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Full transcript: Recode’s Peter Kafka on Too Embarrassed to Ask

He and Kara discuss the media landscape in the wake of the AT&T/Time Warner decision.

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Recode’s Peter Kafka onstage at Code 2018 with AT&T CEO Randall Stephenson
Recode’s Peter Kafka onstage at Code 2018 with AT&T CEO Randall Stephenson
Asa Mathat

On this episode of Too Embarrassed to Ask, Recode’s Kara Swisher and Peter Kafka talk about the ruling that will allow AT&T to Time Warner, likely ending a lawsuit brought against the companies by the U.S. Justice Department. Is it now mega media merger time?

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Too Embarrassed to Ask on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.


Kara Swisher: Hi. I’m Kara Swisher, editor at large at Recode, and you’re listening to Too Embarrassed to Ask, coming to you from the Vox Media podcast network. This is the show where we answer all of your embarrassing questions about consumer tech and the week’s news. You can send your questions on Twitter with the #tooembarrassed. We also have an email address, tooembarrassed@recode.net. Reminder, there are two Rs and two Ss in embarrassed.

Today, I’m still in New York City. Last week, I talked with Recode’s editor in chief, Dan Frommer, about Apple’s Worldwide Developers Conference. Today, I’ve roped a different Recode editor into this. I’m here with Executive Editor Peter Kafka, these editors. He also co-produces the Code Conference with me and is the host of the excellent podcast Recode Media. Hi, Peter.

Peter Kafka: Hello, Kara. It’s delightful that you are still in town. You should turn your phone off so you’re not distracted.

I’m trying. I don’t have it ... I’m going to turn it over. I’m going to turn it over.

I’ll teach you how to grayscale it.

Thank you very much. We have lots to talk about. I’m still in New York. I’ve been doing a lot of New York things, and a lot of it is media related. So you’ve had a busy week. On Tuesday, there was some AT&T/Time Warner news, and on Wednesday there was some 21st Century Fox news. Let’s start with Tuesday. Tell us what happened.

Tuesday was the day of a big ruling we’ve been waiting for literally for months or for weeks.

Some of us have been waiting.

Judge Leon of the U.S. District Court. Some of us have been. This is going to reshape the media world, this ruling.

It is.

He said, “Yes, AT&T, you can go ahead and pay 85-some-billion dollars for Time Warner, even though the Department of Justice has sued to stop you and even though Donald Trump has made it a campaign point to try to stop this deal. Go ahead. Do it.”

Give some details of the judge’s ruling. It didn’t have very many hooks on it, too, right?

It had zero hooks, which was kind of a surprise.

Yeah. People thought there would be some hook ...

He might prove it, but there’ll be some sort of conditions. We can get into why it’s a vertical merger, but basically he just said go for it. And on top of that, by the way, government, please don’t try to stop this. You can appeal. That’s fine. But don’t try to put an injunction into this.

Because I’m not going to pass it.

Well, but by the way, it’d just be bad for democracy. He sort of hinted at there might be a reason you’re pursuing this case other than the legal ...

Political. That Donald Trump doesn’t like CNN.

So please stop.

Yeah.

So, basically, anyone who had any concerns about whether or not a media merger would be blessed is now assuming they can go ahead and buy whatever they want.

Right, right. So your headline on Tuesday was “AT&T can buy Time Warner and everyone else can buy everything else.” And you’ve called it a seismic change. Explain to everyone what’s going to happen now in the wake of it, and then something did happen, obviously. There was another bid for 21st Century Fox. But what does that mean, everyone can buy everything else?

We’re not sure what’s going to happen next, but if you are Verizon or Charter — or Amazon, for that matter — someone who owns distribution, has a lot of resources, and was thinking, “I’d like to add a content company to this,” you might have had reservations about doing that legally before.

Right, because of the Justice Department.

And now you can go ahead and do it. It doesn’t mean they will. Verizon may not buy a media company for Verizon-specific reasons. Charter may not for Charter-specific reasons. But anyone who was thinking about this really no longer has to worry about, “Can this deal get through regulators?” Apparently, right now, go for it.

Right. Exactly. So what happened on Wednesday, then, with 21st Century Fox?

Wednesday was one of these deals ...

Let’s just call it Rupert Murdoch.

We’ll call it Murdoch. Again, if you take the long view, it’s astonishing that Rupert Murdoch is basically saying, “This business that I’ve been building for all of my life, I’m abandoning a big chunk of it and selling it to Bob Iger and Disney.”

Right. Explain what he’s selling. He’s selling ...

He is selling his movie studio first and foremost. He’s also selling some assets like Sky, the satellite company in Europe, Star India, another distributor in India obviously, a couple random cable companies. He’s holding on to things like Fox Network itself, Fox News, Fox Sports, and he still owns the Journal and that publishing stuff.

Right, exactly. This is stuff he’s built, like grabbed for all his life and assembled to become ...

All his life. One thing I can remember is he is not a romantic about this stuff. He doesn’t care about any particular assets he owns. I think he loves news. He cares about that and he still holds on to Fox News. And he likes influence, which again, Fox News is a tremendously influential property and he cares about that. Movie studio should be a tremendously valuable thing, the kind of thing you don’t want to give up. He’s fine. “Go ahead. Take it. I don’t need it.”

What is that saying about media at this point? Is it because this guy’s getting out, or is it just that you have to be bulked up? He knew he couldn’t win in the wars-

This is sort of the core question for my beat for a while now, is when you see Rupert Murdoch selling, when you see Jeff Bewkes, who ran Time Warner, selling, guys who are very good at running media companies who spent their entire lives building these things up, trying to get bigger.

HBO, CNN.

Right. A couple years ago, Murdoch was trying to buy Time Warner to get bigger. And you see them saying, “We’ve had enough. We’re getting out.” Should that worry you if you’re the buyer? The on-the-record polite answer is, “No, no, no. We’re just going to combine them and make even bigger assets.” We had a version of that from James Murdoch.

I think that there are multiple reasons they’re selling, and one of them, and a big one, is that structurally the things they’ve been really good at for a long time — grabbing your attention, showing you advertising, grabbing your attention, giving you a big package of TV channels that you have to buy if you want to buy one — all that stuff has either hit a wall or looks imperiled for various reasons, but really fundamentally because of tech. And they’re saying, “We don’t think we can grow this business anymore. It is a slow-growth to no-growth business, so we are getting out at the top.” They’re not saying that on the record. They’re not saying it officially. But I think if you look at their actions, that is what they’re saying.

And then what about the buyers? Why are they buying it, then?

Well, Kara, you remember a time when people thought if you took a big distribution company and added ...

Yes, yes. It was a topic in my book.

... a big content company, it would be an awesome combination.

It could be. Yeah.

What happened?

Well, that didn’t work, but that was another reason. I think that was directionally correct.

Let’s just spell it out. That was AOL/Time Warner.

AOL/Time Warner. Yes. I thought it was directionally correct, but the people involved got in the way of ... And it was too early. I don’t think it was the wrong idea. I still don’t.

So the worst merger of all time ...

Yes. I get it.

... in corporate media or in corporate history. So now they’re basically trying to do these things ...

But they never combined them. Let’s be fair. The cable company wouldn’t distribute it. Remember, there was a whole bunch of stuff that didn’t happen.

Sure, but still, the idea was the internet was the distribution, right?

Yes.

So it’s still the same thesis, right? So you have AT&T, which controls distribution, buying literally the same company, Time Warner, and trying to combine them and saying, “If we combine them, we’ll get 2+2 and we’ll get 5.”

Right. What do you think?

I’m fundamentally skeptical. I’m doubtful that they’re going to get those synergies. I think there’s an unstated reason, which is not a bad one if you’re AT&T, which is this business we have is selling you wireless and selling you DirecTV. That is a shrinking business. We need to replace the revenue we’re losing as that stuff atrophies, and so we’re going to buy another business that we can bolt in.

That’s closely affiliated.

They’re connected and we can get you to sort of buy them all in a package. If that’s the best thing that happens, that’s not a terrible outcome if you’re AT&T. It’s not that sexy. Everything else is kind of hand-wavy, and maybe our advertising will get better.

More targeted.

Maybe. I don’t know. “The Game of Thrones” guys will make a webisode. They don’t say webisode, but that’s kind of what they’re saying. The reason I’m so skeptical about it is all the reasons that Time Warner works is because they’re not tied to a specific distributor. You can go ahead and watch HBO if you have Charter or Time Warner or any other cable subscriber. You can get it directly through Apple now.

If for some reason that becomes exclusive to AT&T or limited in some way to AT&T subscribers, the value of HBO goes considerably down. Maybe, and this is ... The guys I’m talking to a lot are speculating. Maybe we are moving to a world where AT&T or Google or whoever is going to have exclusive rights to big chunks of programming that we used to think you could get widely distributed. That would be a big change in that world.

Sure, sure. Where are the internet companies in this, then? Because one of the things is that they’re scared of the internet companies because they’re going to be buying media or they could be buying media or they have a lot of control over media.

Netflix, crazily, is the company that is causing a lot of this worry because they have gone from buyers of these media companies’ contents to competitors with these media companies. They’ve got this great product, 10, 11 bucks a month, watch whatever you can find that’s watchable. There’s no commercials. Watch whatever you watch. No one has a product like that. They’re all scrambling of assemble a product like that. They’re way, way behind, and Netflix is now 125 million subs.

So a lot of folks ... A lot of this, like the Disney-Fox combination, is to sort of see, can we pull together assets that will help us compete with them? Everyone else, Facebook, Apple, even Amazon, are all kicking at tires. You can argue what kind of tire-kicking they’re doing. Facebook is not spending a lot of money on media. Apple went from spending zero to a couple billion. Amazon’s spending more than that, but they’re not fully in the content business. But they keep noodling at it. Amazon was looking at buying some of the Fox assets just recently. They’re all looking. They’re all taking a look.

Do you imagine them ever doing a big purchase?

They could. They all have the capacity to do it. You’d have to explain why it makes sense for them to do it, and ... I just gave you the sort of cynical, skeptical answer for why AT&T does it: Because their fundamental business has stopped growing. The internet companies don’t have that problem, so they don’t have that same compulsion. That said, I’ve been talking to people that say, “Oh, you know what? Actually, Google is very interested in owning the living room.” They think if they own a big content company, it’s worth over-paying for.

Like Disney or Netflix or ...

Like Disney or HBO. They spin out all these scenarios, and a lot of this is banker talk, too.

I can’t see those guys doing that.

I can’t see it at all. They know nothing about it.

And they’re so bad at it.

I can also see in their robot brain saying, “Well, this is the thing. If we buy the thing, people will buy our thing.”

They’re so bad at it.

They’re not good at it.

Like Facebook Watch. Don’t watch. Nobody watches.

Is Vox Media a Facebook Watch partner?

Yeah.

Maybe. I don’t know.

I don’t care.

They’re great partners.

I’m enjoying all the alternative rights stuff on theirs.

They’re all basically still reluctant to really become content companies with all those problems. We just went through a cycle where Roseanne Barr and Sam Bee showed the downside of owning content: Being responsible for talented people. You can see how uncomfortable Time Warner and Disney are with this. Imagine what happens when ...

And they’re used to it. And they’re used to it. And you know ...

Right. Imagine what happens when this happens to ...

Senator Warner, we just interviewed him together onstage at Code, talked about regulating them like media companies too, because then it answers a whole new ...

I think Amazon is the one that is most obviously going to get there. I think everything they’ve done to now is still them planning around ...

And they’re sort of adjacent with selling books and music.

And they’re stopping and starting, and also, they’re the ones who go, “Well, we are a technology company, but fundamentally, we sell stuff to consumers and so we don’t really ... We use tech to do it, but we’re less hung up on the idea that we’re a platform.”

Yeah, yeah. Let’s go back to the AT&T Time Warner merger. Is there anything else that could stop the merger, or will the judge ...

That’s a done deal.

It’s a done deal.

I will note ... I’m sorry. The Department of Justice could still appeal. It seems unlikely. People thought that the DOJ had a low chance of succeeding to begin with. One of the things that’s astonishing in that 172-page decision from Judge Leon is how completely he illustrates the fact that the DOJ made no ...

They were stupid. He called them stupid.

He said, “I’m giving you no points. No points for effort. There’s not a single thing you did here that worked. By the way, the theoretical argument could have worked. You just did nothing to prove it.”

Right, right, right.

So I ... Tough.

You know, it was like a political hack job from the beginning. It felt like that, didn’t it? I can’t believe I’m on AT&T’s side, but ...

There’s a lot of optics that make it look like this is something Donald Trump told the DOJ to do. There’s a counterargument that says, actually, the DOJ has career staff who’s very interested in this and making Delrahim, the antitrust guy who bought it, is actually a serious person, not like some of the other Trump appointees.

Not the hill to die on.

That’s why they were surprised that he brought the case, because it had a lower chance of succeeding to begin with. In general, you don’t bring these suits unless you think you’re going to win.

Right, or at least there’s some question. So it’s going to go forward, the merger’s going to happen.

Yeah.

And then, what happens to Sam Bee and things like that? They just run it then, they just have to ...

They run it. There’s going to be this period of feeling out, and how you doing, and some people who are running Time Warner are going to be gently moved out.

What about like HBO, for example? A high point of that company, correct?

That will be one of the more interesting ones to watch.

Because Richard Plepler runs it.

Richard Plepler runs it, very successful. The tension point there ...

Very, very, very successful. Like he just continues to turn out the hits, right?

He’s very successful, and up until a couple of years ago was considered the pinnacle of TV, and now Netflix has come up ...

That bugs him, I bet.

Bugs him a lot.

I know it does.

Not you bet. A lot. What he is going to say to the AT&T folks is, “I’m doing a great job, give me a lot more money.”

Oh, okay.

“Right now, I’ve been making a lot of money for Time Warner, but I need a lot more if we’re really going to be going up against Netflix. Give me more.” And that is going to be an interesting question for AT&T, which is a fairly tight-fisted company when it comes to this stuff.

Right.

And they’re going to have to decide how comfortable they are letting these creative guys ...

How comfortable ... You just interviewed Randall Stephenson at Code. How comfortable is he?

He seemed, in his mind ... and he says it out loud. He said, “Look I don’t know how to make this stuff. I shouldn’t be greenlighting scripts. We should hire smart people to do it and let them go do it.” Which, I think, is the case.

So Question One is, what happens when Sam Bee screws up? And two, what happens with Richard Pepler comes to you and says, “Double my budget.”

Right.

That’s a whole different question.

Right. Right. And to hold onto creative people is harder than holding onto wireless providers and dealing with things like that.

Yeah.

It’s a very different business. Oh well, that’s what they bought. They bought it.

Yes. So, that will take a while. And then if you’re a consumer, you will want to watch and say ...

Will they sell anything?

That was the question, “Will they be required to sell off Turner or CNN or some asset?” and the answer is, “No.”

No.

“Go for it.”

Do you think they will keep them?

I do, because, I mean, one of the things Jeff Bewkes has done over the last 10 years is winnow, is shed everything from Time Warner that wasn’t the movie studio, that wasn’t cable TV and that wasn’t HBO.

All right, so then what happens at Fox. Let’s shift gears. So who’s going to win that one?

That is a bidding war.

Yes it is.

So, Disney made a bid, and Fox said, “Yes, great we’ll do it.” They’re walking down the aisle and then here comes Comcast as the Dustin Hoffman character from “The Graduate” [shouting] “Elaine!” So he’s banging on the window. And now Disney is going to have to come back and bid again. And then the question is, “All right, does Comcast really want to keep bidding this thing up?”

Right.

They’re at 65 billion now, it’s going to go up from there.

Can Disney keep up? Most people don’t think Disney can keep up, right?

No, they certainly have the assets to counter.

But it’s a different bid. It’s a stock bid.

Well, they’re going to have to add some cash. I mean, this is banker talk, but if Disney really wants it, they can keep going.

Well, are they going to pay that much for it?

Yeah, yeah. So, even though $65 billion seems like a lot to little old me ...

It seems like a lot to me.

It’s 19 percent more than Disney had. Disney has known this bid has been coming for a long time.

Right.

They’re certainly going to come back.

All right, if you had to guess which one was going to get it, which one? Is there a third person that could come in?

No.

Could all of a sudden, we see Amazon?

No.

Anyone?

No. It’s these two guys who are going to fight. And everyone else is content to let them punch each other out.

Okay.

I think ... You got Brian Roberts running Comcast, you got Bob Iger running Disney, this is the ...

Oh, so had cemented ...

They had cemented, but see, they both see this as defining deals for their legacy. They both really want it. No one in their company is telling them not to.

Right.

So they’re going to. They can’t. Honestly, a coin flip. I mean, the Murdoch folks up until now have said, “We prefer the Disney deal for a bunch of reasons.”

What reasons?

When push comes to shove ...

Yeah, they’ll take the money. What is the reasons they like Disney?

It kind of even doesn’t matter because it’s the kind of thing you have to say when you’re walking down the aisle with the person you’re going to get married to.

Any regulatory issues with this?

Yeah, there will be some regulatory stuff. This is a horizontal merger.

Yes, it is.

Which is traditionally a tougher thing to get by. If you’re cynical you’d say ...

Because Comcast owns NBC.

Well no, it’s because you’ve got content companies in the same business combining. Which, theoretically, makes them more powerful. That’s the thing regulars normally care about.

Yup.

So, again, we can go into the minutiae, but both of them are probably going to have to give something up to make the deal go through. They’re both prepared to do that.

Do they have to give up some superheroes?

Superheroes, some sports. Basically, that’s one of the big assets here, is the full complete rights Marvel. Disney has most of them, Fox has a few of the Marvel characters that combines ...

Right. Who wants the mutants?

That’s Fox right now.

Okay, yeah, so, all their superheroes.

You know all the stuff.

I love the superheroes.

How can you play like you don’t, when you know exactly ...

I know all ... I have children.

Don’t blame it on your kids. You love this stuff.

I do. I do like the mutants, the X-Men. That’s my favorite. I like Marvel, and of course I love Wonder Woman.

Do you want to ask what this means for consumers?

What does this mean for consumers?

Good question.

That’s what I was just ... my last question here in this section.

You should be wary when all the stuff you like to consume and/or need to consume or think that it’s important to democracy to consume starts getting owned by a smaller group of people. That has been happening for decades, but now it’s really going to accelerate.

Right.

It’s worrisome.

Yes, I am also concerned that one company owns search and one company owns social and one company owns commerce.

And by the way, this is all happening while net neutrality is now officially off the books.

Right. So the big giants ...

So when you have a content company combining with a distribution company, there’s even more temptation to make it more difficult not to consume rival content. Should be worrisome.

If you’re optimistic ... internet ... It’s fine. We didn’t first foresee Netflix that number of years ago. YouTube was dogs on skateboards a few years ago. This stuff will work itself out. These guys are all reacting to technology. If they had this much control, they wouldn’t be combining because they would have squelched Facebook and Google already.

Yeah. So you think Amazon’s the one that’s going to buy something first? What would they buy?

Seems most likely. Easily buy a studio.

Which one?

Our handy map. I’ve got this cool map, go to recode.net, it’s the media landscape. The pink guys are distributors, the blue guys are content companies. The blue guys are all smaller than the distributors to begin with. You’ve got companies like CBS, Viacom, Sony, Alliance Gates/Stars, AMC, these companies are all basically for sale now.

Right.

Not officially for sale, they’re for sale ...

What about Netflix? Just too expensive?

I think Netflix is too expensive, and no one wants to compete with Netflix. It’s a good question about what you get if you buy Netflix. But yeah, I mean if you were really going to go on and you might just say, “Look, these guys are the best at it. Let’s buy them and just be done with it.”

And then that’s all you’re ...

Like if I’m Apple.

Apple.

And I’m screwing around with content, and I’m spending a couple billion dollars, just put him in charge of it. By the way, Apple doesn’t get content.

Right, they don’t.

They kind of get that they don’t get content. If you think it’s important to do this ...

If I was Apple I’d buy Reed Hastings.

Let’s tell Tim.

I will tell him. Well, Reed Hastings could also go to Facebook, but ... He’s on the board.

I don’t think this fits with Facebook’s DNA.

Amazon, yeah.

But Amazon could clearly say ...

... he’s on a lot of those ...

Yeah, he’s on boards. He was on the Microsoft Board, I think he’s off now, right?

Well, he’s around. He’s everybody’s favorite executive.

I think Facebook is in that, “We really don’t feel comfortable in this business, we’ll ...”

They’ve got a bunch of things to clean up over there.

Yes.

They better be cleaning them up. Anyway, we’re going to take a quick break for a word from our sponsors, and then we’ll be back with Peter Kafka from Recode. Peter, can you give me your best reading of the line “hashtag money”?

Hashtag money.

You sold nothing.

[ad]

And we’re back with Peter Kafka, Recode’s executive editor, talking about media merger mania, that’s three M’s. We’ve got a couple of questions here from our readers, and then we’re going to wrap up by talking about Viacom and CBS.

From Quan Tu: “Content generators covered the first personal relationships mobile has with end users. Who does what, when and where? Will new mobile tech companies avoid mergers? For example, can Amazon reduce satellite latency from voice and video enough to minimize terrestrial touchpoints?” Oh my God ... Okay.

I only understood half of that.

All right.

Here’s what I think he’s talking about.

Okay.

Is the direct consumer connection, who is going to be able to bring their stuff directly to consumers and sell to them, like Netflix does already.

Right.

Like many of the internet companies do already. Can the big content guys, the Time Warners of the world, do this?

Right now they don’t. They’re basically wholesalers. They’re trying to fix that. So you can either argue that the only way they can do that is by selling themselves to someone like an AT&T, who again has a direct billing relationship and they know exactly who you are.

Or you could argue that it’s actually not rocket science to do this. CBS, which is a very old light media company, a couple of years ago just up and said, “Hey, you could now subscribe to CBS directly through us. We will sell it to you for six bucks a month. Boom. Here you go.” They don’t get a lot of credit for doing that. They seem to be somewhat successful at doing it.

You could argue that it isn’t that hard to actually just sell the stuff to the consumers via the internet. It’s happening right now. A bunch of these guys are doing it.

Right. Right. Okay.

All right this is from our colleague from Vox, Steven Belser, the GM of Recode and the Verge. “Now that AT&T/Time Warner has paved the way for other mega mergers, what’s the impact on medium-size media companies? How does Vice, BuzzFeed, Group 9, obviously Vox, fit into the” — he’s asking, asking for a friend — “fit into the media landscape? Would they benefit from the opposite ruling, where the road to additional scale/content/distribution came via a handful of smaller acquisitions? Or is less regulation and M&A of any size good for all?” I think they are busy with the bigs, right?

I know Jim Bankoff listens to Recode Media. Does he listen to this?

I don’t know.

Okay, let’s pretend he’s not listening.

Okay.

I don’t think the merger matters one way or another to those mid-sized media companies/bigger internet companies like us and Vice and BuzzFeed. I think the fundamental question/problem for people in that peer group is, who’s our buyer? A couple of years ago, the logical buyer was a TV company like NBC.

Which is an investor in Vox.

Now they’re being acquired. Anyway, but the bigger problem, bigger question, was, “What would we solve for them when they bought us?” And the premise that, “Oh, we know how to reach young people, we can monetize that in order to solve your digital problem. We’re going to solve your millennial problem.” It’s harder for many of those companies to make that argument to those would-be buyers today.

Right.

Certainly if valuations ...

Should have sold when the getting was good.

I’m just redacting everything right now.

Right, right. Okay.

Just imagine a big “redacted” sign around my face.

Yeah, okay, all right. But it’s interesting, I mean, obviously it’s ... They’re also dealing with the big ones now.

First of all, they’re preoccupied because they’re buying or selling bigger companies, or being sold to bigger companies.

And there’s bigger ones above that.

Right.

Above this group.

Could an NBC afford to buy a Vox? Or a BuzzFeed, or even a Vice? Sure. You’d have to explain to them what they’d get out of it. At least several of them will tell you right now they’re not that interested in companies that are in the ad business right now because they have their own struggles with that. If you have a business where you get consumers to pay you for things, they would love to hear about that.

Right, right. Interesting time. And also it should be said, this Vice story that appeared in New York Magazine. Talk about that.

This is a good sort of de-pantsing of Vice, it happened sort of after the fact, because people ...

Changed. Nancy Dubuc took over.

Dubuc, everyone’s figured out, “Oh, the Vice story was more story than we thought.” I think the interesting part of that, you should go read the story, is that Vice did have a chance to sell to Disney a couple of years ago. That fell apart, presumably because of price, and I think that if you’re Shane Smith and Vice’s investors, you think, “Man I wish we would have taken that deal at two or three or four billion dollars, and not insisted on 10, because now we may have a very hard time getting back to two or three or four billion dollars.”

Right. The way Maker did, or something.

Right, and again, I don’t know who the logical buyer is for a Vice anymore.

Right, and then the same thing with BuzzFeed, too. The Disney...

Yeah, this is gonna depress us all. Although you know what? It’s great, we can all be strong independent digital media companies.

Whatever, it’s just an interesting time. It’s just these things go up and down, too.

They go up and down, and a couple of years ago all of these sized media companies looked like the future of the media business, and a big part of that premise was, these guys have figured out audience and how to reach them. They figured out Facebook and how to work with Facebook. They’re still big-sized media companies, the Facebook part of it has totally been removed from the table, right. So, that is a big problem.

What about those companies buying? Not just these, but these like them.

The Facebooks of the world?

Googles.

Well, I don’t see what problem you solve for them.

Yeah, problem. You’ve got to solve a problem.

Here’s the thing, Facebook and Google are the problem for many of these companies. They have 80, 90 percent of the digital ad spend, they don’t need to acquire any other properties.

Right, yep. Very good point.

They already have the eyeballs.

Nobody solves any problems, you have to solve a problem to be bought, Peter.

I think that’s the idea.

I think that’s the idea.

Or have a great story and good timing.

Right, exactly. All right, let’s finish up by talking about the other mega media merger story that’s been floating out there, CBS and Viacom. Obviously, a lot of contention there. For listeners who’ve forgotten, give us a quick refresher, and then where it’s going.

This is an old-time media mogul brawl, the kind of thing that used to be a ...

Right, Shari Redstone versus Les Moonves. They used to love these stories.

It’s the kind of thing that you used to be ahead of A-1 on the Times and there’s still HBO documentary shows about this right now, the “Succession” show. Shari Redstone’s father, Sumner Redstone, built a media company that had CBS and Viacom. He split them up. Now he’s basically passed on control to Shari Redstone, or she’s taken it from him. She wants to combine them.

Why does she want to combine them?

She wants to combine them because Viacom, which is basically the MTV business plus Paramount, is in real trouble and needs to find a buyer. That was supposed to be the sexy business, CBS was supposed to be the dull business, Les Moonves runs CBS.

And well.

Has done really well with it. Here’s the thing. Both Les Moonves and Shari Redstone agree that both these companies need different owners. They just are debating who’s going to control it and who they’re going to sell to. If Les Moonves had his way, he would sell to Verizon or Amazon or someone. He doesn’t want to go work with the Viacom folks, and frankly he doesn’t really want to work for Shari Redstone anyway. It is a great, juicy, gossipy battle that in some ways is totally a footnote to the big ideas we’re talking about.

Right, well, did they become a purchaser? They become a purchased, right?

They’re definitely going to have a new owner in the next couple of years.

Right, right. So how does that solve itself? They’re just fighting with each other, with lawyers, it seems like. It does seem like ...

It’s a game of chicken, who has more to lose. Shari Redstone is richer and she owns these companies.

She owns control of it.

Theoretically she has more to lose, because if this thing just goes in the toilet ...

And he leaves ...

... she’s lost much more than Les Moonves has. Les Moonves will leave and continue to be a very rich person. It’s not his company.

But he kind of likes to be in the game. He won’t have a game.

He totally likes to be in the game. But, by the way, I can totally see him being hired by an Amazon or someone to go run a fiefdom if he wants to.

Huh.

Or he might say, “You know what? I’m 70, I’ve had a really good life, I’ve managed to escape with my ...”

Dignity.

“... professional reputation, I have yet to be tagged by the Me Too movement, I’m getting out.”

Right, getting out now. Interesting. Do you think that’s what’s going to happen with him?

It’s hard for these guys to walk away.

It seems just like a game, right. They do, they wander around conferences ...

You would have said that about Bewkes, you would have said that about Murdoch. Then again, Murdoch’s just going to sort of stay in the game.

I wouldn’t have said that about Bewkes. I can see him heading up to Maine and spending, you know, time at a country club. Sorry.

Boats.

Boats, there’s boats in Jeff’s future.

They have a lot of money, they can purchase their own household staffs.

No, I get it, but they wander around. I’ve seen them wandering, like the ones, you know, you see it.

Jerry Levin, bumping around Hawaii.

Yeah, yeah. No, was it Hawaii now? I saw him in Los Angeles last time I saw him. But you know what I mean?

Yeah, I do.

They like the life.

I would like to have that problem.

Would you?

That I have a giant media asset ...

They don’t. They look vaguely unhappy, with all their money.

Everyone has problems.

I guess, I suppose, I don’t know. People like the game, Peter.

You will have that problem one day.

Me? No, I’m going to leave. No, you’re wrong. I think you could not be reading me more wrong. I will be gone and you’ll never see me again, thank you very much.

Who ...

I’ll just disappear.

You’re going to disappear from microphones and cameras? Not a chance.

Like the rapture. You’ll see.

Zero chance.

All right, we’re just going to have a bet on that.

Yeah.

It’s going to be like ... you’re going to be like, “What happened to that Kara Swisher? I don’t know, where did she go?”

You’re going to have to come back to reclaim it, and then ...

No.

... the whole point of reclaiming it is to brag that you won the bet.

No, how sad and pathetic. No, no, no. I will be like in Rome or Hawaii or somewhere else, and you will never see me again.

I’m shaking my head as vigorously as I can.

All right, we’ll see how it goes. Maybe I’ll write a tell-all book and then go, be gone.

There you go.

That’s what I’ll do. All right, so that’s it. So this is all going to happen now. This is all ...

It’s all happening now. It’s great. It’s the Full Employment Act for media reporters, thank you very much. If you are a consumer of this stuff, nothing happens tomorrow, but keep an eye on this, because the next couple of years, things could change. By the way, there could be a tremendous upside, because there’s a lot of money being thrown at content right now, so if you like “The Wire,” if you like “Mad Men,” if you like all this stuff, more of this stuff is going to get funded, for a while at least.

Right. Now I want you to give a big prediction. What in 10 years will be the biggest media company?

Google.

Google?

Come on, that’s easy.

Google, why?

They’re the biggest media company already, today.

But the ownership of studios ...

I think they’re just going to steamroller over stuff and not even realize they’ve acquired it along the way.

I see, okay.

“Oh, did we just buy the NFL?”

Who’s going to run that? Sundar Pichai is going to ...

No, he’s going to find people to run it. He’ll find Les Moonves-es to run it for him, and they’ll kind of hold their nose and be like, “That’s weird, these content people, but we’re continuing to make so much money that this is fine.”

I thought you’d say Bezos.

Yeah, could be Bezos. But I think Bezos wants to own everything, and media is a side business, and Google is fundamentally a media business.

Is there any way we can pull Elon Musk into this? That’s all I want to know. Because, you know, him and the press.

Well, he listens to everything.

Yes. Wouldn’t it be cool if he bought a media company?

No.

No.

No, well he’s gone and hired a bunch ... this is a real story, he’s hired a bunch of guys from The Onion, to make something.

Oh, this is Pravda?

No, this preceded the Pravda thing.

Okay.

He has hired a bunch of former Onion people.

What did you think about the Pravda thing? You didn’t really mouth off that much. I liked that about you.

Yeah, I kept my mouth shut.

You didn’t get all high dudgeon about it.

I think it’s an entertaining sideshow. I don’t think anyone cares, by the way. Elon Musk just laid off 9 percent of his workforce, actually. He has a real company to run.

He’s got a real company.

Several companies to run. I think he gets off on tweaking the press, the Ppess is very easy to bait.

He’s trolling them.

So why not? I don’t think it’s ... I’m not worked up, like some of my colleagues in the press about what he’s doing.

Yeah, they’re real worked up.

I think comparing him to Trump misses the point, he’s not the president of the United States.

The only thing I would say is, he does have a following that is ... he’s got some fan-boys.

Yes, he has a following, and yes, it’s not a great precedent for big companies to go around beating up on the press. But we’re the press, it’s fine. We have the First Amendment.

That’s what I say.

Save your ire for the president and for the DOJ and for Sarah Sanders lying in front of the podium. That’s what matters.

Exactly. Because we pay for her.

Yeah.

We don’t pay for Elon Musk.

She works for us.

Do I pay for Elon Musk?

No, not yet.

All right.

You subsidize him a little bit.

All right, okay. Well, he’s done some interesting things.

It’s a good trade.

All right, this has been another great episode of Too Embarrassed to Ask. Thanks again to Peter Kafka for joining me on the show. If you haven’t already, make sure to subscribe to his podcast.

Free.

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