The bonfire of the media vanities

In today’s newsletter:

News outlets dominate the headlines

On Monday it felt like Fox News and CNN were vying for the biggest story. Unfortunately, all the drama was happening internally.

Shortly after Rupert Murdoch’s media group made an unexpected announcement that it had decided to part ways with its biggest star Tucker Carlson, CNN’s Don Lemon said he had been fired just hours after appearing on air.

Both exits shocked the media world; neither Carlson nor Lemon had shown any indication during their shows that their time was up.

It’s difficult to overstate how much of an impact Carlson has had on Fox News. He was one of the most watched TV personalities in America and his show, Tucker Carlson Tonight, drew in more than 3mn viewers.

An indicator of Carlson’s effect on the American right (and perhaps on the left, as well) is a New York Times live blog dedicated solely to his exit.

So why would Fox break with its biggest rainmaker? The circumstances around Carlson’s departure are murky.

Fox just days ago agreed to settle a defamation lawsuit brought by voting-machine company Dominion over accusations it aired false theories about US election fraud, but Carlson wasn’t really a big part of the case.

Some have pointed to a pending lawsuit by former Fox staffer Abby Grossberg against Carlson himself, which alleges widespread discrimination at the network.

Minutes after Fox released its terse statement on Carlson, Lemon broke the news of his own firing on Twitter, alleging that management had not bothered to tell him directly. Warner Bros Discovery-owned CNN disputed his account of events, saying that he was offered a meeting.

Lemon’s departure is perhaps a little more clear cut. He had made sexist comments about Republican presidential contender Nikki Haley, stating that she “isn’t in her prime”. According to Lemon, a woman is considered to be in her prime “in her 20s and 30s and maybe 40s”.

All of this unfolded about 24 hours after Jeff Shell, chief executive of NBCUniversal, said he was stepping down from his role. The statement on Sunday said Shell had engaged in “an inappropriate relationship with a woman in the company” but on Monday NBC added there were allegations of sexual harassment which had been substantiated by an outside law firm hired to investigate the matter.

Meanwhile, BBC chair Richard Sharp finds himself in the hot seat after it emerged last week that he had been shown a report that he had made “significant errors of judgment” in failing to declare his role in an £800,000 personal loan secured by Boris Johnson shortly before the then prime minister recommended him for his position.

Sharp, a former Goldman Sachs banker and friend of prime minister Rishi Sunak, had been shown the allegations against him under the so-called Maxwellisation process, whereby people criticised in an official report are shown the details in advance to allow them to respond.

“It may be that Richard decides to jump before he is pushed,” said one person briefed on the draft report by Heppinstall.

And that’s not all in the world of media scandals. KKR-backed Axel Springer on Monday said it’s pursuing a criminal complaint and civil legal action against Julian Reichelt, a former editor of the tabloid Bild who was sacked for alleged misconduct.

The recent media storm comes as networks grapple with cost pressures, heavy debt loads and digital transformation.

But even as things change, one rule of journalism always remains the case: never become the story.

The thread connecting First Republic, Silicon Valley Bank and Credit Suisse

What do First Republic, Silicon Valley Bank and Credit Suisse have in common?

Expensive taste.

The trio spent decades bending over backwards to court wealthy clients. The thing about catering to the ultra-rich, though, is that they can be fickle.

San Francisco-based First Republic had carved out a niche for itself reeling in cheap deposits to offer competitive rates on loans to wealthy clients.

Its signature “white glove” customer service model, targeting well-to-do tech types not yet rich enough to get the same treatment at bigger rivals such as Citigroup and Goldman Sachs, banked on the idea that rich people rarely default on their loans.

Of the $332bn that First Republic lent out between its founding in 1985 and the first quarter of 2021, only 0.1 per cent went unpaid, about one-quarter of the loss ratio for a typical bank.

But the California lender, already in the midst of a succession crisis when the Federal Reserve began cranking up interest rates in March 2022, was ill-equipped for the sharpest rise in US interest rates in more than four decades.

After being salvaged in a $30bn rescue mission captained by US Treasury secretary Janet Yellen, Fed chair Jay Powell and JPMorgan Chase’s Jamie Dimon, the bank reported a $72bn — or 40 per cent — drop in its deposits during the first three months of 2023.

Silicon Valley Bank, on the other hand, didn’t live long enough to regret its reliance on venture capital firms and tech industry tycoons. (Its new owner First Citizens will hopefully consider its past mistakes.)

Regulators now agree that SVB’s vulnerabilities were hiding in plain sight, according to this FT postmortem on the second-biggest US bank failure on record.

“It is not just that the bank is taking outsized risk,” one short seller told the FT before the bank’s collapse. “It was a wealth management operation for the VC and PE industry.”

Credit Suisse has also learnt the hard way that wealth management deposits aren’t as sticky as thought. On Monday, clients pulled $68.6bn from the bank in the days before Swiss regulators intervened.

That deposit flight has also signalled consequences for the Swiss lender’s investment banking arm, Lex notes: as UBS boss Sergio Ermotti looks to stabilise Credit Suisse’s wealth management division, heavy cuts could be coming for investment banking.

Those Credit Suisse investment bankers who aren’t already considering external job offers might well be updating their CVs.

The curious case of Dominic Perks

Earlier this month London venture capitalist Dominic Perks resigned as chief of the investment firm Hambro Perks that still bears his name, as well as from the firm’s listed blank-cheque vehicle Hambro Perks Acquisition Company.

The move was unexpected. One investor told the FT that they were surprised no further explanation was given other than that Perks offered his resignation with immediate effect.

And despite declaring that it was continuing its search for a target just a couple weeks ago, HPAC announced plans on Monday to close up shop and return investors’ funds.

Anthony Salz, the vehicle’s chair and a former senior partner at law firm Freshfields, chalked it up to tumultuous equity markets.

Left unmentioned was Perks’s mysterious exit. He had played a significant role at the investment group that he co-founded in 2013, serving as its chair and public face. He also led the launch of London’s first Spac following a government overhaul designed to help the UK’s markets compete with Wall Street.

Spacs have been on a tumultuous course since their pandemic boom. Another high-profile vehicle backed by LVMH founder Bernard Arnault and former UniCredit chief Jean Pierre Mustier also recently fell on its sword.

But the blank-cheque misadventures of Hambro Perks — the former poster child of a new and improved UK listings regime — will be particularly painful given the market’s current slump.

PS: do get in touch if you know more about the circumstances of his departure: due.diligence@ft.com

Job moves

• Centerview Partners has named veteran investment bankers Tony Kim and Eric Tokat as its first co-presidents.

• Goldman Sachs’ Lyle Schwartz is joining Evercore in London as a senior managing director and head of equity capital markets for Europe, the Middle East and Africa.

• ThyssenKrupp chief Martina Merz is leaving the German industrials group.

• Hellman & Friedman partner Philip Sternheimer has left the firm after 16 years, according to his LinkedIn profile.

• British American Tobacco senior independent director Sue Farr will take on the same role at THG as Apollo Global Management eyes the troubled ecommerce group.

• Vincent Bolloré’s eldest son Sébastien Bolloré has joined the supervisory board of his father’s media group Vivendi, which is chaired by his brother Yannick.

Smart reads

Based on true events A fictional German novel with very real parallels to the scandal at KKR-backed media giant Axel Springer is piling pressure on its chief Mathias Döpfner, the FT reports.

David Solomon’s other side hustle In addition to DJ-ing, the Goldman Sachs boss advises and part-owns a private real estate company that the Wall Street bank has sought to do business with, the New York Times reports.

Behind the buzz Ex-Buzzfeed editor chronicles how Disney’s attempt to buy the digital media group fell apart in his new book Traffic. Read the excerpt in Vanity Fair.

News round-up

LVMH becomes first European company to hit $500bn market value (FT)

Czech billionaire Daniel Křetínský proposes €1.1bn investment in Casino (FT)

Swedish ‘green steel’ start-up plans €1.5bn fundraising (FT)

Deloitte to cut 1,200 jobs in the US (FT)

Adani Ports announces first bond buyback since short seller attack (FT)

IAG’s Air Europa bid expected to face lengthy EU probe (FT)

Software AG/Silver Lake: German buyout could yield fat return (Lex)

Getty/M&A: Trillium must shed more light on snap bid (Lex)