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BFD Expert Voices - Media Deals

BFD Expert Voices

Billboards with bold text reading "Better. Faster. 100% Fiber" and "Building Gigabit America" dot I-95 in Connecticut. These are the new taglines of Frontier Communications as part of its turnaround story, CEO Nick Jeffery tells Kerry.

Why it matters: Frontier filed for Chapter 11 bankruptcy in April 2020. Since Jeffery started in March 2021, the veteran telecom executive has been tasked with regrowing the business amid increasing demand for high-speed internet and rising competition with other telecoms. 

"The opportunity is to turn Frontier from what it was in the past, which is your grandfather's telephone company, into what I think it can be in the future, which is a modern, agile, fast-moving technology company," Jeffery says.

Context: Before joining Frontier, Jeffery served as CEO of Vodafone UK for nearly five years and had been with Vodafone since 2004. 

"The brand really sucked," Jeffery says. "Everything was broken. Five years later on, it's now the second-biggest cash generator in the group."

"There are many similarities between Frontier as a company and Vodafone UK as a company," he says. "We need to update IT. We need to improve customer care. We need to increase distribution. We need to rejuvenate the brand." 

State of play: Jeffery was enticed to join Frontier after a call with John Stratton, a Verizon veteran who's executive chairman of Frontier's board. 

His motivations included a desire to work in the U.S. again and its low fiber penetration of about 30%.

Under Jeffery's leadership, Frontier named a new board and executive team, including AT&T's Veronica Bloodworth as chief network officer, Arcosa's Scott Beasley as CFO, Audible's John Harrobin as head of consumer and Verizon's Alan Gardner as chief people officer.

What they're saying: New Street's Jonathan Chaplin says he measures Frontier's success on its goal of deploying fiber to 10 million locations by 2025 and selling fiber there.

"Execution on both fronts have been strong so far," Chaplin says. "It's the team that makes us confident that Frontier will succeed. Success hinges on execution. Execution hinges on the team."

Of note: The FTC sued Frontier in May 2021 over allegedly not delivering the internet speeds it promised to consumers. The parties agreed to a settlement this past May in which Frontier had to pay $8.5 million to California and $250,000 distributed to Frontier customers in California.

The bottom line: "We're gonna keep on with the hard graft of building fiber as fast as we can, selling it as actively as we can, really improving customer care, becoming more efficient and delivering what I hope is going to be the net of this, which is a truly great American turnaround story," Jeffery says.

1 big thing: Frontier's turnaround

Photo illustration of Nick Jeffery, CEO of Frontier Communications, and abstract shapes.

Nick Jeffery. Photo illustration: Gabriella Turrisi/Axios. Photo: Courtesy of Frontier Communications

Film production has boomed in states outside of California and New York over the last decade, largely due to incredibly generous tax breaks — some as high as 30%. Arizona has officially signed on to its own Hollywood deal, Tim writes.

Why it's the BFD: Arizona, with its $125 million in breaks that Gov. Doug Ducey signed into law yesterday, joins a small list of states offering nine-figure tax breaks, including New Mexico, Louisiana, Connecticut, New Jersey, Illinois and Georgia.

And of course, New York and California, each of which handed out more than $400 million in tax credits in 2021. 

Georgia offers the most, giving away $1.2 billion in tax credits last year.

Details: The Arizona Motion Picture Production Program will offer $75 million in 2023 and increase to $125 million by 2025, according to the bill, HB 2156. 

Meanwhile: Arizona's eastern neighbor New Mexico has emerged as a production hub itself.

Both Netflix and NBCUniversal committed $2.5 billion between them to produce content in the state, which has been the home for AMC's "Breaking Bad" and "Better Call Saul."

New Mexico offers among the highest tax breaks, with some productions getting as much as 35%. Arizona targets 15-20% in credits.

Of note: This is not the first time Arizona has had a film tax credit program. It had a prior one from 2005 to 2010, when it was scrapped after the state reported millions in losses.

2. The BFD: 🎥 Arizona inks Hollywood deal

Illustration of a film strip with one hundred dollar bills in each frame

More than half of all digital video and display ad campaigns are being underfunded, according to Nielsen's first-ever ROI report, Tim writes.

Why it matters: Just about every advertiser worries that spending too much decreases ROI, but Nielsen is arguing the opposite is true. 

By the numbers: In totality, Nielsen estimates that half of all media plans had too little investment to achieve maximum ROI.

Only 25% had an optimal level of investment, while 25% were overinvested. 

For those that are overinvested, Nielsen found that ROI would only grow about 4%, while those that were underinvested could grow their ROI by 50%.

The bottom line: "Brands should focus on finding the right balance versus cutting spend because they may not actually be spending enough in the right channels to cut through the noise and drive real impact in the first place," the report said. 

3. Charted: Show them the money

"Stranger Things" co-creators Matt and Russ Duffer have formed their own production company, Upside Down Pictures, as part of their overall deal with Netflix. http://axios.link/ZO9k

4. Deal flow

Former Meta CRO David Fischer joined the board of Antler, the Singapore-founded VC firm and international startup studio. http://axios.link/LWcQ

The Academy Museum of Motion Pictures named Jacqueline Stewart as director and president. http://axios.link/GtzG

Comcast Advertising promoted its general manager James Rooke to president. http://axios.link/cNzG

Wattpad Webtoon Studios hired David Madden as head of global entertainment. http://axios.link/kNoZ

CNN's Chief White House Correspondent Kaitlan Collins was elected to a three-term on the White House Correspondents' Association's board and will take over as president in 2024. http://axios.link/1uPt

Live Nation CEO Michael Rapino signed a new five-year contract with the live events company. http://axios.link/9dEs

Disney hired Kristen Finney for the newly-created role of EVP, content curation, for Disney's International Content and Operations group. http://axios.link/q54A

Kate Bedingfield is leaving as White House communications director later this month. http://axios.link/uMg1

5. Movin' on up (or out)

Hulu is facing an existential crisis as Disney approaches a 2024 deadline to buy Comcast's 33% stake (CNBC)

"Disney is on the hook to pay billions of dollars for an asset that now seems like an awkward fit. There's little evidence investors care about Hulu's quarterly results. In fact, the better Hulu performs, the more Disney will have to pay Comcast to buy the rest of it in 2024," Alex Sherman writes. 

"Stock prices may be down, but the mood isn't dour—though companies that once fantasized about shedding linear assets for that coveted Netflix multiple are now thankful for their dual revenue streams. That may be one reason why Disney has abandoned talks to spin ESPN," Dylan Byers writes. 

Amazon brings 'Lord of the Rings,' 'Thursday Night Football' into Prime Day push (THR)

"While Amazon has offered some Prime Day deals in the past tied to entertainment (think discounted streaming subscriptions), this is the first real effort to use its owned Prime Video programming as part of a promotional push," Alex Weprin writes.

6. Channel surfing

Illustration of a television with a tie dye pattern on the screen.

🗣️ Quote of the day: "News readers all around the world are overwhelmed by too many choices, too many options, information overload and no longer sure of what to trust," Semafor CEO and co-founder Justin Smith said at the company's first pre-launch event this morning. 

@tim_bays: "A League of Their Own." This classic sports film just celebrated its 30th birthday. 

@kerrymflynn: "Into The Woods" on Disney+. My fiancé enjoyed the onstage musical enough that I've convinced him to watch the strangely cast 2014 film.

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July 07, 2022

1 big thing: Frontier's turnaround