Should Penn’s Troubles Force a Rethink of University Leadership?

Rethinking university leadership

After weeks of criticism from alumni, donors and public officials — and disastrous testimony on Capitol Hill — Liz Magill stepped down as the University of Pennsylvania’s president on Saturday over her stance on combating antisemitism. Meanwhile, the heads of Harvard and M.I.T. remain under pressure, with some of their fiercest critics continuing to call for them to resign, too.

That has ignited a broader debate about how American universities are run, and raised a question: Should these institutions look outside of academia for their top leadership?

A recap: Magill resigned — followed shortly by Scott Bok, the chairman of Penn’s board of trustees — days after she gave evasive, legalistic answers to lawmakers on whether students advocating the genocide of Jews should be disciplined. Claudine Gay, the president of Harvard, faces similar pressure from alumni including the financier Bill Ackman, though she has also won support from faculty; the Harvard Corporation, a governing board that could oust her, is set to meet on Monday.

Modern universities may require different kinds of leadership. Traditionally, university presidents have been either academics or veteran school administrators: 83 percent of those leaders have had a doctorate, while just 1.4 percent had a master’s in business administration, according to the American Council for Education.

But colleges and universities are now multibillion-dollar enterprises, with Harvard’s endowment standing at $50 billion and Penn’s at $21 billion. Their presidents report to boards that are often stocked with prominent business executives, and they must frequently raise money from corporate leaders. They’re also increasingly expected to deftly navigate a politically charged environment.

Some institutions have done well with presidents from outside academia. Barry Mills (who in fairness holds a doctorate in biology) jumped from being a partner at the white-shoe law firm Debevoise & Plimpton to serving as a highly regarded president of Bowdoin College for 14 years.

Politicians have also won acclaim in the role. Examples include Mitch Daniels, the former Republican governor of Indiana who froze tuition fees for seven straight years as president of Purdue University, and John Brademas, a Democratic lawmaker from Indiana who helped transform N.Y.U. into a global powerhouse.

But such a move may draw a backlash, especially from longtime professors who place a high value on an independent academia. (Coming from business doesn’t guarantee success either: Simon Newman, a former financier, resigned as president of a Maryland college after reportedly comparing struggling freshmen to bunnies that should be drowned or shot.)

Charlie Eaton, the author of “Bankers in the Ivory Tower,” said that leaders with an academic background could protect schools from outside pressure. “There’s already so much pull towards doing what donors would want the university to do,” he told DealBook. “You need presidents who are academics to keep the university anchored in that project.”

HERE’S WHAT’S HAPPENING

Saudi Arabia is blocking efforts to limit fossil fuel use. The kingdom is pushing back against talks at the COP28 climate summit to call for phasing out hydrocarbons to halt global warming, The Times reports. Previous climate deals have shied from mentioning fossil fuels, but dynamics have shifted this year, which has been the hottest in recorded history.

Cigna pulls out of merger talks with Humana. The insurer abandoned efforts to create a $140 billion giant after shareholders reportedly reacted coolly to the proposed deal and the two sides failed to agree on a price. Cigna will instead focus on smaller acquisitions and stock buybacks.

Tucker Carlson is said to be starting his own streaming service. The former Fox News host will launch the Tucker Carlson Network with content including interviews, short-form videos and monologues, according to The Wall Street Journal. He’ll continue to post free content on X, where he began broadcasting in the spring. Separately, Elon Musk said that the conspiracy theorist Alex Jones would be allowed to return to X, five years after he was banned from the platform.

Donald Trump abruptly reverses course on testifying at his Manhattan civil fraud trial. The former president announced on Truth Social on Sunday that he wouldn’t return to the witness stand on Monday. Trump had been expected to continue defending himself against accusations that he had fraudulently inflated his net worth.

A Paramount sale may just be the start

Shari Redstone, the mogul who runs the parent company of Paramount Global, is finally considering a deal for her ailing media empire as she holds talks to sell control to the entertainment company Skydance. (Shares in Paramount are up 12 percent since Puck first reported the talks last week.)

But the bigger question isn’t just whether Redstone will sell or at what valuation. It’s what sort of deals would come after such a sale, as the media industry braces itself for a flurry of transformative M.&A., DealBook’s Michael de la Merced writes.

Redstone has been under pressure to do a deal for some time. National Amusements, which her family has run for decades, has already negotiated with creditors over its hefty debt load and taken an investment from BDT & MSD Partners with an eye toward a sale of some kind. (BDT & MSD is advising Redstone now.)

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

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

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

More consolidation is coming — but who will buy? Even a bulked-up Skydance-Paramount wouldn’t have the scale of a Netflix or a Disney, suggesting that it might need to be sold again.

But U.S. antitrust regulators remain wary of consolidation, potentially limiting the ability of, say, Comcast to buy another major studio. (That would most likely also extend to tech giants like Apple or Amazon.) Perhaps a merger with Warner Bros. Discovery could work, though that company also faces a huge debt load, and such a deal might still face tough scrutiny in Washington.

All of which is to say that even if Redstone sells, her buyer would face many of the same headaches.

The pro-A.I. philosophy on the rise

A philosophical divide within the artificial intelligence sector burst into the open last month after Sam Altman’s brief ouster from OpenAI. While the board members who fired him believe that the technology could lead to humanity’s doom, encapsulated by a school of thought known as Effective Altruism, another is increasingly coming to the fore.

Effective Accelerationism — or “e/acc” to adherents — posits that A.I. should advance as quickly as possible, without guardrails that might limit its progress. Kevin Roose, The Times’s tech columnist, explores its rise (and why some in Washington are worried about it):

The battle between the e/accs and the Effective Altruists is one of many quasi-religious schisms breaking out in San Francisco’s A.I. scene these days, as insiders argue about how quickly the technology is progressing, and what should be done about it.

E/acc prefers the all-gas, no-brakes approach. Its adherents favor open-sourcing A.I. software rather than having it be controlled by big corporations, and unlike Effective Altruists, they don’t see powerful A.I. as something to be feared or guarded against. They believe that A.I.’s benefits far outweigh its harms, and that the right thing to do with such important technology is to get out of the way and let it rip.

Some of those tenets have been embraced by Silicon Valley luminaries like the investors Marc Andreessen and Gerry Tan and by the seven-month-old Mistral, a French start-up that just raised $415 million at a $2 billion valuation.

“Having those characters not in the plot anymore is a really good thing. I’m focused and have been focused on: How do we make this useful for the world?”

— Jeremy Allaire, the C.E.O. of the crypto company Circle, on the power vacuum at the top of the crypto industry after the conviction of Sam Bankman-Fried of FTX and the guilty plea of Changpeng Zhao of Binance.

The week ahead

Central banks, including the Fed, and inflation data will be in the spotlight this week. Here’s what to watch.

Tomorrow: The Commerce Department is set to release its Consumer Price Index report for November. Economists have forecast that overall inflation will come in at 3.1 percent, down a tick from October. But they expect no such improvement with core inflation, which excludes food and energy prices.

Wednesday: It’s Fed decision day. The central bank is widely expected to hold firm on interest rates. But after last week’s hot jobs report, there will be plenty of attention paid to what Jay Powell, the Fed chair, has to say about what might happen with rates next year, as well as the health of the economy.

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

Thursday: It’s the European Central Bank and Bank of England’s turn; both central banks are expected to stand pat on rates.

In the U.S., retail sales data will deliver an update on the strength of consumer spending.

THE SPEED READ

Deals

Policy

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

• Big donors including Shonda Rhimes and Steven Spielberg showed up for President Biden’s fund-raising trip to Hollywood over the weekend. (NYT)

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