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BFD Expert Voices - Media Deals

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Elon Musk has been speaking with investment firms and wealthy individuals about backing his takeover of Twitter, Reuters reports. 

Why it matters: Bringing on other backers could mean the deal is no longer as financially tied up in Tesla stock.

What's happening: In his previous financing plan, Musk said Morgan Stanley, with backing from other institutions, would provide $13 billion in debt financing and $12.5 billion in loans against Musk's Tesla stock. Musk's equity financing is expected to be $21 billion.

Reuters reports that the new plan could involve private equity, hedge funds or wealthy individuals providing preferred or common equity.

That plan would reduce both Musk's $21 billion equity financing and the margin loan against his Tesla shares.

Apollo Global Management and Ares Management Corporation have been in talks with Musk, per Reuters.

Details: Musk sold shares of Tesla stock worth about $8.4 billion last month, likely to get more cash on hand ahead of his purchase. 

Tesla's stock price has dropped by 26% over the past six months.

Musk's Twitter purchase could continue to affect Tesla as he balances running his many companies. 

Twitter filed an FAQ to the SEC about the takeover, confirming that Goldman Sachs and JP Morgan evaluated the deal and that the company is operating in "business as usual" until it closes.

What they're saying: Puck's William D. Cohan wrote about the "silver lining" in Musk tying the deal to Tesla: "[W]hile that certainly does seem capricious on some level, all his collateralized stock does make one thing clear: he is motivated, and fully incentivized, to make Twitter a financial success."

Asked about the deal at the Met Gala yesterday, Musk said, "My goal —assuming everything gets done — would be to make Twitter as inclusive as possible and to have as broad a swath of the country and the rest of the world on Twitter and that they find it interesting and entertaining and funny and that it makes their life better."

1 big thing: Elon chases equity likes

Illustration of Tesla logo and Twitter logo on Elon Musk's shoulders

Illustration: Lindsey Bailey/Axios. Photo:  Joshua Lott via Getty Images

Ava, a live-captioning tech startup company, has raised a $10 million series A funding round, CEO Thibault Duchemin exclusively tells Tim.

Why it's the BFD: With more than 450 million deaf and hard-of-hearing people around the world, the real-time communication access and transcription market is $20 billion.

Details: The new round brings Ava's total funding to $16.5 million.

Khosla Ventures led the round, with additional investors including Initialized Capital, Lerer Hippeau Ventures, LeFonds VC, Ring Capital and Sorenson's Enable Ventures, a fund by the founder of the leading interpreting and video relay services for deaf and hard-of-hearing people.

Ava plans to use the new capital to double its U.S. and France-based team.

How it works: Ava's technology was used during the filming of Apple's Oscar-winning "CODA" to help the deaf actors and their hearing counterparts communicate with each other.

Ava has three main products: a web and desktop app, a mobile app and Scribe, which combines Ava's artificial intelligence with a human editor. 

Each product is designed to let its users see real-time closed captions layered over any online or video meeting. 

In the case of Scribe, as Ava's AI transcribes the speech, a human edits them to be accurate. 

So far, Ava offers captioning in 12 languages. 

The big picture: The pandemic has made remote working — and thus, communicating via video chat — more of the norm. For the deaf community, that has only furthered the need for fast and accurate captioning services. 

Additionally, the frequent use of masks, particularly in office settings, has taken away lip-reading as a means of communication.  

"During COVID, there were a lot of disruptions happening, because a lot of people started seeing masks and not being able to connect," Duchemin says. "Usually, people prioritize having a solid telecommunication platform for the rest of the company, or the university and its classes, that are not necessarily accessible. Zoom captions, for example, didn't exist for a whole year and a half."

Between the lines: Ava is a personal matter for Duchemin, who grew up as a CODA (Child of Deaf Adults) himself. 

Duchemin believes that recent movies like "CODA" and Amazon's "The Sound of Metal" have put more mainstream focus on the deaf and hard-of-hearing communities. 

"Each time you have someone with any tiny bit of hearing loss, they'll turn on the captions for the movies. Our whole premise is, why can't you turn on captions for conversations? It's like the equivalent of the TV remote — that CC button — to apply it for the rest of your life," Duchemin says.

2. The BFD: Live captioning startup Ava raises $10m

Illustration of a speech bubble with closed captioning displaying dollar signs.

Data: Yahoo Finance; Chart: Erin Davis/Axios

Lee Enterprises' stock closed yesterday at $23.89, just under Alden Global Capital's unsolicited takeover bid at $24 per share. Since the bid, Lee has been quietly laying off dozens of employees, Sara Fischer and Kerry write. 

Why it matters: Lee is one of the last remaining independent local newspaper companies. With these drastic and ongoing cuts, journalists are left to wonder if a hedge fund takeover could have been better than staying independent.

Details: One source said more than 400 roles are expected to be cut in total this year across at least 19 Lee-owned local papers and corporate functions. 

The cuts could represent as much as 10% of Lee's total staff being reduced.

A spokesperson for Lee didn't deny the cuts in response to an email asking about the scale: "As Lee Enterprises continues to transition from a print-centric to a digital-first business, we need to make job reductions to better align staffing with our long-term strategy."

3. Charted: Lee shrinks

Vice Media has hired financial advisers in hopes of a buyer, though the company may sell itself in pieces, CNBC reports. http://axios.link/wpi9

All3Media acquired an undisclosed stake in Build Your Own Films, the British production company launched by Vicky McClure and Jonny Owen. http://axios.link/DkKA

Lionsgate signed a multiyear movie output deal with Peacock for all theatrically released films starting with its 2022 slate. http://axios.link/3alh

4. Deal flow

Michael Mignano, Anchor co-founder and Spotify's podcasting tech chief, submitted his resignation last week. He will exit in June. http://axios.link/UVrQ

UTA hired Nick Axelrod as VP of its ventures department. He most recently served as co-founder and head of creative and product development for Courteney Cox's home care brand Homecourt. http://axios.link/0d7k

5. Movin' on up (or out)

Scene stealer: The true lies of Elisabeth Finch, part 1 (Vanity Fair)

"For years, a 'Grey's Anatomy' writer told her personal traumas in online essays, and wove those details into the show's plot—until a surprising email to Shondaland accused her of making it all up," Evgenia Peretz writes. 

Facebook pulls the plug on podcast business after a year (Bloomberg)

The social media giant will remove all of its podcasts beginning June 3.  It will stop letting people add podcasts to the service starting this week.

Behind Justin Lin's 'Fast 10' breaking point (THR)

Lin, who had directed five of the "Fast and Furious" films including "F9," is being replaced by Louis Leterrier for the latest installment. 

Amazon highlights Freevee, virtual product placement at in-person NewFronts debut (Adweek)

"We're really excited about the new moniker. We hope it communicates everything that we are and everything that we deliver," said Ryan Pirozzi, co-head of content and programming at Freevee.

6. Channel surfing

Illustration of a surfer with a television in the place of his head.

Despite living in NYC for eight years, Kerry has had few spontaneous celebrity sightings. 

The magical moment happened yesterday when Kerry was waiting at a crosswalk on her way to Vizio's NewFront. She glanced over at a tray of drinks hovering to her right and looked up at the person holding them only to quickly realize it was the actor. 

1 magical thing: Kerry meets Daniel Radcliffe

Selfie of actor Daniel Radcliffe and reporter Kerry Flynn

Situational awareness: Paramount+ and Showtime reached a combined 62.4 million subscribers, up from 56 million last quarter, Paramount Global reported in its earnings this morning. 

@tim_bays: Stanley Tucci's "Searching for Italy" on CNN. The fiancée and I are taking notes for next year's (hopeful) trip to Italy. 

@kerrymflynn: Roku Originals NewFront party. No time to watch content tonight. Only time to celebrate content. 

Thank you for reading Axios Pro Media Deals! Please ask your friends, colleagues and Daniel Radcliffe to sign up.

May 03, 2022

1 big thing: Elon chases equity likes