March 8, 2023 • 32 mins
TV distribution executive Scott Koondel details the launch of his Sox Entertainment banner and why it is well-positioned to take advantage of massive disruption across the media landscape. He offers insights on the evolution of the streaming marketplace, having orchestrated important early Netflix and Hulu licensing pacts for the CBS and the CW. And he explains how a phone call from Judith Sheindlin led to the creation of Freevee’s “Judy Justice.”
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Episode Transcript
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Speaker 1 (00:07):
Welcome to Strictly Business Varieties weekly podcast featuring conversations with
industry leaders about the business of media and entertainment. I'm
Cynthia Littleton, co editor in chief of Variety Today. My
guest is Scott Kundel, founder and CEO of Sacks Entertainment.
Undel made a career in Hollywood out of being one
(00:28):
of those executives who is indispensable to any big media company.
He became an expert in making it rain or selling
top tier content to the highest bidders around the world.
This job description can be opaque Head of Sales, Leader
of distribution, but the mission is simple monetization. Fundel was
(00:50):
a key rainmaker at CBS and at Paramount Pictures before that.
Amid the post Leslie Moonbus shake up at CBS in
twenty eighteen, Undel headed the exit with a vision of
finally letting his inner entrepreneur run free. His company helped
bring Judge Judith Shinlan to a new bench, presiding over
the daily Judy Justice Court show for Amazon's freeb He's
(01:14):
done a lot of behind the scenes work advising friends
and clients on how to value media assets in this
changing environment. That work also gives him great insight into
where the hockey puck is headed. That's all coming up
after the break, and we're back with a frank discussion
(01:39):
of where the money is in TV with Sox Entertainment
founder Scott Kundel. You've been out there in the trenches
as an entrepreneur with Sox Entertainment for the past couple
of years after a very long career at CBS and Paramount.
I guess I want to start by asking you, as
(01:59):
you are out there putting together shows and deals and
packages and consulting as you do on a lot of
high level media strategy, where do you see where do
you see the most opportunity in the business for content creators,
content owners? Where do you see where do you where
are you getting traction right now as you are out
(02:19):
selling different packages and things. Well, it's more it's about
producing efficiently. It's about giving volume. You know, a lot
of the companies right now are have an advertising model
as well as a subscription model, and it's probably a
necessity because I think people want to get as much
(02:41):
content as possible and they can only afford a certain amount,
so they'll make some sacrifices to watch things with ads
in it to get a lower price. And for the
bigger companies, I think they need to monetize their content
with advertising. And also, you know, it's been talked about,
You've written about it, everyone's kind of written about it.
(03:03):
It's the prices of really escalated and there is somewhat
of an arms race in terms of content spending. So
you know, sure, I'd like to sell a show for
you know, fourteen fifteen million dollars in an hour, but
I like the idea of producing shows that potentially will
(03:26):
people could bins on it. It's advertiser friendly, people want
to put it without ads on in the subscription model
that also has a back end, viable back end that
I could distribute. And so from my company's business model,
and I could talk about how I approached the business.
(03:46):
I'm looking for as many paths to generate revenue for
my company. So it's not just like selling a show
and getting an EP fee and getting pages an executive producer.
It's about representing other pieces of the puzzle, whether it's
the IP or a talent or a writer or showrunning
producer and having some sort of arrangement with them where
(04:10):
I could get a piece of what I'm you know,
in representing them in this project, producing it and then
having back end distribution rights to format rights and then
profit participation. So for me, a lot of what I
do is you know, you know, people say, oh, you're
a producer now, and I kind of laugh humbly because
(04:32):
there are real producers out there. Who are you know,
in the control room and on the floor and getting
into the you know, nuts and bolts of making TV
of the curtains. Yes, And sometimes I joke around saying, yeah,
the biggessession I make is what to order for lunch.
So when people ask me you're a producer, what do
(04:52):
you produce? My answer usually is I produce money, which
is what? Which is no matter what, Even the last
couple of years there's been a few departures from that.
No matter what, money is what makes the biz in
showbiz go around. The big thing that evolved and change
of the business was the vine of business and putting
people to work. I think agents did a very good
(05:14):
job of capitalizing on it. But you will those big
pay days of what Dick Wolfe gets or David E Kelly. Yes,
it didn't seem like it was going in a different
direction based on the leverage and all them spending that
was being done, not to mention the fact that there
was more data through the streamers, and if you look
(05:39):
at a lot of them, you know, shows on some
of the streamers, they typically weren't going more than three seasons, right,
And because they wanted to spend their money to provide
new shows that gay people who use and subscribe that
they could market, they've done. They've outsmarted the industry. This
is what I will say. I would say the streaming companies,
(06:00):
you know, put aside the ones that are in other
businesses that you know, this is like a side business.
And I'm obviously talking about Apple and Amazon. They outsmarted
the business. But they had real numbers, they knew how
to use that data to their advantage. And traditional media
(06:24):
companies aren't judged the same way to Wall Street the
way the streaming companies were, you know, and so they're
playing by different set of rules and it made it
very very hard for them to compete. And streaming companies
were also very smart of identifying who are the talented
people in old media and getting them. So do I
(06:49):
think it'll switch? Will certainly it'll switch with big talent
that you know, the leverage will revert and you know
they'll demand back end and in certain rights U and
then they might you know, a big talent might opt
(07:09):
to go with a second tier of streaming service because
they are getting that back end. That talent that goes
there creates a monster hit and the people the biggest
tier one companies are saying, we blew this. Look what
this could have done for us. Now we put these
other guys on the map. So I think that is
(07:29):
a scenario that could very well happen. Does it Does
it seem to you like the sort of right, the
return of advertising into the into the conversation about streaming
is opening. It would seem like it would have to
be open doors for more entrepreneurial efforts and more different
(07:49):
forms of content licensing versus the cost plus that has
been the norm, if you can call it the norm
over the last certainly you know, five six years. Yeah,
I mean, what's happening is is that I think when
you first word it was very niche, and then now
it's becoming more you know, as they have so many subscribers,
it's broad like like broadcasting. And they've also have done
(08:12):
things and gotten viewers. You know, I remember when Disney
was outselling Grey's Anatomy. They couldn't you know, They've sold
it basically to themselves at Lifetime and no one watched it.
It was a lot of money. And yet my daughter,
who's you know, you know, a teenager is watching Grey's
Anatomy on Netflix, was watching it before she went away
(08:33):
to college. And I'm saying they've been able to do
things in a way and get viewers to watch things
that traditional linear television was not able to do. And
I think it's about marketing and understanding the audience, and
it's where they've won because in that first deal they did,
(08:53):
they probably got a sweetheart deal on what they paid for.
So it's that type of insight that is they're just smarter.
You had a long career at Paramount and then CBS.
What made you decide that the time was right to
launch Socks Entertainment Will Truth be Told? I looked at
(09:16):
where the business was going, and I was in the
most uncertainty. I wasn't uncertain where the business was going,
that streaming was going to be as big as it was.
I really I got CBS did streaming business with that
first Netflix deal, then we did an Amazon deal. We
know Hulu. I knew that we had to be in
that business. It was really not knowing where that my
company was going and whether or not I wanted to
(09:38):
participate in it. So we in eighteen were post emerged
with viacommas you know, then we ended up suing controlling shareholder.
Much drama ensued. There was a lot of drama, and
I had worked I was probably one of the only
(09:58):
people with one of the very few people who worked
on both sides. I was head a distribution and president
of Paramount Distribution. Then I went on the CBS side.
I did this you know round a division and then
eventually elevated to corporate. But I knew the players on
both sides and from where I was unless I knew
(10:20):
for sure that was going to be controlling the whole
empire on both sides, meaning all the content and licensing
and distribution A I didn't want to get involved in
that dog fight because we know what happens emergers and
I was being asked by at a very high level
(10:42):
one of the major companies on a traditional media company
about how I'd go about licensing this stuff. And when
I heard that and heard there was an opportunity, and
then they went they went to try and hire me.
I said, there's no way I would ever go back
for that type of job just doing that. But maybe
(11:04):
i'd launched my own company and you would be my
first client and I would exclusively sell your sell your
product exclusively for like a year and a half. And
that's where my head started going spending saying I really
probably should start my own company, and that the conversations
(11:26):
began with one very large company, and then I had
different ideas. The rsns were had to be spun off
from Disney during the with the merger with Fox, and
I was in play potentially by that was I'm a
huge sports fan. I saw a sports gambling That was
one thing that I thought was going to happen, and
(11:49):
obviously it's arrived and it's there and one of the
biggest advertising clients right now for these companies or draft
Kings and all these sports betting companies. So I pivoted
in my head again and this is about like how
am I going to make the most amount of money?
And so I, you know, was very involved in that.
(12:09):
I was working with a bank and everything just happened
very very quickly. I wasn't sure what avenue was going
to go in and could I buy it? Could I
actually buy a network if I can't buy the rsns?
But I was thinking very very big. And then the
pandemic hit, and it was the last year at CBS
(12:31):
was like kind of like, you know, a rough year.
We weren't we were paralyzed. We're paralyzed by the lawsuit,
were paralyzed by a potential merger. We were growing CBS
all Access. There was confusion on what should go on
the service and what we should license. And I like
to work and I like to make money. And when
you put me in a position where I'm being paralyzed
(12:53):
as not the state that I want to be in,
I you know, you know, I was watching the movie
other night. There was a line in the movie Munich,
you know what what what what do you fear? And
I think Eric Bennis is something like stillness was the
line in that movie. And I'm that's how kind of
how I am. I wanted to keep moving and and
(13:14):
so I went out and I looked at like, what
are the big pieces that could help move my company?
And I just started to talked about I was involved
with the comic book book company Aftershock on representing their
rights to in their IP. Judy picked up the phone
and called me and said, what, I want to distribute
a show because she didn't want to be at CBS
(13:37):
anymore because their negotiations, I guess fell apart um, which
I was reagistented to do because I worked at CBS
and you know, I didn't want to be perceived as
taking their you know, talent from them. Don't leave us.
We'll be back with more tales from the trenches from
(13:59):
Socks Entertained founder Scott Kundell. And we're back with more
from Socks Entertainment founder Scott Kundel. Given that the regional
sports networks that were spun off from as part of
(14:19):
the Fox Disney deal, given that those appear to have
one foot in bankruptcy, do you feel like you dodged
a bullet there? I was trying to have as a
partner a different type of company, and knowing what this
company is now doing with a very big sports franchise,
that was the right I think I had it right.
(14:42):
I think that the model with Sinclair's doing right now
is very very difficult. Um and you know that just
the advertising part of it, but the rates they get into,
you know, they have no leverage, and the m vvds,
the bundle's going away, right. It's basically an old school
We're going to use our stations and the sports club,
(15:03):
cable operators or ahead. I had a different model. I
had a different partner. That partner ended up being a
little bit in that business and as a partner on
one RSN. And my model was different than the traditional model.
I believe that it would have worked and would have thrived.
And in that sense, I went to dage with the
(15:25):
bullet going out and raising you know, billions of dollars
and owning them like Sinclair does. Yes, that would have
been a mistake. And I saw that when the opportunity
dissipated with the one other buyer to be a partner
in it, I then pivoted to two or three different opportunities.
(15:48):
Can you talk about what you learned in dealing with
Netflix at that time fourteen twenty fifteen, What was it?
What was it like dealing with Netflix and setting that deal?
What did you learn about the streaming economy at that time? Well,
money was gushing out of the faucets, in that company, right,
people thought, you know, early on, when I finally convinced management,
(16:12):
it's CBS, that we should be licensing streaming companies at
the same time, when Jeff Bucas was calling Netflix the
Albanian Army, as if the Albanian Army was going to
come up and take over Europe break when I when
I saw that opportunity, and I saw that what they
were willing to spend into build a service. Um, I
(16:33):
was spending a lot of time there like that, you know,
and they also have really great free food and maple drive,
so I was going there everything, and so I spent
a lot of time there, and I knew that they
wanted to get as much content and make the service
valuable to a subscriber. And so from my standpoint is
(16:54):
what could I put on there and have, you know,
non exclusive rights because CBS was very protective about their rights.
And initially we did a very you know, lucrative output
deal as well as a catalog deal the seeds that
was first. Then there was the CW content, which, believe
(17:16):
it or not for as young as we thought it
was for broadcast. When I saw an opportunity for it
to be even younger on a streaming service. And you know,
I got called into my CEO's office and he's like,
he said, the only you know. He sat me down,
he said, the only division of this company that loses
(17:39):
money is our fifty percent equity stake in the CW.
What would you do? And I said, let me think
about it. I'll get back to you, and I left
his office and an hour later I came back to
his office and I said, um, I think we should
just stream the entire network in addition to linear, and
(17:59):
I think we could probably get a lot of money
for it. And I started to It was a really
tough thing to do because of, you know, the other partner,
and it was Warner Brothers, which is owned by Time Warner,
which is the same company that owned HBO when HBO
was in this pr battle about you know, who's the
(18:20):
king of subscription television at the time, it was HBO
and then number two we showed Time. There was a
really tough um to convince the head of Warner Brothers
at the time that we should be doing this. But
we were a partner and the network was losing money.
(18:42):
And after working really hard with some really incredibly smart people,
I mean that was really when I you know, you know,
Ted surround us and Cindy Hunt like you know, at
that point, you know, you know when Ted was you know,
the content officer, you know, nine years ago. I mean,
he was in the trenches of all of these deals,
and Cindy Holland is brilliant, and you know, I learned
(19:07):
a lot about the way that they valued product and
I got a little bit of inside to it, and
we worked hard and we took it to marketplace and
we ended up, you know, doing a deal that was
worth ended up being billions, and it saved the networking,
which is good for broadcast. It was good for the
parent companies, and ultimately it was really good for Netflix.
(19:27):
And I knew that it worked, and it was good
because we divvied it up into two windows. We had
a Hulu window, which was like within one week, and
then the catalog Goal went in an output deal to
Netflix because had a steak and Hulu at that time
that they did so for them it was really lucrative. Actually,
(19:48):
I don't know if they bought in at the time
we did the first deal. I don't think Time Warner
had a steak and it was only later on they
bought into it. But the real proof of the putting
is when the deal came available, Netflix bought the entire
both windows and it became a really hairy negotiation because Hulu,
(20:10):
you know, you know, they thought they were so small
and thought they you know, could buy the first window
for less one and they paid for the Noah, the
players for it. They were wrong, and you know, Netflix
eventually bought it out and I think they did pretty
well with it, and obviously the partners did well with it,
and that, as I recall, I mean that especially for
that time, that was a very unique deal. Netflix didn't
(20:33):
have any kind of like broader all you can eat
deal from not Only Sorry at the time. That was
a pretty unique deal for Netflix. I can't remember them
having a kind of a broad output deal that was
non exclusive. I mean, all those things were just seemed
like an afthema to them. But you got it done.
I got it done. And to their credit, they had
the confidence from the data and just intuition and they
(20:57):
and again it's like yes, these you know Netflix back then,
there was a lot of really really there was a
lot of intuition that was used other than just raw numbers.
And I really credit you know, Ted and Cindy early
on for seeing the value in it and stepping up
for it. It was definitely, it was definitely a big, big,
(21:21):
certainly a big commitment for them, but showed. And it
is so interesting that for all the basilions spent on
original content, when you look at the numbers every week,
what drives FBI and Law and Order and you know,
it's It's the it's the tried and true workhorses of
broadcast TV. Gray's anatomy, which is why part of my
(21:43):
model right now is doing shows that are cost efficient. Listen,
They're still going to buy big ticket products, you know.
I saw, you know some of the deals that were
you know announced, the Apple bought something for a lot
of money, and you know, there's no stopping that. They're
big drivers for a new subscribers to the the highly marketable
(22:06):
and it's great television. So there has to be some
balance there, and I think for the most part that's
where I come in, although I have I'm doing a
series called Big Man about the story of World Chamberlain
and Bill Russell, and it came to me through Ideal
Entertainment and a couple of other two really really talented
(22:28):
writers and they're like, you know, the most knowledgeable about
the relationship between these two athletes. And that's going to
be like a winning time. You know, it's going to
be a big time scripted series and we're gonna have
a really big name attached to it that's going to
be anown shortly and as a star or show runner,
(22:51):
as someone attached to it who is a big athlete,
who is a brandame athlete in the NBA, you know,
played in the NBA, and then um, shortly afterwards, we're
going to have a really big name showrunner and this
will be something that hopefully I'll read about and others
(23:13):
we'll read about. You know, what we got for it,
and hopefully it's something that will be a woodworthy because
I think it will because it's not just the story
of these two phenomenal athletes, you know, Bill Russells who
number was just retired as well Chamber in this legendary Laker,
but also it's really about the backdrop of the civil
rights movement and and if you look at all, you know,
(23:36):
some of these stories are just so meaningful to being
told in a different way. You know, Hulu just started
sixteen nineteen and there's just some great stories and this
is a great way. If you saw the movie forty two,
it was a great way to tell the story about
equality in baseball. This is going to tell it in
basketball with two legends, and I couldn't be more excited
(23:58):
about it. I'm beyond excited about the success of Judy
Justice because it really demonstrates that this business model works.
The audience shows up, they're showing up on a different platform,
the streaming service, and Amazon freev values it. They see
the value in it there. The renewal is the best
(24:22):
validation of it all and really just showing that this
huge talent, the biggest talent in all of television, could
dominate on another platform. Let me ask you, do you
see the same kind of viewing. Is it appointment viewing?
Do people come once a day? Is it a check
in kind of thing? Because Judy Justice airs on freebe
(24:44):
and it was definitely one of the cornerstones when that
when Freebe launched. I will tell you that people are
watching it at all hours of the day and if
they watch one episode, they watch most. It's just as excellent.
You know, I want to say, you know, Amazon's very
proprietary about their data. But I mean, and the biggest
(25:05):
validation is the renewals. But people are watching it all
different times, at times a day, and I think they
enjoy being able to have it on demand. Is there
are you thinking down the road in a couple of
years you will package the package those episodes and find
another window for them. Is that is that the plan?
(25:25):
The plan is absolutely to do that conversations the beginning.
The question is the time, the right timing of it
to really maximize the opportunity. But the business model for
judicial syndication has got to change, and you know it's
that business has just beaten down and it's really got
(25:47):
to change. I've been a little bit poking around the
marketplace and it's in desperate need of innovation. And I
think I could certainly do it on the content side.
And I think it's just going to require some of
the people in the leadership positions on the broadcast side
(26:09):
to be open to innovation, be opening to windows, because
you know, you just can't run. You know, you see
these stations running news afternoons, afternoons, that's not the answer.
The news is being constantly repeated through the day and
it's not. The news isn't exactly an exclusive product that's
on every single station in the marketplace, and so they
(26:31):
have to be able to find a way to bring
audiences back to broadcast to help their news do ratings,
to help their seven to eight to do ratings, to
help their prime time. And so there are all these
time periods available, shows being canceled left and right, and
you're seeing third and fourth runs of the same show
(26:51):
in a schedule. It seems it seems like they you know,
times I look at it and just feel like they're
giving up. I mean it's really you know, someone say
to me, oh, we just want you know, daytime for free.
And I understand that what there's people have budgets and
they have financing issues. But at the end of the day,
I think the conversation begins with how can I get
(27:13):
the biggest audience in a time period? Right now, reruns
of Judge Judy, which is syndicated by CBS, is like
the highest rated number and syndication there's like six moon
views viewers a day in reruns. Does that challenge? I mean,
that's got to be a challenge for what you're doing
with Judy Justice, because in some sense she competes with herself.
(27:36):
I view it actually is helpful. I think that the
viewers love Judy, they welcome more of her. Our money
is more than you know, we The prize money that
we give away to the winning plaintiff is significantly higher
than what is on that show and the episodes that
(27:57):
haven't seen before and broadcast. So it's fresh content and
the proof is in the pudding. We know that they
love love her. So I think it's just further validation
that any product that Judy puts her name on. By
the way, I think for anything that she endorses or
produces or creates will have high value and broadcast indication.
(28:20):
There is a fascinating and incredibly well reported new book
out called Unscripted, The Epic Battle for a Media Empire,
that really recounts all of the drama among Sherry Redstone,
Leslie Moonvess, Philippe domand many other characters. Have you read
the book? Do you have any thoughts? Actually, even more
(28:42):
so than have you read the book, do you have
any thoughts? I won't ask you to go into the
individual great details and some of them are pretty unpleasant,
but do you have any thoughts about, like what all
of that cost CBS a great, you know, a great organization.
What all of that cost Viacom, which was an organization
that was already having some troubles. But any thoughts about
(29:05):
sort of the opportunity cost of all of that personal
craziness and and in fairness bad behavior, um, I'll take
I mean my thoughts are is that there was really
a way to make it work better than how I
(29:25):
see that company today. And you know, it's not just
about assets, it's about people. You know, You're it's like baseball.
You gotta put the you know, if you gotta a
guy playing second base, he's batting two sixty with twelve
home runs, and you've placed with a guy batting three
hundred and with Derek Jeter, Um, then you got to
(29:48):
put the right plays in the right position to having
a having to having a winning team. And so what
the initial intentions were from the are in terms of
what the team was going to look like. I think
it was, you know, putting aside what the correct valuation was,
(30:09):
what the correct number was to the Viacom shareholder and
the CBS shareholder, putting aside those numbers and all that
the fair numbers were for you know, for the merger,
I think that there was really a great opportunity there
to build a great media company and putting these company
back together. You have to also remember I was there
(30:31):
when the company was one. I was there, you know,
you know, I'm twenty seven years in between both companies.
So I think that opportunity was a thousand to two
thousand and six. They about five years, It was really
actually not that long. But then they busted up in
January of two thousand and six, and so, you know,
the team and we were you know, I think, you know,
(30:54):
I was part of the diligence team. There was definitely
a goal to find a way to make it work
and make it work correctly, and there were strategies. In
my head, I was I was up all night thinking
about ways to help save the cable networks and how
to drive more revenue there and how do we build
CBS all Access up with potentially some of the Nickelodeon content.
I mean, there was definitely a plan and a strategy,
(31:16):
and I think the key stakeholders who I worked with,
we were up day and night thinking like, this is
going to happen eventually, and how are we going to
like really build one great company for Showery Redstone. And
you know, sadly because of you know, the event of
(31:38):
the events that happened at the lawsuit first and then
the fall out of less, none of that came to
be which kind of you know, and it was exhausting.
It was an exhausting time because we were paralyzed, as
as I said earlier, during this period of time or transition.
(32:02):
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in next week for another episode of Strictly Business
Welcome to Strictly Business Varieties weekly podcast featuring conversations with
industry leaders about the business of media and entertainment. I'm
Cynthia Littleton, co editor in chief of Variety Today. My
guest is Scott Kundel, founder and CEO of Sacks Entertainment.
Undel made a career in Hollywood out of being one
(00:28):
of those executives who is indispensable to any big media company.
He became an expert in making it rain or selling
top tier content to the highest bidders around the world.
This job description can be opaque Head of Sales, Leader
of distribution, but the mission is simple monetization. Fundel was
(00:50):
a key rainmaker at CBS and at Paramount Pictures before that.
Amid the post Leslie Moonbus shake up at CBS in
twenty eighteen, Undel headed the exit with a vision of
finally letting his inner entrepreneur run free. His company helped
bring Judge Judith Shinlan to a new bench, presiding over
the daily Judy Justice Court show for Amazon's freeb He's
(01:14):
done a lot of behind the scenes work advising friends
and clients on how to value media assets in this
changing environment. That work also gives him great insight into
where the hockey puck is headed. That's all coming up
after the break, and we're back with a frank discussion
(01:39):
of where the money is in TV with Sox Entertainment
founder Scott Kundel. You've been out there in the trenches
as an entrepreneur with Sox Entertainment for the past couple
of years after a very long career at CBS and Paramount.
I guess I want to start by asking you, as
(01:59):
you are out there putting together shows and deals and
packages and consulting as you do on a lot of
high level media strategy, where do you see where do
you see the most opportunity in the business for content creators,
content owners? Where do you see where do you where
are you getting traction right now as you are out
(02:19):
selling different packages and things. Well, it's more it's about
producing efficiently. It's about giving volume. You know, a lot
of the companies right now are have an advertising model
as well as a subscription model, and it's probably a
necessity because I think people want to get as much
(02:41):
content as possible and they can only afford a certain amount,
so they'll make some sacrifices to watch things with ads
in it to get a lower price. And for the
bigger companies, I think they need to monetize their content
with advertising. And also, you know, it's been talked about,
You've written about it, everyone's kind of written about it.
(03:03):
It's the prices of really escalated and there is somewhat
of an arms race in terms of content spending. So
you know, sure, I'd like to sell a show for
you know, fourteen fifteen million dollars in an hour, but
I like the idea of producing shows that potentially will
(03:26):
people could bins on it. It's advertiser friendly, people want
to put it without ads on in the subscription model
that also has a back end, viable back end that
I could distribute. And so from my company's business model,
and I could talk about how I approached the business.
(03:46):
I'm looking for as many paths to generate revenue for
my company. So it's not just like selling a show
and getting an EP fee and getting pages an executive producer.
It's about representing other pieces of the puzzle, whether it's
the IP or a talent or a writer or showrunning
producer and having some sort of arrangement with them where
(04:10):
I could get a piece of what I'm you know,
in representing them in this project, producing it and then
having back end distribution rights to format rights and then
profit participation. So for me, a lot of what I
do is you know, you know, people say, oh, you're
a producer now, and I kind of laugh humbly because
(04:32):
there are real producers out there. Who are you know,
in the control room and on the floor and getting
into the you know, nuts and bolts of making TV
of the curtains. Yes, And sometimes I joke around saying, yeah,
the biggessession I make is what to order for lunch.
So when people ask me you're a producer, what do
(04:52):
you produce? My answer usually is I produce money, which
is what? Which is no matter what, Even the last
couple of years there's been a few departures from that.
No matter what, money is what makes the biz in
showbiz go around. The big thing that evolved and change
of the business was the vine of business and putting
people to work. I think agents did a very good
(05:14):
job of capitalizing on it. But you will those big
pay days of what Dick Wolfe gets or David E Kelly. Yes,
it didn't seem like it was going in a different
direction based on the leverage and all them spending that
was being done, not to mention the fact that there
was more data through the streamers, and if you look
(05:39):
at a lot of them, you know, shows on some
of the streamers, they typically weren't going more than three seasons, right,
And because they wanted to spend their money to provide
new shows that gay people who use and subscribe that
they could market, they've done. They've outsmarted the industry. This
is what I will say. I would say the streaming companies,
(06:00):
you know, put aside the ones that are in other
businesses that you know, this is like a side business.
And I'm obviously talking about Apple and Amazon. They outsmarted
the business. But they had real numbers, they knew how
to use that data to their advantage. And traditional media
(06:24):
companies aren't judged the same way to Wall Street the
way the streaming companies were, you know, and so they're
playing by different set of rules and it made it
very very hard for them to compete. And streaming companies
were also very smart of identifying who are the talented
people in old media and getting them. So do I
(06:49):
think it'll switch? Will certainly it'll switch with big talent
that you know, the leverage will revert and you know
they'll demand back end and in certain rights U and
then they might you know, a big talent might opt
(07:09):
to go with a second tier of streaming service because
they are getting that back end. That talent that goes
there creates a monster hit and the people the biggest
tier one companies are saying, we blew this. Look what
this could have done for us. Now we put these
other guys on the map. So I think that is
(07:29):
a scenario that could very well happen. Does it Does
it seem to you like the sort of right, the
return of advertising into the into the conversation about streaming
is opening. It would seem like it would have to
be open doors for more entrepreneurial efforts and more different
(07:49):
forms of content licensing versus the cost plus that has
been the norm, if you can call it the norm
over the last certainly you know, five six years. Yeah,
I mean, what's happening is is that I think when
you first word it was very niche, and then now
it's becoming more you know, as they have so many subscribers,
it's broad like like broadcasting. And they've also have done
(08:12):
things and gotten viewers. You know, I remember when Disney
was outselling Grey's Anatomy. They couldn't you know, They've sold
it basically to themselves at Lifetime and no one watched it.
It was a lot of money. And yet my daughter,
who's you know, you know, a teenager is watching Grey's
Anatomy on Netflix, was watching it before she went away
(08:33):
to college. And I'm saying they've been able to do
things in a way and get viewers to watch things
that traditional linear television was not able to do. And
I think it's about marketing and understanding the audience, and
it's where they've won because in that first deal they did,
(08:53):
they probably got a sweetheart deal on what they paid for.
So it's that type of insight that is they're just smarter.
You had a long career at Paramount and then CBS.
What made you decide that the time was right to
launch Socks Entertainment Will Truth be Told? I looked at
(09:16):
where the business was going, and I was in the
most uncertainty. I wasn't uncertain where the business was going,
that streaming was going to be as big as it was.
I really I got CBS did streaming business with that
first Netflix deal, then we did an Amazon deal. We
know Hulu. I knew that we had to be in
that business. It was really not knowing where that my
company was going and whether or not I wanted to
(09:38):
participate in it. So we in eighteen were post emerged
with viacommas you know, then we ended up suing controlling shareholder.
Much drama ensued. There was a lot of drama, and
I had worked I was probably one of the only
(09:58):
people with one of the very few people who worked
on both sides. I was head a distribution and president
of Paramount Distribution. Then I went on the CBS side.
I did this you know round a division and then
eventually elevated to corporate. But I knew the players on
both sides and from where I was unless I knew
(10:20):
for sure that was going to be controlling the whole
empire on both sides, meaning all the content and licensing
and distribution A I didn't want to get involved in
that dog fight because we know what happens emergers and
I was being asked by at a very high level
(10:42):
one of the major companies on a traditional media company
about how I'd go about licensing this stuff. And when
I heard that and heard there was an opportunity, and
then they went they went to try and hire me.
I said, there's no way I would ever go back
for that type of job just doing that. But maybe
(11:04):
i'd launched my own company and you would be my
first client and I would exclusively sell your sell your
product exclusively for like a year and a half. And
that's where my head started going spending saying I really
probably should start my own company, and that the conversations
(11:26):
began with one very large company, and then I had
different ideas. The rsns were had to be spun off
from Disney during the with the merger with Fox, and
I was in play potentially by that was I'm a
huge sports fan. I saw a sports gambling That was
one thing that I thought was going to happen, and
(11:49):
obviously it's arrived and it's there and one of the
biggest advertising clients right now for these companies or draft
Kings and all these sports betting companies. So I pivoted
in my head again and this is about like how
am I going to make the most amount of money?
And so I, you know, was very involved in that.
(12:09):
I was working with a bank and everything just happened
very very quickly. I wasn't sure what avenue was going
to go in and could I buy it? Could I
actually buy a network if I can't buy the rsns?
But I was thinking very very big. And then the
pandemic hit, and it was the last year at CBS
(12:31):
was like kind of like, you know, a rough year.
We weren't we were paralyzed. We're paralyzed by the lawsuit,
were paralyzed by a potential merger. We were growing CBS
all Access. There was confusion on what should go on
the service and what we should license. And I like
to work and I like to make money. And when
you put me in a position where I'm being paralyzed
(12:53):
as not the state that I want to be in,
I you know, you know, I was watching the movie
other night. There was a line in the movie Munich,
you know what what what what do you fear? And
I think Eric Bennis is something like stillness was the
line in that movie. And I'm that's how kind of
how I am. I wanted to keep moving and and
(13:14):
so I went out and I looked at like, what
are the big pieces that could help move my company?
And I just started to talked about I was involved
with the comic book book company Aftershock on representing their
rights to in their IP. Judy picked up the phone
and called me and said, what, I want to distribute
a show because she didn't want to be at CBS
(13:37):
anymore because their negotiations, I guess fell apart um, which
I was reagistented to do because I worked at CBS
and you know, I didn't want to be perceived as
taking their you know, talent from them. Don't leave us.
We'll be back with more tales from the trenches from
(13:59):
Socks Entertained founder Scott Kundell. And we're back with more
from Socks Entertainment founder Scott Kundel. Given that the regional
sports networks that were spun off from as part of
(14:19):
the Fox Disney deal, given that those appear to have
one foot in bankruptcy, do you feel like you dodged
a bullet there? I was trying to have as a
partner a different type of company, and knowing what this
company is now doing with a very big sports franchise,
that was the right I think I had it right.
(14:42):
I think that the model with Sinclair's doing right now
is very very difficult. Um and you know that just
the advertising part of it, but the rates they get into,
you know, they have no leverage, and the m vvds,
the bundle's going away, right. It's basically an old school
We're going to use our stations and the sports club,
(15:03):
cable operators or ahead. I had a different model. I
had a different partner. That partner ended up being a
little bit in that business and as a partner on
one RSN. And my model was different than the traditional model.
I believe that it would have worked and would have thrived.
And in that sense, I went to dage with the
(15:25):
bullet going out and raising you know, billions of dollars
and owning them like Sinclair does. Yes, that would have
been a mistake. And I saw that when the opportunity
dissipated with the one other buyer to be a partner
in it, I then pivoted to two or three different opportunities.
(15:48):
Can you talk about what you learned in dealing with
Netflix at that time fourteen twenty fifteen, What was it?
What was it like dealing with Netflix and setting that deal?
What did you learn about the streaming economy at that time? Well,
money was gushing out of the faucets, in that company, right,
people thought, you know, early on, when I finally convinced management,
(16:12):
it's CBS, that we should be licensing streaming companies at
the same time, when Jeff Bucas was calling Netflix the
Albanian Army, as if the Albanian Army was going to
come up and take over Europe break when I when
I saw that opportunity, and I saw that what they
were willing to spend into build a service. Um, I
(16:33):
was spending a lot of time there like that, you know,
and they also have really great free food and maple drive,
so I was going there everything, and so I spent
a lot of time there, and I knew that they
wanted to get as much content and make the service
valuable to a subscriber. And so from my standpoint is
(16:54):
what could I put on there and have, you know,
non exclusive rights because CBS was very protective about their rights.
And initially we did a very you know, lucrative output
deal as well as a catalog deal the seeds that
was first. Then there was the CW content, which, believe
(17:16):
it or not for as young as we thought it
was for broadcast. When I saw an opportunity for it
to be even younger on a streaming service. And you know,
I got called into my CEO's office and he's like,
he said, the only you know. He sat me down,
he said, the only division of this company that loses
(17:39):
money is our fifty percent equity stake in the CW.
What would you do? And I said, let me think
about it. I'll get back to you, and I left
his office and an hour later I came back to
his office and I said, um, I think we should
just stream the entire network in addition to linear, and
(17:59):
I think we could probably get a lot of money
for it. And I started to It was a really
tough thing to do because of, you know, the other partner,
and it was Warner Brothers, which is owned by Time Warner,
which is the same company that owned HBO when HBO
was in this pr battle about you know, who's the
(18:20):
king of subscription television at the time, it was HBO
and then number two we showed Time. There was a
really tough um to convince the head of Warner Brothers
at the time that we should be doing this. But
we were a partner and the network was losing money.
(18:42):
And after working really hard with some really incredibly smart people,
I mean that was really when I you know, you know,
Ted surround us and Cindy Hunt like you know, at
that point, you know, you know when Ted was you know,
the content officer, you know, nine years ago. I mean,
he was in the trenches of all of these deals,
and Cindy Holland is brilliant, and you know, I learned
(19:07):
a lot about the way that they valued product and
I got a little bit of inside to it, and
we worked hard and we took it to marketplace and
we ended up, you know, doing a deal that was
worth ended up being billions, and it saved the networking,
which is good for broadcast. It was good for the
parent companies, and ultimately it was really good for Netflix.
(19:27):
And I knew that it worked, and it was good
because we divvied it up into two windows. We had
a Hulu window, which was like within one week, and
then the catalog Goal went in an output deal to
Netflix because had a steak and Hulu at that time
that they did so for them it was really lucrative. Actually,
(19:48):
I don't know if they bought in at the time
we did the first deal. I don't think Time Warner
had a steak and it was only later on they
bought into it. But the real proof of the putting
is when the deal came available, Netflix bought the entire
both windows and it became a really hairy negotiation because Hulu,
(20:10):
you know, you know, they thought they were so small
and thought they you know, could buy the first window
for less one and they paid for the Noah, the
players for it. They were wrong, and you know, Netflix
eventually bought it out and I think they did pretty
well with it, and obviously the partners did well with it,
and that, as I recall, I mean that especially for
that time, that was a very unique deal. Netflix didn't
(20:33):
have any kind of like broader all you can eat
deal from not Only Sorry at the time. That was
a pretty unique deal for Netflix. I can't remember them
having a kind of a broad output deal that was
non exclusive. I mean, all those things were just seemed
like an afthema to them. But you got it done.
I got it done. And to their credit, they had
the confidence from the data and just intuition and they
(20:57):
and again it's like yes, these you know Netflix back then,
there was a lot of really really there was a
lot of intuition that was used other than just raw numbers.
And I really credit you know, Ted and Cindy early
on for seeing the value in it and stepping up
for it. It was definitely, it was definitely a big, big,
(21:21):
certainly a big commitment for them, but showed. And it
is so interesting that for all the basilions spent on
original content, when you look at the numbers every week,
what drives FBI and Law and Order and you know,
it's It's the it's the tried and true workhorses of
broadcast TV. Gray's anatomy, which is why part of my
(21:43):
model right now is doing shows that are cost efficient. Listen,
They're still going to buy big ticket products, you know.
I saw, you know some of the deals that were
you know announced, the Apple bought something for a lot
of money, and you know, there's no stopping that. They're
big drivers for a new subscribers to the the highly marketable
(22:06):
and it's great television. So there has to be some
balance there, and I think for the most part that's
where I come in, although I have I'm doing a
series called Big Man about the story of World Chamberlain
and Bill Russell, and it came to me through Ideal
Entertainment and a couple of other two really really talented
(22:28):
writers and they're like, you know, the most knowledgeable about
the relationship between these two athletes. And that's going to
be like a winning time. You know, it's going to
be a big time scripted series and we're gonna have
a really big name attached to it that's going to
be anown shortly and as a star or show runner,
(22:51):
as someone attached to it who is a big athlete,
who is a brandame athlete in the NBA, you know,
played in the NBA, and then um, shortly afterwards, we're
going to have a really big name showrunner and this
will be something that hopefully I'll read about and others
(23:13):
we'll read about. You know, what we got for it,
and hopefully it's something that will be a woodworthy because
I think it will because it's not just the story
of these two phenomenal athletes, you know, Bill Russells who
number was just retired as well Chamber in this legendary Laker,
but also it's really about the backdrop of the civil
rights movement and and if you look at all, you know,
(23:36):
some of these stories are just so meaningful to being
told in a different way. You know, Hulu just started
sixteen nineteen and there's just some great stories and this
is a great way. If you saw the movie forty two,
it was a great way to tell the story about
equality in baseball. This is going to tell it in
basketball with two legends, and I couldn't be more excited
(23:58):
about it. I'm beyond excited about the success of Judy
Justice because it really demonstrates that this business model works.
The audience shows up, they're showing up on a different platform,
the streaming service, and Amazon freev values it. They see
the value in it there. The renewal is the best
(24:22):
validation of it all and really just showing that this
huge talent, the biggest talent in all of television, could
dominate on another platform. Let me ask you, do you
see the same kind of viewing. Is it appointment viewing?
Do people come once a day? Is it a check
in kind of thing? Because Judy Justice airs on freebe
(24:44):
and it was definitely one of the cornerstones when that
when Freebe launched. I will tell you that people are
watching it at all hours of the day and if
they watch one episode, they watch most. It's just as excellent.
You know, I want to say, you know, Amazon's very
proprietary about their data. But I mean, and the biggest
(25:05):
validation is the renewals. But people are watching it all
different times, at times a day, and I think they
enjoy being able to have it on demand. Is there
are you thinking down the road in a couple of
years you will package the package those episodes and find
another window for them. Is that is that the plan?
(25:25):
The plan is absolutely to do that conversations the beginning.
The question is the time, the right timing of it
to really maximize the opportunity. But the business model for
judicial syndication has got to change, and you know it's
that business has just beaten down and it's really got
(25:47):
to change. I've been a little bit poking around the
marketplace and it's in desperate need of innovation. And I
think I could certainly do it on the content side.
And I think it's just going to require some of
the people in the leadership positions on the broadcast side
(26:09):
to be open to innovation, be opening to windows, because
you know, you just can't run. You know, you see
these stations running news afternoons, afternoons, that's not the answer.
The news is being constantly repeated through the day and
it's not. The news isn't exactly an exclusive product that's
on every single station in the marketplace, and so they
(26:31):
have to be able to find a way to bring
audiences back to broadcast to help their news do ratings,
to help their seven to eight to do ratings, to
help their prime time. And so there are all these
time periods available, shows being canceled left and right, and
you're seeing third and fourth runs of the same show
(26:51):
in a schedule. It seems it seems like they you know,
times I look at it and just feel like they're
giving up. I mean it's really you know, someone say
to me, oh, we just want you know, daytime for free.
And I understand that what there's people have budgets and
they have financing issues. But at the end of the day,
I think the conversation begins with how can I get
(27:13):
the biggest audience in a time period? Right now, reruns
of Judge Judy, which is syndicated by CBS, is like
the highest rated number and syndication there's like six moon
views viewers a day in reruns. Does that challenge? I mean,
that's got to be a challenge for what you're doing
with Judy Justice, because in some sense she competes with herself.
(27:36):
I view it actually is helpful. I think that the
viewers love Judy, they welcome more of her. Our money
is more than you know, we The prize money that
we give away to the winning plaintiff is significantly higher
than what is on that show and the episodes that
(27:57):
haven't seen before and broadcast. So it's fresh content and
the proof is in the pudding. We know that they
love love her. So I think it's just further validation
that any product that Judy puts her name on. By
the way, I think for anything that she endorses or
produces or creates will have high value and broadcast indication.
(28:20):
There is a fascinating and incredibly well reported new book
out called Unscripted, The Epic Battle for a Media Empire,
that really recounts all of the drama among Sherry Redstone,
Leslie Moonvess, Philippe domand many other characters. Have you read
the book? Do you have any thoughts? Actually, even more
(28:42):
so than have you read the book, do you have
any thoughts? I won't ask you to go into the
individual great details and some of them are pretty unpleasant,
but do you have any thoughts about, like what all
of that cost CBS a great, you know, a great organization.
What all of that cost Viacom, which was an organization
that was already having some troubles. But any thoughts about
(29:05):
sort of the opportunity cost of all of that personal
craziness and and in fairness bad behavior, um, I'll take
I mean my thoughts are is that there was really
a way to make it work better than how I
(29:25):
see that company today. And you know, it's not just
about assets, it's about people. You know, You're it's like baseball.
You gotta put the you know, if you gotta a
guy playing second base, he's batting two sixty with twelve
home runs, and you've placed with a guy batting three
hundred and with Derek Jeter, Um, then you got to
(29:48):
put the right plays in the right position to having
a having to having a winning team. And so what
the initial intentions were from the are in terms of
what the team was going to look like. I think
it was, you know, putting aside what the correct valuation was,
(30:09):
what the correct number was to the Viacom shareholder and
the CBS shareholder, putting aside those numbers and all that
the fair numbers were for you know, for the merger,
I think that there was really a great opportunity there
to build a great media company and putting these company
back together. You have to also remember I was there
(30:31):
when the company was one. I was there, you know,
you know, I'm twenty seven years in between both companies.
So I think that opportunity was a thousand to two
thousand and six. They about five years, It was really
actually not that long. But then they busted up in
January of two thousand and six, and so, you know,
the team and we were you know, I think, you know,
(30:54):
I was part of the diligence team. There was definitely
a goal to find a way to make it work
and make it work correctly, and there were strategies. In
my head, I was I was up all night thinking
about ways to help save the cable networks and how
to drive more revenue there and how do we build
CBS all Access up with potentially some of the Nickelodeon content.
I mean, there was definitely a plan and a strategy,
(31:16):
and I think the key stakeholders who I worked with,
we were up day and night thinking like, this is
going to happen eventually, and how are we going to
like really build one great company for Showery Redstone. And
you know, sadly because of you know, the event of
(31:38):
the events that happened at the lawsuit first and then
the fall out of less, none of that came to
be which kind of you know, and it was exhausting.
It was an exhausting time because we were paralyzed, as
as I said earlier, during this period of time or transition.
(32:02):
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