Paul Gluckman

For centuries, it has been a “fundamental right of owning something that it is yours -- it belongs to you, and you control what happens to it,” emailed George Slover, Center for Democracy & Technology senior counsel-competition policy, in praise of New York’s passage of the nation’s first electronics right-of-repair legislation (see 2206030034). If a product breaks, “you can get it fixed where you want, or fix it yourself if you can,” said Slover, former Consumer Reports senior policy counsel. “Consumers should not lose this right just because the product now comes with electronics inside it,” he said. The New York legislation “restores that fundamental right of choice to consumers, giving them greater ability to get their electronics-enabled products fixed more conveniently and more affordably,” said Slover. “By opening up the repair aftermarket to competition, it gives independent technicians the opportunity to offer this service to consumers -- just like cobblers and blacksmiths and seamstresses have been able to do."

Though right-to-repair advocates expect the tech lobby “will continue to fight” freedom of repair legislation in the states, “we don’t see a legal challenge” to New York’s Digital Fair Repair Act as “viable,” emailed Elizabeth Chamberlain, iFixit director-sustainability. The New York Assembly, on a 145-1 vote, sent the legislation to the desk of Gov. Kathy Hochul (D) Friday (see 2206030034). New York senators approved the legislation 59-4 earlier in the week. “The Digital Fair Repair Act passed with a veto-proof majority in both houses,” said Chamberlain Monday. “It’s overwhelmingly favored by the electorate,” she said. A recent Consumer Reports poll found 84% of Americans “support legislation exactly like this,” she said. “We expect many more states to follow New York and a legal challenge in all these places would be futile. We welcome productive dialogue with manufacturers to inform future regulations.”

Disclosures in an April 19 earnings report that Netflix lost 200,000 subscribers in Q1, sending the stock plunging more than 35% in a single day, sparked at least the second federal securities fraud complaint against the streaming company seeking class-action status (see 2205040004). The Cleveland Bakers and Teamsters Pension Fund, a Netflix shareholder, “suffered damages as a result of the federal securities law violations and false and misleading statements and material omissions” made by co-CEOs Reed Hastings and Ted Sarandos, Chief Financial Officer Spencer Neumann and Chief Product Officer Greg Peters, alleged the complaint in U.S. District Court in San Jose that was filed Tuesday and transferred to Oakland Thursday after U.S. District Judge James Donato recused himself. In at least five quarterly earnings calls before April 19, the Netflix executives failed to disclose to investors that subscriber account-sharing and increased competition from other streaming services “were becoming significant headwinds” and that the company was “experiencing difficulties retaining customers,” the complaint said. Netflix didn’t respond to requests for comment.

Lionsgate is engaged in a “robust and productive process” with its bankers and “a number of potential strategic and financial partners” to spin off Starz as a stand-alone company, said CEO Jon Feltheimer on an earnings call Thursday for its fiscal Q4 ended March 31. “We're targeting an announcement of our plan by the end of the summer and expect a transaction could close as early as our fiscal fourth quarter,” he said.

Broadcom will finance $32 billion of its proposed $61 billion VMware buy for cash and stock with new, "fully committed" debt financing from a “consortium of banks,” said the buyer Thursday. Broadcom also agreed to assume $8 billion in VMware debt, it said. The transaction is expected to close during Broadcom’s fiscal year ending October 2023. The deal includes a 40-day “go shop” provision enabling VMware to solicit bids from other potential buyers, it said. VMware Chairman Michael Dell has agreed to vote in favor of the deal, “so long as the VMware board continues to recommend the proposed transaction,” Broadcom said. Dell controlled 97.4% of VMware’s voting power as of a May 2021 proxy filing at the SEC. The VMware buy will take Broadcom and its business “to the next level,” said Broadcom CEO Hock Tan on a Thursday call with investors. “By adding VMware, we will bring significant scale to Broadcom’s software business.” Broadcom’s “target” is for VMware to contribute EBITDA of $8.5 billion “once we have fully integrated the company onto our platform,” said Tan. VMware on Thursday reported 3% revenue growth in its fiscal Q1 ended April 28 to $3.09 billion but canceled its quarterly earnings call due to the Broadcom transaction.

Qorvo downgraded its projections on global 5G smartphone shipments for calendar 2022 to 650 million-675 million from 700 million-750 million phones because “we also believe the smartphone market itself is also coming down,” CEO Bob Bruggeworth told a J.P. Morgan investors conference Monday. The company supplies RF components to the world’s top smartphone OEMs, and much of the forecast downgrade “has to do with our customers in China, which is one of the growth areas for 5G,” he said. “Consumer sentiment” for 5G in China has been declining, and the COVID-19 lockdowns in Shanghai and elsewhere “continue all the way up to this day,” he said. The war in Ukraine “also is impacting some of the export market for some of our China based handset customers,” plus that of Samsung, in Eastern Europe, he said. “So when we integrated all that, we felt it was best to bring down our numbers for 5G.” Qorvo views this as a “temporary” lull, said the CEO. “We don't see this as a structural change in our end markets.”

There’s “so much more we can do, and so much more we have to do,” to thwart the spread of violent content on social media, especially the livestreamed video of the mass killings over the weekend at a Buffalo supermarket, Rep. John Katko, R-N.Y., ranking member of the House Homeland Security Committee, told an Axios webinar Tuesday. “This pathetic human who did this crime was inspired by other similar attacks that he’d seen online,” said Katko. “We’ve got to get more sophisticated algorithms and more sophisticated vehicles in technology to prevent these individuals from spreading this filth online. To wear a camera and livestream killing people is something that we’ve got to do everything we can, using every technology at our disposal, to try and prevent. We’re going to endeavor to do that going forward.”

Elon Musk agreed for a year after his Twitter takeover to pay each “continuing” employee “at least the same base salary and wage rate” earned before the transaction, according to a preliminary proxy statement filed Tuesday at the SEC for an as-yet-unscheduled special shareholders virtual meeting to vote on the sale. Musk is offering $54.20 a share in cash to take Twitter private.

The Redbox Entertainment “legacy business” of 38,000 DVD-rental kiosks “still has tremendous reach and power for consumers looking for the ultimate value,” said CEO Galen Smith, appearing on Thursday’s Q1 earnings call of Chicken Soup for the Soul Entertainment to discuss its proposed $375 million Redbox buy (see 2205110051). Redbox has been “investing heavily” in recent years to transform the company into a “multi-window multifaceted digital entertainment company,” said Smith. But COVID-19 “severely impacted” the Redbox kiosk business when it forced studios to release content on streaming platforms or delay movies “completely outright,” he said. The expected recovery has taken “longer than we expected,” and has “hampered our ability to invest in the digital transformation,” he said. “Joining forces” with CSSE will give Redbox “much needed scale,” plus access to capital, to “power” the digital transformation, “something we couldn’t do on our own,” he said.

Disney’s linear networks are “huge cash generators for us,” said CEO Bob Chapek, responding to a question on a fiscal Q2 earnings call Wednesday about what’s holding him back from converting ESPN to a streaming-only service. The U.S. launch of the Disney+ ad-supported subscription tier (see 2203040042) is on track for later in calendar 2022, he said.