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Rather than the reckoning many predicted, the Disney-Charter dispute instead set a roadmap for future deals that could keep the legacy TV business afloat, Tim writes.

Why it matters: Consumers may hate it, but the cable TV bundle is like Freddy Krueger: Just when you think it's dead, it keeps coming back. 

The big picture: The weeklong standoff between Disney and the country's second-largest cable TV provider was seen as a proxy for the future of TV, with some analysts signaling it as the beginning of the end for the bundle.

But instead, the deal showed that both sides were willing to give up something to maintain the status quo.

Charter gets to offer some Disney streaming services at either no or a reduced extra charge, while Disney secured a higher fee for its content.

Be smart: Future carriage deals between programmers and distributors could look similar to the one Disney and Charter made: a mix of linear TV and streaming services, with a serious culling of the sheer amount of TV channels. 

Disney willingly dropped eight channels from this deal, including Disney XD, FXX and Freeform — since most of their programming ends up on one of its streaming services anyway. 

It could give cover to Disney and others to shutter many underperforming and low-rated cable channels. 

What they're saying: Analysts and industry experts agree that the deal is likely to spawn similar agreements and was a necessary step for Disney in its plan to take ESPN over the top.

"The business needed to be reimagined," Patrick Crakes, a media consultant and former Fox Sports executive, tells Tim. "This will be the approximate new paradigm going forward — not just for Disney, but other content owners as well — and it marks the end of the 'cut out the middleman' model, which has seen Disney lose, like, $11 billion over two years."

In a research note to clients this morning, MoffettNathanson's Michael Nathanson wrote that the deal will likely make it easier for ESPN to move over its higher-value sports rights to streaming.

"Having a template with ESPN+ bundled together with ESPN, Disney should be able to have more leeway on putting more of its premium sports rights on ESPN+ going forward and avoid the perception of cheating its linear partners," Nathanson wrote. "Including ESPN+ in all new deals will likely be a central deal point for future renewals."

Disney-Charter deal begins era of "reimagined" TV bundle

1 big thing: Cable TV's new era 

Illustration of television antennas pointing in different directions as trend lines resembling a shrug.

Jack Dorsey had second thoughts about supporting Elon Musk's takeover of Twitter, so Musk made Dorsey a secret offer he couldn't refuse, Dan Primack writes.

That's according to the new Musk biography by Walter Isaacson, released today.

Dorsey and Musk were longtime acquaintances and mutual admirers.

In fact, the former Twitter CEO had suggested to his successor, Parag Agrawal, that Musk be added to the social network's board of directors — well before the buyout talks began.

Dorsey also was part of a Twitter board that in April 2022 accepted Musk's $54.20 per share takeover offer, valuing the company at $22 billion, but was no longer on that board when it sued Musk to enforce the agreement.

Most importantly, Dorsey had agreed to roll his 2.4% equity stake into the buyout, which helped lower Musk's own capital contribution by around $1 billion.

As the takeover got closer, Isaacson reports, Dorsey began getting cold feet.

Part of Dorsey's concern was that Musk's impulsiveness threatened to destroy what Dorsey had spent so many years building.

"Musk had called [Dorsey] almost daily over the past week, reassuring Dorsey that he truly loved Twitter and wouldn't harm it," Isaacson writes.

Dorsey was also worried about his own pocketbook and future liquidity needs.

Musk's solution was a promise: Were Dorsey ever to need money, Musk would buy back his Twitter shares at the original takeover price of $54.20 per share. In other words, $44 billion became Dorsey's floor.

2. The BFD: Musk's secret offer

Photo Illustration of Elon Musk and Jack Dorsey with the X logo between them

Elon Musk and Jack Dorsey. Photo illustration: Natalie Peeples/Axios. Photo: Chesnot, Bloomberg/Getty Images

A new music startup called JKBX (pronounced "jukebox") wants to let retail investors in on the music rights market and turn royalty streams into regulated securities, the company's CEO Scott Cohen tells Tim.

Why it matters: Music rights have gone for eye-watering sums over the last several years, and there are fewer and fewer large catalogs available.

How it works: Beginning later today, prospective investors can reserve stakes in the royalty streams for well-known hits from Beyoncé, Adele, Taylor Swift, Colbie Caillat and Ed Sheeran.

JKBX makes money whenever a song is listed, bought, sold or traded on its platform.

JKBX set up a creator program to reward the actual artists whenever someone buys a share of their songs' royalties;  most artists don't own their own music.

The big picture: Creating financial incentives for fans of their favorite artists is not new; David Bowie sold "Bowie Bonds" in 1997 to get investors to bet on royalties from his back catalog. 

More recently, other startups like SongVest and Royalty Exchange have cropped up.

"We have a music team that has deep relationships in the music industry; we have a legal and regulatory team that has deep relationships into the regulatory and finance world," Cohen says. 

Catch up quick: The company was founded by Sam Hendel and John Chapman of Dundee Partners, a minority investor in Kobalt Music Group.

In 2021, Dundee teamed with KKR to acquire a batch of rights from Kobalt that featured 62,000 copyrights, including a bunch of hits written by OneRepublic's Ryan Tedder.

"The company was essentially founded by a large catalog owner that acquired a catalog and were looking for new ways to exploit it," Cohen says.

JKBX raised $16 million in seed funding last year from investors including Valor Equity Partners and Maywic Select Investments.

What's next: JKBX plans for investors to begin buying and trading their music shares by the end of the year. 

Music startup JKBX wants to turn hit songs into investments

3. Stock market for music 

Illustration of a pencil writing sheet music with dollar and cents symbols

• Kale Logistics Solutions, an Indian logistics SaaS startup, raised $30m in Series B funding led by Creaegis Advisors. https://axios.link/3LeaFVq

• Animoca Brands, a company building blockchain-based games, raised $20m. CMCC Global led and was joined by Kingsway Capital, Liberty City Ventures and GameFi Ventures. https://axios.link/45O8Zdg

• Pahdo Labs, a New York-based anime game studio, raised $15m in Series A funding. Andreessen Horowitz led. https://axios.link/3sQSNcR

• GamePhilos Studio, a Singapore-based mobile game publisher, raised $8m in seed funding from Xterio, Animoca Ventures, SevenX Ventures, Chain Hill Capital, Hashkey Capital, Sanctor Capital, Game7, Bas1s, GSR Markets and GSG Ventures. https://axios.link/3LGD5HV

• Glass, an NFT video startup, is shutting down after raising $5m from firms like TCG Crypto and 1kx. https://axios.link/3Rfw3x4

• Endeavor closed its acquisition of WWE this morning, with the new holding company TKO Group, which combines WWE with UFC, trading on the NYSE. https://axios.link/45YTIpQ

• National Amusements, Shari Redstone's family holding company, reached a deal with creditors to restructure some of its debt. It paid down 20% of the roughly $250m outstanding loan to its creditors, per WSJ. https://axios.link/483YqV0

4. Deal flow

• Michael Rodriguez will join the MPA as senior litigation counsel and director, Americas content protection. He previously worked as senior lead litigation and enforcement counsel at LinkedIn. https://axios.link/488FPY1

• Dafna Linzer was named editorial director and EVP of U.S. News & World Report. She was previously executive editor of POLITICO. https://axios.link/3Lk8Je6

• Natalie Sportelli joined consumer brand-focused VC firm Bullish as a director. She previously was with Thingtesting and Lerer Hippeau. www.bullish.co

• The Messenger exodus: CRO Mia Libby and head of marketing Stephanie Parker have left, per The Daily Beast. https://axios.link/3Pd9gj4

5. Movin' on up (or out)

☎️ Roblox plans to offer an alternative to phone calls (Axios)

"Roblox may never be able to displace Zoom or texting, but its new ambitions involving in-app calls indicate just how high a company with 65 million daily active users is aiming. ... Roblox Connect is not video chat. Users see each other's avatars, not faces," Stephen Totilo writes.

😈 How Barstool built an empire by swiping sports highlights (The Daily Beast)

"A new investigation by The Daily Beast found over 40 more anonymous Twitter accounts that give every indication of being controlled by Barstool. This network has laundered incalculable amounts of copyright-protected sports and entertainment videos and reaped billions of views over at least the last four years," Robert Silverman writes.

✊ Can talk shows continue during Hollywood strikes without being scabs? The answers are tricky (Variety)

"[U]nlike news shows, which are covered under a different WGA agreement, talk show and game show writers are on strike and not able to work until the strike is resolved. So anyone who provides literary material for a talk show, whether it's the host, a producer, etc., would be in breach of WGA rule," Gene Maddaus and Pat Saperstein write.

6. Channel surfing

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

⚖️ Situational awareness: Google's trial on federal antitrust charges begins today. 

@tim_bays: "Stanley Tucci: Searching for Italy" on Max. Getting ready for my trip to Milan-Lake Como-Venice next week. 

@kerrymflynn: All Time Low at The Rooftop at Pier 17. Seeing one of my favorite pop-punk bands at one of the city's best concert venues.

✏️ Thanks to Michael Flaherty for editing and Katie Lewis for copy editing this newsletter.

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September 12, 2023

1 big thing: Cable TV's new era