Tucker Carlson: ‘We’re back.’
Tucker Carlson says he’s back: The conservative firebrand announced on Twitter on Tuesday that he would start a new show on Elon Musk’s social media platform, two weeks after being fired from Fox News.
But Mr. Musk’s less-than-enthusiastic response — and his rush to note that the social media platform hadn’t signed a deal with Mr. Carlson — suggests that even Twitter’s outspoken owner has reservations.
Mr. Carlson’s new show would be a jab at his old bosses. The host said that the program would closely resemble what he did before, potentially violating his noncompete clause with Fox News. Tuesday’s announcement was a sign that talks to end Mr. Carlson’s contract, worth $25 million a year until it ends in January 2025, may have broken down.
Things could get spicier. Mr. Carlson has accused Fox executives of breaching his contract, according to Axios, while the network could seek an injunction to keep its onetime star from reviving his broadcast. Fox barely referred to Mr. Carlson’s exit in its quarterly earnings report on Tuesday, with its C.E.O., Lachlan Murdoch, saying only that the company’s prime-time programming strategy wouldn’t change.
Mr. Musk didn’t exactly rush to embrace his new star. Mr. Carlson praised Twitter for being a forum for free speech, saying “Everybody’s allowed here, and we think that’s a good thing.”
But Mr. Musk, who appeared on Mr. Carlson’s Fox News show just last month, tweeted, “We have not signed a deal of any kind whatsoever.” He added that Mr. Carlson would not get a special deal, instead receiving the same subscription revenue-sharing arrangement as anyone else.
Being tied to Mr. Carlson offers risks as well as rewards for Twitter. His popularity — his announcement has been viewed more than 78 million times so far — could bring more users. A successful subscription-only broadcast could also generate more money for Twitter, which is trying to build another source of revenue beyond advertising.
But Twitter is still dealing with a sharp drop in ad revenue after many national brands recoiled from Mr. Musk’s drastic changes to the social network’s content policies. Openly embracing Mr. Carlson, whose Fox News show was shunned by mainstream advertisers, could further hit Twitter’s business.
That probably explains both Mr. Musk’s warning that anything misleading would be subject to Twitter’s communal fact-checking feature and his call for political balance: “I hope that many others, particularly from the left, also choose to be content creators on this platform.”
Some commentators also warned Mr. Carlson about his new boss. “Sooner or later Elon’s going to turn on him too,” the tech and media reporter Kara Swisher wrote in a Twitter thread. Musk, she added, “is the show and he will show you the door if you cross him.”
HERE’S WHAT’S HAPPENING
Donald Trump is found liable for sexually abusing a writer. A Manhattan jury found that the former president had sexually abused and defamed E. Jean Carroll. Trump was ordered to pay $5 million in damages, but he said that he would appeal the verdict. And he still plans to appear at a CNN town hall on Wednesday.
Steve Schwarzman reportedly refrains from backing Ron DeSantis for president. Schwarzman, the billionaire co-founder of the investment giant Blackstone and a major Republican donor, met with the Florida governor recently but is unconvinced about his odds for success, according to Bloomberg. Other G.O.P. backers are unhappy with DeSantis over his policy positions as he prepares to declare his candidacy.
George Santos faces criminal charges. Federal prosecutors have charged the first-term Republican congressman from New York, The Times reports. The specific accusations aren’t yet known, but the authorities have conducted monthslong investigations into Santos’s finances and campaign activities, including his work with an embattled financial firm and his role in brokering a yacht deal between two donors.
SoftBank is said to be near a sale of its Fortress division. A deal to offload the investment business to the Abu Dhabi wealth fund Mubadala for up to $3 billion is in late-stage discussions, according to The Financial Times. If an agreement is reached, it would be the latest unwinding of SoftBank’s asset-management ambitions; the Japanese tech giant is set to report earnings tomorrow.
The finance mogul taking on BlackRock over E.S.G.
The hedge fund mogul Boaz Weinstein has profited for years by shaking up closed-end funds, a class of publicly traded investment vehicles that can sometimes trade at wide discounts to their net asset value.
Now his $4.4 billion firm, Saba Capital Management, is taking on BlackRock. Weinstein is seeking board seats on three of its funds to force changes that he says would lift their stock performance. The twist: He argues that the investment giant, which has championed good corporate governance over the past decade, isn’t living up to its own ideals.
Weinstein has attacked how the funds are run. He criticized provisions at the three vehicles — known by their ticker symbols BIGZ, BFZ and ECAT — that allow only some of its directors (known as trustees) to be up for election in any year, permit those trustees to serve on dozens of other boards at the same time and limit the voting rights of some shareholders.
Weinstein called on fellow shareholders in the funds to back his hedge fund’s four nominees for trustee roles. A date hasn’t yet been set for the funds’ annual meetings.
Weinstein is accusing BlackRock of hypocrisy. The asset management giant has cast itself as a defender of investors, particularly through its embrace of the environmental, social and corporate governance movement, or E.S.G. But Weinstein says the firm acts differently when it’s in charge.
“After clearly defining the E.S.G. standards it demands as a shareholder and professing to set the bar for the industry, one would expect BlackRock to hold itself to an even higher standard,” Weinstein told DealBook in a statement. “But it turns out, it does the complete opposite when it comes to its own funds.”
BlackRock urged investors to reject Weinstein’s candidates. The firm told DealBook that it and its funds’ trustees “both act in full accordance with their fiduciary obligations and in the best interests of all fund shareholders,” adding that they “are qualified, experienced stewards who have demonstrated their ability to create sustainable long-term value.”
The two have clashed before. In 2019, Weinstein sued BlackRock after it tried to block him from nominating trustees, arguing then, as now, that it wasn’t practicing the good-governance principles it preaches.
Weinstein won the right to nominate candidates, though a Delaware Court allowed BlackRock to reject them on technical grounds — but he eventually got what he wanted when the investment firm later took steps he favored to close their valuation discounts.
A pivotal inflation report awaits
Inflation in the United States has been creeping down in recent months as consumers spend less and banks slow lending. But economists expect Wednesday’s Consumer Price Index report, due out at 8:30 a.m. Eastern, to show that progress has stalled, putting more pressure on the Fed to keep aggressively raising interest rates.
What to watch: The consensus forecast is that the headline C.P.I. rose by 5 percent last month on an annualized basis. Core inflation, which excludes the more volatile food and fuel price data, climbed by 5.5 percent, well above the Fed’s target. If that comes to pass, the central bank may feel compelled to raise rates to bring down prices.
High inflation could add to market volatility. Wall Street remains divided on whether the Fed is done raising borrowing costs, with some market bulls predicting rate cuts later this year. But the optimistic forecasts are beginning to look like wishful thinking after last week’s jobs report showed brisk hiring and wage growth, which could keep inflation high.
“With inflation far from tamed, rationale for this degree of cuts will either come from a recession (bad news) or a crisis that stems from the debt ceiling, regional banks or some other black swan,” Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, wrote to clients this week. “None of those scenarios is good news.”
Fed officials are keeping their options open. The central bank has signaled that it could pause its rate increases next month — so long as inflation and jobs data support that. But John Williams, the New York Fed’s president, said on Tuesday that it could take another two years for inflation to return to the Fed’s 2 percent target, leaving the door open for more rate increases.
“I can’t make products just for 41-year-old tech founders. That’s not a really big market. So I’ve gotta make sure I remember the 26-year-old me that didn’t have a lot of money when I started the company.”
— Brian Chesky, Airbnb’s co-founder and C.E.O., on rebooting the company after the pandemic, with a renewed focus on room rentals. Airbnb reported strong quarterly results on Tuesday, but its cautious outlook on bookings sent shares lower in premarket trading.
Debt-limit deadline ticks down
The United States was no closer on Wednesday to averting a default crisis.
“We have now just two weeks to go,” Speaker Kevin McCarthy told journalists on Tuesday after inconclusive talks between congressional leaders and President Biden broke up. The biggest breakthrough: They plan to meet again on Friday.
Neither side has budged from their original positions. Republicans want spending cuts tied to lifting the debt limit, and Democrats insist on a “clean” bill with budget discussions to follow.
Expectations for a quick resolution are low. The “X-date” — when the U.S. runs out of money to pay its bills — could come as soon as June, Treasury Secretary Janet Yellen has warned, unleashing “an economic and financial catastrophe.”
Even so, negotiations are likely to drag on. “In this political moment, it is not just about the substance of the agreement or the transaction, but the zeal with which you fought for your position,” Rohit Kumar, who helps lead tax policy at PwC and was a top staffer to the Republican Senate leader Mitch McConnell, told DealBook.
Debt crises usually go down to the wire. The 2011 deal was struck two days ahead of the X-date, not enough time to avert a market-rattling credit downgrade from the ratings agency S&P Global. President Biden on Tuesday gave reassuring statements about the state of negotiations, adding that default was “not an option.” Mr. McCarthy said the same.
So far, investors are showing no signs of panic. But the clock is ticking.
THE SPEED READ
Deals
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Apollo said that it would probably fall short of its $25 billion fund-raising target for its latest private equity fund. (Bloomberg)
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Ryanair, the European low-cost airline, will buy 150 Boeing 737 Max 10 airplanes, with an option to purchase another 150. (NYT)
Policy
Best of the rest
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Paramount Global will shut down MTV News and cut 25 percent of the staff at Showtime, MTV Entertainment Studios and Paramount Media Networks. (WaPo)
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“A.I. Drug Discovery Is a $50 Billion Opportunity for Big Pharma” (Bloomberg Businessweek)
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Source: New York Times
