Overview of The Powers That Be
This episode of The Powers That Be (hosted by Peter Hamby with John Kelly) — titled "A Telegraph Putsch & The Disney–YouTube TV Denouement" (Media Monday, Nov. 17) — covers two main stories: the late-stage carriage dispute between YouTube TV (Alphabet) and Disney that temporarily blacked out ABC/ESPN programming for millions of subscribers, and the collapse of Redbird Capital’s attempted takeover of Britain’s Daily Telegraph amid newsroom resistance and UK government scrutiny. The hosts explain the business stakes, strategic dynamics, and likely downstream consequences for consumers, media companies, and regulators.
YouTube TV vs. Disney: what happened and why it matters
- Context: The blackout began Oct. 30 (episode recorded before the final weekend deal), affecting major sports (college football, Monday Night Football) and flagship ESPN programming — a significant pain point for subscribers.
- Stakes: YouTube TV is a rapidly growing distributor within Alphabet; Disney remains a massive content owner with expensive sports rights. The negotiation centered on carriage fees and future pricing terms.
- Core dispute: YouTube TV wants lower or restructured fees tied to scale (arguing for better terms as it becomes the largest distributor). Disney wants to preserve its fee structure and also push users to the new ESPN app.
- Strategic asymmetry:
- Disney relies on distributor fees today and holds leverage due to live sports.
- YouTube TV has the flexibility of an expanding platform and doesn’t need Disney as urgently in the same way legacy cable operators did; it can absorb short-term loss and push bargaining power over time.
- Contract mechanics: Most-favored-nation clauses in distributor deals mean any concession to one distributor can force similar terms across others — a big margin risk for Disney.
- Consumer impact and behavior:
- Many viewers switched to the ESPN app, other services (Fubo, Hulu, Peacock, etc.), or found streams/pirated alternatives.
- YouTube TV’s core audience skews 25–44 and rates highly on live-TV satisfaction surveys, giving it consumer goodwill.
- Likely outcomes (hosts’ expectations):
- Short-term: a deal (which the hosts note may have been reached after recording).
- Medium-term: higher prices for consumers across platforms; continued pressure on legacy bundles; eventual consolidation of distribution power toward large tech platforms that control data and integration.
- Broader trend: The negotiating power is shifting from legacy distributors/media companies to large tech platforms/streaming aggregators that can scale distribution and own viewer data.
Redbird Capital’s collapsed bid for The Daily Telegraph
- Deal background: Redbird (Jeff Zucker–linked interests) pursued the Telegraph in a multi-stage effort. Prior attempts included larger consortium bids that faced regulatory pushback over foreign partners.
- Final bid: Reportedly
£500M range on a stagnant asset (£150–160M annual revenue). The newsroom and UK government concerns complicated the process. - Why it fell apart:
- Newsroom resistance: Telegraph journalists actively reported on Redbird/John Thornton and pushed back internally against the takeover.
- Regulatory/government scrutiny: UK officials worried about foreign influence/control over a major national media brand (historic conservative/center‑right profile).
- Practical/business calculus: The asset is troubled (flat revenues) and the deal required multiple approvals and cultural change; Redbird may have judged the risk/reward insufficient.
- Takeaway: Even well‑funded suitors can be blocked by a combination of political/regulatory scrutiny and hostile or investigative newsroom dynamics; media transactions remain as much about public/government perception as about price.
Key takeaways
- Carriage disputes are evolving: large tech-owned distributors (YouTube TV) can sustain stand-offs and press for future-scaled pricing models; that dynamic changes bargaining fundamentals versus legacy cable.
- Live sports remain critical leverage for content owners, but distribution alternatives and consumer savviness (including piracy) blunt that power.
- MFN clauses make individualized concessions costly for content owners — creating incentives to resist renegotiation even as distribution consolidates.
- Media takeovers face non-financial obstacles: newsroom pushback and national-security/public-interest concerns can scuttle deals as effectively as regulators or price negotiations.
- Consumers will likely face higher prices and more fracturing of where live sports and marquee content live — the winner may be platforms that integrate content and user data.
Notable insights / quotes (paraphrased)
- “YouTube TV is okay holding the line — the platform doesn’t need Disney the way a legacy cable operator would.” (on bargaining asymmetry)
- “If Disney offers better terms to one distributor, MFN clauses could force them to elevate others — that eats margin.” (on contractual ripple effects)
- Redbird’s collapse demonstrates that newsroom resistance plus government concern can be decisive, even when price and intent appear sufficient.
Implications & what to watch next
- For consumers: expect short-term churn between apps/services and likely modest price increases across distributors and content owners over time.
- For Disney: watch how they balance direct-to-consumer growth (ESPN app) versus maintaining distributor revenue and negotiating clauses.
- For distributors (YouTube TV/others): continued push to gain scale and integrate apps/content to control data and reduce dependency on costly carriage fees.
- For UK media: future takeover attempts will face heightened political scrutiny; interested buyers may restructure bids to minimize foreign/geo-political optics.
- Near-term monitoring: final terms of the YouTube–Disney deal (if reached), investor/analyst reactions, and whether Redbird returns with a reworked offer or other bidders emerge for the Telegraph.
Episode context & extras
- Hosts: Peter Hamby and John Kelly (Puck). Episode recorded before the final Disney–YouTube blackout resolution but the discussion remains relevant.
- Side mentions: Puck’s LA “Stories of the Season” event, New York Times profile of Matt (Garahan), ESPN programming changes (Charles Barkley panel), and consumer trends (Instagram teen protections ad and multiple sponsor plugs).
- Tone: analytical, skeptical of legacy-media complacency, and attentive to how platform scale reshapes media economics and politics.