Disney’s new CEO faces first challenge

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0:17Good morning from the Financial Times. Today is Tuesday, May 5th, and this is your FT News Briefing. The U.S.-Iran ceasefire is more fragile than ever. And Anthropik is boasting a new partnership with Wall Street. Plus, Josh DeMauro is less than two months into his new gig as Disney CEO. And boy, has it been eventful. A lot of people say he's actually quite similar to Bob Iger. That being said, even Bob Iger, he struggled quite a bit with how to handle Trump, with how to handle these political issues. I'm Mark Filippino, and here's the news you need to start your day.

0:58The U.S. military says it traded fire with Tehran near the critical Strait of Hormuz yesterday. A fifth of the world's oil used to flow through the Strait. But since the war started at the end of February, it's effectively been shut and oil tankers have been stuck. U.S. President Donald Trump started a plan on Monday to help guide tankers out of the Strait. Iran, however, said it would attack any naval vessels that tried. It says it launched missiles and drones yesterday at the U.S. Navy in order to defend its own ships. The strait isn't the only place in the field of fire either. The UAE said it intercepted several missiles and drones launched from Iran yesterday.

1:37One sparked a fire at a major petrochemical site. The escalation sent Brent crude to as much as$115 a barrel.

1:50AI giant Anthropic is teaming up with some of Wall Street's biggest companies. On Monday, Anthropic announced a new joint venture with the likes of Blackstone and Goldman Sachs. The new consulting business will deploy Anthropic's tools across their investment portfolios, and some are saying this could speed up the adoption of AI all around. Ryan McMurrow is our West Coast finance correspondent. He's been covering this story for us in San Francisco. Hi, Ryan. Hi there. Thanks for having me on. Good to have you. So tell me more about this joint venture that Anthropic has announced. Yeah, so Anthropic, the AI startup, has really paired up with all the big names in private equity, or many of them, to form a new company that's essentially going to be trying to infuse AI into all of their portfolio companies and maybe some other mid-sized businesses in the US.

2:40So they've all put in a good chunk of money,$1.5 billion altogether. And they're basically going to be sending Anthropic engineers into midsize businesses to try to help them get started with the AI transformation. Right. So you got Blackstone and Goldman Sachs basically going in and sending engineers to spread the gospel of AI to software companies that they have a huge stake in. What's the big idea here for both private equity and Anthropic? Well, for the P companies, there's this fear that all their portfolio companies are going to lose out as AI kind of disrupts the industry. It's definitely disrupting software companies, and there's a fear that it's going to disrupt even more industries.

3:26So P companies want to make sure that all the companies they've invested in and own are not going to be left behind. And then for Anthropic, they get to pair up with these big names and make sure that their AI technology is the one that's being used and not that of its rival, OpenAI. Yeah. Speaking of OpenAI, where are they during all this? Yeah. So OpenAI is kind of working on its own partnership that is very similar to this one with a whole different swath of PE firms. So they have formed their own rival clique. Hard to say who's ahead with them basically pursuing a pretty similar business model to try to push their AI technology into the broader U.S.

4:13company base. Ryan, earlier this year, Anthropic released a new platform called CloudCode, and it triggered a huge sell-off in the stock market. What kind of ripple effects are you expecting from this most recent announcement? it? Well, definitely all these mid-sized businesses within the U.S. don't want to be left behind. So definitely there's, I guess, a fear for other mid-sized businesses that don't have the capabilities or the money to work with Anthropic that they won't be able to revamp and transform their businesses as these P.D. portfolio companies will. Do you think generally this will actually speed up the adoption of AI in the workplace?

4:54I mean, I guess it depends on how committed these portfolio companies actually are to revamping their business. I mean, any business at any time has a million things to do. So I guess the real question is whether these PE owners can force their portfolio companies to focus and kind of use these techniques and use these new abilities that these engineers are going to come in and recommend. Ryan McMurrow is the FT's West Coast Finance Correspondent. Thanks, Ryan. Thanks for having me on, Mark.

5:32Disney reports its quarterly earnings tomorrow, and I think everyone is eager to hear how new CEO Josh DeMauro is holding up. He only took over in March, but he's already got to figure out how to clean up a huge mess. It involves one of the company's late night talk show hosts and President Trump. Shortly after the most recent dust-up, the federal government opened an investigation into Disney. Here to talk about all this is the FT's U.S. media editor, Anna Nicolau. Hi, Anna. Hi, Mark. How are you? I'm doing well. Let's do some background quickly. So Disney owns the TV channel ABC, and ABC late-night host Jimmy Kimmel and Trump, they've been going back and forth since last year.

6:11Disney temporarily suspended Kimmel's show in the fall after one of his jokes angered Trump, which brings us to the White House Correspondents' Dinner in April. What happened there? So Jimmy Kimmel made a comment on his show a few days before the White House Correspondents' Dinner, actually. It was a joke calling the First Lady, Melania Trump, an expectant widow. And then days later at the White House Correspondents' Dinner, the night took a very unexpected turn when a gunman entered the hotel and started shooting. It later was determined to be an assassination attempt on Donald Trump. And so in the days after that, basically Trump and his allies, they were calling on ABC specifically and Disney saying, you need to fire this guy.

6:57Now, we should say that Kimmel defended his joke as satire. Now, shortly after all this, the Federal Communications Commission launched a probe into Disney's broadcast licenses. What grounds was that on? The FCC under Trump has been very aggressive. It's been opening investigations against all these media companies. One of the issues they've brought up is DEI. But given the timing, no one really seems to believe that. They think that this is because of Jimmy Kimmel. DEI, as in diversity, equity, and inclusion efforts. Ana, how worried is Disney that the federal probe will actually succeed? Everyone seems to think that legally there's very little grounds to stand on here.

7:39It's quite an unprecedented move. I mean, to give context, the last time the FCC has actually revoked a broadcast license like this was in the 1960s. The way the law is structured is that unless there's kind of pretty severe misconduct, the licenses just get renewed. So legally, it seems like it would be in Disney's favor. But as we've seen, there have been cases, quite a few, where media companies have just chosen to settle or back down, given that you generally don't want to be in a big public fight with the federal government. What does this all mean, though, for CEO Josh DeMauro, who has spent years at Disney but only took over as CEO less than two months ago?

8:19Do people feel like he can handle all this? People are very confident in Josh DeMauro as a leader, as an executive. A lot of people say he's actually quite similar to Bob Iger in that he seems to really know what he's doing. That being said, even Bob Iger, he struggled quite a bit with how to handle Trump, with how to handle these political issues. So, you know, it's a very tricky situation, especially for someone six weeks in. Right. And we know we're talking about Iger here, who is the two-time former CEO of Disney. Ana, is there any chance that DeMauro would pull Kimmel off the air again? or is the company preparing to fight back on the FCC probe?

8:59For Disney, this is all about the brand and it's about their different stakeholders here. So what happened a year ago with this is they did take Jimmy Kimmel off the air initially, but it only lasted for five days. And I think it was pretty clear why. There was really an enormous pushback to that. They're in the talent business, right? So they need to maintain a lot of those relationships. It was a situation where basically half of the U.S. was very angry with them about this. And for Disney, that's a big problem. I think it was pretty clear that that was the wrong move for them at that time. I think they definitely learned from that.

9:38And what you're seeing now, I mean, they put out a statement. It was restrained, but it was pretty clear that they are going to push back on this legally. It does seem like this time they are not going to just kind of back down. That's the FT's Ana Nicolaou in New York. Thanks, Ana. Thanks, Mark.

10:01Before we go, we told you yesterday that the war in Iran is creating a massive commodity shortage. And in Asia, that means a plastic shock. That's because the war has constrained supplies of the petroleum product naphtha. It's essential for making plastic, and its price has doubled since the start of the war. That means plastic bags, cups, utensils, and containers are all way more expensive. Indonesia is one of the world's largest plastic consumers. Suppliers there are warning they could be forced to cease production entirely.

10:35You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.

11:12We'll see you next time.

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