PRO Tip Sheet: 5 Insights From This Week

This week we reported how the owner of the LA Times lost his star editor, unveiled the lineup for Sundance, revealed how studios are actually marketing their musicals and how activist investors are complicating Nelson Peltz's Disney proxy fight. [5 Insights From WrapPRO]( This week we dug into how Patrick Soon-Shiong, the billionaire owner of the Los Angeles Times, lost his star editor Kevin Merida. We also unveiled the lineup for a strike-impacted Sundance Film Festival, revealed why studios are not marketing their musicals as musicals, reported on how other activist investors are complicating Nelson Peltz’s Disney proxy fight and delved into how a shortage of production accountants equals an opportunity to break into Hollywood. 1. [WaxWord — Newsroom Meddling, Money Woes: How A Billionaire Owner Lost His Star Editor at the Los Angeles Times]( By Waxman and Alexei Barrionuevo | Source: [WrapPRO]( - LA Times executive editor Kevin Merida resigned unexpectedly, with sources citing irreparable differences with owner Patrick Soon-Shiong over newsroom interference, lack of support, and financial challenges. - The LA Times faces an absentee owner in Soon-Shiong, who shows little interest in running the $500 million asset, resulting in a leadership vacuum and ongoing financial losses. - Merida's departure reveals conflicts between ownership and editorial independence, with disagreements over coverage decisions, including the recusal of journalists from covering the Israel-Gaza conflict. - The LA Times is struggling with financial instability. It's failing to meet subscriber targets, losing money, and facing layoffs, despite hiring Merida and winning Pulitzer Prizes. - Soon-Shiong's involvement in newsroom decisions, disagreement over coverage, and financial challenges contribute to a lack of trust, stability, and a potential crisis in the newspaper's future. [Keep Reading]( 2. [Sundance Market Preview: Strike Fallout Hits Park City]( By Kristen Lopez | Source: [WrapPRO]( - The impact of the 2023 Writers Guild and SAG-AFTRA strikes is being felt at the 40th Sundance Film Festival, leading to fewer films — an 18% decrease from the previous year — and increased demand. - The strikes caused delays in film production, with some movies intended for Sundance not finishing post-production in time for the festival. - The industry's need for content is high, particularly among buyers affected by the strikes, creating a competitive environment for acquisitions. - Despite the demand for content, there's a shortage of marquee titles, leading to buyers taking a more thoughtful and cautious approach, avoiding bidding wars and FOMO (fear of missing out). - Sundance remains a significant platform for emerging filmmakers, with notable titles like Steven Soderbergh's “Presence” generating buzz, although the festival landscape is shakier than usual due to the challenges posed by the recent industry strikes. [Keep Reading]( 3. [Why Are Studios Hiding the Fact That Their Musicals ... Are Musicals?]( By Kristen Lopez and Jeremy Fuster | Source:WrapPRO]( - Hollywood is adopting a new strategy of downplaying musical elements in film marketing, aiming to sell musicals to the widest audience, including young men, while minimizing financial risk. - Films like "Wonka" and "Mean Girls" have successfully employed this approach, becoming box office hits despite the musical genre's perceived challenges. - Studios believe that marketing musicals as other genres can attract a broader audience, especially considering the changing movie discovery habits of Gen Z, who rely more on social media. - Despite successful outcomes, the stigma against musicals persists, with assumptions that they appeal more to women and lack broader demographic appeal. - The challenge lies in striking a balance between catering to musical fans and attracting a new, diverse audience, prompting studios to choose marketing strategies that emphasize crowd-pleasing elements beyond the musical aspect. [Keep Reading]( 4. [Disney's Proxy Fight: Activist Investors Pose ‘Major Hurdle’ for Nelson Peltz]( By Lucas Manfredi | Source:WrapPRO]( - Activist investor Nelson Peltz is waging a proxy war against The Walt Disney Company, claiming that the board is too closely connected to long-tenured CEO Bob Iger and lacks objectivity, focus, and accountability. - Peltz's chances of success in his campaign are considered slim, especially with the entry of activist investors ValueAct Capital and Blackwells Capital into the fray, as allies are crucial in a proxy battle of this scale. - Peltz, along with Trian Fund Management, argues that Disney has underperformed its peers, and despite a rebound in share prices, the company faces challenges in a changing entertainment landscape, including a declining linear TV business, unprofitable streaming segment, and box office struggles. - Trian's goals for Disney include adopting best-in-class governance, achieving Netflix-like profit margins, ensuring a clear payback period and return profile for ESPN Flagship DTC, reviewing creative processes to reclaim the #1 box office position and executing a vision for parks with high-single digit operating income growth. - Despite Disney's rejection of Trian's nominees and goals, Peltz argues for board representation, highlighting the need for an ownership mentality and fresh perspectives to address challenges and opportunities, including improving streaming profitability and overseeing CEO succession. [Keep Reading]( 5. [Do the Math: Production Accountant Shortage Equals New Hollywood Careers]( By Diane Haithman | Source: [WrapPRO]( - The California Film Commission's Pilot Career Pathways program is addressing the shortage of production accountants in Hollywood by offering online courses, providing unexpected opportunities for individuals like Nilson Salvador and Juliette Calderon to enter the industry. - The boom in streaming TV shows during the COVID-19 pandemic has increased the demand for specialized production accountants familiar with the production process and state tax credits, creating a significant gap that needs to be filled. - The shortage of production accountants has led to challenges in getting some productions off the ground, and the demand for skilled production accountants remains high despite potential fluctuations in streaming content. - The pandemic-induced increase in demand for content, coupled with the Great Retirement of many production accountants, has exacerbated the shortage, with an estimated 25% of production accountants retiring. - Organizations like the California Film Commission, Entertainment Partners, Netflix, Warner Bros., and Stage 32 are offering training programs and courses to groom more production accountants. [Keep Reading]( With a focus on delivering actionable intelligence, the PRO Tip Sheet empowers readers to stay ahead of the game in the industry. Want to go deeper? [Explore WrapPRO today](. TheWrap | 2034 Armacost Ave Los Angeles, CA 90025 [Unsubscribe](