources tell Axios.

By the numbers: The company brought in roughly $20 million in 2019 revenue, per sources. Its leadership has been telling stakeholders that it expects revenues this year to be nearly double that number by year's end.

Details: Sources say the company is eyeing sales to non-media companies, like financial services companies and luxury brands that are desperate to reach millennial women.

• It's also explored some strategic partnerships, which would be with media companies, including being a part of a SPAC rollup.
• TheSkimm is one of the few assets up for sale that could help a brand reach millennial women.

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Crypto giant Coinbase is launching its own media operation and looking to poach a top media editor to guide the effort, sources tell Axios.

• Unlike a typical newsroom, that person would report into Coinbase's marketing team.

Details: The idea, still in its early stages, is to hire an in-house team of roughly 30 to run a cross-platform media operation.

• The idea would be to create content catering to both retail and institutional investors as a funnel to draw more people to its platform.
• Coinbase declined request for comment.

The big picture: Crypto-focused media companies have gained enormous traction over the past year.

👀 Other crypto media companies are staffing up. The Block will name former POLITICO Chief Revenue Officer Bobby Moran as its first Chief Revenue Officer Tuesday.

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Cameo CEO Steven Galanis tells me in the most recent episode of "Axios on HBO" that the company plans to bring in over $200 million in revenues this year, more than doubling its revenues from 2020.

• Cameo pays creators 75% of their revenues and keeps the rest.

Why it matters: The app, which lets fans pay for personalized videos from celebrities, experienced unprecedented success last year, thanks to COVID lockdowns that restricted celebrities from engaging fans in-person.

• Galanis doesn't see lifted lockdowns as a detriment to his company's growth plans.
• Asked if the four-year-old company was profitable, Galanis said Cameo is in investment mode. "We don't have any aspirations of being profitable at this point. We're investing for growth."

What's next: Galanas wants to go public via an IPO. "My dream has been to run a publicly traded company," but he notes that the company is many months away from being ready.

• He concedes that he would entertain other options, like an acquisition, if it was the best thing for the company, the talent and investors. Cameo recently raised $100 million at a valuation of just over $1 billion.

Watch: Cameo CEO says he would let Trump join platform

G/O, formerly Gizmodo Media Group, is launching a first party data platform called G/O Veritas to sell ads against the data it collects from its 11 websites, executives tell Axios.

By the numbers: So far this year, the company says it has already surpassed 2020 revenues. Executives say it's expecting to be profitable on a full year basis "by tens of millions," which would be a big feat considering its past few years.

• Great Hill Partners, a private equity firm, acquired Gizmodo Media Group in 2019, reportedly for less than $50 million.

Details: The platform is in its initial stages, and is currently being testing with private partners in beta. It plans to launch fully beginning in Q3. 

• It leverages new and historical user data from G/O's 11 websites, some of which are around 15-years-old.
• The data includes proprietary audience insights across everything from its editorial content, to its commerce and commenting platforms.

What's next: The company says it hired 90 new people in 2020, and has already hired 40 more this year.

Go deeper.

The Verge has hired Alex Heath from The Information as a senior reporter for platforms, Axios has learned. His first story for the site will run on Thursday.

• Richard Lawler will also be joining from Engadget as a senior news editor, and Catie Keck from Gizmodo as a reporter for streaming and entertainment. Both start later this month.

The big picture: The Verge is about to kick off a major hiring push, adding about 25 new roles in 18 months. These roles will be concentrated in editorial, audio, commerce, and design.

• Other recent hires have included Alex Cranz, who joined The Verge as managing editor from Gizmodo, and Brandon Widder, who joined The Verge as senior e-commerce editor from Digital Trends

The tech site, which turns 10-years-old this year, is led by editor-in-chief Nilay Patel, who also hosts Vox Media's popular podcast "Decoder with Nilay Patel," formerly "Recode Decode."

The Middle East conflict is a new test of social-media companies' ability to manage their platforms, Axios' Ashley Gold and I write.

Why it matters: Social media has become a much larger part of our everyday lives and media diets since the 2014 round of combat in Gaza.

New data from Zignal Labs provided to Axios shows online support  for both sides spiked dramatically over the past week.

• That includes a spike in use of the hashtags #freepalestine and #savepalestine, according to the Zignal data.

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