Axios Media Reporter Sara Fischer breaks down the latest decisions being made at Warner Bros. Discovery after CNN's Brian Stelter leaves the network and reorganizes programming, in addition to looking at the overall streaming landscape, the Big Ten's media deal, and Oracle's audit of TikTok.
DAVE BRIGGS: The shakeup at CNN continues, as one of the network's most recognizable anchors is out, along with the show, "Reliable Sources." With more on that and a wild week in the streaming wars, we're joined by Axios media reporter, Sara Fischer. Sara, great to have you here, as always. Let's talk about Brian Stelter, "Reliable Sources," gone from CNN. What does this say to you about the direction the network is going to take with Chris Licht at the helm?
SARA FISCHER: Well, I think it means that they're not afraid to make big, bold decisions. "Reliable Sources" is one of the longest running programs at CNN. It debuted in 1993. And so the fact that they're willing to kill the franchise tells you that they're not afraid to go deep when it means that they want to make some changes.
Now, of course, I reported a few months ago and many have reported that CNN is really looking to evaluate some of the talent at the network to ensure that it meets the new values under its new leadership of being less polarizing, being a little bit less hyperpartisan. And so that might have also played into their decision around "Reliable Sources."
Not because I think Brian isn't particularly a partisan host, it's just that a lot of the topics that they would cover, calling out misinformation on certain cable networks, tended to feel really polarizing. I think moving ahead, don't expect this to be the last show or the last personality that might get cut at the network. They are pretty committed, it seems, to making some pretty broad changes.
SEANA SMITH: And Sara, we certainly have seen a number of layoffs, specifically most recently, HBO Max pulling the plug on dozens of shows, announcing layoffs there. It sounds like you think more might be on the way.
SARA FISCHER: Oh, more have to be on the way. When they announced this merger, they said that they needed to come up with $3 billion worth of synergies, which typically means a lot of layoffs. And it's not just HBO. They've also said across WarnerMedia's ad sales department, there were going to be major cuts. Of course, there were layoffs with CNN+. So expect more.
And there could be more on the Discovery side as well. I mean, I don't this is just WarnerMedia. I think they're trying to look across the spectrum at their entire portfolio and see what needs to be slimmed down. But at the end of the day, they might say they need to hit $3 billion in synergy as their goal with the merger, but they've actually got $50 billion worth of debt that came as a result of the combination of these two companies. And so I think that's going to dictate their strategy moving forward as being much more lean and focused on profit.
DAVE BRIGGS: Sara, as a former CNN anchor myself, I can't help but at least engage in some of the talk that's out there on Twitter. What programs or anchors might fit the overly partisan category they're trying to get away from?
SARA FISCHER: Well, I think a lot of the anchors or the personalities that engaged heavily with the Trump administration may have been aligned a little bit more with some of the partisan sort of perception of the network. But I think another challenge that CNN's going to have to figure out and their leadership is going to have to figure out is just where is the most sensible places to cut fat. And so from that perspective, you look at sort of the margins game. Which shows rate really low, but costs a lot of money? And so I would take a look at those types of things.
And then probably the last thing is, are there any opportunities for synergies across CNN and CNN International, places where they could bridge talent, maybe get rid of places where they have too many people covering a particular topic? That's the type of places you would look.
SEANA SMITH: And Sara, certainly, the media landscape is changing and changing very rapidly. For the month of July, streaming topping cable and TV consumption for the first time ever. Talk to us just about the significance of this and whether or not you think this trend will likely continue.
SARA FISCHER: It's definitely going to continue. If you take a look at the trendline, streaming is growing so fast, cable and broadcast obviously losing market share. And that's just because especially after the pandemic, more and more people are getting access to high power broadband. They're getting access to internet in their homes on multiple devices. And so it makes more sense that people are accessing television by streaming.
The other thing is that a lot more of sports, live sports viewership is being shifted over to streaming. You think about Amazon having exclusive rights on Thursday nights to some of those NFL games. That matters because if the live rights for football and soccer and all these big sports move from linear TV to streaming, consumers are likely going to move with it. Sports are pretty much the last thing that's holding the cable bundle together right now.
DAVE BRIGGS: Yeah, and likely a trend we'll never see reverse itself. Speaking of sports rights, the shape shifting, Earth shattering news this week that the Big Ten got a $7 and 1/2 billion per year TV deal. Beyond the Big Ten and those schools that align themselves with the conference, they're the obvious winner. But in terms of streaming, you've got Paramount, you've got Peacock. And in terms of media rights, what's your biggest takeaway from that story this week?
SARA FISCHER: I mean, Fox negotiated themselves a nice deal, is my biggest takeaway. Sources told me that you have CBS and NBC both coming in around the same $350 million a year mark, with Fox paying just a little bit more, I think, around 400 million. But they sort of get first pick of the best games. And so obviously, they have a stake in the conference, so they're going to be able to negotiate a better deal. But it's really, really wonderful outcome for Fox.
And then the big news, too, is that this is ending a very long, decades long relationship between the Big Ten Conference and ESPN. And so what that means is that I think ESPN is going to double down on other conference rights. Obviously, they're still doubling down on sports rights. They just renewed a year ago Monday Night Football for eight years. But this is a pretty big one for them to be walking away from.
SEANA SMITH: Sara, I want to get to a story that you broke earlier this week. Oracle starting to audit TikTok's algorithms. And this comes amid those China privacy concerns. What can you tell us about this effort?
SARA FISCHER: Yeah, so a few years ago, TikTok introduced something that they called Project Texas. It's a reference to the state where Oracle is headquartered. And essentially, it's a partnership in which Oracle has broad oversight over TikTok's technological backend. And giving them that oversight, one, they think is going to appease US regulators who are looking at whether or not this deal poses a national security concern, based off of access to US user data.
But then, two, it also plugs in levels of accountability that they think will help convince members of Congress, lawmakers, and even the public that TikTok isn't being controlled by the CCP, quite frankly. The new partnership that I wrote about earlier this week gives Oracle the ability to sort of audit and overview TikTok's algorithms, which is significant because I think people view algorithms as the way that you manipulate information to the masses. It also gives Oracle the ability to review TikTok's content moderation systems.
So, a few years ago, there was reports that TikTok was censoring out content based off sort of the CCP, the Chinese Communist Party's political views and goals. That is something that you would want someone, a third party, to overview and audit, just to make sure that this is sort of a platform that's not trying to, quite frankly, brainwash the US public. And so it's a pretty big step in the relationship between Oracle and TikTok, but it remains to be seen whether or not that's enough to convince regulators that TikTok is not a national security concern for the US.
DAVE BRIGGS: But would that information from Oracle be conveyed to the public? And you mentioned lawmakers, Senator Marco Rubio, Senator Mark Warner, in particular, trying to go after TikTok. Will they have any luck at bringing transparency here?
SARA FISCHER: Yeah, I think so. I mean, in terms of what this Project Texas is all about, I mean, that really was prompted by pressure from the Trump administration, you'll recall. They tried to ban TikTok with an executive order before turning sort of to the national security route. You asked me, do I think that Oracle sort of give visibility to the US public? No, I think that this oversight partnership is being done in conjunction with US regulators at CFIUS, the committee for foreign investment in the US.
So that way, there is a privacy standard, but also ensuring that Oracle gives proper oversight over what's happening at TikTok. You know, Oracle is a very old company here in the US with decades of experience and reputation for not having big data leak problems. So I think they're probably a great partner for TikTok to be working with, but don't expect them to reveal their findings to the public and the masses. I think it's just an accountability thing from the very highest levels of government.
SEANA SMITH: All right, Sara Fisher of Axios, thanks so much for taking the time to join us.