Hannity v. Kelly; divide inside Fox News; Jesse Watters controversy; Disney not bidding for Twitter; #VPDebate ratings; two big Netflix stories

By Brian Stelter & the CNNMoney Media team
Hannity v. Kelly
Megyn Kelly was right. 

Here's what she said on Wednesday's "Kelly File:" "Donald Trump, with all due respect to my friend at 10, will go on Hannity, and pretty much only Hannity, and will not venture out to the unsafe spaces these days, which doesn't exactly expand the tent." That's true. Lots of us have written and talked about how Trump has been sheltering himself by choosing friendly Fox interviewers and shunning other TV requests.

But Sean Hannity was apparently outraged. He tweeted at Kelly: "u should be mad at @HillaryClinton. Clearly you support her. @realDonaldTrump did talk to u."

And with that, a new cable news feud was born. Kelly chose not to reply. And Fox chose not to comment for now. Read more...
What they're thinking...
From Kelly's POV: She didn't attack Hannity. She was just stating the obvious. She can't ignore Hannity's unusual and uncomfortable role in this election. And she wants both Trump and Clinton to be more accessible to journalists...

From Hannity's POV: He's proud that his program is a gathering place for Trump and Trump's supporters. And he's proud of his recent ratings gains, too. If Kelly's going to come at him, of course he's going to respond... And lots of his viewers already think Kelly is anti-Trump...

From Fox News co-president Bill Shine's POV: [[Expletives deleted]]
My two cents
What this really shows… Is that there's a divide within Fox News. There has been for years. Kelly, a take-no-prisoners journalist, and Hannity, a devoted conservative commentator, embody two co-existing but competitive versions of Fox. It's good for business to have both. But Trump has enflamed things. Here's my full story...
Hannity must have missed this part of what Kelly said
During the aforementioned segment, Kelly also called out Clinton for limiting TV interviews. Kelly specifically mentioned an old Clinton appearance on "The Steve Harvey Show" that was partly scripted by the daytime talk show's producers. The Washington Free Beacon obtained a memo about the interview prep work and published the highlights on Wednesday...
3 things you should know
 — Kelly and Hannity have had a cordial relationship in the past…
 — When I asked Hannity to elaborate on his tweet to Kelly, he replied with a blank email...
 — Kelly's contract is due to expire in mid-2017 and Fox's owners, the Murdochs, are keen to keep her at the network. Hannity's contract extends through 2020...
Jesse Watters' "regret"
Until Wednesday night, this was the day's big Fox controversy: A segment by on-the-street interviewer Jesse Watters was widely criticized for containing offensive Asian stereotypes. It aired on "The O'Reilly Factor" Monday night and went "viral" on Wednesday morning. Some commenters called the segment "blatant" and "unabashedly racist." Dylan Byers has the full story + reaction here... 

Watters sorta-but-not-really-apologized by tweeting, "As a political humorist, the Chinatown segment was intended to be a light piece, as all Watters World segments are... My man-on-the-street interviews are meant to be taken as tongue-in-cheek and I regret if anyone found offense." No comment from Fox...
AAJA demands an apology from Fox
On Wednesday night the Asian American Journalists Association issued this statement: AAJA is "outraged and shocked..." The segment was "rife with racist stereotypes, drew on thoughtless tropes and openly ridiculed Asian Americans..." Watters "committed a litany of offenses..." AAJA "demands an apology from Fox News to our community and a meeting with the show's producers to understand how this segment was conceived and greenlit to air. More importantly, we want an explanation for how this type of coverage will be prevented in the future..."
Disney doesn't want Twitter
And then there was... Salesforce? On Wednesday afternoon Kara Swisher and Kurt Wagner reported that Google will not be bidding for Twitter. A few hours later Peter Kafka reported that "Disney isn't pursuing a bid for the social platform, either." (Recode, for the win!)

While Disney was "mulling a possible Twitter purchase last week," it has "decided not to move forward," per Kafka's unimpeachable sources. "For now, that leaves Salesforce as the only potential buyer for Twitter, though the company has never confirmed publicly that it wants to make a deal..."
 -- More: According to Reuters, "Twitter has told potential acquirers that it is seeking to conclude talks about selling itself by Oct. 27," the day it reports quarterly earnings...
The Atlantic disendorses Trump
Dylan Byers emails: Driven by its staunch opposition to Trump, The Atlantic has endorsed Clinton for president -- the third time in the magazine's 160-year history that it has made a presidential endorsement. "The Atlantic does not have a tradition of weighing in on presidential contests except when there is perceived to be a danger to the Republic," Jeffrey Goldberg, who wrote the first draft of the endorsement, told me...

 -- Jay Rosen tweets: "Endorsements probably don't move voters. The news is that journalists are finally recognizing a unique threat..."
Quote of the day
"I wanted to disengage ... but I can't. On my iPhone I have a an actual icon that can give me the latest polling results for everything, and I'm checking it three or four times a day, as a way to sort of, kind of comfort myself."

--Andrew Sullivan, talking with Jeremy Hobson about being "terrified" by this election...
HLN party in NYC
HLN had a NYC shindig Wednesday night to highlight the five women now hosting the channel's newscasts: Robin Meade, Michaela Pereira, Erica Hill (starting Oct. 10), Ashleigh Banfield (starting Oct. 17), and Lynn Smith. Also spotted: Ken Jautz, Keith Brown, Robin Garfield, Rick Davis, Kerry O'Connor-Aouad, Alex Weprin, Stephanie Todd, Alison Rudnick, Tim Mallon, Brian Steinberg, Stephen Battaglio, Chris Ariens, Brian Flood, A.J. Katz, Scott Warren, and many more...
For the record, part one
 -- ICYMI: Vanity Fair's 2016 New Establishment List is out... Jeff Bezos is #1... (VF)
 -- What will the anchor-free "Vice News Tonight" on HBO look like? Lloyd Grove has an interview with Josh Tyrangiel here... (The Daily Beast)
 -- LinkedIn exec editor Daniel Roth interviews NBC Entertainment boss Bob Greenblatt about disruption and reinvention... (LinkedIn)
 -- While the Tronc deal is percolating, Gannett is acquiring something else: Golfweek magazine... (Press release)
 -- A breach at BuzzFeed: Several news articles "were altered after the site published an article" about a hacker's alleged identity... (Politico)
About that debate...
Elaine!
There was criticism of #VPDebate moderator Elaine Quijano from many corners on Tuesday night and into Wednesday. "The questions lacked focus. The conversation meandered. The men spoke past one another. And the moderator intervened in very mysterious ways," Dylan Byers wrote right afterward.

Brian Lowry said she "commendably prodded the candidates to actually answer questions that Mike Pence, in particular, avoided," but it felt "as if she was too committed to working through her lineup of questions."

As both Byers and Lowry noted, this was partly due to the format chosen by the commission and supported by the campaigns. "But her performance served as a reminder that debates are not scripted events, and they require moderators who can be fluid and adapt to the direction the candidates choose to take the discussion," Byers wrote...

 -- The countervailing view from a CBSer: There were no mistakes, no gaffes by Quijano... She "rose to the occasion" even though Tim Kaine and, to a lesser degree, Pence tried to take over...
Lowest overall #'s since 2000
About 37.2 million people tuned in to the nine TV channels that carried the debate live, according to Nielsen -- the lowest # for a VP debate since 2000. Here's how it stacks up:
2016 - 37.2 mil
2012 - 51.4 mil
2008 - 69.9 mil <-- Sarah Palin
2004 - 43.5 mil
2000 - 28.5 mil
1996 - 26.6 mil
1992 - 51.2 mil 
Some factoids
 -- Last night's # is still higher than this year's Academy Awards... 
 -- Some nets saw a drop-off in the 10 p.m. hour, suggesting some viewers were turned off by the back-and-forth between Kaine and Pence...
 -- NBC had the biggest audience, with about 7 million viewers; CBS was second with 6.5 million...
 -- "NCIS," on CBS at 8pm, had 14 million viewers... Fewer than half stuck around for the debate... 
 -- CNN topped Fox News and MSNBC in the 25-54 demo...
 -- The audience skewed older, with only 3.4 million of the 37.1 million viewers coming from the 18- to 34-year-old demographic -- the millennials Clinton and Kaine are courting...
 -- The concurrent viewership on YouTube was just a fraction of what it was for Trump-Clinton last week...
In fairness...
The two running mates weren't as well known as past V.P. contenders like Joe Biden. This may have dampened overall interest in the debate. And there's this, by BI's Oliver Darcy: "VP debate proved viewers don't care about policy — they want a reality-TV show..."
Today in saucy but accurate chyrons
Spotted on "The Lead" on Wednesday afternoon...
Now on to Sunday!
"Reliable Sources" (and dozens of other newscasts) will be live from St. Louis this weekend...
ICYMI: Anderson Cooper renews with CNN
Anderson Cooper, in effect, chose CNN over "Live with Kelly." He struck a new "long term" deal with CNN, two sources with knowledge of the matter said Tuesday night. (I filed this story after Tuesday's newsletter came out.) The new deal, first reported by THR's Marisa Guthrie, includes a carve-out for Cooper's work on the CBS newsmagazine "60 Minutes" but precludes the talk show possibility. On the ABC/Kelly Ripa side, "the process was very open" and Cooper was "an honest broker," a source says...
"The Media and Malia"
"The Media and Malia" is Jessica Testa's latest for BuzzFeed. She writes about the "hands-off attitude" toward Malia Obama and how that may be changing now that she is 18 years old. "The East Wing simply refuses to talk to the press when it comes to the Obama daughters. 'The East Wing has become really a closed shop,' said Kate Andersen Brower, who reported on Obama's first term for Bloomberg News and has written two books about life inside the East Wing. Questions about the first lady or her children, even 'verification on something very simple,' go unanswered, Brower said…" More from Brower: "I think White House reporters consider it the third rail to do much reporting on the Obama daughters. It's understood that they're given their space…"
Is Shanghai Disney's magic wearing off already?
CNNMoney's Jethro Mullen reports: Disney's biggest ever foreign investment is having a tough time living up to some analysts' expectations. The $5.5 billion Shanghai resort hasn't been a blockbuster hit with China's cost-conscious consumers. There's concern about attendance #'s, but Disney says the speculation is "meritless..." Read more here...
For the record, part two
 -- Bloomberg's Scott Moritz has a must-read about AT&T's "video ambitions" and possible media acquisitions... (Bloomberg)
 -- Bela Bajaria, the former Universal Television chief, has joined Netflix as vice president of content. "Bajaria will lead Netflix's TV-and film-licensing efforts as well as co-productions with U.S. networks. She will also be responsible for developing original unscripted..." (Variety)
 -- Chloe Melas emails: Love is in the air. Laura Prepon and Ben Foster debuted their relationship and their engagement Tuesday night at The Girl On The Train premiere. Fans had no clue they were even dating. Mazel to the happy couple! (CNN)
 -- Lisa France emails: Tori Spelling is pregnant with baby No. 5. I smell another possible reality show... (CNN)
 -- More from Lisa: Demi Lovato is so serious about her down time. The singer is taking 2017 off... (CNN)
 -- Netflix has signed a deal "with luxury theater-chain iPic Entertainment to simultaneously screen its original movies in theaters the same day that they appear on the streaming service, the latest deal to expand Netflix's theatrical ambitions..." (WSJ)

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