WEBVTT - Telstra jacks up prices | Saks 5th Avenue x Amazon acquisition | Paramount's mega-merger

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<v Speaker 1>This is what the flux I'm brad, I'm justin and

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<v Speaker 1>it's Wednesday, the tenth of July.

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<v Speaker 2>The way we spoke about Nine Entertainments and major staff

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<v Speaker 2>cuts the other week, but now it's cut even deeper.

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<v Speaker 2>Nine has announced that it's restructuring its pedestrian business, meaning

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<v Speaker 2>brands like Vice, Refinery, twenty nine, giz Modo Live Hack App.

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<v Speaker 2>It will all be cut in the coming month.

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<v Speaker 1>Of yikes, there is serious paine out there be man

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<v Speaker 1>in good news though, Flex out. This is the final

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<v Speaker 2>Access three bargain basement price stories today. Juzzy boy, let's

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<v Speaker 2>do it for our first. Telstra will be jacking up

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<v Speaker 2>the prices of its mobile phone plans by more than

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<v Speaker 2>the inflation rate as part of its plans to grow faster.

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<v Speaker 1>Telstra making some serious moves lately. So what is going

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<v Speaker 1>on here? Well, juzzy Boy.

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<v Speaker 2>Telstra is the largest mobile network operator in Australia with

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<v Speaker 2>over twenty two and a half million or retail mobile services,

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<v Speaker 2>nearly one.

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<v Speaker 1>Mobile service for every single autult teen and infants in

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<v Speaker 1>the whole of Australia.

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<v Speaker 2>You might remember back in May, Telstra announced that it

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<v Speaker 2>would completely restructure its business, including cutting up to twenty.

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<v Speaker 1>Eight hundred jobs by the end of this year.

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<v Speaker 2>Now, over the past two years, juzzy Boy Telstra has

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<v Speaker 2>been increasing its mobile phone plans in line with inflation.

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<v Speaker 1>But be man, during that big announcement in May, they

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<v Speaker 1>warned that increasing prices with inflation was a thing of

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<v Speaker 1>the past. I really wanted flexibility, you meaning like two

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<v Speaker 1>months later, because now Telstra's announced its mobile phone plans

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<v Speaker 1>will increase by four to five percent at a minimum,

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<v Speaker 1>and that's across its og Telstra brand, but also its

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<v Speaker 1>cheaper brand Boost and b Man. Well, customers weren't quite

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<v Speaker 1>doing the happy dands. Investors most certainly were.

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<v Speaker 2>Telstra shares jump two and a half percent to their

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<v Speaker 2>highest level since April.

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<v Speaker 1>So what is the key learning here?

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<v Speaker 2>When you're looking to grow your profit, there are only

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<v Speaker 2>a couple of levers that can make a big difference

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<v Speaker 2>to a company.

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<v Speaker 1>On the one hand, a company can look to reduce

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<v Speaker 1>their costs.

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<v Speaker 2>Like what Telster has done with their major job cuts.

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<v Speaker 1>And their cuts to product offerings and cuts to offer

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<v Speaker 1>space that the man. If that doesn't get you to

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<v Speaker 1>the required profit and profit margin, then you need to

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<v Speaker 1>start making moves on the revenue side.

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<v Speaker 2>Too, which is why Telstra is increasing the prices on

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<v Speaker 2>its mobile phone plans by more than inflation.

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<v Speaker 1>And the man. Sadly for US consumers, Telstra aren't the

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<v Speaker 1>only ones doing this now.

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<v Speaker 2>Votaphone increased prices by between six and nine percent back

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<v Speaker 2>in January, and Optics raised prices for new customers by

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<v Speaker 2>five to six percent in May as well. For our

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<v Speaker 2>second story, Sacks fifth Avenues parent company has acquired a

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<v Speaker 2>luxury or retailer name and Marcus for two point six

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<v Speaker 2>five billion US dollars. And if you don't mind, Amazon

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<v Speaker 2>and Salesforce are taking a slice too.

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<v Speaker 1>Geez, Jeffy Bee really leaning into his fashionable slash ripped

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<v Speaker 1>ear at the moment. So what is going on here,

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<v Speaker 1>jose boy?

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<v Speaker 2>If you know anything about fashion, and I mean anything,

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<v Speaker 2>it's likely that you know Sacks Fifth Avenue.

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<v Speaker 1>I do, thankfully. It's the luxury department store that's feed

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<v Speaker 1>you're on Gossip Girl and Sex in the City, and

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<v Speaker 1>Will and Grace and Friends, and the list goes on.

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<v Speaker 2>The original store opened in eighteen sixty seven, if you

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<v Speaker 2>don't mind, and it's grown into forty two different locations,

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<v Speaker 2>including the USA.

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<v Speaker 1>You expect that.

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<v Speaker 2>Canada, you'd expect that too, And get this. Couzak'stan and b.

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<v Speaker 1>Man Name and Marcus is another luxury department store that

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<v Speaker 1>actually went bankrupt during the pandemic. It was saved by investors.

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<v Speaker 2>It always kind of made sense for these bitter rivals

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<v Speaker 2>to join forces, and now it's become reality.

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<v Speaker 1>Yep, SAX Fifth Avenue's parent company has a Quiet Name

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<v Speaker 1>and Marcus for two point sixty five billion US dollars.

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<v Speaker 2>But here's the kicker, you know, just Sax's parent investing

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<v Speaker 2>in Name and Marks.

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<v Speaker 1>No, no, no no, You've always got Amazon throwing some

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<v Speaker 1>cash in Salesforce also tipping some cash into this deal

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<v Speaker 1>as well.

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<v Speaker 2>Fascinating stuff. Josey Boyce, I'm wondering what is the key

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<v Speaker 2>learning here.

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<v Speaker 1>There's a difference between being a luxury goods department store

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<v Speaker 1>and a luxury goods.

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<v Speaker 2>Retailer objectively luxury goods. It's a great industry because of

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<v Speaker 2>its ridiculously high margin.

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<v Speaker 1>For example, LVMH, the company behind Louis Bitton and Dior

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<v Speaker 1>and Fendi and many more. They have gross margins of

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<v Speaker 1>nearly seventy percent.

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<v Speaker 2>It does avoid. The challenge is that when consumer spending

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<v Speaker 2>is down, the whole industry takes.

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<v Speaker 1>A major hit, including department stores.

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<v Speaker 2>You've got online luxury retailer far Fetch that was sold

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<v Speaker 2>for a fraction of what it was previously worth because

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<v Speaker 2>it required emergency funding.

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<v Speaker 1>You've got Matches that were sold and then put into

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<v Speaker 1>administration just three months later.

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<v Speaker 2>And you've got many physical department stores also shutting down

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<v Speaker 2>locations at.

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<v Speaker 1>The same time dmat. It just so happens that Amazon's

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<v Speaker 1>been working hard to expand into luxury fashion over the

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<v Speaker 1>past few years.

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<v Speaker 2>But hasn't yet really cracked this market.

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<v Speaker 1>So this investment gives us on access to luxury products,

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<v Speaker 1>physical department stores, and juicy data that desperately need.

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<v Speaker 2>For our third and final story, Paramount Global, one of

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<v Speaker 2>Hollywood's oldest studios, and Skydwan's Media have agreed to merge,

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<v Speaker 2>forming a twenty eight billion US dollar company.

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<v Speaker 1>Match made in Hollywood Heaven, rsay. So what is the

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<v Speaker 1>story here?

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<v Speaker 2>Well, Paramount is the global film studio and TV production

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<v Speaker 2>company that's been around for almost as long as Hollywood has,

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<v Speaker 2>dating back to nineteen twelve, and it's.

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<v Speaker 1>Given us some classics like Titanic, Godfather, like Breakfast at

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<v Speaker 1>Tiffany's Seeing.

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<v Speaker 2>That One, anything more recent Juzzy Boy, don't forget the

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<v Speaker 2>most classic of all, the Shrek series. Now, Paramount was

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<v Speaker 2>put on the selling block earlier this year, with many

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<v Speaker 2>companies circling from Warner Brothers to Comcast and even Warren Buffett,

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<v Speaker 2>but now be man.

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<v Speaker 1>Paramounts announced it will merge with an independent film studio

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<v Speaker 1>called sky Dance in a deal that will create a

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<v Speaker 1>twenty eight billion US dollar company.

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<v Speaker 2>The deal is twofold, as they say, d the Boy

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<v Speaker 2>First Guidance will acquire the controlling stake in Paramount for

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<v Speaker 2>two point four billion US dollar's care.

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<v Speaker 1>Then Skydans will merge with Paramount. Now.

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<v Speaker 2>Skydance has been trying to get this deal over the

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<v Speaker 2>line for a while now, and it seems like they

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<v Speaker 2>finally managed.

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<v Speaker 1>To do it yep, allegedly by sweetening Paramount's controlling owner's payout,

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<v Speaker 1>and this challenge has been all thanks to multi class shares.

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<v Speaker 1>So what is the key learning here?

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<v Speaker 2>When it comes to company shares, not all shares are

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<v Speaker 2>created equal seeb Man.

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<v Speaker 1>When company's issue shares, they often divide them into multiple

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<v Speaker 1>classes with different rights.

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<v Speaker 2>They can do this to give people like founders or

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<v Speaker 2>executives more voting power than ordinary shareholders.

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<v Speaker 1>And therefore more control over the company's direction.

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<v Speaker 2>Now, in Paramount's case, the Redstone family was the controlling owner,

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<v Speaker 2>and while they.

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<v Speaker 1>Owned only five percent of Paramount stock, they controlled seventy

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<v Speaker 1>seven percent if it's votes.

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<v Speaker 2>So when it comes to accepting a deal, despite being

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<v Speaker 2>a public company, Paramount's controlling owner holds a lot of

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<v Speaker 2>the decision making power and they man It's not too

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<v Speaker 2>dissimilar to News Corp YEP. The Murdoch family owns around

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<v Speaker 2>fourteen percent of the shares but nearly forty percent of

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<v Speaker 2>the voting right.

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<v Speaker 1>Which means even once the company's gone public, a lot

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<v Speaker 1>of the power can still sit with the controlling owners.

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<v Speaker 1>Fluxam it is the very last day to get fifty

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<v Speaker 1>and you missed out, so make sure to hit the

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<v Speaker 1>link in the show notes to unlock that fifty percent

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<v Speaker 2>Thanks for listening, and we'll see you on Friday.