That is Scorching Pod, The Verge’s e-newsletter about podcasting and the audio business. Enroll right here for extra.
I hope you all had a fantastic weekend/eclipse/first second of NYC sunshine. At this time, I’ve acquired a take a look at Ted Cruz’s eyebrow-raising association with iHeart and information on two new acquisitions. Let’s get into it.
iHeart doesn’t pay Ted Cruz for internet hosting Verdict. It pays a Ted Cruz tremendous PAC.
That is definitely one method to elevate marketing campaign cash. Sen. Ted Cruz hosts an iHeartMedia podcast, Verdict, which performs moderately nicely amongst right-wing political reveals. He doesn’t receives a commission for internet hosting the podcast, however reporting in current weeks from Forbes and the Houston Chronicle reveals that iHeart has paid greater than $630,000 to an excellent PAC that helps his marketing campaign. For good motive, this has raised eyebrows, and now a marketing campaign finance watchdog has filed a grievance with the Federal Elections Fee.
That is how the transaction works: Ted Cruz’s management PAC, Jobs, Freedom, and Safety PAC, produces Verdict. The present is then distributed and monetized by Premiere Networks, a subsidiary of iHeartMedia. Then, based on Premiere Networks, iHeart pays cash constructed from the present’s advertisements to Reality and Braveness PAC, an unbiased political motion committee that helps Cruz’s reelection. “Senator Cruz volunteers his time to host this podcast and isn’t compensated for it,” Rachel Nelson, spokesperson for Premiere Networks, stated in a press release to Scorching Pod final week.
That is technically true in that paying the cash into Reality and Braveness just isn’t the identical as paying Cruz instantly. However he clearly sees a private profit, and the Marketing campaign Authorized Middle argues that it crosses the authorized line. “There may be motive to imagine Cruz has violated federal marketing campaign finance legal guidelines that prohibit federal candidates and officeholders from soliciting or directing ‘mushy cash’ — together with cash from companies, that are categorically prohibited from contributing to candidates — in connection along with his 2024 reelection efforts,” the group’s grievance reads. Nelson didn’t reply to a request for touch upon the submitting.
Cruz’s camp denies any wrongdoing. “Senator Cruz seems on Verdict 3 times every week totally free. He does this to tug again the veil on the corrupt internal workings of Washington — none of which ever get pretty lined,” marketing campaign spokesperson Macarena Martinez instructed Scorching Pod in a press release.
How the FEC guidelines might have large implications for a way politicians are in a position to leverage podcasting for fundraising functions. The everyday election-cycle relationship between campaigns and the large radio firms is that these campaigns purchase up loads of spots in native markets — it’s a transaction that financially advantages the radio firm. However the Cruz state of affairs flips that relationship on its head. Cruz will get the publicity whereas additionally making advert cash that then will get funneled, if to not his official marketing campaign, then to entities that assist it. It’s not clear how replicable this is able to even be — Cruz is a star who can command a nationwide viewers and get advert {dollars} — but it surely does set a troubling precedent for the politics-media dynamic.
Behold! Podcast M&A: The Roost acquired by Night time, Sony buys Neon Hum
Not a lot of this as of late. We’ve got not one however two acquisitions introduced this week. The Roost, which is the podcasting arm of the just lately shuttered Rooster Tooth, has been bought by influencer expertise company Night time. Neon Hum, which beforehand had Sony Music as an investor, has been purchased outright by the music big. Notably, each firms provide one thing apart from unique content material.
The Roost, which handles advert gross sales and distribution for The H3 Podcast and The Kinda Humorous Podcast as a part of its community, is the final pillar left standing of Rooster Tooth. Rooster Tooth was shut down final month by mother or father firm Warner Bros. Discovery. The company that’s shopping for it, Night time, represents digital stars like MrBeast and Kai Cenat, so it looks like a match. Plus, Night time’s president, Ezra Cooperstein, served because the president of Rooster Tooth between 2018 and 2019. In shopping for The Roost, Night time has acquired a podcasting infrastructure that could possibly be prolonged to its beneficial roster of shoppers.
With Neon Hum, Sony can be broadening its attain. Along with originals like Smoke Display, Neon Hum produced reveals for shoppers like NBC Information and HBO Max. As firms reduce on their very own podcast models, they flip to manufacturing homes like Neon Hum to take care of a podcast presence. In an identical vein, Audacy laid off Pineapple Avenue Studio staffers who labored on unique reveals with an intention to focus extra on consumer providers.
So, sure: podcast firms can nonetheless be acquisition targets, however more and more, it’s the much less horny stuff that sells.
That’s all for as we speak! I’ll be again on Thursday.
