Howard Schultz's decision to explore a third-party presidential bid has angered Democrats and confounded pollsters, but it is a source of immense interest and even some excitement in C Suites across America.

February 12, 2019 | Hollywood


Good morning. Want to know how to start a fight in Washington? David Brooks just accused the Left of embracing elitism.


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The Entrepreneurs' Candidate


Moving the Market: Howard Schultz's decision to explore a third-party presidential bid has angered Democrats and confounded pollsters, but it is a source of immense interest and even some excitement in C Suites across America, nine prominent business executives from the worlds of finance, technology and media tell me.


Why They're Watching:


Many of the executives are socially liberal and fiscally conservative like Schultz and identify with his policies, as well as his concerns about the increasingly partisan rhetoric from both sides.


Some of the executives know Schultz personally or have worked with him over the years and believe that, while his chances may be slim, his bid will have more appeal than the pundits anticipate.


At least a couple of the executives harbor their own ambitions of running for public office and see his campaign as a litmus test for centrist candidates with executive rather than political experience.


What They're Saying:


Schultz's entrepreneurial ethos is why he believes he can win — despite the tidal wave of data, political expertise and historical precedent that says he cannot. Entrepreneurs are used to being in rooms where 99% of people see X and they see Y. Schultz was once told that consumers wouldn't spend more than 50 cents on a cup of coffee. So he doesn't put a lot of stock in conventional wisdom.


The Democratic freakout over Schultz belies a greater fear among the party: That if they nominate a candidate who is too far to the left, they risk alienating centrist voters and losing the election to Trump even without Schultz in the race. In other words, Schultz wouldn't even be in the conversation if the Democrats had a candidate who had broad appeal across the party.


The tidal wave of opposition to Schultz's campaign before it has even launched bolsters Schultz's claim that American politics has become too partisan and that the American people are being held captive by a two-party system.


What They're Not Saying:


• Anything publicly. Which doesn't help.


Bonus: Why not Bloomberg? Several sources said they had similar interest in Mike Bloomberg's possible presidential bid, but strongly doubted his ability to survive the Democratic primary.


• Which is one reason to run third-party.


What's Next: Schultz is in Houston tonight for a CNN Town Hall hosted by Poppy Harlow airing at 10 p.m. ET. As you might expect, Democrats aren't happy about it.


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David Pecker's Saudi suspicion


Plot Thickener: David Pecker's American Media Inc. asked the Justice Department last year whether or not it should register as a foreign agent due to its financial ties to the Saudi kingdom, WSJ's Julie Bykowicz and Lukas Alpert report:


• "In recent years, American Media sought Saudi financial backing to finance a failed effort to acquire Time magazine, Sports Illustrated, Fortune and Money."


• AMI "also produced a promotional magazine about Saudi Arabia [to] commemorate Saudi Crown Prince Mohammed bin Salman’s visit to the U.S. in March 2018."


The Big Picture: The revelation will fuel the suspicion, floated last week by Jeff Bezos, that Saudi Arabia had a role in AMI's effort to expose the Amazon founder's extramarital affair — an insinuation that representatives for both AMI and the Saudi kingdom flatly deny.


What's Next: "I think the story today is: Why [was AMI] so determined and hell-bent to get Bezos to say it’s not political?" former People editor Larry Hackett tells VF's Joe Pompeo. "[It] suggests a worry on their part."


Bonus, via THR's Ashley Cullins: "Are Jeff Bezos' Nude Selfies Newsworthy? Probably Not, Say Legal Experts"

🌮 Rally the Market 🌮


What's Next: SXSW will announce a new round of featured speakers this morning with added guests from across the worlds of politics, tech, media and entertainment. The list is impressive.


• Scheduling Alert: My interview with WndrCo's Jeffrey Katzenberg and Meg Whitman will take place on Friday, March 8, at 12:30 p.m. CT.


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Murdochs shake up Fox pitch


Big in Midtown: Fox News is launching a new marketing effort in New York that touts the network as the number-one cable news source in America, rather than a bastion of conservative opinion.


• The campaign is a play for advertisers who have been forced to weigh Fox News' relatively vast audience reach against the more controversial aspects of its heavily partisan primetime programming.


Variety's Brian Steinberg explains:


• Fox's opinion programs "have come under scrutiny from advertisers. ... Some sponsors have pulled their advertising from Tucker Carlson ... or Laura Ingraham’s [shows] after remarks made by the hosts in 2018."


• "Media buyers suggest their clients recognize the value and size of the audience around Fox News programs, but are leery of being called out on social media by advocacy organizations monitoring primetime advertising."


• "Keeping the ad dollars flowing at Fox News is critical ... [especially as Fox sells] the bulk of its cable and studio assets to ... Disney."


Jason Klarman, the consultant supervising the marketing effort, puts the message to advertisers this way: “If you’re not buying us, you’re not reaching the whole audience."

Market Links 


Doug McMillon wants to boost Walmart's ad business (Bloomberg)


Jeff Weiner tests out a live LinkedIn video service (TechCrunch)


Charlie Hale says the Patch sites are turning a profit (Recode)


Shari Redstone prefers to curl up with podcasts (Bloomberg)


Irving and Shelli Azoff have acquired the Apple Pan (THR)


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Kevin Durant's 'Boardroom'


Big in the Bay: Kevin Durant has launched a new six-episode series about the sports business on ESPN+ called "The Boardroom," one of the first big new shows on ESPN's streaming service.


Who's In, via Variety's Todd Spangler:


• "Guests on 'The Boardroom' include L.A. Lakers players LeBron James and Kyle Kuzma, Houston Rockets forward P.J. Tucker, L.A. Clippers owner Steve Ballmer, Twitter CEO Jack Dorsey and Peter Guber, the co-owner of Warriors, Dodgers and LAFC."


• "'The Boardroom' is hosted by ESPN’s Jay Williams and features Durant and [business partner] Rich Kleiman, who also serve as the show’s executive producers."


• "ESPN Insider analyst Jordan Schultz" — son of Howard — "serves as a correspondent throughout the series."


The Big Picture: For Durant, it's a chance to elevate the media conversation around sports; for ESPN, it's a "bid to persuade more sports fans to pay for ESPN+, the over-the-top complement to the core TV business."

What's Next: Today on TNT: Manchester United vs. PSG ... Tonight on TNT: Celtics at 76ers; Jazz at Warriors.


See you tomorrow.


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