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I hope you all had a great weekend/eclipse/first moment of NYC sunshine. Today, I’ve got a look at Ted Cruz’s eyebrow-raising arrangement with iHeart and news on two new acquisitions. Let’s get into it.

iHeart doesn’t pay Ted Cruz for hosting Verdict. It pays a Ted Cruz super PAC.

This is certainly one way to raise campaign money. Sen. Ted Cruz hosts an iHeartMedia podcast, Verdict, which performs reasonably well among right-wing political shows. He does not get paid for hosting the podcast, but reporting in recent weeks from Forbes and the Houston Chronicle shows that iHeart has paid more than $630,000 to a super PAC that supports his campaign. For good reason, this has raised eyebrows, and now a campaign finance watchdog has filed a complaint with the Federal Elections Commission.

This is how the transaction works: Ted Cruz’s leadership PAC, Jobs, Freedom, and Security PAC, produces Verdict. The show is then distributed and monetized by Premiere Networks, a subsidiary of iHeartMedia. Then, according to Premiere Networks, iHeart pays money made from the show’s ads to Truth and Courage PAC, an independent political action committee that supports Cruz’s reelection. “Senator Cruz volunteers his time to host this podcast and isn’t compensated for it,” Rachel Nelson, spokesperson for Premiere Networks, said in a statement to Hot Pod last week.

This is technically true in that paying the money into Truth and Courage is not the same as paying Cruz directly. But he clearly sees a personal benefit, and the Campaign Legal Center argues that it crosses the legal line. “There is reason to believe Cruz has violated federal campaign finance laws that prohibit federal candidates and officeholders from soliciting or directing ‘soft money’ — including money from corporations, which are categorically prohibited from contributing to candidates — in connection with his 2024 reelection efforts,” the group’s complaint reads. Nelson did not respond to a request for comment on the filing.

Cruz’s camp denies any wrongdoing. “Senator Cruz appears on Verdict three times a week for free. He does this to pull back the veil on the corrupt inner workings of Washington — none of which ever get fairly covered,” campaign spokesperson Macarena Martinez told Hot Pod in a statement.

How the FEC rules could have big implications for how politicians are able to leverage podcasting for fundraising purposes. The typical election-cycle relationship between campaigns and the big radio companies is that those campaigns buy up a lot of spots in local markets — it’s a transaction that financially benefits the radio company. But the Cruz situation flips that relationship on its head. Cruz gets the publicity while also making ad money that then gets funneled, if not to his official campaign, then to entities that support it. It’s not clear how replicable this would even be — Cruz is a star who can command a national audience and get ad dollars — but it does set a troubling precedent for the politics-media dynamic.

Behold! Podcast M&A: The Roost acquired by Night, Sony buys Neon Hum

Not so much of this these days. We have not one but two acquisitions announced this week. The Roost, which is the podcasting arm of the recently shuttered Rooster Teeth, has been purchased by influencer talent agency Night. Neon Hum, which previously had Sony Music as an investor, has been bought outright by the music giant. Notably, both companies offer something other than original content.

The Roost, which handles ad sales and distribution for The H3 Podcast and The Kinda Funny Podcast as part of its network, is the last pillar left standing of Rooster Teeth. Rooster Teeth was shut down last month by parent company Warner Bros. Discovery. The agency that is buying it, Night, represents digital stars like MrBeast and Kai Cenat, so it seems like a fit. Plus, Night’s president, Ezra Cooperstein, served as the president of Rooster Teeth between 2018 and 2019. In buying The Roost, Night has acquired a podcasting infrastructure that could be extended to its valuable roster of clients.

With Neon Hum, Sony is also broadening its reach. In addition to originals like Smoke Screen, Neon Hum produced shows for clients like NBC News and HBO Max. As companies scale back on their own podcast units, they turn to production houses like Neon Hum to maintain a podcast presence. In a similar vein, Audacy laid off Pineapple Street Studio staffers who worked on original shows with an intention to focus more on client services.

So, yes: podcast companies can still be acquisition targets, but increasingly, it is the less sexy stuff that sells.

That’s all for today! I’ll be back on Thursday.