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Digital media bailout? CBS-Viacom could be a buyer for not-so-new media

Byers Market is a daily newsletter from NBC News senior media reporter Dylan Byers that takes you behind the scenes in Hollywood, Silicon Valley, New York and Washington.
Image: CBS Television City in Los Angeles.
CBS Television City in Los Angeles.Tripplaar Kristoffer / Sipa USA via AP file

Good morning. 🛥️ Larry Page and Sergey Brin's Google Camp is underway at the Verdura Resort in Sicily. Eric Schmidt, Barry Diller, David Geffen and Evan Spiegel are among those in attendance.

New this A.M.: Vanity Fair's Evgenia Peretz goes deep on how the Varsity Blues scandal "ensnared the richest families in Southern California." Radhika Jones is on CBS at 8 a.m. ET to discuss.

Join the Market.

Shari Redstone wants more

Moving the Market: Shari Redstone plans to pursue additional media acquisitions after merging CBS and Viacom and has floated Sony Pictures Entertainment and Discovery Communications as potential targets, my colleague Claire Atkinson reports.

The big picture: "The CBS-Viacom merger is, to her, a starting line, not a finish line,” one source familiar with the situation says.

Redstone's targets: Redstone "has held conversations about quickly pursuing acquisitions that would help the company compete with other sizable media operations," three parties familiar with the talks tell Atkinson.

• In addition to Sony and Discovery, sources familiar with the matter told me late last night that Redstone is also eyeing smaller targets like BuzzFeed and Vice.

• Such acquisitions might enable CBS-Viacom to compete with much larger players like Disney and WarnerMedia.

• Spokespeople for Redstone, Sony Pictures and Discovery all declined to comment for Atkinson's piece.

What's next: The boards of CBS and Viacom "are currently hammering out details of the offer price and management structure ahead of a possible Aug. 8 deadline, when CBS reports its second quarter earnings."

Flashback: At last month's Brilliant Minds festival in Stockholm, Redstone could be heard telling people that if the CBS-Viacom merger didn't work out, "We have other options. Trust me, we have other options."

Tim Cook offsets iPhone drop

Big on the Street, big in the Bay: "Apple countered another quarter of weak iPhone sales with strong revenue growth from its supporting businesses," including a 13 percent rise in sales from services, WSJ's Tripp Mickle reports.

Key stat: Apple now gets less than half of its revenue from iPhone sales, which declined 12 percent during the quarter.

The big picture: "Apple is mired in one of the weakest years of Cook’s tenure. ... [but] Cook has charted a new path forward, shifting the company’s focus from ... hardware [to] software and services."

• Apple "plans to release new subscription services for original TV shows and video games this fall, as well as a credit card in August."

• The credit card, which Apple is launching in partnership with Goldman Sachs, could also create new opportunitiesfor the company in financial services.

Big in the Beltway: Cook says Apple wants to continue making its Mac Pro in the U.S., rather than China. President Donald Trump said last week that he wouldn't provide the company with tariff exemptions for parts made in the Middle Kingdom.

🇺🇸 Talk of the Trail 🇺🇸

Ballot block: Gov. Gavin Newsom has signed a law that could make President Trump ineligible for California’s 2020 primary ballot unless he discloses his tax returns. An attorney for the president says the effort "will be answered in court."

Last night in Detroit: The progressive-moderate split "ripped wide open" at the Democratic debate, my colleague Alex Seitz-Wald reports. Tonight: Joe Biden vs. Kamala Harris, round two.

Sen. Warren wins Google

How they spend it: Elizabeth Warren and Bernie Sanders, the two candidates "who are leading the charge to break up Big Tech," have also received "the highest number of donations out of all presidential candidates from Google employees," Recode's Rani Molla and Shirin Ghaffary report.

• The employees, "mostly engineers who work on everything from Android to virtual reality," said "breaking up Google could help consumers and spur more tech innovation by allowing for more competition from upstarts."

• "Googlers donated a total of $87,000 to Warren’s presidential bid so far. ... That makes her the most-funded candidate by Google employees, followed Pete Buttigieg with $73,300."

The big picture: The staffers support for Warren and Sanders "seems to reflect a broader movement among corporate tech employees who have begun demanding more ethical behavior and policies from their companies."

• Their support also appears to be in direct opposition to the views of their bosses, who are fighting hard to avoid seeing their companies dismantled by Washington.

See the charts.

Market Links

David Zaslav hires Amazon vets for e-commerce (Information)

Randall Stephenson does away with "DirecTV Now" (Verge)

Ann Sarnoff prepares for her takeover of Warner Bros. (Variety)

Jeff Zucker takes a different tack for the 2020 campaign (WaPo)

Ben Smith launches a new political newsletter (BuzzFeed)

Bryan Goldberg drops Gawker

Digital media dog days: Bustle Digital Group chief Bryan Goldberg has postponed plans to re-launch Gawker and laid off the website’s entire staff, including its top editors and executives, the New York Post's Alexandra Steigrad reports.

The backstory: Goldberg, who owns a number of small digital media assets, bought Gawker "in a bankruptcy auction last June for $1.35 million — despite warnings that it was a toxic asset."

• "Attracting talent has been difficult. ... Earlier this year, Gawker’s only two reporters quit ahead of a planned January relaunch."

Bonus: Former Gawker website Deadspin is planning to publish a story on Jim Spanfeller, the chief executive of its new parent company. Spanfeller wants an outside editor to review the story.

Jeffrey Katzenberg cashes chits

Talk of Tinseltown: Jeffrey Katzenberg has been on a buying spree for Quibi, revealing "no fewer than 20 new projects" in the last two months as he works toward releasing "some 7,000 pieces of content during Quibi's first year," THR's Natalie Jarvey reports.

• "Hollywood is jumping into business with the startup despite pervasive questions about how consumers will respond to an app devoted to shortform episodic programming that's meant to be viewed during day breaks."

The big picture: "Quibi's biggest draw is Katzenberg himself."

• "It's his long tenure in the business that has helped him land investments from NBCUniversal, Disney, Sony Pictures Entertainment, WarnerMedia and Viacom." (NBCUniversal is the parent company of NBC News.)

• It's "the strength of his relationships" that "has led to deals with [Steven] Spielberg, [Guillermo] del Toro, [Antoine] Fuqua and others of their ilk.

What's next: "The biggest challenge that Quibi faces when it comes to attracting talent is [that] it's rarely a creator's first choice. ... [But] Katzenberg says he doesn't mind buying up passed-over projects, pointing to E.T. as a box office hit that it took Spielberg years to get made. 'Great stories are great stories,' he says."

🎤 What's next: Badshah rising. A Bollywood rapper is setting viewer records on YouTube, per Bloomberg's Lucas Shaw. He's also testing the industry's dark art of buying views to pump stats.

See you tomorrow.