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Who should run universities?

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After weeks of criticism from alumni, donors and government officials — and disastrous testimony on Capitol Hill — Liz Magill resigned as president of the University of Pennsylvania on Saturday over her stance on combating anti-Semitism. Meanwhile, the heads of Harvard and MIT remain under pressure, while some of their fiercest critics also continue to call for them to resign.

That has sparked a broader debate about the way American universities are governed, and raised the question: Should these institutions look outside academia for their top leadership?

A summary: Magill resigned — followed shortly by Scott Bok, the chairman of Penn’s board of trustees — days after she gave evasive, legalistic answers to lawmakers about whether students who advocate the genocide of Jews should be disciplined. Claudine Gay, Harvard’s president, is facing similar pressure from alumni, including the financier Bill Ackman, although she has also received support from the faculty; The Harvard Corporation, a board of directors that could oust her, meets Monday.

Modern universities may require different types of leadership. Traditionally, university presidents have been academics or experienced school administrators: 83 percent of these leaders have earned a doctorate, while only 1.4 percent had a master’s degree in business administration, according to the American Council of Education.

But colleges and universities are now billion-dollar businesses, with Harvard’s endowment at $50 billion and Penn’s at $21 billion. Their presidents report to boards of directors that are often filled with prominent business executives, and they must regularly raise money from business leaders. They are also increasingly expected to deftly navigate a politically charged environment.

Some institutions have done well with presidents from outside academia. Barry Mills (who, to be fair, has a PhD in biology) went from being a partner at the law firm of Debevoise & Plimpton to serving as a highly regarded president of Bowdoin College for fourteen years.

Politicians have also received high praise in the role. Examples include Mitch Danielsthe former Republican governor of Indiana who froze tuition for seven years as president of Purdue University, and John Brademas, a Democratic lawmaker from Indiana who helped transform NYU into a global powerhouse.

But such a move could cause a backlash, especially from old professors who attach great importance to an independent academic world. (Coming from a business background is no guarantee of success either: Simon Newman, a former financier, resigned as president of a Maryland university after allegedly comparing struggling freshmen to bunnies to be drowned or shot.)

Charlie Eaton, the author of “Bankers in the Ivory Tower,” said leaders with academic backgrounds can protect schools from outside pressure. “There is already so much appeal to doing what donors want the university to do,” he told DealBook. “You need presidents who are academics to keep the university anchored in that project.”

Saudi Arabia is blocking efforts to limit the use of fossil fuels. The kingdom is opposing talks at the COP28 climate summit to call for a phase-out of hydrocarbons to halt global warming, The Times reports. Previous climate agreements have shied away from mentioning fossil fuels, but the dynamics have changed this year, which was the hottest in history.

Cigna withdraws from merger talks with Humana. The insurer abandoned efforts to create a $140 billion giant after shareholders reportedly reacted coldly to the proposed deal and the two sides could not agree on a price. Cigna will instead focus on smaller acquisitions and share buybacks.

Tucker Carlson would start his own streaming service. The former Fox News host will host the Tucker Carlson Network with content such as interviews, short videos and monologues, according to The Wall Street Journal. He will continue posting free content on X, where he started broadcasting in the spring. Separately, Elon Musk said conspiracy theorist Alex Jones would be allowed to return to X, five years after he was banned from the platform.

Donald Trump abruptly changes course as he testifies in his civil fraud case in Manhattan. The former president announced on Truth Social on Sunday that he would not return to the witness stand on Monday. Trump was expected to continue defending himself against allegations that he fraudulently inflated his wealth.

Shari Redstone, the mogul who runs Paramount Global’s parent company, is finally considering a deal for her ailing media empire as she engages in talks to sell control to entertainment company Skydance. (Shares in Paramount have risen 12 percent since then Puck was the first to report on the conversations last week.)

But the bigger question isn’t just whether Redstone will sell or at what valuation. It’s what kind of deals would come after such a sale, as the media industry braces for a wave of transformative mergers and acquisitions, writes DealBook’s Michael de la Merced.

Redstone has been under pressure to make a deal for some time. National Amusements, which her family has run for decades, already does that negotiated with creditors about his heavy debt burden and took a investment from BDT & MSD Partners with a view to some kind of sale. (BDT & MSD now advises Redstone.)

The fundamental problem is that Paramount, which runs its eponymous studios and TV networks like CBS and MTV, is considered too small to succeed. While it has valuable properties like the “Mission: Impossible” franchise, it has far less money and content to compete in the money-losing streaming wars against companies like Netflix, Disney and Comcast’s NBCUniversal.

Skydance may only be interested in parts of Paramount Global, especially the legendary Hollywood studio. Skydance, which is backed by media investment firm RedBird Capital Partners, is already a partner with Paramount on the “Mission: Impossible” films.

That raises questions about who might buy the television networks, which have been hit by declining ad sales and viewer “cutting the cord” but still generate significant fees from cable providers that carry those channels. Private equity firms eager to milk these declining revenues, perhaps including RedBird, could be the answer.

More consolidation is coming, but who will buy? Even a large Skydance-Paramount wouldn’t be the size of a Netflix or a Disney, suggesting it may need to be sold again.

But U.S. antitrust regulators remain wary of consolidation, potentially limiting the ability of the likes of Comcast to buy another major studio. (That would most likely extend to tech giants like Apple or Amazon.) Perhaps a merger with Warner Bros. Discovery could work, although that company is also struggling with a huge debt burden and such a deal would still be heavily scrutinized in Washington.

All of this is to say that even if Redstone sells, its buyer would face many of the same issues.

A philosophical divide within the artificial intelligence industry came to light last month after Sam Altman was briefly kicked out of OpenAI. While the board members who fired him believe the technology could lead to the downfall of humanity, encapsulated in a school of thought known as Effective Altruism, another is increasingly coming to the fore.

Effective Accelerationism – or “e/acc” to proponents – argues that AI should progress as quickly as possible, without guardrails that could limit its progress. Kevin Roose, The Times’ tech columnist, explores its rise (and why some in Washington are concerned about it):

The battle between the e/accs and the Effective Altruists is one of many quasi-religious schisms erupting in San Francisco’s AI scene today, as insiders debate how quickly the technology is developing, and what should be done about it.

E/acc prefers the full throttle and brake approach. Its proponents prefer open source AI software rather than being controlled by big corporations, and unlike Effective Altruists, they don’t see powerful AI as something we should fear or guard against. They believe that the benefits of AI far outweigh its drawbacks, and that the right thing to do with such an important technology is to get out of the way and let it rip.

Some of these principles have been embraced by Silicon Valley celebrities like investors Marc Andreessen and Gerry Tan, and by seven-month-old Mistral, a French startup that just raised $415 million at a $2 billion valuation.

– Jeremy Allaire, the CEO of the crypto company Circle, on the power vacuum at the top of the crypto industry following the conviction of FTX’s Sam Bankman-Fried and the guilty plea of ​​Binance’s Changpeng Zhao.

Central banks, including the Fed, and inflation figures will be in the spotlight this week. Here’s what you need to check out.

Tomorrow: The Commerce Department is expected to release its Consumer Price Index report for November. Economists have made predictions that overall inflation will amount to 3.1 percent, a decrease compared to October. But they do not expect such an improvement when it comes to core inflation, which excludes food and energy prices.

Wednesday: Are Fed decision day. The central bank is widely expected to remain firm on interest rates. But after last week’s hot jobs report, plenty of attention will be paid to what Fed Chairman Jay Powell has to say about what could happen to rates next year, and about the health of the economy .

Elsewhere, Adobe and Inditex, the parent company of Spanish clothing chain Zara, will report quarterly results.

Thursday: It is the turn of the European Central Bank and the Bank of England; Both central banks are expected to maintain interest rates.

In the US, retail sales data will provide an update on the strength of consumer spending.

Offers

Policy

  • The Biden administration will give BAE Systems, the British defense contractor, the first federal grant under the CHIPS and Science Act to boost domestic semiconductor production. (NYT)

  • Major donors including Shonda Rhimes and Steven Spielberg showed up for President Biden’s fundraising trip to Hollywood this weekend. (NYT)

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