Inside a Year of Chaos at Kevin Hart’s Media Company

0:00If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day. A fire, a loss, a disruption that demands immediate attention. When that happens, what matters isn't just what you planned, it's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise, and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions.

0:37Their approach is grounded in experience, follow-through, and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built, and is ready to help you move forward. The Cincinnati insurance companies. Let them make your bad day better. Find an independent agent at c-i-n-f-i-n.com. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work.

1:20Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. Game night rush, or any night of the week, really. Genius keeps every order moving. From online ordering to your kitchen to the front counter. Big league reliability for any business. That's genius.

1:48Bloomberg Audio Studios Podcasts, radio, news. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. Usually when we talk to Lucas Shaw, he's out there in sunny California, but we brought the bad weather for you. No, this is great. I mean, the rain, not so much. Yeah. But the cool, I prefer the temperate climate of today to the 90s of early this week. Yeah, you and me both. I mean, and it's going to be a brutal summer if, you know, earlier this week was any indication of what's going to happen. Lucas Shaw is Bloomberg News Managing Editor, Media and Entertainment.

2:23He's also the writer of the Screen Time newsletter, which you should subscribe to if you do not subscribe to it yet. He also is the guy behind the Screen Time event every year in Hollywood. Happens in October. I imagine there are still tickets available because it is only May right now. Haven't announced our speakers yet. Haven't announced speakers, but the event is in full swing and it's still happening in October. September 30th, October 1st, we will announce our first drop of speakers next week. I think five, six, depending on how you do the math. It's a good group, you know, continuing in our tradition of mixing kind of the biggest executives with the biggest creative people across the business of culture.

3:09yeah I mean if we just remember who that some of the people were who were there last year I mean you had a great interview with Jimmy Kimmel um Netflix's co-ceeo Greg Peters was on stage as well David Ellison Ryan Coogler director of uh of got sinners blanking on that for a second but yeah so well we're looking forward to that we're going to be broadcasting from it again before we get there though there's a lot we want to talk to you about and we've been trying to get you on the program over the last week or so to talk about the Kevin Hart feature yeah that you did uh about the about Kevin Hart's empire and the way that it's kind of gone over the last couple of years or so.

3:46Just give us some background on what he wanted to do entrepreneurially and then what ended up happening, what you found. Well, Kevin Hart has always been one of the more entrepreneurial, creative people in Hollywood. So, you know, he, in addition to being an actor and a standup and a producer, he started a couple of different companies, one of which was a kind of more traditional production company, one of which was more focused on building a kind of online brand with YouTube and free streaming channels. And there was a marketing component. And a few years ago, he tied that all together under the umbrella of Heartbeat.

4:17He raised some money from private equity that valued the firm at about$650 million. This was, keep in mind, at sort of the peak of the streaming boom. It was the same year that Reese Witherspoon sold her company at a valuation of about$900 million, that LeBron James raised money for his company at a valuation out of, I think, 725 and Kevin Hart was like you know I've got more going on than these people why can't I do it myself um you know named one of his executives as the as the CEO and really had to kind of grand ambitions of running this multi-pronged company that would build much more than was just him didn't depend on him for everything uh and you know it it never really turned out the way that he wanted.

4:58Now, part of that was industry dynamics. Studios and streaming service started pulling back on spending. And then there was more competition in the free streaming space, but then part of it was also mismanagement. And I think there's a fundamental tension with any of these celebrity companies between the needs, ambitions, and time of their patron saint, their namesake and the company. And so if you're Kevin Hart and you're, you know, you can get these brand deals and you're funneling them through heartbeat because that gives them money and then you're trying to build that brand business. But if that brand business doesn't become some self-sustaining entity that's doing deals with a lot of other celebrities, you start to just feel like, well, maybe they're just taking money out of my pocket because I can, you know, the brand is going to give me$10 million either way.

5:46Why don't I take all 10 instead of giving my company five? or if I'm producing a movie, do I need, if I'm starring in a movie, do I need this company producing it? Do I need to have a podcast operation? You know, I think he was someone who likes to play in all these different spaces, but the company never quite had of got to a place where it could sustain and grow to the scale that he wanted on its own. And so it's had to pretty dramatically pare back its ambitions over the last couple of years. Yeah, so what's next for Heartbeat? Well, most people think it's going to go away or that it will be folded into this new venture.

6:23He did a deal with Authentic Brands Group, which sort of this collector of dying brands might be harsh, but they buy up Brooks Brothers and Sports Illustrated, but they also do deals. They've also been very good at striking advantageous deals with celebrities like David Beckham and Shaquille O 'Neal and Marilyn Monroe, where they sort of manage an estate and the likeness business of a famous person. And so Kevin Hart did that. A lot of the businesses that ran through Heartbeat now run through that ABG deal. And I think people think that they'll either eventually fold Heartbeat into ABG or just wind it down.

6:59In your story, the title is Inside a Year of Chaos. Can you tell the listeners about maybe one example of some of the chaos that ensued that you're reporting uncovered?

7:15It was everything from promising to do things. They hired these people to build a podcast slate. They didn't end up approving any of the slate. They then fire some of the people who are supposed to be making the podcast. Before they start making them, the people who are supposed to be assembling that slate then decide to go off and start their own company. because heartbeat finds out fires them and sues them for theft of trade secrets and one of the people who did that was this guy jeff clanigan who had set up several of his own businesses um that he sort of like the relationship between them and heartbeat is a little bit unclear there's like an ai video business there's a promotion business some people say they're totally separate from heartbeat but he uses heartbeat resources to prop them up some people say that he that they're part of heartbeat you know there was you know they after they fired a bunch of people kevin hart changed his phone number so that it made it harder for some of the people to reach him you know he had previously said he was coming back as ceo and was going to lay out a strategy that never really happened so how much of the story is about uh problems that kevin hart experienced at his at this company versus the the landscape and the way it shifted in just a couple of years i think it's both like if the if the industry had not entered a a new um out of more precarious period then some of these flaws would have taken longer to come to the surface but i think the flaws were there regardless okay uh let's shift gears and talk a little bit about some of the other stories that you published recently perhaps uh a good segue is to talk about the Kevin Hart roast, which I actually have not been able to see, but everybody apparently watched this on Netflix.

9:05You're doing okay. It wasn't as good as the Tom Brady roast. The Tom Brady roast was amazing. But 13.5 million viewers. Not bad. Yeah. Not as big as the Brady roast, but still the most watched show in the world on Netflix last week. Probably the most watched show of anything that's not sports. Well, let's hold on. Let's take a step back there and talk that we're, first of all, we're talking about ratings on Netflix, which a few years ago would have just been bonkers. We're talking about live events and appointment viewing and sports on Netflix. You've talked a lot with Ted Sarandos and Greg Peters in the past, Reed Hastings, too, about the content strategy at Netflix.

9:39Is this turning into a company that is trying to be everything? Like essentially trying to be cable TV all over? Yeah, they would like to have anything you could ever want to watch on their service, right? From morning to evening from, you know, live on demand sports talk, maybe not news because they've been wary of going too far into news. Because of politics? Yeah, it's just it's an invitation for scrutiny, especially if you're global. You know, the way that news is handled in the US is very different than in many of the other countries that they operate in. That's a good point. You know, they've gotten in trouble just for topical humor in some of those countries like in Saudi Arabia.

10:20So, you know, they, they announced a deal this morning actually, where they already had the popular radio show, the breakfast club as a video podcast on the service. Now it's going live. You see Netflix trying to fill out so that they're, they have something for people to watch all day. That's very YouTube to, to go like a live video podcast. Yeah. Well, and that's how people watch Joe Rogan, for example, if they're, well, the video podcast is very YouTube, the live part YouTube doesn't, I mean, they do increasingly more live, but not, I view it as Netflix's answer to sort of daytime talk on television.

10:56They don't really, like The View or, you know, Jerry Springer back in the day, like they don't really have something for people to watch at 10 a.m. And that's something that Charlamagne Tha God hopefully helps them figure out. When you listen to a podcast, do you guys watch the video element of it? um like i don't ever watch the video is it is it are people watching the videos or is this something that the content companies want i do not watch the videos there are people who who do watch the videos and there was actually just a report that my colleague uh our colleague actually wrote about i guess we both wrote it but it was a report from this company allen company about how podcast revenue reached like 9.2 i want to say billion uh and it was a lot of that was because of growth in video.

11:43Now, I'm of the opinion that a lot of people just put the video on in the background. Like you mentioned Joe Rogan. I don't think a lot of people are actively watching Joe Rogan. I think they just pull it up and put it on. And much as television has long been background noise for people, so is Rogan. By the way, I want to state the obvious and say a lot of people are watching us right now or listening to us on YouTube, which is the video. Hello, YouTube. Hello, YouTube. Okay, before we let you go, you mentioned that OWL and co-study. This is so much more lucrative than just audio only. And that's what appeals to the podcast creators and then also to the advertisers, right?

12:18Well, it's both. It's that to your question, there is a part of the audience that wants to watch. And so they're trying to satisfy that. And then it's, yes, I mean, video has always monetized better than audio. It's more compelling and engaging. Now, I question that a little bit with podcasts only because I know from my own experience, at least podcasts versus text. You know, the listener feels a far more immediate connection to you, listening to you than they do reading you. I'm sure with, you know, video takes that to another level, but audio is pretty useful. We certainly agree with that. Good place to end.

12:54Lucas Shaw, Bloomberg News Managing Editor for Media and Entertainment. He's also the writer of the Screen Time newsletter. It comes out every week. You should subscribe to it on the Bloomberg Terminal or at Bloomberg.com if you haven't already. Bloomberg what? It's free. Oh, it's free. Yeah, it's free. If you want more Lucas, you can get more Lucas for free. This is Bloomberg.

13:16When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation.

13:51Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. Game night rush or any night of the week, really, genius keeps every order moving. From online ordering to your kitchen to the front counter, Big League reliability for any business. That's genius. From coast to coast, unlock adventure at Red Lion Hotels by Sinesta, where restful sleep, friendly service, and trusted local knowledge are part of every stay. Red Lion makes it easy to feel welcomed, comfortable, and connected wherever the road takes you. Whether you're traveling for business or pleasure, you can spend less and make more of every trip.

14:31When you sign up for Sinesta Travel Pass, you'll get their best rates instantly. Go to Sonesta.com to book your stay and unlock the best rates with Sonesta Travel Pass. Here today, roam tomorrow. Join now at Sonesta.com. Terms and conditions apply.