The Philip DeFranco Show - PDS 1.24 MatPat's Defy Media Bombshell, BuzzFeed Mass Layoffs, Venezuela, & Trump v Pelosi

Episode Date: January 24, 2019

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Sup you beautiful bastards, hope you're having a fantastic Thursday. Welcome back to the Philip DeFranco Show. And a quick note before we get started. This morning, if you didn't see, we posted a brand new morning deep dive. And I saw some of you saying you didn't get your notifications, it didn't show up in subscriptions. So, just after today's show, it's gonna be one of the top links in the description down below. Be sure to check it out, it's a really good one.

But, as far as this PDS, let's just jump into it. And the first thing we're gonna talk about today is, it's massive industry news, but it's just massive news in general. As you might recall, over the past few months, we've talked about Defy Media a few times. Right, they were a massive MCN, the owners of Smosh, Clever, All Me, among others. And it was massive news when near the end of the year,

seemingly out of nowhere, they just announced it was over. Right, seeing reports that on January 2nd, they would be shutting down, they'd be laying off 80 people on their staff. And the reaction from many, especially those that had been involved, is how the hell did this happen? I mean, one of the last times something was reported

about the company before this was that they got $70 million in investment. And all of a sudden, you had channels that seemingly were homeless, didn't have support systems in place, people wondering where their money was. And today we got a massive update from MatPat, aka The Game Theorists.

And in part, I'm covering this not only because I think it's important, I think it is interesting, but because MatPat, aka The Game Theorists. And in part I'm covering this not only because I think it's important, I think it is interesting, but because MatPat himself put out a request for others to talk about it. And one of the biggest revelations in his video was this. Collectively, us 50 had 1.7 million dollars stolen from us. 1.7 million dollars. And you can also tell in this video that it's not just the money, although that is important, you can see that he feels personally betrayed. And if that wasn't bad enough, in my case, it was taken by someone who I thought I knew.

Someone who I thought I could trust. Someone who only weeks after giving birth to Oliver, hopped on the phone with Stephanie and I and lied directly to our faces, knowing full well that he intended to take our money. But oh no, he's to offer us some newborn advice. He then goes on talking about the questionable way that they ran their business. Also giving a background on how some MCNs work, essentially how part of their whole business structure is make themselves seem bigger or more profitable than they actually are. But if you don't know, it's been common practice for MCNs to take a, you know, a slice of the money that you make from AdSense, part of the money that you make from ad deals, and then they pay you out.

So on their books, the gross amount of money that they're making, huge, even if only they're keeping a little bit. But MatPat goes on to say that they even did other kind of shady stuff to make their bank accounts seem bigger. Defy even asked us if they could delay paying us our AdSense for a month.

We didn't know why they asked, but we wanted to be a good partner, so we said, sure. We found out later, and by later, I mean recently, that they kept the money to make their books look better for the investors. Shady, shady friends. Also, he comments on where maybe some of the money went. He knew that he was about to steal from us, that he was about to take our money to pay his debts or fill his offshore bank account or whatever. And I'm not exaggerating when I say that. The more and more we learn about this situation, the more layers we peel back and try to find this money, the more complicated it gets.

It's like a movie. It's so stupid. And then he gets to the part of the story where he talks about the money that is now in the hands of a bank, specifically a bank called Ally Bank, and what comes next. DeFi is gone. The guy won't respond to my emails or calls for obvious reasons. And whatever money DeFi did have left has been repossessed by a bank named Ally Bank. And their job is to now look at the list of everyone that DeFi owed money to and prioritize it in order of importance and then start paying them back. Until the money's gone. And if you're at the bottom of the list, start paying them back until the money's gone.

And if you're at the bottom of the list, well, too bad, no money for you. For now, as it regards the defy situation, that's the best we can do. The next big decision happens in May, so you can expect one or two more updates between now and then about how things are going. And as far as his goal behind making this video, he said, To force them to hear us, to hear our story and understand that the money that currently exists in the vaults as Defy's largely doesn't belong to them. Stephanie and I have reached out to each and every one of the creators who've been affected to lead the charge in making Ally Bank hear our story, understand a business that they, I guarantee, have no idea how it runs, and to recognize that that money,

that $1.7 million that they have in the vault doesn't belong to Defy and never did. While I am obviously not represented by or never partnered with Defy Media, I think it's incredibly important that we get the word out because many of the other things MatPat talks about with MCNs are very true. A lot of them have been, and some still are,

based on nothing. When some of these places represent as many people as they do, they cannot provide a valid benefit for what they are costing to everyone they represent. And a lot of these things have been built with a lot of hot air just to sell. Unfortunately, what we're seeing with things like Defy Media are just the people left waiting

for a check that they're not probably going to get. And so in part, I wanted to add my megaphone to this story to hopefully help these creators, also help future creators that are thinking about taking a deal that they don't maybe feel good about. But with that said, like I try to do with every story on this show, I pass the question off to you. What are your thoughts around all of this?

And then let's talk about massive business news and I guess news news. The reason we're talking about this is we just saw the news that several major media companies will be laying off employees. And one of the big ones right off the bat is that BuzzFeed specifically will be laying off 15% of its workforce, which is around 250 positions. And these reductions are expected to impact multiple departments, including their news division. And to make things even worse, even though reportedly staffers had already been speculating that layoffs may be around the corner, it's being reported that this news broke before it was officially announced internally. But then last night after the reports,

we saw that it was true. Buzzfeed CEO, Jonah Peretti confirmed the cuts in a memo to staff that read in part, "'Unfortunately, revenue growth by itself "'isn't enough to be successful in the long run. "'The restructuring we are undertaking "'will reduce our costs and improve our operating model "'so we can thrive and control our own destiny

"'without ever needing to raise funding again.'" And actually on the note of funding, Buzzfeed has reportedly raised about $500 million and was valued at $1.7 billion following its last funding round back in 2016. But aside from wanting to avoid having to raise funds again, the changes at Buzzfeed are also being viewed as an attempt to put them on a path to profitability,

especially now as they scout for potential merger combinations with other digital media companies. And I say that because that's something Peretti has floated around for some time. Last November, he told the New York Times, quote, "'If Buzzfeed and five of the other biggest companies "'were combined into a bigger digital media company, "'you would probably be able to get paid more money.'"

And at that time, he specifically mentioned Group 9, Vice, and Vox as companies he thought were doing interesting work. So there was that part of the layoffs, but Buzzfeed was not alone. We also had Verizon Media, formerly known as Oath, announcing their cuts on Wednesday, saying that they would be cutting 7% of their staff

from their media division. As far as who and what that could be affecting, Verizon's media division is comprised of several brands, including Yahoo!, AOL, TechCrunch, and Huffington Post. In total, around 800 employees are expected to lose their jobs, but as of right now, it's not immediately clear how many people from each specific brand will be affected.

Also, like BuzzFeed, the staffers had heard rumors of layoffs coming, but really even looking from the outside in, you could see something bad might be coming, especially since the company slashed its value to 200 million when it rebranded as Verizon Media down from 4.8 billion. Right, so there you're looking at what people are seeing as a loss of 4.6 billion dollars, which is about half

what the company collectively paid to acquire AOL and Yahoo in the first place. And also on top of that, back in December, the company announced that 10,000 staffers had accepted buyout offers. And then finally yesterday we had Gannett who started cutting jobs at newspapers all over the country. Gannett, if you don't know, owns USA Today, AZ Central,

the Detroit Free Press, and several other newspapers. Now it should be noted that all of these layoff decisions have their own specific reasonings, but the overall picture is pretty similar. Changes in advertising and consumer behavior are shifting the way media outlets work. And across the industry, online publishers are struggling to both sustain fast growth

in digital advertising sales and meet the high expectations of their investors. It should also be noted that this is not like a completely new situation. This isn't even the first round of layoffs for most of these companies. You had Buzzfeed laying off about 100 others in 2017 after missing revenue targets by 15 to 20%.

Verizon Media laid off 2,100 people in 2017. We've also seen other companies as well, like Vice and Vox, reducing staff last year. And actually, I mean, you also had Refinery29, who cut about 40 members of staff back in October. Last one I'll mention, because you're getting the point, you had Mike.com, who followed, who cut a majority of staff ahead of a $5 million deal.

As far as my reaction to this news, I mean, it's not completely surprising to me. The news space in general, and especially online, is hyper-competitive. There are a lot of aspects that seem unsustainable. I think you do have a lot of companies that raise a ton of money. They throw money mass hire, try to do as much as possible,

either with the intent of potentially being able to sell, or with the intent to get as much market share as possible to bring on more money and then try to make it sustainable. But I mean, it can be hard. I mean, I have a very, very small company, especially when you compare it to others. And even with us having a bunch of people on staff wearing different hats, doing multiple jobs,

without us making very specific decisions, making sure we have money coming from this thing, that thing, I mean, what we do would be unsustainable. For example, as we've been expanding, we've been doing those morning deep dives. Those take way more man hours, pre-production all the way to post-production than a regular Philip DeFranco show. We're often covering stories

that are not advertiser friendly. There's always the chance for demonetization, which all of a sudden all this work could go into something and you make nothing, which means you lose money. And so that can happen on any piece of content. And the only reason we even have any stability is we go out ourselves in addition to having some partnerships and sell our own ads.

And beautiful bastards like yourself have been able to support us with paid subscriptions over at defrancoelite.com, which thank God. And so yeah, it's hard out there, but it's also part of the reason why I've been growing slow and steady. If I was trying to get investors or bought out, yeah, throw as much money as possible,

try and say, hey, look how big our numbers are. But with that, you do risk the potential of failing the people that you're hiring, that are believing in your mission to join the team. But I don't know, you know, that's just my opinion as a very, very small person, kind of in the space. But with that said, I would love to know your thoughts on this story.

And then let's talk about those two lovebirds, Donald Trump and Nancy Pelosi. Will they, won't they? It's a regular Ross and Rachel. Sorry, this is not actually a funny story. I think I'm just, I'm tired in general because I keep waking up at two o'clock in the morning And also just tired of this situation But main point for the last week Donald Trump and Speaker Nancy Pelosi have been engaging in this public back-and-forth and in part that was

About whether or not Trump would be able to deliver his State of the Union address back on January 3rd Pelosi sent Trump the traditional Invitation to deliver the State of the Union on January 29 thinking the government would have been reopened by that But then on January 16th She sent Trump a letter suggesting that it would be best to postpone the speech for security reasons, writing, Given the security concerns, and unless government reopens this week, I suggest that we work together to determine another suitable date after government has reopened for this address, or for you to consider delivering your State of the Union address in writing to the Congress on January 29th. Then, while Donald Trump didn't immediately and directly respond to this, he did delay her international travel plan,

saying, due to the shutdown, I am sorry to inform you that your trip to Brussels, Egypt, and Afghanistan has been postponed. We will reschedule this seven-day excursion when the shutdown is over. In light of the 800,000 great American workers not receiving pay, I'm sure you would agree that postponing this public relations event

is totally appropriate. And adding, obviously, if you would like to make your journey by flying commercial, that would certainly be your prerogative. And following that, Pelosi declined Trump's offer to fly commercial citing security concerns. This because her trips were meant to be private and she claims that Trump put her in danger

by publicly announcing them. You never give advance notice of going into a battle area. You just never do. Speaker Pelosi was also asked if she saw this as retaliation to which he responded. I would hope not. I don't think the president would be that petty to you Then we fast forward to yesterday where Trump wrote a letter to Pelosi saying that he planned to deliver the speech on the 29th As the invite originally said writing there are no security concerns regarding the State of the Union address

Therefore I will be honoring your invitation and fulfilling my constitutional duty and to that Pelosi responded with a letter of her own later in The day saying I am writing to inform you that the House of Representatives will not consider a concurrent resolution authorizing the President's State of the Union address in the House chamber until government has opened. And later during a White House press briefing, Donald Trump acknowledged Pelosi's letter. We were planning on doing a really very important speech in front of the House and the Senate, the Supreme Court, and everybody else that's there. It's called the State of the House and the Senate, the Supreme Court, and everybody else that's there. It's called the State of the Union. It's in the Constitution. We're supposed to be doing it. And now Nancy Pelosi, or Nancy, as I call her, she doesn't want to hear. It's truck month at GMC. Tackle the open road with

added confidence in the 2025 Sierra 1500 Pro Graphite at 0% financing for up to 72 months. With an available 5.3 liter V8 engine, 20 inch high gloss black painted aluminum wheels, off-road suspension with available 2 inch factory installed lift kit, plus a towing capacity of up to 13,200 pounds, you'll be ready for anything this truck month. Truck month is on now. Ask your GMC dealer for details. It won't take long to tell you neutrals ingredients. Vodka, soda, natural flavors. So what should we talk about?

No sugar added? Neutral. Refreshingly simple. The truth, and she doesn't want to hear, more importantly, the American people hear the truth, so we just found out that she's canceled it. I think that's a great blotch on the incredible country that we all love. It's a great, great, horrible mark. But then later in the night, Donald Trump tweeted that he would agree to postpone the State of the Union.

And adding, I look forward to giving a quote, great State of the Union address in the near future. To which Pelosi responded, Mr. President, I hope by saying near future, you mean you will support the House-passed package to end the shutdown that the Senate will vote on tomorrow. Please accept this proposal so we can reopen government, repay our federal workers,

and then negotiate our differences.'" And that's where we are as of right now, with today being the 34th day of this shutdown. And so that means that people are about to miss their second paycheck. And during at least this last week, Pelosi and Donald Trump have not seen face-to-face talking through either the media or letters or Twitter.

And ultimately right now, that's where we are. And I really don't know how this moves forward. I'm recording this before the Senate is set to vote on two potential funding bills. One that has money for Trump's border wall, the other does not. There were news reports that came out saying that three Republican senators are fine

with a funding bill without the border wall, but that doesn't matter. One, this is something that can't pass through the Senate with 51 votes, you need 60. And two, it's still incredibly likely that if this did somehow get past the Senate, yes, it could easily make its way through the House, but once it got to Donald Trump,

if it didn't have money for the border wall, he would most likely veto it. And actually, sure enough, we just got the update that both of the bills have failed, even with six Republicans voting for the two weeks of funding without the wall. And so that's ultimately where we are right now. And then, once again, let's talk about what is happening in Venezuela.

We covered this story on Tuesday, we gave a brief but important update yesterday. But in case you didn't see the update, yesterday National Assembly President Juan Guaido declared himself interim president until elections can be held. Also, a quick explainer here, because some people online were wondering how Guaido has the authority to claim himself president. You had other people claiming that it was just a coup. So ultimately what we're talking about here is a matter of order of succession in Venezuela. Under their 1999 constitution if there is no president or vice president then the president of the National Assembly is interim president until new elections can be held. Because the National Assembly doesn't recognize Maduro as president because of his quote fraudulent election they reason their man Guaido is now president.

The United States along with Canada and Brazil were members of the ever growing list of nations that came out and backed Guaido. With other countries expressing support for democracy in general in Venezuela and condemning current President Nicolas Maduro. We also talked about how Guaido called for protesters to take to the street and yesterday we saw thousands

and thousands take to them. And since we last talked about this, so much has happened. Yesterday's demonstration was followed by an eruption of spontaneous protests that continued throughout the night. We saw this largely in the central, eastern, and western sectors of the capital, with protests registered in 70 neighborhoods, according to the Venezuelan Observatory of Social Conflict.

And those protesters were reportedly met with tear gas and rubber bullets. And with that, there was one reported death overnight, adding to the total of 11 total protesters who died on Wednesday, all of whom were reportedly killed by gunshots. Also right now the number of injured is unknown but it's been reported that dozens of people have flooded hospitals throughout Caracas. We also saw people looting supermarkets, bakeries, and liquor stores while others lit garbage on fire through Molotov cocktails and rocks and built barricades. And in some areas

there were even reports of confrontations between armed civilians and Venezuelan security forces with reports of grenade explosions set off by security forces seeking to contain protests and targeting protesters homes in the city center and eastern parts of the city and these overnight protests are especially significant because they reportedly occurred in primarily working-class neighborhoods that in the past have widely supported the government This is believed to represent a turning point for many in Venezuela who have put up with economic hardships, food and medicine shortages, increasing authoritarianism. And a big thing to keep in mind is that these protests and marches are not limited to just Caracas. There were other protests planned across Venezuela and in front of their embassies around the world. And in fact, in a northeastern city in Venezuela named Ciudad Guayana, there was a statue of Maduro's predecessor, Hugo Chavez, a figurehead of Venezuelan socialism.

He was burned, cut in half, and hung from a bridge on Tuesday night. But let's understand that this is not just all one thing, not all Venezuelans support Guaido, which is why, yes, we did see several hundred Maduro supporters hold a rival march in Caracas, but the big thing here is that it was just dwarfed by the opposition protests.

But still with that, it's not just the number of people, it is the power of people. And I'm not talking about the power of the people, I'm talking about the military and military leaders who have also expressed widespread support for Maduro. This morning, Venezuela Defense Minister Vladimir Padrino Lopez reaffirmed his support for Maduro, reportedly calling Maduro the legitimate president

and saying that the opposition was carrying out a coup, adding that the armed forces will never accept a leader imposed on their country. And along with that, we saw military commanders taking to the airwaves across Venezuela to reaffirm their loyalty to Maduro. And these divisions that we're talking about internally in Venezuela are not just isolated to Venezuela. We've also seen this replicated in the massive international response, with some countries supporting Guaido and other country leaders supporting Maduro. Although it is very anti-Maduro.

I mean, since our last update, we saw Germany, France, Denmark Denmark, the European Union and many others coming out in support of Guaido and the new elections calling Maduro illegitimate. Also shortly after Trump's statement of support a Declaration supporting Guaido was signed by 13 of the 14 nations in the Lima Group. If you don't know the Lima Group's a group of Regional nations that was created back in 2017 to deal with a Venezuela crisis. And this group includes Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Honduras, Paraguay, and Peru. And in case you're wondering who the 14th member is, the one that was not included,

the dentist that does not recommend that toothbrush, that was actually Mexico, who did not sign the resolution supporting Guaido. And he had a spokesman for Mexico's president, AMLO, stating, we recognize the authorities elected in accordance with the Venezuelan constitution. And Mexico is not alone. We also saw Bolivia and Cuba supporting Maduro with Cuba's foreign ministry reportedly expressing its firm

Support of Maduro and referring to the protest as a coup attempt You also had the much larger players in the space Russia and China expressing support for Maduro Although that shouldn't be completely surprising I mean you have Russia which has supplied Venezuela with billions of dollars in loans and the Russian foreign ministry released a press statement saying quote We urge the sober-minded Venezuelan politicians standing in opposition to Nicolas Maduro's legitimate government not to become pawns in other players as chess game and their statement also asserted That the efforts of the United States in general support of Guaido will quote deepen the social divide in Venezuela Aggravate street protests dramatically destabilize the Venezuelan political community and further escalate the conflict.

And along with that, Russia has also accused the United States of attempting to usurp power in Venezuela. With a spokesperson for Putin reportedly stating, "'Today, we consider the attempt to usurp sovereign authority "'in Venezuela to contradict and violate the basis "'and principles of international law.'" As far as Maduro's response here, he has condemned the protest as unnecessary violence and lashed out

at international leaders who have supported Guaido. In fact, he immediately dismissed Guaido, reportedly calling Guaido's claim to the presidency part of an American-led conspiracy to topple him, saying, quote, I am the only president of Venezuela. We do not want to return to the 20th century of gringo interventions and coups d'etat. And also, on top of everything, shortly after Trump's announcement, Maduro cut diplomatic ties with the United States and called for the immediate removal of US diplomats within 72 hours. But this morning, US Secretary of State Mike Pompeo said that the US would not remove

any diplomatic personnel from Venezuela. So as we're recording this, there are numerous meetings going on between international leaders and organizations. Right now, the news out of Venezuela is still incoming. It has been difficult to track. And so right now we're in this situation of wait and see. And that's where I'm going to end today's show.

Remember, if you like this video, you like these daily dives into the news, hit that like button. If you're new here, hit subscribe, maybe ring that bell to turn on notifications, even sometimes work, which actually on that note, if you missed this morning's video or the last PDS, you can click or tap right there.

But no matter what you choose to do, of course, as always, my name's Philip DeFranco. You've just been filled in. I love yo faces and I'll see you tomorrow.