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Activision board's support of CEO Kotick raises more questions

Activision CEO Bobby Kotick is under fire after yesterday's Wall Street Journal report claiming he knew about sexual misconduct claims at the company and didn’t inform its BOD for years, but the Activision board is “rallying to Mr. Kotick’s side almost immediately with a press release of support," according to CNBC's David Farber. Faber said he was "somewhat surprised at how quickly that board came out there" to support Kotick. Faber on Activision: "Not the strongest board I would say." CNBC’s Jim Cramer noted Activision employees "seem to be quitting in droves" in response to the company's recent scandals, which include an ongoing SEC investigation. Cramer: “Right now, I question whether the whole company’s slate of product is going to have a gigantic hole” (“Squawk on the Street,” CNBC, 11/17). CNBC’s Kelly Evans noted Activision shares are down 26% “since California regulators filed a gender-bias lawsuit back in July” (“The Exchange,” CNBC, 11/16). WSJ’s Kirsten Grind: “This is very much a company under crisis" (“Closing Bell,” CNBC, 11/16). 

NUMEROUS ISSUES: BLOOMBERG's Jason Schreier notes around 150 Activision Blizzard employees yesterday "walked out of the video game publisher’s Irvine headquarters" in a bid to press Kotick to "step down." The WSJ report released yesterday detailed "allegations of rape at one of Activision’s studios" and said that Kotick had been "informed of the alleged incidents, which are said to have occurred in 2016 and 2017, as well as an out-of-court settlement, and failed to report them to the board." Activision’s stock has "lost about a quarter of its value since a California government agency sued the company in July." But Kotick "doubled down on his defense of the company’s actions to improve the workplace culture in recent months." Kotick said, “Anyone who doubts my conviction to be the most welcoming and inclusive workplace doesn’t really appreciate how important this is to me.” The Activision board's statement said that it "'remains confident' in Kotick’s leadership and his commitment to achieving the company’s goals of inclusion" (BLOOMBERG, 11/17). The WALL STREET JOURNAL's Sarah Needleman notes Activision in September said that it "agreed to pay $18 million to settle a separate lawsuit by the Equal Employment Opportunity Commission," which had been "investigating the company since 2018" (11/17).

SBJ Spotlight: TikTok’s threat to traditional sports media

While tech companies are consumed with finding ways to compete with TikTok, almost no one in conventional media “spends any time talking about it,” said Recode senior correspondent Peter Kafka in an Spotlight interview with SBJ’s John Ourand. “To me, that’s just an obvious disconnect.” Kafka authored a recent column headlined, “It’s TikTok’s world. Can TV live in it?” He said the main response to TikTok’s growth from traditional media execs has been to “punt and hope it’s someone else’s problem a quarter from now or two years from now.” But Kafka said that ignores the trend of conventional broadcast audiences growing older while a billion younger consumers spend most of their media time watching short video after short video. “If you’re in the business of getting anyone under the age of 30 to look at what you’re putting on a screen, you have to think about the fact that you’re probably asking them to put down TikTok and watch your thing instead,” said Kafka. “That’s a very difficult ask. … [TikTok] is insanely addictive.”

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