Scandals! Legal duels! Ousters! Looming strikes! Even by Hollywood standards, this week’s industry news has been fit for, well, Hollywood. To make sense of it all, The Business presents a special spring Megabanter in which host Kim Masters teams up with Banter compatriot and Puck News founder Matt Belloni and Bloomberg entertainment and media head Lucas Shaw to break down some of the biggest Hollywood stories of 2023 so far — from a misconduct shakeup at NBCUniversal and Disney’s tête-à-tête with Florida Governor Ron DeSantis to Tucker Carlson’s Fox departure and the latest on the impending writers’ strikes.
This segment has been edited for length and clarity.
Jeff Shell, CEO of NBCUniversal, speaks during a conference at the Cannes Lions International Festival of Creativity in Cannes, France, June 22, 2022. Photo by Eric Gaillard/REUTERS.
NBCUniversal CEO Jeff Shell shocks with sex scandal
Kim Masters: The sudden ouster of Jeff Shell as CEO of NBCUniversal — I have written a piece about that. In that piece, I describe how a lot of people in the industry and people who worked with Jeff Shell saw him as this buttoned down, business guy, and a bunch of other people, who had been at NBCUniversal, had heard rumors or seen him, as one put it, “get crushes on people.” I should note that the reason he was ousted is because he had an affair with a woman who works for CNBC in Abu Dhabi, something like 11 years long, on again, off again. But she filed the complaint, apparently when her contract wasn't renewed. Jeff Shell certainly put himself in the crosshairs.
Matt Belloni: It's interesting because the Shell sourcing on that says that this guy wasn't even responsible for her contract or had any control over [it]. But the mere fact, if there was a relationship, either ongoing or in the recent past, that perhaps colored his perspective on her contract. She has a decent claim here. This is exactly why these rules are in place at these companies to prevent even the appearance of impropriety.
And it's just so rich that Jeff Shell would get himself into this situation after having [to] manage so many of the other NBCUniversal problem-people, starting with Ron Meyer going all the way through Paul Telegdy, the marketing person that was fired, and then sued, and Matt Lauer – yet he had these skeletons in his closet.
Lucas Shaw: It doesn't matter if he was responsible for her contract or not because ultimately, he ran the whole company. You can say, “Okay, well, maybe she was out for revenge because she didn't get her contract renewed.” I've heard all sorts of theories, sort of maligning her intentions. But even if her intentions were not good, the fact remains that he made a pretty clear mistake: ethically, morally, professionally. If you're a big boss at one of these media companies, you're not supposed to sleep with one of your employees, you're certainly not supposed to sleep with them and not disclose it, and in this case, it seems like it may have started when he was running [NBCUniversal] International, and she was also International. I don't see how he really has a case for why he was unjustly fired.
Belloni: It puts the company at risk. That's the exact same rationale that they used to get rid of Ron Meyer, who disclosed that he was in his words, “Being extorted by a woman who did not work at the company, but who he had helped and paid a settlement to.” Just the fact that that put the company in a potentially tough situation, was enough to get Ron Meyer fired by Jeff Shell, in person, to his face. So here you've got the situation where putting the company at risk from a lawsuit from this employee, is enough.
Masters: As I tried to suggest in the piece, I believe there's more to this than just that one thing. Certainly, NBCUniversal is not going to help anybody figure that out, but I have multiple sources who talk about him saying things to women, liking pretty women, as one of them put it, “Not creepy, but cringy.” I would say maybe look elsewhere for your companionship in life.
He had a lot of enemies, and they're coming out in the wake of this. One of the nicknames Jeff Shell had was shooter because he had this habit of shooting from the hip. And it's cost him and I think he lost the confidence of Brian Roberts at Comcast. He was negotiating a deal first with Paramount Global, in which he said that Bob Bakish could run a combined company if they made a deal. Then with Electronic Arts in which he said their CEO could run the company. So obviously, Jeff Shell's behavior had cost him points, and he at one point had been a rising star. And now he's very much a fallen star.
Belloni: One question for Lucas. I think you tweeted something like this, “Do you think that Comcast would have been a little bit lighter on him and perhaps not fired him, if Jeff Shell was in better standing at the company?”
Shaw: I don't know. The tweet you're referring to was as much a reference to Tucker Carlson as it was to Jeff Shell. But I think that companies are quicker to dispose of people who have done something wrong if they don't feel great about their performance, or there's some reason to write again. In the case of Tucker Carlson, this guy has had all sorts of horrible things over the years that would have been justification for Fox News to get rid of him. But they do so after he's a central player in this lawsuit that cost the company almost $800 million, and in the course of discovery, they find out that he says all sorts of things that make them look bad.
With Shell, it's a little bit harder to say. On the one hand, he's been at Comcast for a really long time. He's widely seen as a favorite of Brian Roberts and of the people who run and own that company. So even if they were going to marginalize and kick him upstairs, he wasn't going anywhere. But I do think that some of the concerns around the performance of NBCUniversal made the decision easier. They acted pretty quickly, made it cut and dry. I think that had he been a star, they probably would have taken the action anyway, just because it was clearly something that he shouldn't have done.
Florida Governor Ron DeSantis speaks at the 2023 NHGOP Amos Tuck Dinner in Manchester, New Hampshire, April 14, 2023. Photo by Brian Snyder/REUTERS.
Disney duels with DeSantis
Masters: Disney has also had very big news in the very recent past. They are grimly having massive layoffs, trying to adjust to a changing economy and to the struggle of getting money out of a business that's transforming. But also, they've had a really good time with Florida Governor Ron DeSantis, who decided to go to war with them. I think he is not going to win this one in any way.
To refresh everybody's memory, [DeSantis] had taken on Disney over the criticism of the so-called “Don't Say Gay” law. Disney, after some excruciating pain under the previous CEO Bob Chapek, landed solidly on opposing this as they surely had to do it for many reasons: basic decency, the progressive and LGBTQ employees they have.
Bob Iger has been kind of running rings around DeSantis, and they outmaneuvered him because he tried to take away Disney's control of this district in Florida where Disney World is and give this board that is supposed to oversee that district to a bunch of very right wing people. But he failed to notice that Disney was nullifying that effort in plain sight, publicly, by the rules, before it went into effect. So now Ron DeSantis is trying to say, “You can't do that,” and Disney has taken them to court as clearly they had to do.
Belloni: Disney hasn't won just yet. We can't declare them the winner. They definitely have been winning the PR war and DeSantis certainly hasn't been winning the early non-presidential/presidential run that he's on right now. But this is going to be a full on legal fight because you have Disney asserting that it is being retaliated against.
More: Fight against Disney could hurt DeSantis’ presidential aims
If you read the complaint, which was clearly written with the media in mind, it goes on and on about how much value Disney brings to Florida, claims they paid more than $1 billion in taxes last year, and it dared make a political statement on the “Don't Say Gay” law. Since then, DeSantis at every level of government has attempted to retaliate against the company. The complainant says, “a targeted campaign of government retaliation orchestrated at every step by Governor DeSantis as punishment for Disney's protected speech.” That is a pretty compelling argument because they are trying to institute taxes against Disney. They specifically voided development agreements only to target Disney. DeSantis has made a public statement after public statement saying, “We’re going to put a prison perhaps next to Walt Disney World,” [to] do things specifically designed to hurt one company, and when any judge or jury takes a look at this, I think they're gonna see pretty clear retaliation.
Shaw: You're the legal expert here. Matt. What are the grounds for a retaliatory case? What is the law that has been broken?
Belloni: The First Amendment is the US and Florida constitutions, both of which have free speech clauses. If we go all the way back to Citizens United would declare that corporations are people, something that I think a conservative Supreme Court would apply in this case. If you can give money as a corporation, you can certainly express an opinion on a very literal political issue.
Let's take an analogy here. Let's look at a company like Chick-fil-A. They have made political contributions to organizations that are pretty objectively anti-LGBTQ. They made statements to that effect. If the governor of California all of a sudden decided, because those statements and values do not align with the values of people in California, and started punishing Chick-fil-A and saying that you cannot develop in certain areas or passing taxes that target one specific company, Chick-fil-A would go nuts. They would sue and they would probably win because that is a protected first amendment right to give money and speak on political topics. It is no different here.
People pass by a promo of Fox News host Tucker Carlson on the News Corporation building in New York, U.S., March 13, 2019. Photo by Brendan McDermid/REUTERS.
About that whole Tucker Carlson thing…
Masters: Let's go to Fox for a minute. This has been something else at Fox. Fox obviously lost the Dominion suit but they didn't lose. They had to settle for $780 million dollars. Is that right? Ballpark?
They have the Smartmatic lawsuit in the wings. They have shareholders that could sue and say what the heck are you people thinking all of this linen is being washed? Abby Grossberg, that former producer with Tucker Carlson and Maria Bartiromo, has a lot of receipts. These are all dribbling out. I can't imagine how they're not going to just pay the lady. But Fox has just put itself through the wringer, and this culminated in this shock firing of Tucker Carlson. Lucas, what are you seeing here?
Shaw: The firing was far and away the most surprising part of this, I have to admit. I thought the lawsuit with Dominion would end exactly as it did, where they would settle. Fox would pay a bunch of money, and would just go back to being Fox News and saying and doing all the things that it does. But the firing of Tucker suggests that there was some real concern at Fox News and they needed someone to blame. I assume after that happened, there was a conversation with Tucker about the future of his show, what sort of language he should use and where you should be careful. He wasn't very happy, and he said, “Screw you. I'm out of here.”
Last, Fox just decided he wasn't a capable scapegoat because the one thing to remember about Fox is that they are bigger than any one personality. We went through this when [Bill] O'Reilly left. We went through this when Glenn Beck left. They have these big stars who come around and become the most popular person on the network, and then guess what? When they leave, their impact dwindles, and then somebody else comes along and replaces them, because Tucker himself was an O'Reilly replacement.
More: What Fox News looks like without its star Tucker Carlson
Belloni: There's two things to look for moving forward here because we're never gonna get inside Rupert Murdoch's head unless he tells us what he's thinking, which he likely won't. One, is how this impacts the still pending litigation against Fox because they are not out of the woods here. They may have settled one case, but the Smartmatic case is still ongoing and they're asking for more money than Dominion was. So is this firing an admission of some kind of a liability here that, “Yes, we're getting rid of these people because they said false things on the air?” Or is it a sign that Fox is making amends, cleaning up its act, trying to do the right thing and focus on journalism and not lies conspiracy theories? I know that the Fox lawyers are very concerned about these other cases.
The second one is, where does Tucker Carlson go? Because he is still a relatively young guy. He has got a lot of allies, a lot of people that want to see what he has to say. Does he start his own media company, alas Glenn Beck? Does he go to one of the rival networks like Newsmax or OAN? Newsmax’s ratings have gone up since Carlson has been off the air and a lot of those hardcore Fox viewers may try out one of these alternative stations, especially if Tucker Carlson goes there. Or does he do some kind of a combo where he does a podcast or a radio show, and then has a TV show on one of these networks? I think it would be very fascinating in the right-wing universe to see where he lands.
Striking members of the Writers Guild of America, West rally in Hollywood, California November 20, 2007. Photo by Mario Anzuoni/REUTERS.
Industry strikes are coming (probably)
Masters: We have to talk about this looming strike. It's coming. It feels very fraught, very costly, potentially very bad, not only for people in the industry, but for people around the industry. There's a big economic impact in LA. I'm sure we all agree that this looks like it's going to happen and we see publicly SAG-AFTRA come out saying we support our brothers and sisters in the Writers Guild. We see the Teamsters part of the equation also coming out, the directors are sort of holding off on their negotiation, they usually go earlier and give studios a better deal than the writers would. I don't want to handicap its game because it's not. It's serious business. But what are you guys seeing?
Shaw: We've reached the point where the strike feels inevitable. That's been the thinking for a lot of this year. I chose to remain cautiously optimistic for some of that time, in part because some of my sources remain so, but it's very hard for me to find anyone right now who thinks that's not going to happen. It doesn't seem like there are particularly active conversations between the Guild and the studios, and most of the public comments from the people who run these companies, whether it was Netflix co-CEO, Ted Sarandos during their earnings a week or so ago, or David Zaslav from Warner Bros. Discovery at their press event, they are sort of saying, “Look, we value the writers, we want to deal, but also we'll be okay if we have to strike for a little bit,” which certainly signals to me that they're not in a rush to figure this out.
Belloni: And they've all prepared. They have their productions all lined up. The real damage here would be if the other guilds join in and all productions shuts down this summer, which is a real possibility here because the studios can keep going for a while with the scripts and things that they have prepped. But if you can't shoot this summer, we're going to start to see real impact in the fall. And that puts the pressure point on the studios and the streamers to come to the table on something.
More: Writers amp up for strike; Netflix to crack down on password sharing
Masters: The DGA has told members of the Directors Guild that if they have a job and they're actively working, they have to cross a line and continue to work per the DGA agreement with the studios. I know someone, they are both a Writers Guild member and a DGA member, and they said, “I cannot cross a picket line, even if it's my job to be acting as a director on this. I cannot in good conscience cross the picket line.” I'm sure a lot of people who are in both guilds feel that way.
Shaw: You guys are both right that if there is solidarity across the different labor unions, that will put a lot more pressure on the studios. I guess the two things I'd say in response to that are, one, if you look back to what happened with the last strike, it was the other guilds that ultimately undercut the writers. And two, the not being able to produce over the summer, that's going to affect certain productions that are for broadcast networks in the fall, but if you're talking about these streaming services, they're in post or finished with almost everything that's going to come out over the next three to six months, so there's a little bit less pressure on them than there is on a CBS or an NBC.
Belloni: And the streamers could actually enjoy a competitive advantage here. If they are able air all the stuff they have stockpiled globally, and the traditional broadcast and cable networks are hampered by their production shut down. So it's a big deal.