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The logic behind AT&T's illogical J.J. Abrams deal

Moving the Market: WarnerMedia chief John Stankey has committed up to $500 million to sign J.J. Abrams to a five-year, not-quite-exclusive deal that gives the star filmmaker the best-possible terms in exchange for a big bright halo that AT&T executives can wear around Hollywood.

• The big picture: Stankey spent way more on Abrams than he's actually worth, several Hollywood executives tell me. But he did it to send a signal to the creative community and to consumers: AT&T came to play.

• "There's no way this deal makes sense," one executive said. "But it doesn't matter. It's important to Stankey to be seen as the guy who brought in J.J., and important to the perception that AT&T is in the game."

• That is all the more important for AT&T as they prepare to launch the HBO Max streaming platform next year and go head-to-head with rival services from Disney, Netflix, Amazon, Apple and so on.

The terms: Abrams' Bad Robot production company will create movies, television series, video games and digital content for WarnerMedia's various properties through 2024. Bad Robot could make $500 million if it meets certain targets, sources with knowledge of the matter said.

• But the sources also said Abrams will be able to work on certain projects outside of WarnerMedia, as well. That likely pertains to sequels of films he's already directed or produced, like "Star Wars" or "Star Trek." (WarnerMedia and Bad Robot declined to comment.)

• One source said Abrams would also get an ownership stake, possibly as high as 50%, in the projects he creates for WarnerMedia — a stunning concession at a time when media companies are locking up content rights. (WarnerMedia and Bad Robot declined to comment.)

The sweetheart deal suggests Stankey, who vigorously courted Abrams, believes WarnerMedia needed a mega-talent in order to compete with other Hollywood giants.

• It's also a deal that Disney, Comcast, Apple and Sony — all of which were in talks with Abrams, per sources familiar — would likely not have agreed to.

What's next: Look for Stankey and other WarnerMedia executives like Bob Greenblatt, Peter Roth and Toby Emmerich to walk around with a little extra pep in their step.

• Because hell, it's not their money.

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ViacomCBS will share content

The Streaming Wars: CBS chief creative officer David Nevins says ViacomCBS will license content to the highest bidders and will not follow Disney, WarnerMedia and others in hoarding content for their own streaming services, THR's Paul Bond reports.

• "There's a lot of hungry mouths to feed," Nevins said at the Bank of America Merrill Lynch Media, Communications & Entertainment Conference in Beverly Hills. "We really believe in not only serving inside our own ecosystem but serving people outside."

Oh/and: "Nevins also seemingly took shots at Apple... AT&T... and at Amazon: 'Our advantage is we're a pure-play content company. We're not trying to drive the telephone or hardware business, or a retail business."

🐉 Talk of TV Land 🐉

Milking the IP: WarnerMedia's next big project is another "Game of Thrones" prequel for HBO. This one will reportedly take place 300 years before the main show and focus on the Targaryen family.

"Hold your dragons."

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Sundar Pichai joins news push

Big in the Bay: Google VP of News Richard Gingras says the company is making changes to its search algorithm to “better recognize original reporting," a development that comes as Silicon Valley makes a more concerted effort to reward legacy media organizations.

• "While we typically show the latest and most comprehensive version of a story in news results, we've made changes to our products globally to highlight articles that we identify as significant original reporting," Gringas writes in a blog post.

• The Google effort comes as Facebook is preparing to launch “News Tab," which will highlight original reporting from established publications. As previously reported, Facebook will pay publishers $2 to $2.5 million a year in exchange for their content.

The big picture: "Google and other major tech platforms have lately come under scrutiny — and federal antitrust investigations — in part because of their influence over the digital news industry," NYT's Marc Tracy reports.

Market Links

• Peter Thiel comes under an FBI investigation (Recode)

• Susan Zirinsky deals with a $400 million lawsuit (NYT)

• David Linde signs a multiyear deal at Participant (THR)

• Matt Hullum lays off 50 staffers at Rooster Teeth (Variety)

• Bryn Mooser launches a documentary studio startup (Variety)

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Lauren Petterson takes FBN

Moving Midtown: "Brian Jones, a longtime Fox News employee who had a hand in the launch of Fox Business Network before he became the top executive overseeing it, is leaving the operation," Variety's Brian Steinberg reports.

• "Lauren Petterson, an executive who has had oversight of the 'Fox & Friends' franchise on Fox News Channel, is taking that role immediately."

Fox spokespeople provided no further details on Jones' abrupt departure.

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Jeffrey Epstein goes Hollywood

Talk of Tinseltown: The Jeffrey Epstein scandal is nowhere near over — see Felix Salmon — but already Hollywood is starting to cash in on the stranger-than-fiction drama that has played out in recent months, per Vanity Fair's Joe Pompeo.

The big picture: "The inevitable boomlet in big-ticket Epstein productions with Hollywood clout" has begun:

• Projects from Lifetime, 20/20 and Dateline.

• A four-part Netflix docuseries from Radical Media.

• An Endeavor-backed podcast co-produced by Dylan Howard, former editor in chief of the National Enquirer.

• An Adam McKay-produced podcast.

Money quote, via a Hollywood source: "When you have a scandal of this magnitude, it is only inevitable that there would be a multitude of attempts to tell that story for a larger audience."

🏈 What's next: The weekend.

See you Monday.