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BFD Expert Voices - Media Deals

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Whether or not Standard General's $5.4 billion deal for Tegna gets approved could come down to the Biden administration's success — or failure — in finally breaking the FCC's deadlocked commission, Tim writes.

Why it matters: The clock is ticking on the deal, and so are the fees. The nearly yearlong deal approval is making Tegna more expensive due to "ticking fees," or advisory payments that go up as the deal lags. 

The transaction already hit one set of ticking fees when the deal, first agreed to on Feb. 22 of last year, reached the nine-month mark. A second ticking fee gets added if the deal isn't closed by Feb. 22.

That fee would cost Standard General more than $500,000 per day, according to the deal terms announced last year. 

The latest: Standard General's managing partner, Soo Kim, held a conference call with the media yesterday, three days after the FCC's deadline for comments on the deal. 

Kim did not say how much longer past the one-year mark Standard General would try to keep pushing to close the deal, but he remained optimistic they would still get the deal done. 

"We're optimistic and obviously would prefer economically to get this done during the current ticking fee that's in place today," Kim said. "I wouldn't say that we are that focused on what happens if we extend. We are very focused on getting it done in the here and now."

The intrigue: Biden re-nominated Gigi Sohn, whose confirmation was stalled during the last congress, to be the fifth FCC commissioner this month. The hope this time is that a wider Democrat majority in the Senate will make it easier to get her confirmed.

The FCC has been gridlocked since Biden was inaugurated with two Democrats and two Republicans on the commission, which has stunted any movement on major policy for the last two years.

However, hitting that Feb. 22 date looks unlikely because her confirmation hearing could be several weeks away.

What's next: Without a fifth commissioner, Standard General faces the very real prospect of a split vote next month, which would leave it one short of the three "yes" votes to get FCC approval.

1 big thing: Tick, tick, tick... 

Pictured: Gigi Sohn. Photo: Pete Marovich-Pool/Getty Images

Investment firm Thrive Capital is selling a 3.3% stake to a group of investors including Disney CEO Bob Iger, the WSJ reports. 

Why it's the BFD: The media-focused venture capital shop now has an additional $175 million of money to play with, and the deal makes the firm worth around $5.3 billion. 

Details: Thrive, founded by Josh Kushner, has invested across the TMT space, including stakes in Spotify and Instagram. The firm is also in talks to invest in OpenAI, the creator of ChatGPT.

Of note: Among those joining Iger in the purchase of the Thrive stake are KKR co-founder Henry Kravis, Brazilian banker Jorge Paulo Lemann and Indian billionaire Mukesh Ambani. 

Thrive Capital sells minority stake to Bob Iger and other moguls

2. The BFD: Thriving with tycoon ties 

Bob Iger in Los Angeles earlier this month. Photo: Hollywood To You/Star Max/GC Images

ABC News is considering selling FiveThirtyEight in a move to cut costs, according to The Daily Beast.

Why it matters: Nate Silver's polling site was once an industry darling. ABC's putting it on the chopping block underscores the site's decline in popularity and the tough economic challenges media companies face right now, Kerry writes.

Catch up quick: After launching FiveThirtyEight in 2008, Silver signed a licensing deal with The New York Times in 2010. He joined ESPN in 2013. 

The site changed hands within The Walt Disney Company to ABC News in 2018. 

Details: The talks come ahead of Silver's contract expiring in the summer and in the wake of the company not backfilling several positions, per The Daily Beast. 

Silver reportedly had held his own talks about selling FiveThirtyEight, speaking with The Atlantic and The Athletic in 2017.

"There are no imminent decisions about our relationship with 538," an ABC News spokesperson told The Daily Beast. 

A spokesperson declined to provide further comment to Axios.

Of note: Silver took heat for incorrectly predicting a "red wave" during the midterm elections.

Nate Silver's FiveThirtyEight could be up for sale

3. Forecasting a 538 sale

Illustration of polling, voting, and chart symbols on a grid

Data: Box Office Mojo; Chart: Axios Visuals

The total box office gross for this year's Oscar Best Picture nominees is the highest in 13 years, led by "Avatar: The Way of Water" and "Top Gun: Maverick." 

Why it matters: TV networks are struggling to validate the high price tag for award shows like the Oscars, which have been bleeding viewers amid criticism that it ignores the most popular movies, Tim writes.

Although last year's Oscars rebounded from its nadir in 2021, the 16.6 million who watched in 2022 was still the show's second-smallest audience ever. 

This year, the two highest-grossing movies of 2022 are vying for the top prize, which could bring back some viewers. 

Be smart: Driven by pandemic-era theater closures in 2020 and 2021, the majority of films that have been up for awards have not commanded huge audiences at the box office. 

Last year's Best Picture winner, "CODA," was the first to be wholly owned by a streaming company, Apple. The year prior, "Nomadland" was the first Best Picture winner to be exclusive to streaming. 

Outside of 2020, when Marvel's "Black Panther" was nominated, the average global box office haul for Best Picture nominees has been under $300 million over the past 10 years. 

This year's 10 nominees have an average theater gross of nearly $400 million. 

What's next: The TV contracts for the Emmys, Grammys and Tonys all run through 2026, while the Oscars' current deal expires in 2028.

Netflix's recent deal for the SAG Awards, which had aired for 25 years on cable, could be a look into the future of the award show industry. 

4. Charted: 🍿 Oscars' box office rebound

Providence Equity Partners acquired a multi-decade lease for nine Times Square billboards from Universal Branding Group and signed a long-term operating agreement with Outfront Media. https://axios.link/3XSyxSh

The Washington Post is not for sale, Jeff Bezos told CNN. The statement followed a New York Post report suggesting he was selling the paper ahead of buying the Washington Commanders. https://axios.link/3HpUHpq

⚾ Los Angeles Angels owner Arte Moreno is no longer exploring options to sell the team. https://axios.link/3XvQPsx

Bob Iger strikes! ESPN will not license its brand name to DraftKings' sportsbook, according to Bloomberg, which first reported of the potential tie-up back in October. 

💭 Tim's thought bubble: During his first turn as CEO, Iger was heavily against gambling Disney's family-friendly brand on sports betting https://axios.link/3R5ngMm

The Association of Pickleball Professionals announced TV deals with CBS and ESPN for its upcoming tour events. https://axios.link/3WxFSW8

Meta expanded its VR partnership with the NBA and WNBA to offer more than 50 live games on Meta Quest. https://axios.link/3iWK6cn

Justin Bieber sold his song catalog to Hipgnosis Song Management for an undisclosed amount. https://axios.link/3XBdLGW

5. Deal flow

Reddit promoted president of global advertising Harold Klaje to be its first-ever CRO and Neal Hubman to VP of global client solutions. It also hired Meta's Ori Schnaps as VP of engineering core product and Coinbase's Milana McCullagh as VP of legal. https://axios.link/3iW4Qkk

Telepool, the Munich-based licensing and distribution company owned by Will and Jada Pinkett Smith's Westbrook appointed Yoko Higuchi-Zitzmann as CEO. She was previously managing director at Pantaleon Films. https://axios.link/3WHi9TO

ShortTok, a New York-based video storytelling tech company, named Amazon veteran Jayan Eledath as CTO. https://axios.link/3H4x8RV

6. Movin' on up (or out)

Media layoffs loom large over 2023 (Axios) 

"An unprecedented number of jobs were cut early on in the pandemic, as a response to temporary advertising headwinds. Now, it looks like those fears are trickling back," Kerry and Sara Fischer write.

Fan revolt rocks Dungeons & Dragons scene (Axios)

"Facing infuriated fans, Hasbro-owned Wizards of the Coast says it will refrain from implementing some of the recently leaked upcoming changes to a license that allows fans and game makers to use elements of D&D in their own spinoff games," Stephen Totilo writes.

2023 Super Bowl Ads: Crypto out, culture wars in? (THR)

"M&M's announced that it was taking an 'indefinite pause' from its long-running 'spokescandies'... The decision was allegedly made after online commenters (as well as Fox News host Tucker Carlson) took issue with recent changes made to the candy characters," Alex Weprin writes.

7. Channel surfing

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

🎟️ Situational awareness: Ticketmaster is testifying on Capitol Hill today on the state of competition in the ticketing industry following its Taylor Swift tour debacle, Ashley Gold reports.

Meanwhile, Tim and Kerry are spending the day at Solomon Partners' Media and Entertainment Summit in New York. 👋

@tim_bays: "Elvis" on HBO Max. Finally watched this Baz Luhrmann-directed fever dream and I still don't know what Tom Hanks was going for here. Austin Butler nailed the role, though. 

@kerrymflynn: "The Farewell" on Showtime. Don't know why I waited so long to watch it. Amazing performances and a moving story.

✏️ Thanks to Michael Flaherty for editing and Jay Bennett for copy editing this newsletter.

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January 24, 2023

1 big thing: Tick, tick, tick...