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XActivision Shareholders, Over 500 Employees Call for CEO Bobby Kotick's Resignation
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
A group of activist shareholders is calling for Activision Blizzard's chief executive Bobby Kotick to resign after accusations surfaced that he concealed alleged sexual harassment and rapes at the company.
Washington, D.C.-based SOC Investment Group (formerly known as CtW Investment Group), wrote a letter to the Activision Blizzard board of directors on Wednesday demanding Kotick exit the company immediately.
"After the new revelations, it's clear that the current leadership repeatedly failed to uphold a safe workplace — a basic function of their job. Activision Blizzard needs a new CEO, board chair, and lead independent director with the expertise, skill set and conviction to truly change the company's culture," said SOC Investment Group executive director Dieter Waizenegger.
"Activision has become a case study for how disregard for workers' wellbeing and human capital management can put company performance at risk."
Activision didn't immediately respond to dot.LA's request for comment.
SOC is the investing arm of the Strategic Organizing Commission, a group of unions that represent over four million workers with investments over $250 billion.
Last month an outcry from investors at SOC prompted CitiBank to agree to an audit of how it may contribute to discrimination and to announce it would commit $1 billion to organizations working to close the racial wealth gap. SOC is also an outspoken investor in newly public electric vehicle firm Rivian and Electronic Arts.
The demand comes in response to a Wall Street Journal report that Kotick knew of alleged sexual harassment and rapes that took place at the company three years ago but failed to discipline any culpable employees or inform the board of directors.
Kwame Bell, a spokesperson for SOC Investment Group, said it owns 3.8 million shares in Activision.
The group also advised Activision's board Chairman Brian Kelly and Robert Morgado, the board's lead independent director, to resign by Dec. 31, "in order to ensure that the board has leadership capable of leading this effort" to reform Activision's company culture.
Read the four-page letter in its entirety here.
Waizenneger added that the growing number of employees reporting harassment or assault — reports Activision admitted in an October letter to employees are increasingly frequent — are proof of "leadership failures and lack of board oversight."
Activision employees have been organizing under the moniker A Better ABK (ABK being a shortened version of the game publishers' three divisions, Activision, Blizzard and King) and this morning circulated a petition demanding Kotick's removal that gained over 500 signatures from current workers and contractors.
The group has been a vocal critic of Activision for awhile now, and has written similar missives to them urging the board of directors to stop giving Kotick bloated performance-based bonuses.
SOC also wrote Activision in August calling for Morgado to step down and be replaced by a woman or woman of color by the end of this year, and urging the mostly male board to commit to gender balance on the board by 2025.
"We call on Mr. Kotick to resign as CEO of the company, and on the board of directors to take responsibility for failing to recognize and address what the California Department of Fair Employment and Housing has described as a 'frat boy' workplace culture to flourish," SOC Investment Group wrote in the letter.
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Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
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Mother Blames TikTok For Daughter’s Death in ‘Blackout Challenge’ Suit
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
The mother of a 10-year-old girl who died after allegedly trying a dangerous online “challenge” has sued Culver City-based TikTok and its Chinese parent company ByteDance, claiming the social media app’s algorithm showed her videos of people choking themselves until they pass out.
Nylah Anderson, an intelligent child who already spoke three languages, was “excruciatingly asphyxiated” and found unconscious in her bedroom on Dec. 7, according to a complaint filed Thursday in federal court in Pennsylvania. She spent five days in pediatric intensive care until succumbing to her injuries.
The lawsuit, filed by her mother Tawainna Anderson, claims TikTok’s algorithm had previously shown Nylah videos depicting the “Blackout Challenge,” in which people hold their breath or choke themselves with household items to achieve a euphoric feeling. That encouraged her to try it herself, the lawsuit alleged.
“The TikTok Defendants’ algorithm determined that the deadly Blackout Challenge was well-tailored and likely to be of interest to 10-year-old Nylah Anderson, and she died as a result,” the suit said.
In a previous statement about Nylah’s death, a TikTok spokesperson noted the “disturbing” challenge predates TikTok, pointing to a 2008 warning from the Centers for Disease Control and Prevention about deadly choking games. The spokesperson claimed the challenge “has never been a TikTok trend.” The app currently doesn’t produce any search results for “Blackout Challenge” or a related hashtag.
“We remain vigilant in our commitment to user safety and would immediately remove related content if found,” the TikTok statement said. “Our deepest sympathies go out to the family for their tragic loss.”
At least four other children or teens have died after allegedly attempting the Blackout Challenge, according to the Anderson lawsuit. TikTok has grappled with dangerous challenges on its platform before, including one in which people tried to climb a stack of milk crates. That was considered so dangerous that TikTok banned the hashtag associated with it last year. In February, TikTok updated its content rules to combat the dangerous acts and other harmful content.
The Anderson lawsuit comes as lawmakers and state attorneys general scrutinize how TikTok and other social media can be bad for teens and younger users, including by damaging their mental health, causing negative feelings about their body image and making them addicted to the apps.
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Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Netflix's New Culture Memo Addresses Censorship and Corporate Secrecy
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Netflix promised change after its poor first-quarter earnings. One of the first targets: the Netflix Culture document.
The changes, which Variety reported on Thursday, indicate a new focus on fiscal responsibility and concern about censorship. While promises to support honest feedback and open decision-making remain, the memo’s first update in almost five years reveals that the days of lax spending are over. The newly added “artistic expression” section emphasizes Netflix’s refusal to censor its work and implores employees to support the platform’s content.
The “artistic expression” section states that the company will not “censor specific artists or voices” and specifies that employees may have to work on content “they perceive to be harmful.” The memo points to ratings, content warnings and parental controls as ways for users to determine what is appropriate content.
Censorship has been a contentious issue within Netflix. Last year, employees walked out in protest after the company stood by comedian Dave Chappelle’s special, “The Closer,” which many said was transphobic. The streaming service has since announced four more specials from the comedian, who was attacked on stage at Netflix’s first comedy festival. The show will not air on the platform, as Netflix did not tape the event.
The reaction to Chappelle’s 2021 special ripples further in the updated memo. After firing an employee who leaked how much the company paid for the special, the new “ethical expectations” section directs employees to protect company information.
The memo also reflects pressure borught by poor first-quarter earnings. Employees are now instructed to “spend our members’ money wisely,” and Variety reported that earlier passages that indicated a lack of spending limits were cut. Variety also found that the updated memo removed promises that the company would not make employees take pay cuts in the face of Netflix’s own financial struggles.
These updates come as employee morale has reportedly dropped and editorial staffers at the Netflix website TuDum were laid off en masse. Those employees were offered two weeks of severance pay—and Netflix has now cut a section in the memo promising four months of full pay as severance.
As the company that literally wrote the book on corporate culture faces internal struggles, it's unlikely that making employees take on more responsibility while prioritizing corporate secrecy and discouraging content criticism will improve morale.
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
‘Raises’: Mahmee Secures $9.2M, Wave Financial Launches $60M Fund
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
Venture Capital
Mahmee, an integrated care delivery platform for maternal and infant health that connects patients, health professionals, and healthcare organizations to increase access to prenatal and postpartum care, raised a $9.2 million Series A funding round led by Goldman Sachs.
FutureProof Technologies, a climate risk analytics platform, raised $6.5 million in capital led by AXIS Digital Ventures along with Innovation Endeavors and MS&AD Ventures.
Anja Health, a doctor-backed cord blood banking company, raised $4.5 million led by Alexis Ohanian's Seven Seven Six.
Funds
Wave Financial LLC, a digital asset investment management company, is launching a $60 million fund to deploy capital via cryptocurrency.
Raises is dot.LA’s weekly feature highlighting venture capital funding news across Southern California’s tech and startup ecosystem. Please send fundraising news to Decerry Donato (decerrydonato@dot.la).
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.