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Hi.
I'm Kara Swisher.
And I'm Scott Galloway.
And you're watching Pivot on Salesforce Plus.
My condolences on CNN.
What's going to happen from the inside?
What occurs? Give us the lowdown.
The thing that was shocking
is, you know, as Doug
Simon says, it's not what you do, it's
how you do it.
And that is Discovery's
Discovery or CNN
wave the middle finger,
as far as I can tell at Discovery
and said
we're launching this with
or without your permission
two weeks before you take us over.
And then two weeks
after Discovery showed up,
they smothered it with a pillow.
I mean,
you know how I found out about this?
What?
How as I find out
about everything from you,
you texted me and said,
Are you all right?
And of course, I got panic
because I'd had
some really bad had happened, so sorry.
And then I got forwarded the article
and I think everyone at CNN
plus I think nobody at Hudson
Squares found out about this
until it was in the media.
So I don't understand.
There's some anger and ego here
because this is not,
from a shareholder
standpoint how you treat people.
Well, he had to cut prices.
Let's get to the actual thing.
They had to say something to Wall Street.
And this was dramatic.
They look stupid doing it.
And I wouldn't mind saying
that to David Zaslav, his face.
It's just
he has this enormous
like the stock is languishing
and doing badly since the acquisition.
Right, since April 8th
or something like that.
He's got $55
billion in
loans and different debt
and stuff like that.
So he's got to cut
and he's got to look like he's strong
and he's a cutter, by the way.
He's someone who does
that over at Discovery.
And so he had to show that he could do it
by do something,
by sacrificing something significant.
Also, Jason Kilar did this
even though it was signal to him not to,
although they make the argument
on that side
that they did not do that,
that they didn't signal to him
that heavily in that regard.
There's a big argument over
how well it was doing initially
and whether it should have
been cut this quickly.
But I think he just needed to
do a flex on on for Wall Street.
But with the content going,
you made a lot.
Of news,
but just a little bit of pushback there.
Most of the money had already been spent.
Yeah. Yeah.
These anchors aren't Uber drivers.
No, they're going to get their money.
Yeah. That was part of rather.
That's what I and.
Rather
the first signal I got was
this is clearly ending soon.
All right.
Was all this negative
press is coming out mostly,
especially from, quote
unquote conservative media.
And Discovery wasn't hitting back
because they could have said, well, Chris
Wallace's interview with Jen Psaki
today was the number one story
in the media.
They could have said,
I was getting hundreds of emails saying,
why isn't it available in this country?
We had just gone on Roku.
They could have easily started
pinging out good news and they didn't.
It's like, Oh my gosh,
our parents are not our allies.
They're the enemy.
There was even rumors
that Discovery was leaking
negative numbers about CNN.
Plus, to create cloud cover
to close it down.
And this business is about talent.
If you're Chris Wallace,
do you do a deal with Discovery?
Of Discovery.
Yeah. Well, he has to stay there, right?
He's going to move.
A lot of these people had contracts.
Just so you know,
there are people who are hired
and are losing their jobs
and have to reapply at CNN
if they're bailable.
And then there are people with contracts
that is
presumably like Audie
CORNISH, yourself and others.
I assume they have
I assume she has a contract
that have to be
either paid out or are somehow prorated.
I don't really know what.
They're all paid out.
Kara Yeah, that's the thing.
This does not make any.
Whenever you see
something that doesn't make
it doesn't make sense
and there's anger and ego involved,
and there is anger and ego involved here
because you know what
they could have done either easily.
Oh, we're going to take Chris Wallace
head program
over to the CNN Core program.
We're going to take Carey
Champion's program
over to Turner for Final Four.
They could have figured out
a million ways
to have peace with honor here.
I think they had to show Wall Street
that it had that
it could do something like this.
I don't know.
I feel like it was
I agree
to put it on to the Jason
Kilar versus David Zaslav
thing is is a little bit,
but it certainly is.
We are in charge here
and our stock is languishing
and so we need to do
something significant.
That to me is what it look like.
But go ahead. You have your vote. Okay.
But as someone who has run companies,
as someone who has been on the board
of big public companies.
Yeah, this isn't how you roll.
This isn't how you treat people.
Yeah.
And I'm not talking about the anchors
cashing seven figure checks.
I'm talking about the gaffer
and the sound guy and the editor. Yeah.
Who read
they may not have health insurance.
And I also I do
want to be clear,
discovery is being generous
with severance, but you call people
like 5 minutes
before they read about
in The New York Times.
Well, that is this is media.
This happens a lot.
This is not a fresh start.
I have anything I've been involved with.
This has happened like a zillion times.
This is media.
So I think the leak got out
ahead of them.
I can't believe people would actually do
behave or treat other people this way.
I don't.
How does how does discovery.
Work for news of these people?
But go ahead.
I guess not.
You know, maybe I'm naive to the media.
Are they said anything to you?
You might as well tell me.
I mean,
they have they
have they said anything
or what's the communication to you?
The communications are
some under the bus. Scott, go ahead.
No, the communication
from all the people
at Warner has been nothing but gracious.
I'm a little bit embarrassed.
And how can we be helpful?
Couldn't have been nicer.
The only communication, Isaiah,
as I've heard from three
other
media companies saying,
hey, do you want to talk?
But in terms
I have yet to speak to a person
at Discovery
and everyone else I speak at
Warner is sort of like chagrined.
How can we be helpful?
What have you heard?
I don't think anyone at Hudson
Yards has been told anything.
And what happened to your team
specifically,
since we're not going to Anderson Cooper,
but go ahead.
My team
approach to
media is fine
because we make the majority
of our revenue,
you know, in books,
speaking, podcasts and other stuff.
So everyone here is just kind of relieved
because this was this was more work
than any of us had anticipated.
I think my
my team
our team at Warner is very nervous,
as they should be,
because what you're
about to see in streaming
media is going to be a bloodbath
over the next 18 months because Netflix,
a quarter of $1,000,000,000,000,
has been shed
from the streaming market, from Netflix,
the general cadence of the market
or complexion
of the market around
streaming was as long as you kept
growing subscriber base,
even if you could ignore the economics,
will keep taking
the value of your firm up.
And then when the lead dog loses
70% of their value, like, I mean,
think of this math, they're
supposedly going to be somewhere
between 220 and 240 billion
in investment in original content
spent in America
or spent across these companies.
Maybe that's a global number,
but let's just use American numbers
as the denominator.
American households,
25 or 35 million are either so far right.
They don't want that
profane streaming in their house
or they're so far left.
They tell everyone,
Oh, we only read The Atlantic,
we don't watch TV, so call it
80 million households are Streamable.
That means that these companies
are spending
$3,000 per household to send you
euphoria
and bridgerton and better call Saul.
That is just not sustainable.
I'm not talking about your cable bill.
I'm not talking about your phone bill.
I'm talking about how much Hulu
and Netflix
and Amazon TV
Amazon Prime are spending
just on content.
Yeah, yeah.
To send you the market.
It was fine when Netscape was alone,
but I mean, excuse me. Netscape. Netflix.
Netflix is like that
said, I think Bill Cohen,
we both agree,
really smart
said that
he thinks the run on
Netflix is ridiculous
given the finances of it
and how well how big it is
and how far ahead it is and stuff.
So, I mean, there is
literally no shortage
of companies, down 70%
in the last six months.
But this is Netflix.
Is the tail wagging the entire year
dog right now
specifically, it's
shedding 70% of its value.
It's the reality this
it just it's a basic lesson in economics.
It got overspent.
And what I'm learning
and everyone learn
is that when certain decisions
kind of don't make sense,
I don't give them the credit
you're giving them in terms of trying to
send a signal
about how decisive they are.
This was anger and ego.
I think it was a good signal.
I just think I can see them saying it.
They're like this. They're they're
besides that, we're in charge here.
Vibe, which I think was interesting
and the sort of underhanded stuff
I think,
you know, after the Zucker thing
now remember
Zaslav was very close to Zucker
and the anger at Jason
Kilar is very real,
there's no question about that.
But the way it was done
seems it seems talent negative,
it seems, makes everybody feel nervous.
I'm pretty.
I know that these deals
for the big talent like Anderson
Cooper's were part of their deal.
They got paid whether they did it or not.
Right.
That didn't matter.
Again, it was already paid upfront.
Right.
So they look
they're just
they just decided
to take the most high profile thing
and sacrifice it
right there to show that they had
they were in charge here, sir.
And that was not just
because they were angry.
It's because of its virtue
signaling to Wall Street.
And I still don't think it matters
because they are in
for a world of trouble,
because they're not big enough
and they're well, they.
Got $55 billion in debt
and they have a shareholder base
that's used to a dividend
and slow growth.
They got to shift that shareholder base
very quickly. It's got a sellout of ATT.
And so they've got to transition
to shareholder base.
And the bottom line is
this was the right decision.
It's just, again, how it was done. Yeah.
I mean, yeah, I.
Okay. Wow.
So your stuff, you don't know
what's going to happen to your stuff.
So I was literally at University
High School
doing something on high schools
and education on Wednesday.
And this happened Thursday morning.
And last week
they put two new producers on my show
because of the success and the numbers.
It was. Show.
Yeah, you were doing pretty well.
And and then Thursday on Wednesday,
I found out that we were the,
the most successful weekly program.
And on Thursday
I read the whole network at 10:00.
I mean, that was like a start.
Okay. I'm like, I'm sure he's fine.
I like.
It.
And I think the sex
the sex tweet was good shorts.
I loved it.
Loved every minute over too fast.
So and what sold you
where did you come back to?
Kara Swisher The only way.
As I was home, hobo mom, mom,
I'm back home. I'm back.
But I'm sorry. Are you okay?
Do you need anything? Do you need any.
You know.
Crackers, salty.
What I found.
So I mean this sincerely.
I was at my high school on Wednesday
and I spoke to the leadership
class there.
I was in leadership and I said somewhat.
Someone asked me
what is quote unquote
the secret to your success?
And it and this is true. It's rejection.
When I was in high school,
I ran for a sophomore,
junior and senior class president.
I lost all three times.
And based on my track record,
I decided to run for student body
president where I wait for it lost.
The key to success
is your willingness
to endure failure to action.
And you never know
what's going to happen.
You just never know
what's going to happen.
So nothing's ever as good or as bad
it is as it seems.
On Wednesday,
when they told me
my show was the best weekly,
it wasn't as good as it seemed.
And on Thursday,
when the thing got unplugged, guess what?
It's not as bad as it's yeah. So yeah.
And I'm blessed
because TV was something I did,
but it wasn't what I do.
Well, now you're back
and you understand
where you're going to have a big hit
TV shows with me. I'm sorry to tell.
There you go.
I hate to tell you,
but you're stuck with me
and you're stuck
with our lovely pivot team.
If this is wrong,
I don't want to be right.
You know,
when Netflix
sneezes, the entire streaming market
catches pneumonia.
And if you look at it
this way,
Netflix gives you $2 billion of content
for every dollar a month,
which means that even at three bucks
a month, CNN
Plus was supposed to show up
with 6 billion in content.
They spent 300 million,
so they literally shut up.
With a squirt gun to a Howitzer fight.
It was kind of over before it began.
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