Morning Brew Daily - Are Reality TV Stars…Employees? & ‘Hot Ones’ Sold For $82M

Episode Date: December 13, 2024

Episode 474: Neal and Toby dive into a labor dispute that could change the landscape of reality TV shows, and at the center of it all: Netflix’s ‘Love is Blind.’ Then, BuzzFeed sells off its wildly popular show ‘Hot Ones’ for a massive $82M deal. Also, people are scared, nervous, concerned, and confused about drones flying over the tri-state area as government officials have no idea where they’re coming from. Meanwhile, the Stock of the Week is Google’s AI agent, while the Dog of the Week are healthcare insurance companies after the fallout of the UnitedHealthcare CEO killing. Lastly, the biggest news for you to close out your day.  Visit https://www.sage.com for more! Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning, Brew, Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, mysterious drones are flying over New Jersey and nobody has any idea what's going on. Then 10 wings, doused and hot sauce, may have just saved BuzzFeed. It's Friday, December 13th. Let's ride. Toby, welcome back.

Hope you're feeling better. Neil, thanks for holding down the fort. You are a one-man band, a solo act, incredible performance yesterday. Thank you. It's also Friday the 13th today, which is one of the spooky. days on the calendar. But not everyone is proceeding with caution. For some people, the number 13 is actually lucky. One person I'm thinking of is obviously Taylor Swift. Her birthday is today. She considers 13 to be her lucky number. And then some cultures, including ancient Egypt, also believed the number 13

was lucky. And then for Colgate University, the number 13 is just venerated. The New York school was founded by 13 men with $13, 13 prayers, and 13 articles. They have a whole website dedicated to the number 13. So they love 13. Are you a person who thinks 13 is lucky or unlucky? I mean, I was going through it because I was wondering if I have any superstitions. And I have routines. Like, I set my alarms at the same time every morning. I always lay my clothes out the night before. But I think I'm realizing that it only moves from routine to superstition if something bad happens following a departure from that routine. And so far, so good, I haven't had anything bad befall me if I do set my alarm at, you know,

408 instead of 409. So I don't think I have superstitions. Were you a superstitious guy? I am, but I think it permeates my life so much that I can't identify just one. But I will think over, I'll think of them over the course of the show and let you know if any pop up. So you're not superstitious. You're just a little stitious. Now let's hear a word from our sponsor, Sage.

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head to sage.com for more info. That's sage.com. Study and play. Come together on a Windows 11 PC. And for a limited time, college students get the best of both worlds. Get the unreal college deal, everything you need to study and play with select Windows 11 PCs.

eligible students get a year of Microsoft 365 premium and a year of Xbox GamePass Ultimate with a custom color Xbox wireless controller. Learn more at Windows.com slash student offer. While supplies last ends June 30th, turns at AKA.m.m.S. College PC. If you thought the dating scene was tough right now, the National Labor Relations Board is here to shake things up even more. The NLRB issued a complaint this week suggesting that the love seekers on the Netflix reality show, Love is Blind, who date one another while in separate rooms known as pods aren't just participants in a social experiment. They might actually be employees. It is the Labor Board's first time venturing into the messy world of reality TV, but comes after

some of the show's on-screen personalities have advocated for change. If the NLRB gets its way, it could turn the reality TV world on its head. If the show's condescents are employees and not contractors, that could lead to unionization, better pay, and less restrictive non-compete clauses. Neil, maybe what these contestants need in their life was less blind love and more labor protections. Right. This could be an earthquake for reality TV.

We've talked about the National Labor Review Board on the show before, but for the most part, it's been in the context of industries like Starbucks unionization or Amazon unionization or auto workers. It's the first time they ventured into reality TV. There have been a number of lawsuits filed by former Love is Blind contestants and extends to other shows as well, accusing the producers of these shows of being abusive, exploitative, and then putting all of these clauses in their contracts such as non-competes and pay or leave, which is something like you have to pay a fine if you leave the show, so that

really gets you in there. So they've chronicled a bunch of these exploitative practices that they're bringing to the National Labor Review Board, and there will be a final determination next year whether reality TV show contestants, at least on Love is Blind, are employees. So the world of reality TV show, there's a lot of wild stuff that happens on screen. That's kind of part for the course, and it's what the producers of the show want. So these production companies that put on the shows always want to reduce their exposure, reduce their exposure to litigation, because, so that's where you get these very tightly worded, these very tightly written contracts, usually with these confidentially provisions, also with these other

restrictions. And so one big one that the NLRB pointed out in relation to Love is blind is that they have this non-compete provision that says cast members cannot give interviews, they can't go on media, on their own behalf or for any third party one year until after the last episode air. So it's a very restrictive non-compete clause that kind of the contestants bristled against. They also had that the no-show fine that if they left the show, they'd have to pay $50,000. And then also just the pay was a little low. Some people were saying they were getting $1,000 a week stipend. And if you went down through the amount of time they spent on set, they were making below minimum wage $7 an hour based off of the entire time that they were working. So a lot of these different complaints added up, and that's why the NLRB got involved.

And the companies are not going to, you know, go down quietly. They issued a response last year to one of these lawsuits. The show's creator said, we document the independent choices of adults who volunteer to participate. in a social experiment. Their journey is not scripted, nor is it filmed around the clock. We have no knowledge or control over what occurs in private living spaces when not filming, and participants may choose to end their journey at any

time. So that's the producer's side. They're saying, look, they signed up for this. We're giving them fame and celebrity and things like that. We signed a contract and this is what they agreed to. So that is, you know, the battle lines are being drawn. This will be resolved next year one way or the other. The big

question mark is whether this is a huge reckoning for reality TV if they are classified as employees, or whether it's a nothing burger. And that all depends on who Trump, you know, appoints to the National Labor Review Board, because it is a commission made up of a bunch of different people. If you appoints a Republican, then this thing is going to be absolutely dead in the water and they're just going to go back to the way things were. But it does seem like there's a broader, what they call a reality reckoning around the Bravoverse right now. You know, Bethany Frankel, who's probably one of the most famous Real Housewives called for unionization among contestants last year.

So there's a broad acknowledgement that perhaps reality TV contestants should be afforded more rights as, you know, compared to the other industries that everyone works in. BuzzFeed stole the studio behind the YouTube show Hot Ones for a non-poultry sum of $82.5 million, offloading one of its most prized assets in order to keep its struggling business afloat. So, who bought it from BuzzFeed? A consortium of investors led by an affiliate of Soros Fund Management, acquired the pair of company of Hot Ones called First We Feast, and will run it as an independent entity.

The show in which Cool as a Cucumber host, Sean Evans, interviews celebs while they eat increasingly spicy chicken wings, has become a massive hit since its debut in 2015. First We Feast has over 14 million YouTube subscribers and does about $30 million in annual revenue. That's a nice business, but BuzzFeed has bills to pay, specifically a $120 million tab from debt and interest that came due last week. It's using the proceeds of the Hot Ones sale to pay that down, so it only has $30 million in debt remaining. Now BuzzFeed is in a much better place financially, saying it has a cash balance bigger than its total outstanding debt.

Still, Toby, I have a lot of questions here. Hot Ones was the one thing BuzzFeed had going for it. what's the strategy going forward? And for Hot Ones and First We Feast, what is the ceiling for them as an independent company? Please answer. I do think BuzzFeed had to, you know, cut off the arm to save the body in this case. Yes, Hot Ones was their buzziest and probably most well-known property, but they are a business in decline right now.

They had to make some cuts. They had to get some cash in the bank so they can make these interest payments. Now all that's left is BuzzFeed, the actual site that you know, from those listicals that and quizzes and celebrity news that used to do a lot of back in the day. They have Huff Post still, which is a news site, and then they also have Tasty, it's food vertical. And that's it right now. They got rid of Hot Ones.

They're now moving into what their CEO, Jonah Pretti, calls new AI-powered interactive experiences. So he is betting a lot on AI here, and I guess you can't have an AI version of Sean Evans. As for Hot Ones, they're joining Soros, or a conglomerate of Soros companies, which sounds weird on the surface because George Soros is worth over $7 billion, has been this very big proponent of liberal causes. So why are they owning this celebrity interview show? They have been moving into the media space in past years. The Soros Empire is now run by his son Alex.

He acquired a minority stake in Crooked Media, which is the media company behind Pod Save America. They also have a controlling stake in Odyssey, which is this radio company. so they have been making inroads into the media company. This is now another crown jewel that they're adding to their portfolio. And Hot Ones is, let's just put an emphasis on it, incredibly successful. I mean, it is a destination stop on the press tour circuit.

If you have a movie coming out, then you absolutely go on this show. You were looking at some of the numbers this morning, and they sometimes exceed the hundreds of millions for one episode. Yeah, Hugh Jackman, Ryan Reynolds, went on to promote Deadpool and Wolverine. That pulled in 31 million views. Arianna Grande was recently on to promote Wicked. 8.3 million. Paul Mescal, only 1.9 million.

Come on Paul, get those numbers up. All time, though, on the all-time list, I was wondering who is the most famous Hotland Guess, and it is Gordon Ramsey with 129 million views. You are right, though. It's almost replaced late-night television as the go-to-stop, the de facto stop, for if you are a celebrity,

because it just has this very dedicated audience. It puts celebrities in a great scenario. You get to see them. Everyone's tried spicy food before, so it's very relatable. And then Sean Evans also asked these great deep questions to them. So you are totally right that it's become part of the late-night media apparatus in a way that I don't think anyone really could have foreseen when it started 10 years ago. New Jersey residents are your neck sore? People living in the Garden State have reported a rash of mysterious drone sightings over the past few weeks, prompting wild explanations for

their presence ranging from foreign motherships to aliens. These drones have been described as larger than your typical hobbyist models and are often seen flying over critical infrastructure like reservoirs, airports, and military bases. Witnesses describe the drones as being about the size of bicycles or even small cars, with some seen flying in clusters late at night. Understandably, residents have called on public officials to figure out what the heck is going on. Yesterday, the White House's National Security Communications Advisor, John Kirby, assured the public that there is no threat to public safety or national security. But the same

day, Senator Richard Blumenzal said they should be shut down if necessary, a sentiment shared by two New Jersey area congressman, Chris Smith and Jeff Van Drew, who've called on the military to shoot them down as well. The FBI has formally launched an investigation, asking residents to share any videos and photos they may have. It's become the this whole thing. And the only consensus, Neil, is that nobody really knows what they are. No, I was going down a deep thread last night, and there are so many more questions than answers. I think one thing you could probably point to is maybe some of them are just planes. There's a lot of private airports in New Jersey, and people might have this confirmation bias

where there's knowing that others are seeing drones in their state. They might be seeing them as well in documenting just actual planes. but it does remind you a bit of the panic around the Chinese spy balloon where we sent, you know, an F-16 to shoot down a hobbyist balloon that cost $10 with a sidewinder missile. So there's a question of whether this is a panic, but also at the same time, mayors and local officials are putting a lot of pressure on people at the national level to have more transparency to actually look into this because their residents are calling them and saying, we're seeing these drones. scared. We have no idea what's going on. The whole thing kind of blew up a little bit in mid-November when the drones were spotted near Pickettany Arsenal, which is a military research facility, and then also over Bedminster, which is where Trump has his golf course. So those two things, and then you have officials saying they saw them over critical infrastructure as well,

has led to a lot of nerves in that is completely understandable. So you have this push and pull between local mayors saying we demand answers and federal officials saying there's maybe not much to see here, and we'll see what happens going forward. I mean, there is this background context of a increased interest in UFOs, but as the government classifies them as UAPs, which are unidentified anomalous phenomenon. There have been two major hearings this year on UASPs held in front of Congress, where leaders are just calling for greater transparency from the Pentagon. So I think you can't talk about these things without also talking around the greater interest in, at the governmental level, when it comes to UAPs, UFOs, whatever you want to call them.

So until we figure out what this is, it still is just a big question mark. We were speaking this morning, and they think the only possible explanation is just a hobbyist got a really big drone and it's just flying it around and people are freaking out about that. But until you have answers, then there's really nothing you can say other than the fact that you hope it doesn't impact national security or isn't a threat from another country, which the Pentagon has said it doesn't believe it is. but until one of these drones is, you know, taken down from the sky and examine,

we just don't know. Up next, it's Doc of the Week, dog of the week. Dog of the week time. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage on April 30th,

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One size, absolutely, does not fit all. Get a quote or find an agent today at thehart.com slash small business. Welcome to Stock of the Week, Dog of the Week, the Friday segment where Toby and I pick one stock that nailed the high note in defying gravity and another that had to take it down the octave. I won the pre-show contest of who hosted yesterday, so I get to go first. And my stock of the week is Google, or Alphabet, if you want to be a snob about it. Alphabet, Google's parent company, shot up more than 11% this week after the company released a new AI model that sets the stage for a universal personal assistant that can do pretty much

anything you want for you. Oh, and there was also that quantum computer that proved the existence of the multiverse. But back to the AI stuff, because that's what get investors really foaming at the mouth these days. Google lifted the lid on Gemini 2.0. It's upgraded AI model that lays the foundation for AI agents, which is like chat GPT on steroids. While chatbots can provide answers to your questions and write bad novels. They require some handholding. AI agents are like a dog without a leash. They can complete tasks

on their own and solve multi-step problems without you giving them instructions every step of the way. Many leaders in the AI space see these agents as the industry's next big consumer application and Google just threw its hat in the ring with Gemini 2.0. Let's talk about timing. None of these

agents will hit your Chrome browser anytime soon, but they will come next year, and that seems good enough to placate investors who are seriously worried about Google search losing its throne to AI upstarts like chat GPT and perplexity. It really was a great week for Google. Go back to even earlier this year, and it seemed like the AI revolution was passing it by. It was falling behind in this critical race, but now a lot of things are going on at Google that will get you reason to be excited. They have another project called Project Astra, which introduces a virtual assistant like a Siri, like an Alexa. That's slightly more natural to talk.

to it can remember and refer back to past interactions. It also is teaming up with Samsung to try to take on meta in this resurgent market for smart glasses and VR headsets, which is ironic because we're almost a decade removed from its first attempt in Google Glass that went very, very poorly. It also wrote out this new AI called GenCats, it's a weather prediction model. It can accurately predict weather forecast 15 days in advance. And then you mentioned the quantum computing thing as well, the willow chip that decreased the error rate involved in quantum computing. So all of a sudden, we were just looking back at Google and said, they rolled out a ton of products here that are doing very well and suddenly changed the entire narrative around this company when it comes to AI. And it is still hypothetical because these things aren't going to be released to the public until next year.

And then the quantum computer is not going to come for, I don't know, decades. But it did kind of show investors that Google has is technical chops in order and that it can still provide. provide technological breakthroughs. And that excited investors, Google Alphabet had lagged all of the magnificent seven peers up until a few weeks ago. And now it's doing much better with investors. Super excited about some of these AI products and the fact that it may be able to change its business enough to hold off those competitors. My dog of the week is healthcare stocks following the spate of negative press connected to the assassination of United Healthcare CEO Brian Thompson. Names like CVS, 6.5.

and United Health Group continued to struggle this week. A bipartisan group of senators pushed things from bad to worse when they introduced a bill that could result in the breakup of some of these health care giants. The bill goes after the middlemen of the drug world pharmacy benefit managers. It would force health insurance companies and PBMs to break off their pharmacy businesses within three years or face penalties. Senator Elizabeth Warren said in a press release

that the fact that health care companies can own both PBMs and pharmacies are, quote, a gross conflict of interest that enables these companies to enrich themselves at the expense of patients and independent pharmacies. So in addition to trading lower in the days after Thompson's killing, healthcare stocks are now facing some serious heat in Congress as well. Yeah, United Health Group, Cigna and CVS Health are all down at least 10% this week. There's just a lot of negative sentiment around the healthcare industry right now. Both, all three of those operate huge insurance arms.

and then they also have the largest PBMs, which are the drug supply chain, middle men. Collectively, those three companies or those three PBMs operate 80% of the nation's prescriptions. And the pitchforks have been out for PBMs for a while. The FTC started looking at them in 2022. So there does seem to be appetite for health care reform right now, which was not talked about at all during the presidential campaign. I don't think they asked a single question about it at any of the debates. what are you going to do with the health care system? But all of a sudden, after this assassination, it's come to the fore as a major talking point here. And we'll see whether, you know, it's very

unclear whether this specific bill will gain traction. But for, you know, an issue that certainly wasn't top of mind, it will be now in the years going forward. And we'll see whether the Trump administration decides to take that popular mandate and do something on it. We know that his health and human services secretary, RFK, really does not like the big health care industry. So we'll see if there's any reform there. But yeah, there's certainly a lot of, you know, negative attitudes towards healthcare industries right now and their stocks are plummeting as a result. Yeah, I mean, you just got to go and look at what the people are saying. A Gallup poll said that only 19% of Americans are satisfied with the cost of health care. I think a lot of people would say, who are that 19%? Because a lot of

people do feel like the system is not built to, you know, support the people who need the care their most. And then all you have to do is point to the stock gains that these companies have seen in the past two decades over the last 20 years. United Health Group, it's up 1,200 percent. Cigna is up 4,000 percent over the same time period. But then you look at the life expectancy numbers in the U.S. and those have stayed flat, which is part of the reason why people are so frustrated with this particular industry right now. Let's sprint to the finish with some final headlines. President-elect Trump was named Time Magazine's Person of the Year for the second time. and to celebrate, he rang the opening bell at the New York Stock Exchange to kick off the trading day.

It was a jubilant scene with loads of finance execs in attendance, including Goldman Sachs CEO David Solomon, city groups Jane Frazier, and Pershing Square's Bill Ackman. They're excited about Trump's second stint in the White House because his administration is expected to cut taxes, deregulate companies, and spur more merger activity, all things that would seemingly benefit Wall Street. Here's an interesting fact, though, despite being a New Yorker and being in the business scene for decades, Trump's never rung the opening bell before. The Stock Exchange started inviting guests to do it starting in 1965 with a 10-year-old who won a stock market quiz show. Oh, that is a good fun fact, actually.

I've always wanted to ring the bell. We have been to the New York Stock Exchange. It is a very cool place. I do want to talk about him winning Time Magazine's person of the year, though. There were some people saying it comes with an asterisk because, tell me if you think that he's a system time person of the year candidate because each of the last seven presidential election years and four of the seven before that have been named time person of the year. Whoever won the White House became time person of the year. So all you got to do is win

the win the White House, which I mean, I guess is quite the feat to be named time person of the year. The president seems to have an inside track to that award. YouTube TV you done messed up. The streaming TV provider set off a firestorm of negativity yesterday after it announced another price hike, bringing its monthly cost to $83, a 137% increase from its 2017 launch price. The $10 hike has subscribers seeing red and set off this big brouhaha online with a lot of people citing YouTube TV shift from an affordable streaming alternative to what feels a lot like traditional cable pricing. To add insult to injury, there's no real new content or features to justify this cost increase. So a lot of people are left wondering if the service is even worth it anymore.

There's no new content, but it seems like they do have to pay their bills and YouTube TV paid $2 billion per year to the NFL for the exclusive rights of Sunday ticket and now it wants customers to help them pay that down. But you're right, this is a shockingly huge increase, $10 per month increase. That amounts to hundreds of dollars over. the year. I guess we're going to get to a point where customers are going to, you know, leave and go to other streaming platforms because at this point, there is absolute parity between the new guard of pay TV and the old guard of the cable bundle. And it's really hard to see the difference at this point. That's why the internet always has a field date with these

price sites, because it is so easy to compare it to cable and how streaming has reinvented cable and just branded it differently. So I think that's why you see so many jokes. But also, people can remember the price that YouTube TV debuted at, which was $35 a month. That was a game changer because it was both a probably superior service because you could watch it on whatever device. It was very accessible, but it was also a superior price. Now it seems like the product hasn't innovated that much, but the price has gone up exponentially. Still, the predictions are that it will eclipse Comcast in 2026 as the country's largest paid TV provider. So there's that. What do Michael Jordan, Rob Grankowski, and Jim Carey have in common?

They all came out of retirement. Jim Carrey returned to work to voice Dr. Robotnik and Sonic the Hedgehog 3 opening next week, but the legendary actor did so for a fairly commonplace reason. He needed the money. In an interview on the red carpet before the movie's London premiere, Kerry said he came back first of all because he gets to play a genius, and also, quote, I bought a lot of stuff and I need the money, frankly. it's a U-turn for a guy who said he was retiring from the game two years ago.

In 2022, he told the Hollywood Reporter, I really like my quiet life and I really like putting paint on canvas and I really love my spiritual life and I feel like I have enough. Apparently not. Apparently not. You said you just went to Wicked and in the previews you saw Sonic 3 advertise and you saw you heard Jim Carrey's voice, which is what set off kind of like this whole headline

because it makes sense. He seems like someone who wouldn't need to work anymore. He has quite the, movie catalog, but, you know, money doesn't grow on trees unless you suddenly wake up and become God, as Jim Carrey has once done before. But now that we're talking at Jim Carrey, I need to know your favorite Jim Carrey movie. I mean, I do love the Ace Ventura ones. Those are so funny. I know I will like Eternal Sunshine of the Spotless Mind better. I just haven't seen it yet, but that movie is totally up my alley. I hear amazing things. So once I watch that,

that will certainly rise in the power rankings, but for now, it's Ace Ventura. It was interesting. to see Jim Carrey as the person who came out and said, I needed the money here because he has been very happy in his retirement, or seems like he left everything behind, but the bills do rack up and you got to have money to pay him. Well, apparently, you know, how he wants to paint and stuff. Apparently his artwork is not very good. The Guardian reviewed it and said it was astonishingly bad and a joke.

So maybe that wasn't the right career path for him in retirement. That is all the time we have. Thanks so much for starting your morning with us. have a great Friday and an even better weekend. For any questions, comments, or feedback, send an email to Morning Brew Daily at Morningbrew.com. And don't forget to share the podcast with friends, family, and coworkers who could use a quick hit of business news in the morning.

For some sharing inspo ahead of the weekend, Toby's here with an idea. I want you to share this podcast with someone who's been having a little bit of bad luck recently. It is Friday to 13th. Someone in your life has probably been going through it. So toss on this episode to cheer them up and let them know things do turn around. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lute is our producer. Olivia Graham is our associate producer. Yuchinawa Ogu is our technical director. Billy Minino is on audio. Hair and makeup has come out of retirement. Devin Emery is our chief content

officer and our show is a production of Morning Brew. Great. Show today, Neil. I wish you all well. Spring is the season everyone refreshes everything except their blinds. People put it off because they think it's complicated. But at blinds.com, we've spent 30 years proving not. Right now, you can save big during the spring Cyber Monday sale. Whether you want to DIY it or have a pro to handle everything from measure to install, we've got you. Free samples, real design experts, and zero pressure. Just help when you need it. Shop up to 50% off sitewide. Huge savings on special buys, plus a free professional measure now during the Spring Cyber Monday sale. Rules and restrictions apply.