Big Bird and ‘CoComelon’ are moving. Who’s next? ~ ⛾:Kaffibolla

First Sesame Street, now CoComelon. Some of children's television's most beloved characters are headed to new streaming services. Felix Gillette writes today about how Warner Bros. Discovery's pullback from the genre is driving the changes, and what might be next. Plus: Meta's CEO goes MAGA, global business school leaders back Harvard, and a Japanese-style barbecue sauce catches on.

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A few years ago, when media mogul David Zaslav pondered the future of home entertainment in the streaming era, he sometimes invoked the metaphor of a treacherous lake. Most traditional media companies, he liked to say, were marooned on the wrong side, gazing enviously over the roiling water to the far banks where Netflix Inc. and Walt Disney Co. were already setting up shop.

One day in 2021, Zaslav, then the chief executive officer of Discovery Inc., spun this metaphor to John Stankey, the CEO of AT&T Inc. At the time, the telecom company owned WarnerMedia, an entertainment conglomerate that included the cable networks CNN, HBO and Cartoon Network. If they combined forces, Zaslav told Stankey, they could successfully cross the dangerous expanse while rivals sputtered and drowned. So began a $43 billion merger.

Zaslav became CEO of the new company, Warner Bros. Discovery Inc., in 2022 and started paddling furiously toward the streaming promised land.

Zaslav. Photographer: David Paul Morris/Bloomberg

Not everything has survived the choppy crossing. Over the past three years, the company has occasionally had to do away with provisions no longer deemed essential—saying goodbye to NBA rights, a nearly completed Batgirl movie and a handful of video-game studios. Most recently, the company revealed another surprising sacrifice: It would be scaling back its streaming ambitions for kids.

At some level, it's a shocking development (albeit, one that's been mostly overshadowed by Zaslav's tragicomic rebranding of the once-and-future HBO Max). For decades, Warner Bros. has been a major force in home entertainment for children, thanks to a rich collection of assets, including Cartoon Network, Cartoon Network Studios, Warner Bros. Animation and one of the largest cartoon collections on the planet that's chock-full of Looney Tunes and Hanna-Barbera classics. If they can't make it work in streaming, who can?

YouTube has mostly dominated the field, given its ever-expanding galaxy of low-cost kids programming. This advantage is likely to grow in the short term because of startups such as Toonstar, which uses artificial intelligence to slash the time and cost of making inexpensive animation.

A lot of parents, though, remain deeply wary of overexposing their impressionable offspring to YouTube's sometimes sketchy algorithms, and they would be happy to reward whatever streaming service can offer a bounty of engaging kids shows minus the flat-earth videos. With HBO Max backing away from children's shows and Paramount Global—home to Nickelodeon—tied up in a politically fraught merger, the moment feels ripe for others to pounce. Enter Netflix and Disney.

Both companies are already nibbling on castoffs of Warner Bros.. Last week, Netflix announced a deal to air Sesame Street, the venerable kids series that had previously streamed on Max. At the same time, it debuted new episodes of Peppa Pig, a series popular with preschoolers, and revealed that it would be making video games for kids based on both properties. That's a new wrinkle, which if it works (a big if) could give Netflix a competitive edge with youngsters.

Meanwhile, Disney is circling. Last week, Cartoon Network announced that after a long hiatus its beloved characters Gumball and Darwin would be returning in 2025 in a show called The Wonderfully Weird World of Gumball. The twist—in the US, the much-anticipated reboot won't be appearing on Zaslav's newly refashioned HBO Max. Instead, it will debut on Disney's Hulu, which in recent years has been strategically positioning itself as the streaming home of old Cartoon Network series. In my house, Gumball is a big deal. By dinner time on the day of the announcement, I was watching a new Gumball teaser with my sons and, soon enough, being badgered to resubscribe to Hulu.

In another sign of how cutthroat the children's TV market is becoming, Bloomberg News reported over the weekend that Disney swiped the streaming rights for CoComelon, one of the most-popular kids' programs in the world for almost a decade, from Netflix. Starting in 2027, Disney+ will have every season available.

So what else might shake loose from Warner Bros. cupboards? Rumors have circulated that Zaslav might be looking to sell the entire Looney Tunes brand. To date, the company has declined to comment on the speculation. But a sense of opportunity is in the air.

Almost three-and-a-half decades ago, the entrepreneur Ted Turner paid $320 million (roughly $754 million in today's value, accounting for inflation) to buy Hanna-Barbera's deep library of cartoons—shows that ruled the age of broadcast television—and repurposed them to launch an entirely new kids-programming brand for the cable era. Cartoon Network flourished, eventually throwing off hundreds of millions of dollars in annual profits.

Kids programming in the streaming age may feel like a sinking market right now. But as any treasure hunter will tell you, one person's shipwreck is eventually another person's golden opportunity to scavenge.

In Brief

The Trump administration is moving to cancel all remaining federal contracts with Harvard University, worth an estimated $100 million.
Salesforce has agreed to acquire Informatica for about $8 billion, barely a year after an earlier effort fell through.
Private equity firms have seen a sharp drop in fundraising this year, the latest sign of how a slowdown in dealmaking and initial public offerings.

Zuckerberg's Turn Toward Trump

Illustration: Luca Schenardi for Bloomberg Businessweek

In early February, Mark Zuckerberg boarded his Gulfstream G650 for a trip to Washington, DC—a cross-country route he was flying with newfound frequency. After years on the outs, the chief executive officer of Meta Platforms Inc. had regained something valuable he'd lost: direct access to the president.

Since November, Zuckerberg had already had a string of postelection get-togethers with Donald Trump. He'd made multiple trips to Mar-a-Lago in Florida, and he'd sat in the Capitol Rotunda with other tech executives when the president-elect took the oath of office in January. Meta had also donated $1 million to the inauguration, and Zuckerberg co-hosted a black-tie reception that evening in Trump's honor. In a sign that he plans to spend more time in Washington, Zuckerberg in March purchased a $23 million mansion just paces from Vice President JD Vance's residence at the Naval Observatory.

On this particular February visit, Zuckerberg had a short chat with Trump, according to people familiar with the meeting, but his agenda centered on a discussion with Vance. The vice president was headed to Paris for a summit on artificial intelligence, and Zuckerberg wanted him to hammer home to European leaders that their regulators were treating Meta unfairly, making it difficult to roll out AI products.

When Vance spoke in Paris five days later, his speech delivered exactly the sort of message Zuckerberg had had in mind, warning against overregulation in AI and abandoning the Biden administration's more careful approach to the technology.

Riley Griffin and Kurt Wagner write that Vance's speech seemed like tangible evidence that Zuckerberg's clout in DC was on the upswing, but there are reasons to question how well his efforts are working otherwise: Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back?

In Defense of Foreign MBA Students

The Harvard University campus in Cambridge, Massachusetts. Photographer: Sophie Park/Bloomberg

Leaders of business schools worldwide chose their words carefully as they responded to the Trump administration's attempt to block Harvard University from enrolling international students. But even as Harvard's legal challenge has temporarily halted the administration's action, fears about long-term and widespread damage are running high.

The move, announced Thursday afternoon by the Department of Homeland Security, threatens to undermine not just Harvard, but higher education across the US, said David Bach, dean of IMD business school in Lausanne, Switzerland. "The history is really clear—you can't build a world-class academic institution by drawing only on one country. You build a world-class academic institution by attracting the best and brightest from all around the world and by benefiting from the diversity of perspectives, of insights, of backgrounds that makes that possible," he told Bloomberg. US colleges and universities are the envy of the world, he said, because "they have, better than any others around the world, really succeeded in attracting such students."

Another B school leader Dimitra Kessenides talked with called the Trump administration's move, "a direct blow to the very essence of what universities represent": Global Deans Condemn Move Denying International Students to Harvard

Move Over, Ketchup and Mustard

Photo illustration: Ryan Haskins for Bloomberg Businessweek; Photos: Getty Images; Bachan's

Justin Gill was getting desperate. In his yearslong quest to mass-produce and distribute his grandmother's home-brewed Japanese barbecue sauce without pumping it full of preservatives, he'd borrowed $250,000 from relatives and friends, maxed out his credit cards and turned his Northern California home into a fulfillment center. But he needed more capital in the months following the brand's 2019 release. So the landscaper and father of three resorted to short-term, high-interest loans, where borrowing rates compounded daily. "Every dollar I could find or borrow, I put into Facebook ads," says Gill, who prayed that the traffic would translate into sales of the almost $10-a-bottle specialty sauce—which he called Bachan's, after the Japanese word for "granny"—before one of his creditors seized his house.

His desperation turned out to be short-lived. Sales of the umami-forward, savory-sweet condiment exploded, from $35,000 in its first year to $1.5 million in 2020, thanks to Gill's hustling, the brand's healthful sheen and, in no small part, the onset of the pandemic, which dramatically reshaped the way US households shop and cook. Now revenue is on track to exceed $100 million in 2025, says a person familiar with the company who wasn't authorized to speak publicly. (A spokesperson for Bachan's declined to provide specifics on profitability, revenue and other financials.)

Bachan's now ships tens of millions of bottles per year to more than 25,000 retail locations nationwide, including Costco, Walmart and Whole Foods. Ian Frisch, in a new Going Viral story, writes about its appeal: Millions of Americans Are Obsessed With This Japanese Barbecue Sauce

Cost of Living

3.4%

That's how much US home prices were up in March from the same month a year earlier. It's a slowdown from February. The run-up in prices since the pandemic and the rise in mortgage rates to around 7% have pushed buyers to the sidelines.

Food Chain

"We see the strategic benefit in bringing supply chains closer to home, because you reduce exposure to disruption."

Victoria Gutierrez

Sysco chief merchandising officer

Sysco, the largest US food supplier, is using a group of culinary experts to help customers brainstorm ways to blunt the impact of Trump's tariffs. Read the full story here.