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   DealBook: Fox News after Tucker Carlson
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             April 25, 2023
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              Good morning. In today’s newsletter: Tucker Carlson is shown the door; First Republic reveals the scale of its financial challenges; and Jack Dorsey backs a court case that could upend open source software development. (Was this newsletter forwarded to you?
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                  Is Tucker Carlson replaceable?
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                  Leigh Vogel for The New York Times
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            <h2 class="css-12n1aic" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             Dropping anchors
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             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              Fox News’s firing of Tucker Carlson
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             , the most popular prime-time host in cable news, sent shockwaves through the media and political spheres yesterday. Few had thought that repercussions from Fox’s $788 million defamation settlement with Dominion Voting Systems would reach Carlson, who commanded a following of millions and has the ear of Donald Trump.
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             But Fox and Rupert Murdoch, who are used to courting controversy and legal settlements as the costs of doing business, may be betting that getting rid of Carlson is the smarter financial move.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              The impact on Fox is undeniable.
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             Since gaining his prime-time show in 2017, Carlson became the brightest star in the Fox News orbit, with “Tucker Carlson Tonight” averaging over 3 million viewers every night.
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             While the show doesn’t feature top-tier advertisers, many of whom recoiled from his
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              frequent controversies
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             , his formidable audience numbers would have helped Fox News in forthcoming negotiations with cable providers over fees they pay to carry its network. (Shares in Fox Corporation fell 3 percent yesterday — more than they did after the company settled with Dominion last week.)
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             Carlson’s contract, worth $20 million a year, is expected to be paid out.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              His dismissal was swift.
             </span>
             Lachlan Murdoch, the C.E.O. of Fox Corporation, with the blessing of his father, conferred with the Fox News chief Suzanne Scott on Friday about dismissing Carlson, and the host was reportedly notified
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              just 10 minutes before
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             the announcement went out.
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             Carlson may have become too hot to handle:
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               The Dominion lawsuit unearthed private comments by Carlson in which he often profanely disparaged colleagues, sources and, perhaps crucially, his bosses.
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               A former producer is suing Fox News after accusing Carlson of overseeing a
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                hostile and discriminatory work environment
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               .
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              <span style="font-size:17px;line-height:25px">
               And the Murdochs have reportedly grown tired of trying to corral a controversial host who proudly says he can’t be controlled.
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             Then again, Semafor’s Max Tani notes that the firing of Carlson is
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              only the latest sudden and seemingly erratic move
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             by Murdoch. And others are wondering whether there’s
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              some bigger shoe to drop
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             .
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              The Murdochs clearly hope that Carlson is replaceable.
             </span>
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              That’s been true before
             </a>
             when Fox ousted big names like Bill O’Reilly. But the
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              outpouring of support
             </a>
             for the host from Trump and conservatives suggests that it’s not a given this time. It’s unclear where Carlson will go next — rival outlets like Newsmax beckon, as do striking out on his own and getting into politics.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Carlson wasn’t the only media star shown the door yesterday.
             </span>
             CNN
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              ousted the anchor Don Lemon
             </a>
             , hours after he appeared on air. (Among the reasons: Some guests didn’t want to appear on air with him after he drew criticism for sexist comments, and internal CNN research showed that his popularity with audiences was declining.)
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             Lemon didn’t take the news well — “I am stunned,” he tweeted — and has hired the same lawyer as Carlson to negotiate his exit.
            </p>
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              President Biden announces his re-election bid.
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             In a three-minute video posted this morning, he urged voters to let him “
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              finish this job
             </a>
             .” The widely expected move sets him up for a potential rematch with Donald Trump; Biden is expected to meet with top donors later this week.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              UBS draws billions in new customer funds.
             </span>
             The Swiss bank said today that it
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              gained $28 billion in new assets
             </a>
             in the first quarter, including $7 billion after it announced a deal to buy Credit Suisse. Its stricken rival
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              lost $69 billion
             </a>
             in customer money during the same period.
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              An appeals court largely sides with Apple in its fight with Epic Games.
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             A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit ruled that the iPhone maker’s control of its App Store
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              didn’t violate antitrust laws.
             </a>
             But the judges also said developers should be able to steer users to payment systems outside the App Store, avoiding Apple’s fees.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Disney’s latest layoffs include a top ESPN executive.
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             The media giant started a new round of job cuts yesterday that included
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              Russell Wolff
             </a>
             , who oversaw the ESPN+ video service. Cutting streaming costs has been a priority for Bob Iger, Disney’s C.E.O., as he moves to slim down the company.
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              Coinbase sues the S.E.C.
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             The lawsuit is meant to compel the regulator to
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              respond to a rule-making petition
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             filed by the crypto exchange asking for more clarity on enforcement policies. It followed a disclosure by Coinbase that the agency was investigating the company for potential violations of securities law.
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            <h2 class="css-12n1aic" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             First Republic looks for help
            </h2>
           </td>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             First Republic’s
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              brutal quarterly earnings report
             </a>
             yesterday sent its share price plunging, after the bank revealed that customers pulled billions in deposits, profits fell by about a third and it planned to cut a quarter of its work force. Withdrawals have eased, and the worst may be over after the country’s biggest banks gave the California lender a
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              $30 billion lifeline
             </a>
             last month.
            </p>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             But First Republic still needs to cut its balance sheet and shrink its losses. The question is how.
            </p>
           </td>
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         </tbody>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              The results revealed the depth of the problems.
             </span>
             Customers pulled $102 billion out of First Republic last month, well over half of the $176 billion it held at the end of last year. Over that same period, it borrowed $92 billion, mostly from the Federal Reserve and government-backed lending groups. The loans helped stabilize its finances, but they came at a
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              higher cost
             </a>
             than using customer deposits.
            </p>
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             (There was some good news: First Republic says it retained 90 percent of the advisers in its wealth management division.)
            </p>
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              What next?
             </span>
             The bank wants the government to push the country’s largest banks to come up with a more permanent solution to its problems than their last one, DealBook hears. That does not mean the government injecting capital itself, but it does mean corralling big bank bosses and pressuring them to find a solution.
            </p>
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              For the government, the optics of doing so are far from ideal,
             </span>
             particularly given that the bank largely caters to the wealthy. But a First Republic failure would pose broader risks, adding more strain on the banking system at a time when
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              smaller lenders remain vulnerable
             </a>
             .
            </p>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
       <div style="margin:0 auto;max-width:600px;width:100%">
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             It would also reopen the question of whether the government plans to back all uninsured deposits. (Treasury Secretary Janet Yellen has delivered
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              mixed messages
             </a>
             on this front.) Any bank failure risks a hit to the government’s insurance deposit fund, which is funded by taxes levied on the banks.
            </p>
           </td>
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        </table>
       </div>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Big banks have not committed, and First Republic’s sizable losses likely won’t help.
             </span>
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              Given the banks’ recent bumper earnings,
             </a>
             the government also lacks the same cudgel it had in 2008, when it pressured JPMorgan Chase to buy Bear Stearns (a move Jamie Dimon, JPMorgan’s C.E.O., has long bemoaned).
            </p>
           </td>
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         </tbody>
        </table>
       </div>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              The window to secure a deal before another big shock to the industry may be closing.
             </span>
             “First Republic’s stand-alone earnings picture is still worse than we had feared,” wrote analysts at Autonomous, expressing surprise that the stock was not down more than 20 percent after hours. “We would remain very cautious.”
            </p>
           </td>
          </tr>
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       </div>
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           </td>
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        </table>
       </div>
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           <td align="left">
            <h2 class="css-12n1aic" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             $500 billion
            </h2>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
       <div style="margin:0 auto;max-width:600px;width:100%">
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           <td align="left">
            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-style:italic;font-size:inherit">
              — The stock market capitalization reached yesterday by
             </span>
             <span style="font-style:italic;font-size:inherit">
              <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
               LVMH
              </a>
             </span>
             <span style="font-style:italic;font-size:inherit">
              , the French luxury group, making it the first European company to do so. Shares of the company have surged on the back of booming sales in China, making its founder, Bernard Arnault, the world’s richest person.
             </span>
            </p>
           </td>
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       </div>
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           <td style="padding-bottom:15px">
           </td>
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           <td style="padding-bottom:15px;border-top:1px solid #dcdcdc">
           </td>
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        </table>
       </div>
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          <tr>
           <td align="left">
            <h2 class="css-12n1aic" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             An open source fight goes to court
            </h2>
           </td>
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         </tbody>
        </table>
       </div>
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             Jack Dorsey, the co-founder of Twitter and the payments company Block,
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              started the Bitcoin Legal Defense Fund last year
             </a>
             to help developers of the cryptocurrency. But its first case, set to be heard in an English court tomorrow, could have broader ramifications for the tech industry and the whole idea of open source software development.
            </p>
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              The lawsuit claims that open source developers should be held accountable for a theft.
             </span>
             A Seychelles-based crypto company is suing a group of developers who contributed code to the Bitcoin network, a decentralized set of computers that keeps track of all transactions. The network is an open source project and, like most such software, was created under terms that allow for free use and disclaim liability.
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             Craig Wright, an Australian developer (who also claims to be the man behind the pseudonym Satoshi Nakamoto, Bitcoin’s creator), lost access to digital wallets containing 111,000 bitcoin following a 2020 hack of his home computer. His company, Tulip Trading, contends that Bitcoin programmers control the open source network and have a duty to block illegitimate transactions. Last year, a court in Britain dismissed the case on jurisdictional grounds, but that decision was reversed in February following an appeal.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              The open source model encourages collaboration
             </span>
             and innovation, and it has been crucial to software development for decades. Programmers don’t usually get a direct financial benefit from participating. Rather, they share their skills to build and gain credit with the coding community.
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             “These lawsuits could have serious detrimental effects on open source development writ large, which will negatively impact our lives in ways we may not even realize until it’s too late,” Dorsey said.
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             Greg Maxwell, a defendant in the case, told DealBook he began working on the Bitcoin network in 2010 because he was interested in the idea of money without intermediaries. But he stopped after getting sued. “People won’t participate if there’s liability,” he said.
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              <span style="font-size:17px;line-height:25px">
               Carrier Global is reportedly near a
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                deal to buy Viessmann
               </a>
               , a German industrial manufacturer, for $13 billion. (WSJ)
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               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                Netflix will invest $2.5 billion
               </a>
               to produce South Korean movies and TV shows, following the success of titles like “Squid Game.” (CNN)
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                Pay for partners at Wall Street’s top law firms
               </a>
               has fallen as the market for deals stagnates. (FT)
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              Policy
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              <span style="font-size:17px;line-height:25px">
               The E.U. and Japan have reportedly rejected a U.S. push to
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                ban all Group of 7 exports to Russia
               </a>
               . (FT)
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               The Supreme Court will hear two cases on whether government officials
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                can block constituents
               </a>
               on social media. (WaPo)
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               Justice Clarence Thomas
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                didn’t recuse himself
               </a>
               from discussions about a potential case tied to Harlan Crow, his friend and benefactor. (Bloomberg)
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              <span style="font-size:17px;line-height:25px">
               Corporate executives and directors
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                stepped up purchases
               </a>
               of their companies’ stocks last month, signaling their belief in a market rebound after the regional banking crisis. (WSJ)
              </span>
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              <span style="font-size:17px;line-height:25px">
               Phil Knight, Nike’s co-founder,
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                donated $400 million
               </a>
               to help rebuild a historically Black community in Portland, Ore. (WSJ)
              </span>
             </li>
             <li class="css-11scvta" style="line-height:27.5px;margin:0 0 10px 0">
              <span style="font-size:17px;line-height:25px">
               “Amazon delivery drivers scored a rare union win. The company
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                swiftly sidestepped it
               </a>
               .” (Insider)
              </span>
             </li>
             <li class="css-11scvta" style="line-height:27.5px;margin:0 0 10px 0">
              <span style="font-size:17px;line-height:25px">
               The N.F.L.’s New York Jets finally
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                clinched a trade for Aaron Rodgers
               </a>
               , the all-star quarterback; their
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                odds of winning the Super Bowl
               </a>
               have since surged. (NYT, The Athletic)
              </span>
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             <span style="font-style:italic;font-size:inherit">
              Correction: Saturday’s DealBook newsletter misstated the size of Fox News’s settlement with Dominion Voting Systems. It is $788 million, not $788 billion.
             </span>
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