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    Warner Bros. Discovery Q1 Earnings Report: Streaming Loss

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    Warner Bros. Discovery CEO David Zaslav on Thursday argued the future of his studio and the wider TV streaming landscape will be driven by the increased packaging and marketing of streaming products together.  

    “As we look at what happens ahead, there likely will be a restructuring of how people view content. And there’s a lot of irrationality in the market that’s getting shaken out, in terms of the amount of money spent. We said early on, it’s not how much, it’s how good, and that’s what we’re focusing on. And ultimately, the business will look very different in two to three years,” Zaslav told analysts during a morning call as rival streamers increasingly move to bundle their offerings together.

    After releasing their first quarter earnings results, WBD execs talked about proposed streaming bundle partnerships with rival studios, including a sports steaming pact with Disney and Fox, to better serve cost-conscious consumers. The goal is the media conglomerate working with rival studios to squeeze profitability out of their direct-to-consumer platforms in the face of competition against market leaders Netflix and Amazon Prime Video.

    On a proposed triple-play bundle of Disney+, Hulu and Max, Zaslav told analysts:  “It will be priced well, and it will be both ad light and on ad free and for consumers in the U.S. it will be a really positive consumer experience and gives us a real advantage and opportunity when you look at the marketplace.”

    Earlier, Warner Bros. Discovery posted a first-quarter profit of $86 million for its Direct-to-Consumer (DTC) unit, which includes its streaming and premium pay-TV services, compared with a $50 million year-ago profit, after turning a full-year 2023 profit earlier this year.

    The company said Thursday that it ended March with 99.6 million global streaming subscribers, compared with 97.7 million as of the end of 2023 and ahead of Wall Street expectations. Segment revenue was nearly unchanged at $2.46 billion, helped by subscriber price increases and higher advertising revenue, driven by Max U.S. ad-lite subscriber gains.

    With Netflix profitable and being seen by some observers as the king of streaming, Wall Street has been looking for Hollywood conglomerates to make their streaming business units profitable after an initial focus on subscriber growth. Most sector giants ended 2023 with a ways to go.

    On the analyst call, Zaslav argued Disney and WBD with their triple-play content package wanted to put themselves at the center of a streaming bundling push in by the entertainment industry to reach and retain consumers. “Two of the world’s most storied content companies are joining forces to deliver consumers the best and most diverse offering of entertainment at a very attractive price,” he told analysts about the Disney+/Hulu/Max initiative.

    WBD and Disney plan to combine the Disney+, Hulu and Max streaming services, with specific pricing still to be determined, with the promise of both ad-free and ad-supported options of the bundle. Elsewhere, Zaslav touted a move by telecom giant Verizon to roll out a $10 per month deal that includes the ad tiers of both Netflix and Max. “The bundle with Netflix is doing much better than expected,” he reported.

    JB Perrette, CEO and president of global streaming and games for WBD, argued on the morning call that bundling streaming services made both financial and creative sense after an earlier streaming arms race. “What happened in the 2010s is the industry went down a very dangerous financial path of trying to invest in every type of content, in every genre, to try and be something for everyone,” he argued of Hollywood’s Peak TV experiment having left consumers with too much content at too much cost, and having to cut back.

    The Disney+/Hulu/Max bundle aims to battle increased competition in the streaming space, which has TV viewers cycling onto and out of streaming platforms to view their favorite content. “Churn is just the killer in this business, and so we have been hyper-focused on it… Certainly bundling is a big helper,” Zaslav argued.

    Perrette added major studios and streamers had to focus on their strengths and stay in their lanes for competitive advantage, rather than splash out on originals in all genres as part of an all-out war between studios for supremacy in the streaming space.

    “We’re now getting back to all being great at what we do and swim in the lanes that we were great at. Disney obviously is incomparable and a world leader in kids and family. We are world leaders in premium dramas, scripted drama, comedy and non-fiction verticals, and we can get back to investing in and prioritizing our lanes and our key content, and they can do that. And these bundles synthetically allow us to do that, while providing the consumer with a very attractive price for the combination of products,” he argued.

    And on the sports front, Zaslav talked briefly about Warner Bros. Discovery looking to retain NBA media rights as they come up for renewal. “We’re in continuing conversations with them (NBA) now. And we’re hopeful that we’ll be able to reach an agreement that makes sense for both sides,” he told analysts. Zaslav added WBD has matching rights to answer third party offers as the NBA hold media rights negotiations with other players.

    Should a new owner of Paramount Global auction off Paramount+, Zaslav said his studio would be ready to pick up new sports and entertainment content that came up for offer in the event of a studio breakup. “We’re always looking for great content… If we think it can provide a better consumer experience and strengthen our offering, we’re always looking at opportunities,” he told analysts.

    During the first quarter, WBD’s quarterly earnings report showed weakness at its studios and networks segments though.

    Studios results were hit by fewer TV shows delivered than in the year-ago period due to the Hollywood strikes’ fallout, as well as a weaker performance in video gaming. In the first quarter of 2023, the video game Hogwarts Legacy did very well, making for a tough comparison, while in the latest quarter, Suicide Squad: Kill the Justice League didn’t do well, hitting gaming revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA).

    Studios revenue fell 13 percent to $2.82 billion, with EBITDA dropping 70 percent to $184 million. Games revenue was down “significantly,” WBD said, while TV revenue “declined meaningfully as production delays resulting from the WGA and SAG-AFTRA strikes led to fewer episodes delivered during the first quarter of this year, as well as the timing of content availabilities and licensing deals.”

    Theatrical revenue, however, “increased significantly due to Dune: Part Two and higher carryover from fourth-quarter 2023 titles,” the company noted. “Home entertainment revenue grew materially due to Wonka and Aquaman and the Lost Kingdom.”

    The first-quarter Studios results came after a year of major transition for Hollywood studios affected their financials in 2023.

    WBD’s networks unit was hit by continued weakness in the linear business and an advertising revenue miss, which was only partially offset by cost management initiatives. Revenue and EBITDA both decreased by 8 percent to $5.13 billion and $2.12 billion, respectively.

    Addressing analysts, Zaslav predicted more collaborations between Max and the studio’s linear TV channels following the success of ID’s Quiet on Set: The Dark Side of Kids TV premiere, including on Max. “The true crime vertical has great traction on Max, and by leveraging the production scale at ID, we will be able to curate additional series very effectively and efficiently that work across Max and our other distribution platforms,” he argued.

    Ad revenue in the unit fell 11 percent, “primarily driven by audience declines in domestic general entertainment and news networks, as well as the soft linear advertising market in the U.S. and Latin America,” only partially offset by growth in the Europe, Middle East and Africa region. Distribution revenue decreased by 6 percent, driven by the firm’s AT&T SportsNet exit and “declines in U.S. pay-TV subscribers, partially offset by increases in U.S. contractual affiliate rates and inflationary impacts in Argentina.”

    WBD’s first-quarter total revenue fell 7 percent to $9.96 billion, while the company reduced its expenses by 9 percent to $10.23 billion. That led to a quarterly loss of $966 million, including $1.88 billion of “pre-tax acquisition-related amortization of intangibles, content fair value step-up, and restructuring expenses.”

    Adjusted EBITDA, another profitability metric, dropped 20 percent to $2.10 billion, “primarily driven
    by the success of Hogwarts Legacy in the prior-year quarter while Suicide Squad: Kill the Justice League generated significantly lower revenues in the current year quarter,” the conglomerate said.

    WBD shares were down 3.9 percent at $7.50 in pre-market trading, close to the stock’s 52-week low of $7.34 hit on May 1.

    Biden Says the U.S. Will Not Supply Israel With Weapons to Attack Rafah

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    President Biden acknowledged on Wednesday that American bombs have been used to kill Palestinian civilians as he warned that the United States would withhold certain weapons if Israel launches a long-threatened assault in southern Gaza.

    In some of his strongest language to date on the seven-month war, Mr. Biden said the United States would still ensure Israel’s security, including the Iron Dome missile defense system and Israel’s “ability to respond to attacks” like the one Iran launched in April.

    But he said he would block the delivery of weapons that could be fired into densely populated areas of Rafah, where more than a million Palestinians are sheltering.

    The president had already halted the shipment of 3,500 bombs last week out of concern that they might be used in a major assault on Rafah — the first time since Hamas attacked Israel on Oct. 7 that Mr. Biden has leveraged U.S. arms to try to influence how the war is waged.

    On Wednesday, he said that he would also block the delivery of artillery shells.

    “If they go into Rafah, I’m not supplying the weapons that have been used historically to deal with Rafah, to deal with the cities, that deal with that problem,” Mr. Biden said in an interview with CNN’s Erin Burnett.

    He added: “But it’s just wrong. We’re not going to — we’re not going to supply the weapons and artillery shells used, that have been used.”

    Asked whether 2,000-pound American bombs had been used to kill civilians in Gaza, Mr. Biden said: “Civilians have been killed in Gaza as a consequence of those bombs and other ways in which they go after population centers.”

    Mr. Biden’s remarks underscore the growing rift between the United States and its closest Middle East ally over the war in Gaza, which has killed more than 34,000 people and caused a humanitarian crisis. The United States is by far the biggest supplier of weapons to Israel, and the Biden administration plans to deliver a report to Congress this week assessing whether it believes Israel’s assurances that it has used American weapons in accordance with U.S. and international law.

    Mr. Biden had resisted earlier calls to condition aid to Israel. He remains unwavering in his support of Israel’s right to defend itself, even as he speaks out forcefully against the invasion of Rafah and grows frustrated with what he once described as Israel’s “indiscriminate bombing.”

    But Prime Minister Benjamin Netanyahu of Israel has rebuffed the U.S. warnings, saying that Israel would move forward with eradicating Hamas even if it has to do so alone.

    This week, the Israeli war cabinet voted unanimously to move forward with a Rafah assault, and Israeli forces warned more than 100,000 civilians to evacuate as it started what it called “targeted strikes” against Hamas.

    U.S. officials said this week that Israel had said its operation thus far in Rafah was “limited” and “designed to cut off Hamas’s ability to smuggle weapons into Gaza,” but continued to express their concern with an escalation.

    Mr. Biden said he did not consider Israel’s operations in Rafah to date to qualify as a full-scale invasion because they have not struck “population centers.”

    But he said he considered them to be “right on the border,” adding that they were causing problems with key allies such as Egypt, which has been integral to cease-fire negotiations and opening border crossings for humanitarian aid.

    Mr. Biden said he had made it clear to Mr. Netanyahu and his war cabinet that they would not get support if they moved forward with an offensive in densely populated areas.

    “We’re not walking away from Israel’s security,” he said, “we’re walking away from Israel’s ability to wage war in those areas.”

    Mr. Biden was also asked about Gaza protests on college campuses — specifically chants calling him “Genocide Joe” — that have erupted in recent weeks.

    Asked if he hears the message of those young Americans, Mr. Biden said:

    “Absolutely, I hear the message.”

    Secure by Design Pledge | CISA

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    Overview

    This is a voluntary pledge focused on enterprise software products and services, including on-premises software, cloud services, and software as a service (SaaS). Physical products such as IoT devices and consumer products are not scoped in the pledge, though companies who wish to demonstrate progress in those areas are welcome to do so.

    By participating in the pledge, software manufacturers are pledging to make a good-faith effort to work towards the goals listed below over the following year. In the case where a software manufacturer is able to make measurable progress towards a goal, the manufacturer should publicly document how they have achieved such progress within one year of signing the pledge. Where the software manufacturer is not able to make measurable progress, the manufacturer is encouraged to, within one year of signing the pledge, share with CISA how the manufacturer has worked towards the goal and any challenges faced. And, in the spirit of radical transparency, the manufacturer is encouraged to publicly document their approach so that others can learn. This pledge is voluntary and not legally binding.

    The pledge is structured with seven goals. Each goal has the core criteria which manufacturers are pledging to work towards, in addition to context and example approaches to achieve the goal and demonstrate measurable progress. To enable a variety of approaches, software manufacturers participating in the pledge have the discretion to decide how best they can meet and demonstrate the core criteria of each goal. Demonstrating measurable progress across the manufacturer’s products can take a variety of forms — such as by taking action on all the manufacturer’s products, or by choosing a set of products to first address and publishing a roadmap for other products.

    CISA acknowledges and applauds software manufacturers who already meet or exceed these goals. In such a case where a software manufacturer already meets or exceeds a goal, the manufacturer should publicly describe how they are doing so. In these cases, CISA welcomes additional efforts to go above and beyond the goals in the pledge.

    This pledge seeks to complement and build on existing software security best practices, including those developed by CISA, NIST, other federal agencies, and international and industry best practices. CISA continues to support adoption of complementary measures that advance a secure by design posture.

    Robert F. Kennedy Jr. pushes for nationwide ballot access

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    CNN
     — 

    Before Robert F. Kennedy Jr. took the stage at a campaign rally in Des Moines, Iowa, last month, a team of his campaign staffers and volunteers organized hundreds of attendees through an assembly line of government forms, ID checks and color-coded wristbands. The bureaucratic workforce contrasted starkly against the classic rock music blaring over the speakers, the crowded bar at the back of the venue and the jovial spirit circulating among Midwesterners excitedly awaiting Kennedy’s remarks.

    But the paperwork was a fundamental ingredient of the rally’s significance. The independent candidate’s campaign planned to use the event to qualify for Iowa’s presidential ballot through a unique process that requires hundreds of registered voters in Iowa to sign up for a convention-like process to formally nominate Kennedy to appear on the state’s ballot.

    The Iowa event is part of the Kennedy campaign’s push for ballot access in all 50 states and Washington, DC, an undertaking that has endured hiccups and won incremental victories since the effort began last year, capitalizing on voters’ appetite for an alternative to the presumptive nominees from the major parties, President Joe Biden and former President Donald Trump.

    “People on both sides are waking up and wanting an option,” Dan Twelmeyer, a Kennedy supporter from Des Moines said. “They don’t want the lesser of two evils. They want hope, he delivers a message of hope.”

    After his remarks in Iowa, Kennedy doubled down on his audacious 50-state ballot access goal and said the campaign will achieve full ballot access in the next few months.

    “We will have ballot access in every state by the end of July,” Kennedy told reporters.

    Whether Kennedy succeeds in his ballot access mission could have major implications on the playing field ahead of the presidential election. An NPR/PBS/Marist College national poll of registered voters released earlier this month showed Kennedy earning 11% support in a hypothetical five-way matchup between Biden, Trump, Kennedy, independent candidate Cornel West and Green Party candidate Jill Stein. Biden and Trump both received 42% support in the same poll.

    It’s unclear if Kennedy would draw more support from Biden or Trump, but in a close race, a third-party candidate with substantial support has potential to tip the balance of the electoral map in unknown ways. In the 2020 election, Arizona, Georgia and Wisconsin were all decided by margins of less than 1 percentage point.

    Drew Dietle, a 37-year-old Kennedy supporter from Golden Valley, Minnesota, says he believes the environment is ripe for someone like Kennedy to make a significant impact.

    “I don’t think we’ve ever had two candidates like Trump and Biden who are more unpopular, and so I think the road is wide open for a third-party candidate to be successful this time around.”

    Kennedy’s ballot push could also go a long way to proving the legitimacy of his insurgent third-party bid in the eyes of voters who are curious about his message but concerned about his electability.

    Stefanie Westendorf, a 47-year-old plumber from Dayton, Ohio, voted for Trump in 2016 and 2020 but has also voted for Democrats in previous elections. She said she’s considering voting for Kennedy because of his background in environmental advocacy and because “he’s not a politician.” Still, she’s leaning toward supporting Trump in November because she doesn’t think Kennedy can qualify for the ballot in her state.

    “I like Kennedy, but, you know, he’s not gonna be on the ballot in Ohio,” Westendorf told CNN in March.

    Kennedy is officially on the ballot in five states: battleground Michigan, Utah, Hawaii, Delaware and California. The campaign says it’s gathered enough signatures to put Kennedy on the ballot in two more battlegrounds, North Carolina and Nevada, as well as Ohio, Idaho, Nebraska and Iowa.

    The campaign has adopted a wide range of methods meant to find the easiest way to navigate the often disparate and convoluted processes to meet different ballot qualification criteria in each state. Volunteers have collected signatures outside sporting events, on college campuses, at festivals and state fairs and more across the country. The campaign has even drafted off the exposure of more prominent political events: Volunteers collected enough signatures to appear on the New Hampshire ballot by canvassing voters at polling places on the day of the Granite State’s presidential primary in January.

    The campaign typically aims to collect at least 60% more signatures than the required amount in each state, a campaign official told CNN, to avoid invalidated signatures undermining Kennedy’s petition.

    Kennedy has also reached out to minor parties with ballot eligibility in some states to circumvent the signature-gathering process altogether, making strange bedfellows of Kennedy and some fringe political groups. He’ll appear on Michigan’s ballot on the Natural Law Party line, a party best known for promoting transcendental meditation. In California, Kennedy will be on the ballot thanks to the American Independent Party, a group founded in the 1960s to promote segregationist Alabama Gov. George Wallace’s third-party bid in 1968.

    In a video statement announcing his California ballot qualification, Kennedy condemned Wallace’s views and said the party has “been reborn as a party that represents not bigotry and hatred, but rather compassion and unity and idealism and common sense.”

    Sierra Lyons attended a Kennedy campaign event in Michigan celebrating his ballot access win in the state along with her mother. A native of Macomb County who voted for Trump in 2020, she’s been volunteering for Kennedy since last year. She said she’s excited to have the chance to vote for Kennedy, despite criticisms from Democrats and Republicans that Kennedy could be a spoiler for Biden or Trump.

    “I’m not even letting myself go there because I’m not going to vote for Biden or Trump, just because people say the odds are stacked against Kennedy,” Lyons said.

    The campaign’s ballot access infrastructure is overseen by campaign manager Amaryllis Fox Kennedy and Nick Brana, the campaign’s ballot access director, who coordinate strategy with staff and volunteers in each state. Trent Pool, a key ballot access consultant who has worked with the campaign since last year, has helped bring professional petition circulators into the campaign as it ramps up signature gathering in several states. (Pool was charged with assault in Manhattan last week, a New York police spokesperson told CNN. Pool’s attorney told CNN he is “innocent of all charges.”)

    The team works closely with Paul Rossi, the campaign’s lead ballot access attorney who has spearheaded lawsuits challenging petition filing deadlines and signature gathering protocols and coordinated the campaign’s defense against legal challenges over its ballot access work.

    In Utah, the state moved back its petition deadline for independent candidates after Kennedy sued the state. In Idaho, the state legislature changed its statutes on petition gathering after the campaign filed a lawsuit challenging its petition deadline and rules around signature gathering. And in Hawaii, the campaign successfully defended a challenge to invalidate its ballot petition from the state Democratic Party despite not being formally represented in the hearing by an attorney.

    Despite those legal victories, Kennedy still faces a long road to nationwide ballot access. The campaign has yet to file petitions in most states, which will subject the campaign to scrutiny from more state elections officials and outside groups over the validity of their petitions and their signature collection methods. The campaign has already faced issues in Nevada, after the Secretary of State’s office admitted it “provided inaccurate guidance” to the Kennedy campaign regarding whether it needed to announce Kennedy’s vice presidential running mate prior to gathering signatures in the state.

    The campaign is waiting to submit petitions in states where it said it has collected enough signatures to qualify until the deadlines in those states draw closer in hopes of reducing opportunities for legal challenges from Democrats and Republicans, a second campaign official told CNN.

    American Values 2024, a super PAC backing Kennedy, had initially outlayed an eight-figure initiative earlier this year to gather signatures on behalf of Kennedy in some states. The PAC said it gathered enough signatures to put Kennedy on the ballot in Georgia, Michigan, Arizona and South Carolina. But in the wake of a Federal Elections Commission complaint filed by the  Democratic National Committee alleging the PAC illegally coordinated with the Kennedy campaign to set up the ballot access operation, the PAC has abandoned its plans despite spending more than $2 million on the effort, a PAC official told CNN.

    While most states require candidates to collect under 10,000 signatures to qualify, some states require candidates to meet significantly larger thresholds. Florida, for example, requires candidates to collect more than 145,000 signatures to qualify in the state. But Kennedy has expressed optimism about hitting signature targets in some states with the largest thresholds, like New York and Texas. New York in particular is a priority for Kennedy due to the state laws that require a high volume of signatures to be gathered in a short six-week window, the second campaign official told CNN, and the campaign sees qualifying in the state as a critical step in gaining ballot access nationwide. The campaign has volunteers in all 62 counties in New York working to collect the necessary 45,000 signatures before the state’s petition filing window closes at the end of May.

    Matt Rigolini is a 43-year-old health care worker from Huntington, New York, who’s backing Kennedy. He said he didn’t vote in the 2020 election and would stay home again unless Kennedy is able to qualify for the ballot in New York.

    “If Kennedy wasn’t on the ballot whatsoever, I would not be showing up to the polls. I have zero interest if he’s not on the ballot,” Rigolini said. “Trump is a non-option, and Joe Biden’s a non-option. So I would just be happy to sit that one out.”

    The legal battles and signature-gathering challenges amount to financial hurdles that typically prevent independent candidates from gaining ballot access nationwide. Kennedy’s campaign ended March with about $6 million in cash on hand after ramping up spending in March to $4.5 million. But the campaign has received a significant financial boost from Nicole Shanahan, Kennedy’s independently wealthy vice presidential nominee, who contributed $2 million to the campaign in March. Politicians can contribute unlimited sums of money to their own campaigns, meaning Shanahan could continue to provide liquidity as the ballot access effort picks up steam.

    For Kennedy, gaining ballot access is the first measure of his outsider campaign’s potency in the race. For some voters, their support for Kennedy is predicated on whether he can compete in every state. Debra Chilcott, 57, said she hopes Kennedy has enough support nationwide to get him on the ballot in every state. But Chilcott, a paralegal from Patchogue, New York, said that if he doesn’t get on the ballot everywhere, she’ll likely vote for Trump, whom she’s supported previously.

    “I want to obviously put my money where the best bet is,” she said.

    But while obtaining ballot access nationwide would mark a major milestone for Kennedy, it’s unclear at this point whether their grassroots outreach for petition signatures will help build support for Kennedy in November. Benjamin Novak, a Maryland voter and a senior at Towson University, gave his signature to help Kennedy get on the ballot in Maryland. He said he hopes Kennedy can gain ballot access across the country for the benefit of voters who want to support him. But he said he’s planning on voting for Biden in November.

    “If I’m going to be honest, I’m not a huge Kennedy fan but I think it’s important to have options for third-party candidates even if they’re not your favorite. It sets a good precedent for the future,” Novak said.

    But for some voters, the opportunity to potentially cast a ballot for a high-profile third-party candidate is an exciting prospect. Doniella Pliss, a 52-year-old from Springfield, New Jersey, said she’s planning to vote for Kennedy if he qualifies in her state. She’s voted for third-party candidates previously but typically supports Democrats. She said she hopes to be able to vote for Kennedy because he aligns with her values.

    “Look, I’m not a rich person. I cannot buy influence.  All I can offer is my vote. I value it very highly. My vote is never wasted,” Pliss said. “Do I see a path to victory? In an ideal world, maybe. In practical terms, maybe not. But for me personally, this vote is more of my choice, and my action and my civic duty. And that’s what I’m going to use it for.”

    Sony and Apollo’s Plan for Paramount: Break It Up

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    Shari Redstone helped build Paramount Global into a media empire, but if Sony Pictures Entertainment and the private-equity giant Apollo Global Management succeed in acquiring it, they plan to break it all up, according to three people familiar with the matter.

    The plan would include auctioning off CBS, cable channels like MTV and the Paramount Plus streaming service, said the people, who asked not to be identified sharing private details. Paramount Pictures — home to blockbusters like “The Godfather,” “Top Gun” and the “Mission: Impossible” franchise — would be combined with Sony’s business.

    Sony and Apollo, which made a nonbinding expression of interest in acquiring Paramount for $26 billion last week, are also likely to keep Paramount’s library of films and TV shows and the rights to well-known characters, including the Teenage Mutant Ninja Turtles and SpongeBob SquarePants. They have not yet outlined this plan to Paramount or its advisers.

    A breakup of Paramount would represent a major changing of the guard in the entertainment industry. CBS and Paramount have been controlled by the Redstone family for decades, since the media mogul Sumner Redstone assembled the conglomerate in a series of audacious deals. His daughter, Ms. Redstone, championed a 2019 deal to reunite it, and she remains Paramount’s controlling shareholder.

    Sony and Apollo are now engaging with Paramount’s financial advisers on next steps in their proposal, the people said. The two companies have not yet signed formal nondisclosure agreements or begun due diligence reviews, a process that could take weeks.

    Though it’s still early, the two bidders have already begun to envision how a deal for Paramount could unfold. The two would likely operate the company as a joint venture controlled by Sony, with a minority stake owned by Apollo, the people said. Sony would look to combine the marketing and distribution functions of the Paramount movie studio with its own operations, and divest the rest of the properties.

    Over time, Apollo could sell its stake in the joint venture back to Sony or to another buyer. It’s not yet clear just how large a stake Apollo would hold in the business, though the company plans to invest billions in the deal, one person said.

    A breakup of Paramount is not a preferred outcome for Ms. Redstone, who would prefer the company to pass on to another buyer intact, a person familiar with her thinking said. But it wouldn’t necessarily be a dealbreaker if the offer was compelling, the person said.

    There are other suitors. Skydance, a media company founded by the tech scion David Ellison, has been in discussions with Paramount for months about a potential deal. Exclusive negotiations between Skydance and Paramount lapsed last week, shortly after Sony and Apollo put in their expression of interest. But Skydance remains interested.

    Sony and Paramount have different approaches to the entertainment business, and a deal would probably result in a U-turn for Paramount. Unlike Paramount, which streams its content on Paramount+, Sony licenses its movies and TV shows to companies like Netflix and Disney. Sony would probably not change that approach in a deal with Paramount and would most likely look to combine Paramount+ with a rival service, such as Comcast’s Peacock or Warner Bros. Discovery’s Max.

    Sony has long pursued Paramount’s movie studio. Several years ago, Sony executives reached out to Paramount to see if the company would be willing to sell Paramount Pictures or merge it into a joint venture, but Paramount signaled it was interested only in a deal for the whole company. So when Apollo made a bid for all of Paramount this year, Sony decided to team up.

    Any deal by Sony would face regulatory hurdles. Regulations restrict foreign owners from holding licenses for U.S. broadcast stations, which could prevent Sony — which is owned by the Japanese-based Sony Group — from owning CBS-affiliated TV stations. But they could divest the stations immediately, or have Apollo apply for the license. They are also considering other options for the stations.

    The deal would also most likely require clearance from the Committee on Foreign Investment in the United States, the panel in Washington that scrutinizes acquisitions by foreign owners.

    Sony and Apollo believe that when they decide to sell the Paramount assets, there could be many logical buyers, the three sources said. Warner Bros. Discovery, which does not own a broadcast network, could be a suitor for CBS. TV station groups like Nexstar and Tegna could be logical buyers for CBS’s owned and operated TV stations.

    The hardest asset to sell would most likely be Paramount’s cable networks, like MTV and Nickelodeon, but those could be sold to a TV programmer looking for greater scale in negotiations with cable companies like Charter and Comcast.

    Biden touts economic achievements in Wisconsin amid persistent concerns on inflation

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    CNN
     — 

    President Joe Biden on Wednesday attempted to draw a direct line between his signature legislative achievements and shovels in the ground — and a direct contrast with Donald Trump — as he seeks to win over voters unhappy with the overall economy.

    Biden announced a $3.3 billion investment from Microsoft to build a new artificial intelligence facility located on the same site where, in 2018, then-President Trump broke ground using a golden shovel on what was supposed to be a signature project under his administration: an electronics factory for Taiwan’s Foxconn, which had secured billions in tax credits and promised thousands of jobs.

    Those investments largely failed to materialize. And in his remarks Wednesday, Biden directly blamed Trump for that failure.

    Trump, Biden said, “came here with your senator, Ron Johnson, literally holding a golden shovel, promising to build the eighth wonder of the world.”

    “Are you kidding me? Look what happened. They dug a hole with those golden shovels, and then they fell into it,” the president said.

    “Foxconn turned out to be just that – a con,” Biden added. “Go figure.”

    The sprawling stretch of Racine County, which sits between Chicago and Milwaukee, has been at the center of an intense local political debate over the development through one whipsaw election after another. Residents who live and work nearby told CNN they were happy to see the projects — and the jobs — but it was hardly a guarantee that their own economic anxieties would be allayed.

    “Things are really uncertain, not knowing what’s going to happen with interest rates and what’s going to happen with the whole economy,” said Dave Flannery, whose family operates the Apple Holler orchard and farm just a few miles from where Biden is set to visit on Wednesday. “Personally, I’m very optimistic in terms of our future, but at times it’s very scary out there.”

    Tom Oberhaus, whose family owns Cozy Nook Farm about an hour away near Waukesha, said inflation is one of the biggest criticisms he has about the Biden administration. While he’s not a huge admirer of Trump and hoped for a Republican alternative, he said he would gladly return to the economic policies of the Trump era.

    “You get your paycheck and it looks good, but when you pay the bills out, it’s like, ‘Wow, it’s all gone,’” Oberhaus said. “To me, inflation is the big overriding problem economically.”

    Asked whether it was fair to place the blame entirely on Biden, Oberhaus said: “They are the administration that’s in power.”

    At the outset of his term, Biden told some Democratic colleagues he planned to be the “most progressive president since FDR,” the architect of the New Deal.

    Biden has spent the last two years on the road touting the trillions of dollars of infrastructure and construction spending that resulted from legislation he signed, much of it passed through Congress on a bipartisan basis. But leading economists have argued the very funding that helped fuel economic growth also caused rising prices — clouding Biden’s ability to sell those achievements to voters.

    “It’s important for him to be here to hammer home his economic messages and make it real for people,” Mandela Barnes, the state’s former lieutenant governor, told CNN. “Some people are still thinking about the $1,500 check they got from Trump.”

    In CNN’s most recent poll, Biden’s approval ratings for the economy (34%) and inflation (29%) remain starkly negative, as voters say economic concerns are more important to them when choosing a candidate than they were in each of the past two presidential contests.

    As Biden leans into the unfinished business of his 2020 campaign — and urges voters to let him “finish the job” in 2024 — multiple outside advisers and donors have expressed worry the president is tacking too far to the left. The concern: A platform containing costly proposals like universal preschool, subsidized child and senior care, and expanded health care cater less to moderates than to the party’s base.

    “One-eighth of one percent of the population is going to decide this election,” one longtime Biden donor tells CNN, requesting anonymity to share confidential conversations with the campaign. “I’ve told them to move more toward the middle.”

    Yet Biden is also still working to shore up his own progressive base, a task complicated by the rising outrage over the administration’s handling of the Israel-Hamas war.

    “Americans deserve a President who is looking out for them and they have that in President Biden. Donald Trump on the other hand is proudly running to cut Social Security and Medicare, increase health care costs for everyday Americans, and send jobs overseas,” Biden campaign spokesperson Mia Ehrenberg said in a statement to CNN.

    Mandel Ngan/AFP/Getty Images

    President Joe Biden speaks about his Investing in America agenda, at Gateway Technical College in Sturtevant, Wisconsin, on May 8, 2024.

    Wednesday was Biden’s fourth trip to Wisconsin so far this year, an indication of how central the state is to the President’s reelection roadmap. Wisconsin is a pillar of the so-called blue wall with Michigan and Pennsylvania — all three of which Trump won in 2016 and Biden flipped four years later.

    In 2020, Biden won Wisconsin by fewer than 21,000 votes. And with a similarly small margin expected to select the 2024 victor, several advisers and former Biden officials have said that striking the right policy tone with moderates this year — without alienating the party’s base — is paramount.

    “I think that’s the No. 1 question,” a former Biden adviser says of the debate over how progressive to fashion the president’s approach. “Answering that right is the answer of whether Biden wins the election.”

    The Biden campaign and its acolytes don’t see it that way, citing polling that shows the president’s agenda has been popular among the party’s most loyal voters, as well as independents. The White House points to figures from Navigator – a Democratic-aligned polling firm that bills itself as a “resource for progressives” – as informing its views of the agenda’s popularity. In April, Navigator polled 1,000 voters on the policies in Biden’s State of the Union address and found broad support.

    “He doesn’t have to choose between a progressive path and a moderate path,” said Bharat Ramamurti, Biden’s former deputy director of the National Economic Council. “The agenda he has pursued is the consensus path.”

    As the Democratic Party’s priorities evolve, consensus has taken different forms — and sometimes required Biden to shift his own positions to the left.

    A self-professed capitalist, he pledged during the 2020 campaign not to demonize the rich. Soon after taking office, Biden repeatedly began pushing for policies that tax wealthy individuals and corporations, a shift that emerged from a “Unity Task Force” established by the campaign seeking input from progressive economists.

    Perhaps no policy is more illustrative of this shift than student loan forgiveness. Biden started out the 2020 campaign supporting only the most limited student loan forgiveness — such as discharging loans when a borrower declared bankruptcy or died.

    But on the eve of a March 2020 debate with progressive firebrand Sen. Bernie Sanders, who was proposing blanket cancellation of student loans, Biden widened his embrace of loan forgiveness. And as president, Biden announced his support for income-based forgiveness that would cancel more than $360 billion in government loans.

    While that plan was blocked by the Supreme Court, Biden has used regulation and agency authorities to cancel some $146 billion in student debt.

    “It never felt like it was truly something he wanted to do during the campaign,” said the former Biden adviser. “And now it’s one of his premier economic agenda items.”

    Individual issues like student loan forgiveness tend to poll well among voters, especially young voters, whose monthly payments are a larger portion of their take-home pay. The White House cites findings from a focus group conducted by Navigator, the firm run by former Democratic campaign officials, as proof that voters want to see more government action on student loans.

    But when considered against a backdrop of other issues, or through the lens of Biden’s approval rating, the numbers tell a different story.

    KFF poll earlier this year found that only 32% of registered voters said it was very important for the presidential candidates to talk about student loan debt, well below the 83% who consider inflation a very important issue, 80% who say the same about the affordability of health care and 72% who consider the future of democracy that important.

    In CNN’s own polling last month, 24% of respondents called student loans an extremely important issue in making their choice for president, far below the 65% who called the top rated issue, the economy, that important.

    CORRECTION: This story has been updated to correct the spelling of Tom Oberhaus’ last name.

    CNN’s Jeff Zeleny, MJ Lee, Camilla DeChalus and Michael Williams contributed to this report.

    Steward Health Care says it is selling the 30+ hospitals it operates nationwide

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    Steward Health Care says it plans to sell off all its hospitals after announcing this week that it filed for bankruptcy protection

    Steward Health Care said it plans to sell off all its hospitals after announcing this week that it filed for bankruptcy protection.

    The Dallas-based company, which operates more than 30 hospitals nationwide, said it does not expect any interruptions in its hospitals’ day-to-day operations, which the company said will continue in the ordinary course throughout the Chapter 11 process.

    In court filings, the company said that beginning in late January, Steward initiated what it described as a “phased marketing process” for the sale of its hospital facilities.

    “Presently, the company is marketing all of its hospitals,” the company said a filing Tuesday.

    Steward filed for bankruptcy protection early Monday. In a news release, company officials said Steward took the step to let it continue to provide needed care to patients.

    “Steward’s hospitals, medical centers and physician’s offices are open and continuing to serve patients and the broader community and our commitment to our employees will not change,” the company said in a written statement.

    Steward’s eight hospitals in Massachusetts include St. Elizabeth’s Hospital and Carney Hospital, both in Boston. It filed for protection in the U.S. Bankruptcy Court for the Southern District of Texas.

    Massachusetts Attorney General Andrea Campbell said Wednesday that she is pushing for the creation of a Patient Care Ombudsman to advocate for patients and employees throughout the bankruptcy process. She also said she has the authority to review any proposed sale under her office’s antitrust powers.

    “The office has authority to review any proposed sale, and we would do so in order to best protect access to a competitive and affordable healthcare marketplace,” she said in a written statement. “If we find violations of the law, we will address them.”

    Massachusetts Gov. Maura Healey said Monday that the state had been preparing for a possible bankruptcy filing. Despite the filing, she said, Steward hospitals will remain open and patients should keep their appointments.

    “This situation stems from and is rooted in greed, mismanagement and lack of transparency on the part of Steward leadership in Dallas, Texas,” Healey said Monday. “It’s a situation that should never have happened and we’ll be working together to take steps to make sure this never happens again.”

    Steward said it is finalizing the terms of “debtor-in-possession financing” from its landlord Medical Properties Trust for initial funding of $75 million and “up to an additional $225 million upon the satisfaction of certain conditions.”

    He pointed in part to what he described as insufficient reimbursement by government payers as a result of decreasing rates at a time of skyrocketing costs.

    Torre said that by seeking bankruptcy protections, Steward will be better positioned to “responsibly transition ownership of its Massachusetts-based hospitals.”

    In March, the company announced it had struck a deal to sell its nationwide physician network to Optum, a subsidiary of UnitedHealth Group, as it works to stabilize its finances.

    Israel-Hamas War and Gaza Cease-Fire Talks: Live Updates

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    The Biden administration on Wednesday turned up the volume on strains in the U.S.-Israeli relationship, as the defense secretary acknowledged publicly that President Biden’s decision to hold up delivery of heavy bombs was linked to Israel’s plans for a large offensive in the city of Rafah, in the Gaza Strip.

    Secretary Lloyd J. Austin III told a Senate committee that the United States had been clear “from the very beginning that Israel shouldn’t launch a major attack into Rafah without accounting for and protecting the civilians that are in that battle space, and again, as we have assessed the situation, we have paused one shipment of high payload munitions.”

    While the president and other administration officials have publicly criticized the Israeli conduct of the war for months, it has often been in muted terms, saving the harshest assessment for private conversations. Mr. Austin’s comments on Wednesday were the bluntest public statement to date that the disagreement carries consequences and a signal of the kind of leverage the United States can use to influence Israel’s conduct of the war in Gaza.

    The United States and other allies have warned that an all-out assault in Rafah could lead to a humanitarian disaster for hundreds of thousands of displaced Gazans living in tents and temporary lodgings there. On Monday, Israeli tanks and troops made an incursion to take control of the border crossing into Egypt.

    With the scale and timing of their plans still unknown, Israeli officials have downplayed any dispute with the United States over weaponry and the war in Gaza, while also continuing to negotiate on a potential cease-fire that could lead to the return of Israeli hostages taken during the Hamas-led attack in October.

    Palestinian children receiving food at a charity kitchen in Rafah, southern Gaza, on Wednesday.Credit…Hatem Khaled/Reuters

    Experts on the U.S.-Israeli relationship say the pause in delivering the munitions, which the White House confirmed on Tuesday, showed that the alliance had hit a significant divide, with more ruptures possibly to come amid declining American public support for the Israeli war effort.

    “It’s pent-up frustration on Biden’s part, which eventually broke,” Chuck Freilich, a former deputy national security adviser in Israel, said on Wednesday. “The administration has been walking a tightrope between its very strong support for Israel and domestic pressure.”

    This week in particular, two opposing elements of President Biden’s approach to military support for Israel are converging and competing for global attention.

    With his approval of fresh U.S. aid involving weapons and equipment worth $827 million — along with an assertive speech against antisemitism at a Holocaust remembrance service — President Biden has made clear that he remains deeply committed to Israel.

    At the same time, he has signaled that there are limits to American aid and patience, suspending delivery of the heaviest of munitions — 1,800 2,000-pound and 1,700 500-pound bombs — over concerns they will be used in a possible full-scale assault on the city of Rafah in southern Gaza.

    Pro-Palestinian demonstrators at a hearing room as Secretary Lloyd J. Austin III testifies before the Senate committee in Washington on Wednesday.Credit…Kevin Dietsch/Getty Images

    In public comments, Israeli officials have mostly promoted America’s long-term support and ignored the pause in deliveries of weapons.

    Speaking at a conference Tuesday night hosted by a local newspaper, the military’s chief spokesman, Rear Adm. Daniel Hagari, described coordination between Israel and the United States as reaching “a scope without precedent,” while insisting that any disagreements were handled “behind closed doors.”

    Sidestepping questions about the airing of American frustrations and the potential risk to future arms shipments, he stressed the importance of day-to-day coordination and “operational assistance.”

    Israel has a large arsenal to draw on and many options for how to proceed in Gaza that would not necessarily include the bombs Washington has delayed, military analysts said.

    Alon Pinkas, a former Israeli diplomat, said that the U.S. decision was motivated by skyrocketing American frustration with Prime Minister Benjamin Netanyahu, as well as pressure from some Congressional Democrats to more closely supervise Israel’s use of U.S. arms. And, he added, it was an attempt to warn Israel that more consequences could be in the offing.

    “The logic behind this is a warning: If you don’t get your act together, there’s a lot more obstructions that could happen,” Mr. Pinkas said.

    Aaron Boxerman contributed reporting.

    Apple’s Crushing iPad Ad Trashed By Celerbities & Almost Everyone Else

    Apple’s new iPad Pro isn’t hitting the shelves for another week, but the self-described “thinnest Apple product yet” is already being crushed because of a new ad.

    Released yesterday at a virtual launch by the tech giant ahead of the new iPad’s May 15 drop, the minute-long ad is called Crush. To that, the TBWA Media Arts Lab created promo with a soundtrack of the Sonny and Cher 1971 tune “All I Ever Need Is You” literally crushes most of the physical history of creativity in a heavy-handed manner that makes the New Coke fiasco of the Reagan Era look like a near win.

    As Apple tries to reinvigorate slumping iPad sales, CEO Tim Cook praised the ad and the forthcoming tablet online on May 7 with a “Just imagine all the things it’ll be used to create” call-out. That’s Cook’s job, but the exec seems to be nearly alone in his POV as the ad has generated a scathing backlash from almost everyone else.

    Among those taking the tech giant to task for its sheer insensitivity and misstep are Hugh Grant and Justine Bateman.

    The often acerbic Wonka star took a bite out of Apple earlier Wednesday:

    Creed II scribe and Luke Cage creator Cheo Hodari Coker said the ad was problematic, really:

    Well versed anti-AI activist, former Family Ties star and filmmaker Bateman was even more blunt in her reaction:

    In fact, Bateman ever offered up an example of how Apple could fix their self-inflicted wound of destruction:

    Still, a far, far cry from Apple’s breakthrough anti-authoritarianism 1984 ad of 40 years ago, the original Crush ad has been watched almost 400,000 times on YouTube since its release on Tuesday. As is standard with most videos Apple puts up on the platform, the comments have disabled.

    Might have been the best decision Apple made in this whole situation.

    Apple, who are usually flawless in their marketing and communication, did not respond to request for comment on the Crush ad and the reaction it has seen. If and when they do, we will update this post.

    Steve Albini, musician and Nirvana producer, dies at 61

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    Steve Albini, the musician and well-regarded recording engineer behind work from Nirvana, the Pixies, The Breeders, Jimmy Page and Robert Plant among hundreds of others, died May 7. He was 61.

    His death from a heart attack was confirmed by Taylor Hales of Electrical Audio, the Chicago studio Albini founded in the mid-‘90s

    Albini, who was also a musician in punk rock bands Big Black and Shellac, was a noted critic of the industry in which he worked, often offering withering commentary about the artists who hired him.

    He referred to Nirvana as “an unremarkable version of the Seattle sound,” but accepted the job to produce the band’s 1993 album, “In Utero.” Nirvana singer Kurt Cobain said at the time that he liked Albini’s technique of capturing the natural sound in a recording room for an element of rawness. In a circulated letter Albini wrote to the band before signing on, he concurs that he wants to “bang out a record in a couple of days.”

    More: Beatles movie ‘Let It Be’ is more than a shorter ‘Get Back’: ‘They were different animals’

    Albini also famously refused to accept royalties from any of the records he produced. As he wrote in the Nirvana letter, “paying a royalty to a producer or engineer is ethically indefensible” and asked “to be paid like a plumber: I do the job and you tell me what it’s worth.”

    Other albums featuring Albini as recording engineer include the Pixies’ “Surfer Rosa,” The Stooges’ “The Weirdness,” Robbie Fulks’ “Country Love Songs” and Plant and Page’s “Walking Into Clarksdale.”

    Albini was an unabashed student of analog recording, dismissing digital in harsh terms and hated the term “producer,” instead preferring “recording engineer.”

    A native of Pasadena, California, Albini moved with his family to Montana as a teenager and engulfed himself in the music of the Ramones and The Sex Pistols as a precursor to playing in area punk bands. He earned a journalism degree at Northwestern University and started his recording career in 1981.

    In his 1993 essay, “The Problem with Music,” Albini, who wrote stories for local Chicago music magazines in the ‘80s, spotlighted the underbelly of the business, from “The A&R person is the first to promise them the moon” to succinct breakdowns of how much an artist actually receives from a record advance minus fees for everything from studio fees, recording equipment and catering.

    Albini, who was readying the release of the first Shellac record in a decade, also participated in high-stakes poker tournaments with significant success. In 2018, he won a World Series of Poker gold bracelet and a pot of $105,000, and in 2022 repeated his feat in a H.O.R.S.E. competition for $196,000 prize. Albini’s last documented tournament was in October at Horseshoe Hammond in Chicago.