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When the U.S. government cut funding for local news stations, the Knight Foundation moved quickly to help stabilize a rapidly eroding industry. President and CEO Maribel Pérez Wadsworth unpacks the evolving roles of philanthropy and government, and why philanthropic organizations must learn to move at the speed of the news cycle. This is an abridged transcript of an interview from Rapid Response, hosted by former Fast Company editor-in-chief Robert Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with todays top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode. The Knight Foundation has focused on promoting and preserving local news and journalism and local communities for decades. This year, that mission has come under unprecedented attack with big funding cuts for public media, lawsuits by President Trump against CBS News, The Wall Street Journal, New York Times. Is this what you signed up for when you took on this job 18 months ago? I mean, how prepared were youwas the organizationfor this kind of seismic shift? Well, no, I can tell you, it’s not what I signed up for. I don’t think anybody could have quite contemplated the things we are focused on in 2025. But that said, I’ve spent my entire career fighting for journalism and fighting for the First Amendment. So from that perspective, this is yet another part of that journey. Is it harder right now? Absolutely. Are the fights coming across a lot of dimensions that we couldn’t have anticipated? Absolutely. But this is what the Knight Foundation was set up to do since it started its work 75 years ago. So while we’d all rather be able to pace ourselves a little bit more, I think the moment demands urgency, and it demands focus, and it demands clarity of purpose. The First Amendment is what makes all the rest of our democracy possible, so we have to defend that. When Congress stripped $500 million in funding for public media this summer, part of the critique was that publicly funded media had become partisan, that it wasn’t always impartial. I mean, is there a fair critique in there about that? I think that you’ve seen trust eroding in a lot of institutions, and as the country and the world becomes increasingly polarized and dependent on their own echo chambers for information, I think absolutely, trust is a problem, and inherent in that is a concern about bias. The truth of the matter though is when you look at study after study, public media, particularly local public media stations, are still among the most trusted institutions by Americans. People believe in their local newsrooms. They trust their neighbors to report on their communities. The vast majority of these cuts did not impact, say, NPR at a national level or PBS at a national level. While the rhetoric around the cuts and the perceptions of bias centered on those entities and NPR in particular, the cuts in effect barely affected NPR but are devastating to the local stations, especially in huge swaths of the country that are primarily rural, what today we might say are in red states. That’s who’s impacted by these cuts. As this bill was being debated in the Senate, Alaska experienced a significant earthquake. And had it not been for one small public radio station, a lot of Alaska would not have even known that they were under tsunami warnings. And these concerns about news deserts, like apps like Facebook and Nextdoor and other ways that we’re sharing information these days, they can’t or don’t really fill that space. No, they absolutely don’t fill that space. I mean, we’re on all these platforms. We know the kinds of information that is shared there. It is certainly not what any of us would call trusted, verified information. It’s not reliable. And let’s not forget that for a lot of the country, we still struggle with reliable broadband access. The stations most at risk represent some 40 million to 50 million Americans. When these cuts went through, the Knight Foundation, alongside some other funders like the Ford Foundation, the MacArthur Foundation, you jumped in to fill some of the gap. I know you put in a $10 million cash injection. How did that come about? It was a meet-the-moment-urgently proposition. And let’s be clear that philanthropy doesn’t necessarily always move at the speed of news, but it was really important, because this was an imminent loss of funding and dollars that had already been appropriated, that these stations were counting on, in some cases for upwards of 30% to even 70% or more of their annual budgets. So very significant, very dramatic. We had to move quickly, and it was great to see some key partners come to the table with us. We did $10 million to help lead the Public Media Bridge Fund that is being run by the Public Media Company. And today, just 11 weeks later, we’re at almost $60 million raised. That is nearly unprecedented for philanthropy to have moved that quickly. That said, it’s not the long-term solution. This will help to stabilize the stations that are most at risk. That doesn’t mean that there won’t be loss of programming. That doesn’t mean that every single station will survive necessarily. But hopefully it buys the necessary time to think through the transformation of the overall system, what kinds of changes need to be made, from governance of public media to some consolidations that are no doubt necessary. But we need to buy the time, because the rug got pulled out from under them. Some local radio and television stations, as you mentioned, they are shuttering, they are cutting back. Is the hope that you can bring them back, or does the focus need to be on, “Hey, let’s preserve the stations that are still alive that are the stronger ones”? Well, right now, it’s a matter of truly preserving access to local news and information and community. So the prioritization around these funds will be prioritizing those stations that are, say, sole servers in their communities, that absolutely provide local news and information in addition to some of the other programming. But preservation is clearly important. The loss of these stations would represent a significant setback. We have some, what, almost 2,000 so-called news deserts in the country today. So these stations would create that many more all over the country. But this has to be a phased approach. Right now it’s stabilized to ensure that we preserve something to transform, and then we need to get into the serious work of what does it look like for sustainability. Sometimes I think that if public media is no longer supported by the government, is public media the right term or is it just media? It’s a great question. At that point, you’re right, it’s just media. And so I think that will be part of the thinking going forward. I have to believe, and maybe it’s just the hardwired optimist in me, that we will see a rational rethinking of the federal funding picture, specifically for stations in more vulnerale areas, in smaller communities where you don’t necessarily have a huge population base to self-fund these stations or a big business community that can help underwrite the cost of these stations. But where people still understand that there is a true vital role played by these stations in their communities in terms of being connective tissue, in terms of having the issues, the people, the things that are important to the community really front and center. So my hope is that we will see some level of federal funding coming back, even if it’s more targeted to the stations that would be more dependent on public funds to continue to exist. For the Knight Foundation, obviously, you’re committed to freedom of the press and local news, but that’s part of a pledge to support local communities overall, right? I mean, it’s sort of linked together. It is. And we think it’s foundational. To us, reliable local news and information is really a central force for good in communities. People see one another, they connect with one another, they have a common fact base to rally around. And so for a community to thrive, that’s table stakes.
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Here we go again! For the third time within a quarter century, the Warner Bros. studio assets have been acquired for more than $70 billion. Since I commented very sharply on the first two, lots of people are asking me my thoughts on the just-announced purchase of Warner Bros. by Netflix. I provide my response in this Playing to Win/Practitioner Insights (PTW/PI) piece. And as always, you can find all the previous PTW/PI here. Third Time Lucky? The first of these mega deals was in 2001 when AOL bought Time Warner in a deal that valued Time Warner equity at $166 billion. (While it was more of a merger than a takeover, it was technically structured as an acquisition). The next one was in 2018 when AT&T bought Time Warner for $85 billion. Both deals routinely make lists (like this one) of the worst takeover deals in business history. The AOL Time Warner deal cratered almost immediately as the market realized that AOL was largely worthless, which was confirmed when AOL was spun off for a mere $3 billion in 2009. The selling shareholders initially thought they got an awesome deal because Time Warner shares were valued at a massive 70% premium over the preannouncement price. However, the payment was in what turned out to be wildly overvalued AOL stock. In the end, Time Warner shareholders gave up 55% of their companyworth about $55 billion based on preannouncement value of Time Warnerin exchange for an asset worth $3 billion. As a combination, AOL Time Warner was a disaster, but the shareholders of AOL made off like bandits. {"blockType":"mv-promo-block","data":{"imageDesktopUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/09\/martin.jpg","imageMobileUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/09\/Untitled-design-1.png","eyebrow":"","headline":"Subscribe to Roger Martin\u0027s newsletter","dek":"Want to read more from Roger Martin? See his Substack at rogerlmartin.substack.com.","subhed":"","description":"","ctaText":"Sign Up","ctaUrl":"https:\/\/rogerlmartin.substack.com","theme":{"bg":"#00b3f0","text":"#000000","eyebrow":"#9aa2aa","subhed":"#ffffff","buttonBg":"#000000","buttonHoverBg":"#3b3f46","buttonText":"#ffffff"},"imageDesktopId":91412496,"imageMobileId":91412493,"shareable":false,"slug":""}} In the AT&T Time Warner deal, AT&T learned not long after the dust had settled that this was a disastrous acquisition and, a mere three years later, sold the Time Warner assets to Discovery for $43 billiona massive discount. As I have pointed out before, that is the equivalent of the AT&T executives holding a bonfire of $38 million of shareholder cash every day for three consecutive years. On December 5, 2025, Netflix reached an agreement to acquire the Warner Bros. assets for $72 billion. Of course, we dont know yet how it will turn out. The first two deals destroyed over $50 billion of value for Time Warner shareholders and over $40 billion for AT&T shareholders, respectively. The hope is that this will be third time luckybut the track record around the transfer of Warner Bros. assets hasnt been good thus far. Deeply Flawed Strategic Rationales I knew the first two deals were doomed from the outset because the (so-called) strategic rationale for both was deeply flawed. The stated strategic logic of the AOL Time Warner combination was that AOL would benefit competitively in the internet access business, in which it was then the market leader, by having proprietary access to Time Warner content. Sounds great! But the logic just doesnt track. Time Warners value was based on its ability to broadly distribute its content. Content creation is a fixed cost business. Creators invest an enormous amount in creating the content and then to amortize that fixed cost, they strive to sell their content to as many users as possible. AOL led in the internet access business with 30% market share at the time. One of two things could have happened after the combination. First, Time Warner content could have given AOL a meaningful advantage over its competitors. That would have validated a key tenet of the rationale. But had that happened, the other 70% of the market would have boycotted Time Warner content because it was helping their competitor, which would have sabotaged the business model of Time Warner. Alternatively, Time Warner content may not have been able to move the needle on AOL advantage over its competitors, invalidating the entire premise of the combination. That is, there was zero probability of the strategic success of the combination, which I described in this Harvard Business Review piece. On AT&T Time Warner, the rationale was owner economics, a concept I hate in the general case, as I discuss in this piece, and my antipathy applies in spades to this case. The idea was that by buying Time Warner, AT&T gained the advantage of owner economics. Rather than buying content from outside providers and having to pay a profit-margin premium for it, AT&T would get it from Time Warner at costimproving the (owner) economics of AT&T. Yup, that would be true. But then all the business Time Warner would have with its giant customer, AT&T, would be at zero profit, thus tanking the profitability of Time Warner, ensuring that its value would never be close to the $85 billion for which it was purchased. Days after the merger, I pointed out this logical flaw to Fortune reporter Jeff Colvin, who had called me for my opinion, and I predicted that: a) the acquisition would be an unmitigated disaster; b) would be divested within five years; c) at a price half of the acquisition price; and d) would cost AT&T CEO Randall Stephenson his jobpredictions that Colvin confirmed in an article at time of divestiture. The only thing on which I was (slightly) wrong is that I predicted AT&T would salvage 50% of the purchase priceit was 50.6%. Both illustrate what I call the Impossibility Theorem, which describes a situation in which for the logic to hold, two things must be true, but if one is true, the other cant possibly be. For example, if AT&T does benefit from owner economics, Time Warner cant maintain its value. If Time Warner can maintain its value, AT&T cant benefit from owner economics. Not understanding the Impossibility Theorem cost shareholders roughly $100 billion across these two acquisitions. Netflix-Warner Bros. This all begs the question, is this just another Warner deal based on a fundamental strategic fallacy? No, it is not. There is no insane argument about owner economics or vertical integration. This is a plain, old-fashioned bulk-up move. With the acquisitionof Warner Bros., Netflix bulks up in its two core businesses: content creation and content streaming. Netflix started in media content distribution and led by pioneering internet streaming, becoming the dominant player in that arena. It distributed the content created by the traditional major players in that space, such as Universal, Paramount, Warner Bros., etc. However, during the 2011-2015 period, all the new streaming players, including Netflix, started spending aggressively in content creation of their own. As a result, Netflix is now a major player in both content streaming and content creation. However, in streaming, Netflix is no longer the sole dominant player. Based on recent numbers, Netflix still has the biggest U.S. subscriber base with 81 million. But Amazon is close behind with an estimated 75 million. Disneys Hulu has 64 million. But if you combine the three Disney streaming platforms (Hulu with 64 million; Disney+ with 55 million; and ESPN+ with 25 million), it is far ahead of Netflix with 134 million streaming subscribers. Globally, Netflix leads with 302 million subscribers to Disneys 221 million (combined) and Amazons estimated 200 million. But with the Warner acquisition, which includes its HBO Max service, Netflix jumps slightly ahead of Disney in the U.S. (139 to 134 million) and dramatically widens its global lead with 430 million to Disneys 221 million and Amazons 200 million. This is simple straightforward bulking up in Netflixs core streaming businessovercoming its scale deficit in the U.S. and extending its scale advantage globally. That is a simple and powerful strategy logic. In content creation, Netflix was a big part of the dramatic transformation by which the players that have entered content creation since 2011 now make up 50% of the estimated content creation spend. But prior to this deal, Netflix was a mid-tier player in that game, spending an estimated $17 million in 2024 compared with Comcast-Universal at $37 million or Disney at $28 million. However, adding in Warners $14 million makes Netflix one of the top tier content creators. To the extent that scale matters in streaming and content creationand I think it doesthe strategic logic of this makes lots of sense, in stark contrast to the previous two trades of Warner Bros. assets. The Rub When the AOL Time Warner and AT&T Time Warner deals were announced, there was huge uproar in the press over antitrust concerns. Would the vertical integration hurt consumers? Would AOL and AT&T become dangerously dominant in their primary markets because of their ownership of Warner content? I didnt worry for a second because regulators dont have to protect consumers from mergers that are going to crater and I knew both deals were destined to fail miserably. Regulators only need to worry about mergers that are likely to succeed! And they should worry about this one. The Netflix press release is quite something. It makes two claims aimed specifically at potential antitrust concerns. Bold-type callouts claim that the combination will: 1) Offer More Choice and Greater Value for Consumers, and 2) Create More Opportunities for the Creative Community. I understand why companies do this kind of thing. Netflix would love to have readers be insipid enough to believe these two things because that would suggest there are no antitrust problems about which regulators should be concerned. The problem is that both claims are flat out false. When you reduce the number of major competitors by one, you do not provide more choice or greater value for consumers. If you buy the competitor and leave it alone, at best, you provide the same choice and the same value. But to leave it alone is not why a company pays a huge takeover premium to buy a competitor. And when you reduce the number of major industry players by one, you do not provide more opportunities for suppliers to that industry. You reduce by one the number of customers who compete for their services. I can totally understand why Netflix wants to reduce competition from other streamers and other content creators. In streaming, it started with a near monopoly but has lost its lead in the U.S. market and is no longer far ahead globally. Getting rid of one major streaming competitor and bulking up makes lots of sense. In content creation, when all the new players entered, including Netflix itself, they created a bonanza for content creation talent. It has never been a better time for talent, as exemplified by Shonda Rhimess $450 million production deal with Netflix. Bulking up to have more buying power over content talent, plus eliminating one major content competitor makes total sense. But dissimulating about it? Not a good look. Practitioner Insights You will be fed all sorts of ridiculous so-called strategy logic on a regular basis. It can be vertical integration, owner economics, or having one less competitor will deliver more choice for consumers. Some are the product of utter cluelessness, others fundamental dishonesty. Sometimes somebody else (like me) will help you expose the logical fallacies. Other times, you will be on your own. For those times, it is important to practice your critical eye for strategy logic. When you read or listen to someone espousing a strategic logic, practice interrogating it. Dont just accept it. Instead, take it under advisement and ask whether there is a better, more profound logic to explain the situatione.g. Time Warner shareholders were about to be taken to the cleaners by AOL shareholders, owner economics is a fraudulent concept that will cost AT&T shareholders dearly, and Netflix isnt motivated by consumer choice or creative community welfare but rather by increasing its scale and reducing competitive intensity in its core businesses. {"blockType":"mv-promo-block","data":{"imageDesktopUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/09\/martin.jpg","imageMobileUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/09\/Untitled-design-1.png","eyebrow":"","headline":"Subscribe to Roger Martin\u0027s newsletter","dek":"Want to read more from Roger Martin? See his Substack at rogerlmartin.substack.com.","subhed":"","description":"","ctaText":"Sign Up","ctaUrl":"https:\/\/rogerlmartin.substack.com","theme":{"bg":"#00b3f0","text":"#000000","eyebrow":"#9aa2aa","subhed":"#ffffff","buttonBg":"#000000","buttonHoverBg":"#3b3f46","buttonText":"#ffffff"},"imageDesktopId":91412496,"imageMobileId":91412493,"shareable":false,"slug":""}}
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Ive tried them all. A fancy planner, perfect workout routines, ambitious ways to read more, and writing rituals to get more done. I did the research. But what ultimately worked is something called the kaizen incremental method. An idea is from Japanese manufacturing, of all places. It means continuous improvement. The practice of tiny actions. A step so small your brains resistance (a built-in fight-or-flight response to big, scary changes) doesnt even bother to fight it. I use the kaizen approach as a backdoor to building new neural pathways. Im not forcing change; Im gently guiding my brain into new habits, one step at a time. Thats how I started writing almost every day. I opened my laptop and started putting thoughts down at the same time daily. I didnt aim to write a whole page. Just ideas down. After a few weeks of the same practice, writing things down became easy. Not effortless. But the resistance was not the same. Thats the kaizen advantage. You work with your psychology, not against it. Big goals Youve probably tried the new year, new me approach to life. You start the year with big goals. And big motivation. But most people dont even make it through to March. Whats helped me is tiny but consistent routines, rituals, and behaviours. It doesnt matter what time of year. I focus on stacking good actions. The kaizen approach feels like nothing. Until suddenly it feels like everything. The easier a behavior is to do, the more likely the behavior will become habit, writes B.J. Fogg in his book, Tiny Habits. Kaizen matches how you live. Say you want to read more. The old way: Ill read 50 books this year! You buy a stack, stare at it, and feel behind by February. The Kaizen way: Ill read one page before bed. One page. Youll often read more. But on the worst day of your life, one page is still a victory. Youve kept the habit alive. One tiny bit of progress at a time. You read one or two pages of your favorite book daily. A year later, youve finished more books than ever. You save $50 a month. One day, youve built an emergency fund. You start by tidying one drawer. Eventually, your whole space feels clean. Theres no one massive win. Just small wins stacking up. When you want big results, small steps feel insulting. You want to sprint. You want the outcome that means everything. You want proof that youre serious. Direction is everything But being serious means not stopping. The secret is in the consistency, not the intensity. A 1% improvement, repeated, is compound interest for your life. Do the math: 1% better every day for a year, and youre nearly 38 times better by the end. Life isnt that linear, but the direction is everything. Youre moving forward, not stalling out in a cycle of ambition and guilt. Youll doubt it at first. I did. It feels too small, too insignificant. One page of reading is nothing! But nothing is sustainable. Youre playing the long game. You cant overhaul your entire life every January. You will burn out and feel frustrated. Youll feel like you failed when really, its your system that failed. Small steps are not a compromise. Theyre a sustainable life strategy. Make your system too easy to fail. Pick the smallest version of the thing you want. If the goal is to write, maybe you start with one sentence a day. Yes, one. Whats the point? The goal is not to overwhelm your brain. Convince yourself its too easy not to try. The more you practice, the greater the chance of it becoming a habit. Make it repeatable If you need willpower, its too big. Keep score. Tiny wins feel bigger when you can see them. Can you quantify your results? Show your wins to yourself. And let yourself feel proud. Seriously. Celebrate the tiny stuff. Your brain loves reward signals. Over time, your small steps evolve. You dont have to force it. Momentum does the heavy lifting. Kaizen doesnt just help you change. It changes how you see yourself. When you repeat every day, even in tiny ways, you stop seeing yourself as someone who tries. You start seeing yourself as someone who does. And that transformation is everything. Big change looks impressive, but small, consistent action builds identity. They build trust in yourself. They build a life that doesnt fall apart the minute motivation fades. If you want a change that can last in the next few months, something that sticks, try smaller. Way smaller. The path to significant change isnt broken resolutions. Its tiny, steady progress. Just pick an area of change. A tiny habit you can sustain. And start small. Pick one thing you are likely to do. Something that wont tell your brain its a big deal. Kaizen is the discipline of consistency. You dont need a new version of yourself to pursue things too overwhelming for your brain to sustain. What you need is just todays version, willing to take one small, almost silly step. Significant change is not an event you schedule. Its a practice. Youre not breaking yourself down to build something new. Youre just guiding yourself, kindly, in a better direction. Take that goal you are pursuing. Now, make it smaller. Smaller still. Until you think, Oh, I could do that right now. Then do it. And trust that tiny start with all your heart. Its the smartest, most human way forward youve got.
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