Mergers, Acquisitions and Divestitures

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      Epic Games, Who's Behind Fortnite, Buys Bandcamp

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      Epic Games is acquiring an online music platform that has been embraced by musicians for its eclectic offerings and a payment system that favors artists.The world of independent music got a jolt on Wednesday when Bandcamp, the platform that has been a haven for musicians during the pandemic, announced that it had been acquired by Epic Games, the company behind blockbuster online video games like Fortnite.Terms of the deal were not disclosed. In a statement, Epic said that Bandcamp “will play an important role in Epic’s vision to build out a creator marketplace ecosystem for content, technology, games, art, music and more.”While a small player compared to giants like Spotify, Apple or YouTube, Bandcamp has become a favorite outlet among musicians for letting them control how their music is shared and sold and giving artists the bulk of the income they receive from those transactions. According to Bandcamp, artists collect an average of 82 percent of every sale, and the company says that since it went online in 2008, its payments to artists and labels are “closing in on $1 billion.” By comparison, last year Spotify said it had paid out $5 billion to music rights holders in 2020 alone.For listeners, Bandcamp has also become a cherished smorgasbord, filled with obscure but wonderful music they may find nowhere else.But as streaming has become the dominant format for music, artists have begun complaining, loudly, that they are not receiving their fair share of the bounty. According to industry estimates, Spotify pays record labels, music publishers and other rights holders about one-third of a cent for every click of a song; what portion of that money makes its way into a musician’s pocket is determined by their deals with those labels and publishers.On Bandcamp, on the other hand, artists can upload their own work and set the pricing rules for downloads of their own work — pay-what-you-wish pricing is common. During the pandemic, Bandcamp has waived its fees once a month on “Bandcamp Fridays,” bringing the company waves of goodwill. Even more surprising, Bandcamp says it has been profitable since 2012. (Last year, Spotify had $10.7 billion in revenue and lost about $276 million, according to company reports.)Epic Games, which is based in Cary, N.C., and is privately owned, said little about its plans for music, and a company spokeswoman declined to answer further questions about the deal. But Epic’s statement on Wednesday indicated that it was interested in Bandcamp as a direct-to-consumer marketplace. “Epic and Bandcamp share a mission of building the most artist-friendly platform that enables creators to keep the majority of their hard-earned money,” the company wrote.Fortnite, Epic’s flagship game, has been one of the most innovative outlets for music in video games, allowing artists to appear virtually, often in elaborately produced segments In April 2020, the rapper Travis Scott made what was widely seen as a breakthrough appearance, drawing 28 million players to his virtual performance. For Halloween that year, the Latin pop star J Balvin gave a campy concert dressed as a green-haired Frankenstein’s monster, backed by dancers in costume as ghosts and zombie Cyclopes.Epic has also taken center stage in one of the most high-profile debates in current tech policy. The company sued Apple in 2020, saying that the terms of its App Store — which takes payment commissions of up to 30 percent — were unfair. Epic also fought the public-relations battle around that lawsuit with slick, meme-ready content like “Nineteen Eighty-Fortnite,” a parody of Apple’s famous “1984” TV ad that introduced its Mac computer as a joyful disrupter of gray tech monopolies.Last year, in a split decision, a federal judge ordered Apple to give app developers a way for their customers to pay for services that could bypass Apple’s system. Both Apple and Epic Games have appealed that decision.In a statement on Bandcamp’s website, Ethan Diamond, Bandcamp’s chief executive and co-founder, seemed to pre-emptively dispel worries about his platform’s future, and about its value to artists.“Bandcamp will keep operating as a stand-alone marketplace and music community, and I will continue to lead our team,” Diamond wrote, telling artists that “you’ll still have the same control over how you offer your music, Bandcamp Fridays will continue as planned, and the Daily will keep highlighting the diverse, amazing music on the site.” The deal with Epic Games, he said, would help Bandcamp expand internationally and “push development forward across Bandcamp.”As news of the deal spread, some independent artists sounded a note of cautious optimism. Tom Gray of the British band Gomez, who has been a leading critic of Spotify and of the streaming economy in general, tweeted a request for Epic Games: “Please think seriously and long,” he wrote, “about whatever you do with the one place independent artists can always rely on for direct income from recorded music.” More

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      A $550 Million Springsteen Deal? It’s Glory Days for Catalog Sales.

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      Bob Dylan, Paul Simon, Tina Turner and others have all sold rights to their music for eye-popping prices. Here’s why.In 1972, a struggling New Jersey musician hustled into Manhattan for an audition at Columbia Records, using an acoustic guitar borrowed from his former drummer.“I had to haul it ‘Midnight Cowboy’-style over my shoulder on the bus and through the streets of the city,” the rocker, Bruce Springsteen, later recalled in his memoirs.Half a century later, he can afford plenty of guitars. Last week Sony, which now owns Columbia, announced that it acquired Springsteen’s entire body of work — his recordings and his songwriting catalog — for what two people briefed on the deal said was about $550 million.The price, which may be the richest ever paid for the work of a single musician, caused jaws to drop throughout the music industry. But it was only the latest mega-transaction in a year in which many prominent artists’ catalogs have been sold, fetching eye-popping prices.The catalog market was already bubbling a year ago when Bob Dylan sold his songwriting rights for more than $300 million, but since then it has maintained a steady boil. The list of major artists who have recently sold their work, in full or in part, includes Paul Simon, Neil Young, Stevie Nicks, Tina Turner, Mötley Crüe, Shakira and the Red Hot Chili Peppers, many for eight-figure payouts or more. The industry is abuzz about impending deals for Sting and the songwriting catalog of David Bowie.“Almost everything now is transacting,” said Barry M. Massarsky, an economist who specializes in calculating the value of music catalogs on behalf of investors. “In the last year alone, we did 300 valuations worth over $6.5 billion,” he added.Not long ago, music was seen as a collapsing business, with rampant piracy and declining sales. No longer.Streaming and the global growth of subscription services like Spotify, Apple Music and YouTube have turned the industry’s fortunes around. One result is a spike in the pricing of catalogs of music rights to both recordings and to the songs themselves.Tina Turner sold her music rights to BMG earlier this year.Pierre Bessard/Agence France-Presse — Getty ImagesNew investors, including private equity firms, have poured billions of dollars into the market, viewing music royalties as a kind of safe commodity — an investment, somewhat like real estate, with predictable rates of return and relatively low risk.For major music conglomerates like Sony and Universal, which bought Dylan’s songs, such deals help them consolidate power and gain negotiating leverage with streaming services and other tech companies, like social-media, exercise services or gaming platforms, that often make blanket deals to use music..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}Despite the popularity of young acts like Drake and Dua Lipa, older material dominates online. According to MRC Data, a tracking service that powers the Billboard charts, about 66 percent of all music consumption — of which streaming is by far the largest part — is for material that is older than 18 months, and that number has been growing rapidly.And for artists, the sale can bring tax advantages. Royalties are typically taxed as ordinary income, while a catalog sale can qualify as capital gains, which typically have lower rates.Artists like Springsteen, 72, are part of the generation of music stars that, starting in the 1970s, first came to gain control of their work in large numbers, in ways that preceding generations did not.“A lot of artists were taken advantage of in the ’50s and ’60s,” said John Branca, Michael Jackson’s longtime lawyer, who is now one of the executors of Jackson’s estate. “With the emergence of better legal and management representation in the ’70s and ’80s, there was a push for the artists to obtain more power, more leverage, and ultimately to own their own work.”Many of those stars are now pulling the last lever of that control by deciding to sell, in numbers that were unthinkable even a decade ago, many executives and artists’ advisers say.The desire for control is now reflected in younger stars like Taylor Swift, who has campaigned in public about the importance of artists owning their work and criticized the marketplace in which catalogs of songs are bought and sold without the creators’ participation or approval. In Swift’s case, she has gone so far as to rerecord her own songs, in part to control the earnings from those tracks.“Part of the power of being an owner of your assets is that you get to decide when to cash out and how to cash out,” said Bill Werde, the director of Syracuse University’s Bandier Program on the music industry and a former editor of Billboard, the music trade publication.In general, selling out means giving up control, and buyers typically want to exploit assets fully to earn back their investment.Taylor Swift has spoken out about the importance of artists owning their catalogs.Robyn Beck/Agence France-Presse — Getty ImagesIn Springsteen’s case, the negotiations for the Sony sale included discussions about limiting how his work could be used in the future, with particular concern about any ads featuring two of Springsteen’s most iconic songs, “Born in the U.S.A.” and “Born to Run,” according to three people briefed on the deal who declined to be named because they were not authorized to speak publicly about it.Throughout his career, Springsteen consistently refused to license his music for ads, though in February he made his first-ever commercial appearance in a Jeep ad for the Super Bowl, delivering a message about the need for a “common ground” in the United States. (The soundtrack was not one of Springsteen’s hit songs but an atmospheric score composed by Springsteen and Ron Aniello.)Representatives for Sony and Springsteen declined to comment on the terms of the deal.Springsteen, one of the most successful singer-songwriters in pop history, essentially made two deals with Sony. One was for his so-called master recordings, the sounds of his music as captured on albums and single tracks. The other, sometimes described as music publishing, is for his songwriting rights — the words, melodies and musical structure of the hundreds of songs he wrote. With both sets of rights, Sony will have full control over the future use and earnings of Springsteen’s music and lyrics, except for any restrictions that were part of the deal.According to an estimate by Billboard, Springsteen’s two catalogs of music — his recordings and songwriting — earn about $17 million a year, after costs.Many older artists see this as a good time to sell — while their music remains popular, and market conditions are favorable.But behind the scenes, there has often been vigorous debate among artists and their advisers about whether to sell. For many of the most astute players, a key question is not so much the price but who is offering it, as private equity players and other financial specialists — which sometimes buy catalogs outright and sometimes merely provide the financing for specialist companies — wade into the tricky waters of protecting artists’ legacies in a world of commerce.“What does an artist mean over half-century career,” said Jeff Jampol, who manages the estates of the Doors, Janis Joplin and other stars, “if all of a sudden those assets just disappear into the maw of some huge hedge fund that has no connection to art, music or legacy?”While headlines highlight those who have decided to sell, there have been some dissenters.Diane Warren, the songwriter of hits like Celine Dion’s “Because You Loved Me” and Aerosmith’s “I Don’t Want to Miss a Thing,” told Rolling Stone that selling her catalog “would be like selling my soul.” When asked whether the Michael Jackson estate would consider selling Jackson’s rights, which may be worth well over $1 billion, Branca said, “I don’t think I would ever sell.”But as the prices rise, it may become harder for holdouts to resist. 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      The company that produced ‘Parasite’ has bought Endeavor’s scripted content arm.

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      The South Korean media conglomerate whose entertainment arm produced the winner of the 2019 Oscar for best picture, “Parasite,” has acquired a majority stake in the scripted arm of Endeavor Content, a subsidiary of the entertainment company Endeavor Group.Upon closure of the $775 million deal, which was announced late Thursday night, the South Korean conglomerate, CJ ENM, will own 80 percent of the business and the Endeavor Group 20 percent. The companies said they expected the deal to close in the first quarter of 2022.The Wall Street Journal reported the news earlier.“At the end of the day, CJ ENM strives to become a major global studio that encompasses content that appeals to a global audience — like this deal with Endeavor Content, we will continue to expand our presence in the global market,” Kang Ho-Sung, the conglomerate’s chief executive, said in a statement.Endeavor is being forced to reduce its ownership stake in its scripted content business as a result of a settlement this year with the Writers Guild of America, whose writers went on strike to protest what they saw as a conflict of interest at agencies that owned both talent representation businesses and production companies.Endeavor is not required to sell its unscripted assets and will maintain 100 percent ownership of that business.Endeavor Content was formed in 2017 by Graham Taylor and Chris Rice. Today, it calls itself a global film and television studio, and it has produced such projects as “Nine Perfect Strangers,” a Hulu mini-series starring Nicole Kidman, and Maggie Gyllenhaal’s directorial debut, “The Lost Daughter.” It owns a minority stake in Bruna Papandrea’s production company, Made Up Stories, in addition to PictureStart and Media Res.Mr. Taylor and Mr. Rice will remain co-chief executives of the new company.CJ has been expanding its foothold in Hollywood in recent years. Miky Lee, the vice chair of CJ Entertainment, the Hollywood arm of CJ ENM, rose to the national stage when she accepted the best picture Oscar for “Parasite,” but she was an industry player before then, nudging CJ toward Hollywood in the 1990s with a stake in DreamWorks. Most recently, she invested $100 million in David Ellison’s Skydance Media and was elected vice chair of the board of the Academy Museum of Motion Pictures.“Having known Miky Lee for more than 25 years, I’m confident that CJ ENM will be excellent stewards of the studio, accelerating and amplifying its projects on a global stage,” Ari Emanuel, the chief executive of Endeavor, said in a statement. More

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      The company that produced ‘Parasite’ is in talks to buy Endeavor’s scripted content arm.

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      The South Korean media conglomerate whose entertainment arm produced the winner of the 2019 Oscar for best picture, “Parasite,” is in final talks to acquire a majority stake in the scripted arm of Endeavor Content, a subsidiary of the talent agent Endeavor Group, two people familiar with the negotiations said.Under the deal, which the people familiar with the negotiations said was being valued at $900 million to $1 billion, the South Korean conglomerate, CJ ENM, would own 80 percent of the business and the Endeavor Group 20 percent.The Wall Street Journal reported the news earlier. Neither Endeavor Content nor CJ would comment on the talks.Endeavor is being forced to reduce its ownership stake in its scripted content business as a result of a settlement this year with the Writers Guild of America, whose writers went on strike to protest what they saw as a conflict of interest at agencies that owned both talent representation businesses and production companies.Endeavor is not required to sell off its unscripted assets and will maintain 100 percent ownership of that business.Endeavor Content was formed in 2017 by Graham Taylor and Chris Rice. Today it calls itself a global film and television studio, and it has produced such projects as “Nine Perfect Strangers,” a Hulu mini-series starring Nicole Kidman, and Maggie Gyllenhaal’s directorial debut, “The Lost Daughter.” It owns a minority stake in Bruna Papandrea’s production company, Made Up Stories, in addition to PictureStart and Media Res.Mr. Taylor and Mr. Rice will remain co-chief executives of the new company, the people with knowledge of the deal said.CJ has been expanding its foothold in Hollywood in recent years. Miky Lee, the vice chair of CJ Entertainment, the Hollywood arm of CJ ENM, rose to the national stage when she accepted the best picture Oscar for “Parasite,” but she was a Hollywood player before then, nudging CJ toward Hollywood in the 1990s with a stake in DreamWorks. Most recently, she invested $100 million in David Ellison’s Skydance Media and was elected vice chair of the board of the Academy Museum of Motion Pictures. More

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      Nickolas Davatzes, Force Behind A&E and the History Channel, Dies at 79

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      He led the cable giant, whose eclectic mix of shows would include collaborations with the BBC and documentary-style series like “Hoarders.”Nickolas Davatzes, who was instrumental in creating the cable television networks A&E and the History Channel, which now reach into 335 million households around the world, died on Aug. 21 at his home in Wilton, Conn. He was 79.The cause was complications of Parkinson’s disease, his son George said.Mr. Davatzes (pronounced dah-VAT-sis) was president and chief executive of A&E, originally the Arts & Entertainment Network, which he ran from 1983 to 2005 as a joint venture of the Hearst Corporation and the Disney-ABC Television Group. He introduced the History Channel in 1995 and remained an aggressive advocate, both within the industry and as a spokesman before Congress, for educational and public affairs programming.By the mid-1980s, A&E had emerged — mostly through buying programming and building a bankable viewer audience by negotiating distribution rights with local cable systems — as the sole surviving advertiser-supported cultural cable service.“After 60 days here, I told my wife I didn’t think this thing had a 20 percent chance, because every time I turned around there was another obstacle,” Mr. Davatzes told The New York Times in 1989. “I used to say that we were like a bumblebee — we weren’t supposed to fly.”But they did. A&E became profitable within three years by offering an eclectic menu of daily programming that, as The Times put it, “might include a biographical portrait of Herbert Hoover, a program about the embattled buffalo, a dramatization of an Ann Beattie short story and a turn from the stand-up comic Buzz Belmondo.”“We don’t want to duplicate ‘The A-Team’ or ‘Laverne & Shirley,’” Mr. Davatzes told The Times in 1985. “There is a younger generation that has never seen any thought-provoking entertainment on television. They’ve seen a rock star destroying a guitar every 16 minutes, but they’ve never seen classical music.“By network standards,” he continued, “our viewership will always be limited. But that is the function of cable — to present enough alternatives so that individuals can be their own programmers.”Under the A&E umbrella, the network encompassed a broad mix of entertainment and nonfiction programming. It created a singular identity with scripted shows (“100 Centre Street,” “A Nero Wolfe Mystery”) and collaborations like its wildly popular co-production with the BBC of “Pride and Prejudice,” a mini-series based on the Jane Austen novel starring Colin Firth and Jennifer Ehle.Jennifer Ehle and Colin Firth in the mini-series “Pride and Prejudice,” a co-production of A&E and the BBC.Joss Barratt/A&EThe network continued to expand its scope to include documentary series like “Biography”; “Hoarders,” which might be classified as an anthropological study of compulsive stockpiling; and the History Channel’s encyclopedic scrutiny of Adolf Hitler.Mr. Davatzes was awarded the National Humanities Medal by President George W. Bush in 2006. The French government made him a chevalier of the Order of Arts and Letters in 1989. He was inducted into the Broadcasting & Cable Hall of Fame in 1999.After his death, Frank A. Bennack Jr., the executive vice chairman of Hearst, called him “the father of the History Channel.”Nickolas Davatzes was born on March 14, 1942, in Manhattan to George Davatzes, a Greek immigrant, and Alexandra (Kordes) Davatzes, whose parents were from Greece. Both his parents worked in the fur trade.After graduating from Bryant High School in Astoria, Queens, he earned a bachelor’s degree in economics in 1962 and a master’s in sociology in 1964, both from St. John’s University, where he met his future wife, Dorothea Hayes.In addition to his son George, he is survived by his wife; another son, Dr. Nicholas Davatzes; a sister, Carol Davatzes Ferrandino; and four grandchildren. Another son, Christopher, died before him.After serving in the Marines, Mr. Davatzes joined the Xerox Corporation in 1965 and shifted to information technology at Intext Communications Systems in 1978. A friend introduced him to an executive at the fledgling Warner Amex cable company, who recruited him over lunch and had him sign a contract drawn on a restaurant napkin. He went to work there in 1980, alongside cable television pioneers like Richard Aurelio and Larry Wangberg.The Arts & Entertainment Network took shape in 1983, when he helped put the finishing touches on a merger between two struggling cable systems: the Entertainment Network, owned by RCA and the Rockefeller family, and the ARTS Network, owned by Hearst and ABC.His strategy in the beginning was twofold: to focus on making the network more available to viewers, and not to be diverted by producing original programs, instead focusing on acquiring existing ones.“If you’re in programming, we know that 85 percent of every new show that goes on the air usually fails,” said in a 2001 interview with The Cable Center, an educational arm of the cable industry.“Our overall approach is to create a sane economic model,” Mr. Davatzes said in 1985. “I like to tell people working for us that we don’t eat at ‘21.’” More

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      Chicago Improv Was Dead. Can New Leaders Revive It?

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      The past year left the city’s two most prominent institutions reeling. Now, outsiders are helping to guide the re-emergence of these celebrated comedy centers.CHICAGO — Fourteen months after iO Theater closed its doors because of the pandemic, a move that seemed temporary at the time, the storied improv center looked as though it had been frozen in time, the calendar stuck on March 2020.In front of one stage, chairs were arranged around small round tables covered with a layer of dust. A grocery list in a back room reminded employees to buy more olives and baked potatoes. In the hall, handwritten signs directed audience members where to line up for shows.“This hallway used to be so crowded that I’m sure it was a fire-code disaster,” Charna Halpern, the theater’s co-founder, said as she surveyed the barren corridor recently.In June 2020, Halpern decided that the hallway would stay empty. The theater’s income had plummeted to zero amid the shutdown, bills were piling up and nearly 40 years after she helped start iO, Halpern announced that she was ready to close it permanently.The theater wasn’t the only one in an existential crisis. That same month, performers of color there and at Second City — the two most prominent improv institutions in the city, where the modern version of the art form was born — spoke publicly about their experiences with racism, inequity and a persistent lack of diversity at the theaters.The space at iO Theater is left as it was in March 2020, when it shut down because of the pandemic.Lawrence Agyei for The New York TimesThen, less than a week apart, both iO and Second City were put up for sale, heightening anxiety among performers who were already worried about improv’s post-pandemic future. Could improv be saved in the city where aspiring comedians flock to learn and perform, as stars like Tina Fey, Stephen Colbert and Keegan-Michael Key had?The short answer is yes. Less than a year after the businesses went on the market, buyers who believe in Chicago improv stepped up. Both are industry newcomers: Second City is now owned by a New York-based private equity firm and iO by a pair of local real estate executives.Decades of history and cultural relevance are part of what made these theaters appealing acquisitions, but after calls for transformational change, a new era of leadership is now grappling with how much of the old improv culture they want to preserve and how much they are willing to give up. At iO, criticism of its lack of racial diversity and equity has gone unaddressed during the theater’s year of uncertainty. And although Second City is back with regular shows and a plan to transform itself into an antiracist company, there is some skepticism among performers and students that this effort at reform will be different than previous attempts (a diversity coordinator has been in place since at least 2002, for example, and a revue with a notably diverse cast ran in 2016, though all the performers of color quit before it was over).“We want it to be good; it’s our home,” said Rob Wilson, an improviser who has been in Chicago’s comedy scene for a decade. “You’re going to give them the benefit of the doubt, but you’re also not going to be afraid to leave if it goes south.”Second City’s New BeginningLast fall, when Jon Carr, an improv veteran, was named Second City’s new executive producer — the company’s top creative role — his peers asked him the same question: “Why did you take that job?”The 62-year-old institution had just been the subject of a deluge of complaints from performers of color, who told stories of being demeaned, marginalized, tokenized and cast aside. As a result, the chief executive and executive producer, Andrew Alexander, abruptly resigned that summer.Still, Carr decided to take the offer, making him the second Black executive producer in the company’s history. (The first was Anthony LeBlanc, who had served in the role on an interim basis after Alexander’s resignation.)Carr told the people who had asked about the job that despite the pressure and inevitable stress it would bring, it presented an opportunity to change a company whose leaders had already pledged to “tear it all down and begin again.”“This is the thing that people will be talking about 40, 50 years from now,” he said. “We have the opportunity to shape that history.”Parisa Jalili, Second City’s chief operating officer.Jermaine Jackson Jr. for The New York TimesJon Carr, Second City’s new executive producer, its top creative role.Jermaine Jackson Jr. for The New York TimesSitting in a booth at Second City’s restaurant in Old Town a week after the company reopened in May, Carr and Parisa Jalili, the chief operating officer who had been promoted amid the criticism, ticked off some of the steps the company had taken to meet the calls for change.It documented the complaints and hired a human-resources consulting firm to evaluate them; it re-evaluated the photos in the lobby extolling mainly white performers and labeled offensive sketches and jokes in its expansive archive; it put into writing what the company is looking for in auditions to try to prevent bias in the process.​​“We were able to do it all quickly because we were much smaller and more agile being shut down,” Jalili said.The company also had to ensure that it survived the pandemic. Online improv classes were made permanent, raising revenue by opening up the potential customer base to the entire globe, rather than to only those who could show up to their sites in Chicago, Hollywood and Toronto. Then, in February, Second City was acquired by a private equity group, ZMC.The deal made some performers even more skeptical that Second City could return better than before. What would it mean for the company to be owned by an investment firm with no track record in comedy?Jordan Turkewitz, a managing partner at ZMC, said in an interview that the firm’s role as an investor was not to dictate decisions or get involved in minutiae; it’s to ask questions, offer advice and financially support the company’s growth.iO Theater, ResurrectedSecond City is holding several live shows a week, but for iO, a reopening is much further out.Many employees are desperate to return, said Scott Gendell, a real estate executive who bought iO last month with his longtime friend Larry Weiner. But there is no clear reopening date on the horizon, he said.Right now, the new owners are taking it slow, interviewing operating partners who will help run the theater and control its creative side.“We’re being very delicate and very cautious about reopening because you don’t want to crash and burn,” Gendell said.Gendell is the type of lifelong Chicagoan who can’t stand seeing the city’s trademark businesses shut down (“I’m still ticked off that Marshall Field’s went away,” he said). When he heard that Halpern had put iO up for sale, he and Weiner decided to buy it to preserve what they view as an important cultural institution.But some performers are interested less in an iO preserved in amber from 2020 and more in an iO that embraces radical change when it comes to diversity.The new iO owners are searching for operating partners.Lawrence Agyei for The New York TimesFor now, the theater is dark.Lawrence Agyei for The New York TimesOn June 9, 2020, five improvisers who had taken classes or performed there posted a petition calling on the theater to address entrenched problems of institutional racism. They told The Chicago Tribune of “bungled or inadequate past efforts at diversity, an unwelcoming attitude to performers and students of color, and problematic behavior by staffers.”.css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-16ed7iq{width:100%;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:center;-webkit-justify-content:center;-ms-flex-pack:center;justify-content:center;padding:10px 0;background-color:white;}.css-pmm6ed{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}.css-pmm6ed > :not(:first-child){margin-left:5px;}.css-5gimkt{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.8125rem;font-weight:700;-webkit-letter-spacing:0.03em;-moz-letter-spacing:0.03em;-ms-letter-spacing:0.03em;letter-spacing:0.03em;text-transform:uppercase;color:#333;}.css-5gimkt:after{content:’Collapse’;}.css-rdoyk0{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-eb027h{max-height:5000px;-webkit-transition:max-height 0.5s ease;transition:max-height 0.5s ease;}.css-6mllg9{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;position:relative;opacity:0;}.css-6mllg9:before{content:”;background-image:linear-gradient(180deg,transparent,#ffffff);background-image:-webkit-linear-gradient(270deg,rgba(255,255,255,0),#ffffff);height:80px;width:100%;position:absolute;bottom:0px;pointer-events:none;}.css-1jiwgt1{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;margin-bottom:1.25rem;}.css-8o2i8v{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-8o2i8v p{margin-bottom:0;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-1rh1sk1{margin:0 auto;overflow:hidden;}.css-1rh1sk1 strong{font-weight:700;}.css-1rh1sk1 em{font-style:italic;}.css-1rh1sk1 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#ccd9e3;text-decoration-color:#ccd9e3;}.css-1rh1sk1 a:visited{color:#333;-webkit-text-decoration-color:#ccc;text-decoration-color:#ccc;}.css-1rh1sk1 a:hover{-webkit-text-decoration:none;text-decoration:none;}The five improvisers pledged not to perform at iO until its management met a series of demands, including hiring a diversity and inclusion coordinator.The next day, Halpern sent a note to the protesters offering a broad and earnest apology for the institution’s “failings.” But just over a week later, Halpern announced that iO was shutting down, frustrating performers who thought the theater was on the verge of substantial change. Halpern said the reason was the financial implications of the pandemic — not the protests.Gendell said he was not ready to outline a plan for addressing these concerns before they brought on an operating partner but said that they were searching for partners in “diverse communities.”“We’re fair-minded people, and I have confidence in my value system,” he said.Performers Choose Their Own PathsIf iO and Second City want to fix the problems that have plagued them for decades, both institutions will need to convince comedians of varied backgrounds that they are places worth returning to.In June 2020, as the stories of discrimination became public, Julia Morales, a Black Puerto Rican comedian who had performed at Second City and iO for years, thought to herself, “These theaters have really disappointed me. Do I want to go back to this?”Her answer was to create something new. She scrounged up less than $2,000 and started Stepping Stone Theater, a nonprofit that she imagined would focus more on supporting performers of color and less on the bottom line. It is one of a few new improv ventures that have sprung up in the city in the past year.So far, Morales has chosen to maintain some ties with Second City. In May, she was onstage improvising in the company’s first post-pandemic program, and next month, her group and Second City are collaborating on a show. Even though the theater had disappointed her, she said, she didn’t think the way forward was to shut it out.Others, like the comedians Shelby Wolstein and Nick Murhling, have left Chicago to find opportunities in Los Angeles or have given up on big comedy institutions altogether. And some who have chosen to stay are unconvinced that there has been substantial change.“I won’t trust it until I see it for myself,” said Kennedy Baldwin, who started last month in a Second City fellowship that offers tuition-free training to a diverse group of actors and improvisers.Second City is now holding several shows a week.Jermaine Jackson Jr. for The New York TimesAmong performers who are intent on seeing the institution change, it is crucial to diversify the audience as well, which tends to skew older and whiter. These performers aren’t thrilled with the new ticket pricing system, which Second City started testing shortly before the pandemic.The system, called dynamic ticket pricing, calculates prices based on the time of the show and number of tickets left. The cheapest tickets cost $25 each, but with growing interest in the return of live theater and lower-than-usual ticket inventory because of the pandemic, they can run much higher. This Saturday, tickets for the 7 p.m. shows are about $90 each.Some performers worry that raising ticket prices will help maintain the status quo.“How can I make this a show that makes people feel included and have an audience that reflects how we look?” asked Terrence Carey, a Second City performer who is Black.A spokeswoman for Second City, Colleen Fahey, said the ticket pricing model is helpful in allowing the company to recoup revenue after a 14-month shutdown. She added that customers still have access to cheaper tickets.At iO, Olivia Jackson, one of the creators of the petition, said she was eager to meet with the new owners to discuss the issues her group raised. After that, she would determine whether to return to iO. If she decided against it, she could always turn to one of the newer, scrappier operations.“There are so many insanely talented people in Chicago who really love improv,” she said. “Chicago improv will be OK.” More

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      in Movies

      HBO and HBO Max Subscribers Seen Reaching 73 Million in 2021

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      AT&T may not want HBO Max anymore, but the streaming platform is gaining traction with customers.HBO and HBO Max, home to genre-bending franchises such as “Game of Thrones” and “The Sopranos” and Hollywood blockbusters like “Wonder Woman 1984,” have added 10.7 million customers in a little over a year, with 2.8 million coming in the three months ending in June, AT&T reported on Thursday. Those figures include both HBO Max and the HBO TV channel.The company has 67.5 million subscribers to HBO and HBO Max, with 47 million in the United States. AT&T, which has struck a deal to sell its media businesses, expects HBO and HBO Max will have between 70 million and 73 million customers by the end of the year, exceeding earlier predictions.Netflix, the most popular streaming service, has 209 million subscribers, with about 66 million in the United States. It gained customers in the second quarter, but growth has considerably slowed and it lost 430,000 subscribers across the United States and Canada, a sign that cracks are beginning to show in the streamer’s long-held dominance.Speaking on the broader streaming industry, Jason Kilar, the chief executive of AT&T’s media arm, WarnerMedia, said in an interview: “The only thing I can promise you is change. There is no doubt that change is coming, and that’s appropriate because we live in a dynamic time.”WarnerMedia, which includes CNN, the Warner Bros. film and television studios and the Turner cable networks, is about to become the property of Discovery Inc., as media companies continue to gobble each other up in an effort to take on Amazon, Apple, Facebook and Google. The deal, which is expected to close around the middle of next year, will create the second-largest media business in the United States, behind the Walt Disney Company and ahead of Netflix and NBCUniversal.Mr. Kilar, who learned of the acquisition only weeks before it would be announced, could be out of a job after the deal closes.Both companies are prohibited from working together until the merger is approved by government regulators, including striking any employment agreements. Still, such deals often involve tacit arrangements about leadership. Mr. Kilar said that he had met socially with David Zaslav, the head of Discovery, but that he hadn’t broached the topic of his employment.“David and I have known each other for a long time,” he said, “and I think it’s fair to say there’s a lot of shared respect between the both of us.”Mr. Kilar, who took charge of the company only 15 months ago, said he did not have plans to step away. “There will be a point where I pick my head up next year where I think about this topic,” he continued. “But I certainly don’t intend to do it until 2022.”Jason Kilar, the chief executive of WarnerMedia, in Dallas last December.Allison V. Smith for The New York TimesMr. Kilar, who was the founding chief executive of Hulu, is considered within Hollywood to be a bit of an iconoclast. In 2011, he broadsided the industry with a now-famous manifesto on the future of entertainment that, to many, came across as a blistering critique of Hulu’s corporate ownership.The post panned traditional TV for running far too many commercials. Mr. Kilar also blasted cable, predicting that viewers would eventually drop expensive packages.After Mr. Kilar joined WarnerMedia, he quickly shuffled the executive ranks and cut costs in an effort to streamline the business.Then he angered Hollywood (again) by breaking with tradition and releasing the entire 2021 lineup of Warner Bros. films on HBO Max on the same day they were scheduled to appear in theaters. The move would have cost some of Hollywood’s biggest players back-end profits — the commission that top-flight producers and stars earn based on box office receipts — but the company quickly worked out deals to make sure they would be paid.Unlike Netflix, Disney+ and HBO Max and other new entrants into streaming have legacy agreements with cable distributors and Hollywood studios that prevent a more full-throated approach to making films and TV shows immediately available online.For Mr. Kilar, the move wasn’t about upsetting Hollywood, but rather was part of a larger strategy to goose HBO Max.It seems to have worked. The release of made-for-the-big-screen spectacles like “Godzilla vs. Kong” on HBO Max helped to increase the service’s customer rolls.Mr. Kilar intends to keep up that strategy through 2022. Warner Bros. will release 10 films exclusively for the streaming platform. And big-budget films like “The Batman,” a reimagining of the comic book character starring Robert Pattinson, will have relatively short windows in theaters of 45 days before they show up on HBO Max, according to Mr. Kilar.“That’s very, very different than the way the world operated in 2019,” he said. “Ultimately, I do think that as long as you’re thoughtful about it, change could be very, very good for not only the customers but also the people we get to work with.” More

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      in Theater

      Historic Cherry Lane Theater Sold for $11 Million

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      The Lucille Lortel Theater Foundation, which has managed the 97-year-old theater for the past decade, will take over the building in Greenwich Village.The Cherry Lane Theater, the oldest continuously running Off Broadway theater in New York City, has been sold to the Lucille Lortel Theater Foundation for $11 million, the theater announced on Monday.“It has been a great run,” Angelina Fiordellisi, the executive director of the theater, said in a statement. “To stand on the stage where so many of our greatest artists, crews and theater providers have stood is to know what theater history feels like.”The new owner will be the Lucille Lortel Theater Foundation, which is a few blocks from the Cherry Lane Theater on Christopher Street and has managed the building for the past decade. The sale includes the 179-seat main stage and a 60-seat studio theater.Fiordellisi, who has led the 97-year-old nonprofit theater since acquiring the building in 1996, will continue to lead the nonprofit producing group Cherry Lane Alternative, which will have readings — and possibly productions — in the theater’s studio space.She had previously announced plans to sell the building, at 38 Commerce Street, in 2010, citing financial struggles. At the time, she told The New York Times that the theater was operating at a deficit of $250,000, which she attributed to a steep drop in income from government and foundation support, ticket sales and rental fees.“It’s frightening to me, what’s happened to Off Broadway theater,” Fiordellisi told The Times in 2010. “We have to adhere to the formula of having a film star in our productions to sell tickets because it’s so financially prohibitive. I don’t want to do theater like that.”But eight months later, she reversed her decision because of a significantly reduced deficit, a new managing agent and the support of the theater’s neighbors. Cherry Lane Alternative, the resident theater company Fiordellisi established in 1997, currently has a deficit of $100,000, a spokesman for the theater, Sam Rudy, said.The theater, a Greenwich Village institution that has long been a testing ground for new work by emerging artists, reopened at full capacity last month with Jacqueline Novak’s “Get on Your Knees,” a comedy that offers a personal and intellectual history of oral sex. It is scheduled to run through July 31.Under Fiordellisi, Cherry Lane has mentored writers including Katori Hall, who won this year’s Pulitzer Prize for Drama for “The Hot Wing King”; Antoinette Chinonye Nwandu, whose play “Pass Over” will begin previews on Broadway in August after being produced at the theater in 2016; and Jocelyn Bioh, whose “Merry Wives,” a contemporary take on Shakespeare’s “The Merry Wives of Windsor,” is running at the Delacorte Theater in Central Park.Cherry Lane was started by a group of artists who were colleagues of Edna St. Vincent Millay and has showcased work by Samuel Beckett, F. Scott Fitzgerald, Eugene O’Neill and Tennessee Williams. But despite its storied history, the theater had not staged a play in two years when Fiordellisi bought it for $1.7 million in 1996 and renovated it for $3 million.Cherry Lane Alternative, the nonprofit producing group, said it expects to resume a scaled-back version of its acclaimed Mentor Project, which pairs emerging writers with established playwrights like Lynn Nottage, Branden Jacobs-Jenkins and Taylor Mac to develop and stage their work in the studio theater space. It will likely include one production per season instead of the typical three.George Forbes, the Lucille Lortel Theater Foundation’s executive director, said the foundation plans to announce new programming shortly. More