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Speaker 1: This is the Blacks.

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Speaker 2: I'm Brettan, I'm justin and it's Friday, the ninth of August.

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Speaker 2: Juzzy Boy.

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Speaker 1: Online betting agencies are shaking in their betting booties. The

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Speaker 1: government is exploring new crackdowns on gambling ads on TV, before, during,

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Speaker 1: and after live sport, and experts reckon. If these changes

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Speaker 1: go through, it could cost the gambling industry six point

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Speaker 1: four billion dollars.

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Speaker 2: Not a small amount of money, by man, I'm speaking

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Speaker 2: of money. If you want fifty bucks in your front

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Speaker 2: pocket this weekend, there is only one way to do it.

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Speaker 2: It's through our weekly quiz at quick Stix that we

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Speaker 2: three questions. That we three business or money questions, and

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Speaker 2: if you're the first to answer correctly, you'll win the

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Speaker 2: fifty bucks. So all you've got to do is download

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Speaker 2: the Flux app and turn your notifications on.

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Speaker 1: Three revolutionary stories today. Juzzy boy, let's do it for

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Speaker 1: our first. Nine Entertainment is expected to wrap up its

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Speaker 1: two year share buyback after a whack in profits and

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Speaker 1: business performance.

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Speaker 2: Not ideal to be buying back shares when your revenue

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Speaker 2: is on the way down, So tell me all, okay.

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Speaker 1: Nine Entertainment is the Aussie media company with the whole

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Speaker 1: range of media.

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Speaker 2: We're talking TV like Channel nine, radio like three W.

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Speaker 1: And two GB, and then there's also publications like The

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Speaker 1: Australian Financial Review, The Age, the Sydney Morning Herald.

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Speaker 2: Now an two years ago, Nine Entertainment announced it would

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Speaker 2: start a share buyback plan where it would buy back

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Speaker 2: up to ten percent of its stock.

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Speaker 1: Now at the time this was considered quite a signal

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Speaker 1: of strength.

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Speaker 2: But now, after two hundred and twenty million bucks in

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Speaker 2: share buybacks, nine has announced that it will finish buying

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Speaker 2: back its own shares.

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Speaker 1: Okay, interesting, juzzy boy, Yeah, why is this all happening

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Speaker 1: right now?

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Speaker 2: Well, be man Nine's been struggling with a weaker ad market,

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Speaker 2: it's lost the media bargaining deal with Meta, and it's

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Speaker 2: laying off over two hundred of their staff.

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Speaker 1: So the buyback may not be the best use of

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Speaker 1: its cash right now.

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Speaker 2: So what is the key learning here?

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Speaker 1: Share buybacks can be a double edged sword for companies.

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Speaker 1: On the one hand, they sent a very strong signal

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Speaker 1: to the market. We are so confident in our business

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Speaker 1: that we see in no better way to spend our

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Speaker 1: money than to buy more of our very own shares.

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Speaker 2: And share buy backs typically also result in a higher

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Speaker 2: share price for the company.

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Speaker 1: Yep. That's because when the company buys back shares, it

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Speaker 1: lowers the number of shares available on the market, and

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Speaker 1: as a result.

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Speaker 2: It boosts the company's earnings per share.

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Speaker 1: But on the other hand, Juzzy boy, share buybacks can

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Speaker 1: be a big disaster in some cases.

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Speaker 2: For some investors, they see a share buy back as

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Speaker 2: a signal that a company's run out of other investment opportunities.

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Speaker 1: But even bigger disaster is when you buy back your

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Speaker 1: shares and the share price falls. And in Nine's case,

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Speaker 1: its share price has dropped thirty seven percent over the

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Speaker 1: last year.

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Speaker 2: So rather than continuing to invest in a falling company,

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Speaker 2: Nine decided to put a pause on the.

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Speaker 1: Buy back because maybe there are now better internal investments

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Speaker 1: to be made to get Nine back on track. For

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Speaker 1: our second story, Airbnb has had its largest share price

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Speaker 1: drop since going public in twenty twenty. That post pandemic

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Speaker 1: holiday revenge really starting to slow down. Juzzy boy, what's

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Speaker 1: going on here?

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Speaker 2: When airbb launched back in two thousand and eight, was

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Speaker 2: considered a bit of a zany idea to let someone

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Speaker 2: sleep in your spare room or your house while you're away.

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Speaker 1: But it's crazy how fifteen odd years later everything can change.

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Speaker 2: Yep, Because now Airbnb has over one hundred and fifty

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Speaker 2: million worldwide users.

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Speaker 1: Who have booked more than one point five billion stays.

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Speaker 1: If you don't mind, but.

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Speaker 2: Be man, it seems like those stays are slowing down

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Speaker 2: real fast for Airbnb. Yep.

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Speaker 1: While Airbnb announced that its bookings increased eight point seven

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Speaker 1: percent in the second quarter, it was well below Airbnb's

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Speaker 1: growth forecasts.

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Speaker 2: Particularly during this summer period in the US and Europe.

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Speaker 1: So Airbnb share price dropped more than thirteen percent, which,

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Speaker 1: as it happens jusey Boy, is the largest drop since

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Speaker 1: enlisted in twenty twenty.

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Speaker 2: Avebman. Some companies have an off quarter, but Airbnb has

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Speaker 2: had three off quarters in a row and now be man.

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Speaker 2: Rather than underperforming again, Airbnb's warned investors of sequential moderation

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Speaker 2: for the next quarter.

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Speaker 1: In other words, just calm your farm and keep your

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Speaker 1: expectations in check Wall Street, but be man.

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Speaker 2: The biggest red flag airbb's marketing spend will outpace its

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Speaker 2: revenue in the next quarter.

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Speaker 1: Not what you want to hear in a slowing market.

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Speaker 1: So what is the key learning here? Marketing spend just

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Speaker 1: be another cost. It needs to be an investment with

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Speaker 1: a strong return, you see, b Man.

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Speaker 2: Airbnb's always promoted the fact that the majority of its

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Speaker 2: traffic is direct. We're talking ninety percent of their traffic

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Speaker 2: comes from unpaid channels.

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Speaker 1: And the reason, well, Airbnb CEO claims it's because of

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Speaker 1: its brand strength.

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Speaker 2: In fact, Airbnb spend just over eighteen percent of its

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Speaker 2: revenue on marketing in twenty twenty three.

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Speaker 1: But boy, in the upcoming quarter, Airbnb now expects its

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Speaker 1: marketing expenses to grow faster than revenue.

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Speaker 2: And increasing marketing spend at a time when demand is

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Speaker 2: softening could be a major red flag for investors. For

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Speaker 2: our third and final story, Warner Brothers Discovery has written

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Speaker 2: down the value of all its TV assets over nine

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Speaker 2: billion US dollars and that led them to a ten

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Speaker 2: billion US dollar loss for the.

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Speaker 1: Quarter Yaikaruni's Juzzy Boy. After losing the NBA broadcast deal

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Speaker 1: this year, this just can't be good for Warner Bros.

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Speaker 1: So what is the story right here?

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Speaker 2: Okay? Warner Brothers is the entertainment giant that was founded

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Speaker 2: back in nineteen twenty three.

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Speaker 1: It's the name behind iconic movies like the Harry Potter series,

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Speaker 1: Dark Knight, The Matrix, and b Man.

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Speaker 2: In twenty two twenty two, Warner Brothers merge with Discovery Channel,

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Speaker 2: added subsidiary channels in a forty three billion US dollar

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Speaker 2: whopper deal, and now Warner Brothers Discovery has written down

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Speaker 2: its PayTV business by a woppin' nine point one billion

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Speaker 2: US dollery dues. Yep, surprise, surprise. They say that they

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Speaker 2: cable channels just aren't worth what they used to be

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Speaker 2: in this uncertain PATV.

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Speaker 1: Market, And as it happens, juzzy boy, this news sent

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Speaker 1: Warner brother Discovery share price down eleven percent, wow.

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Speaker 2: To its lowest share price since these two companies merged.

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Speaker 1: Sounds like this merger hasn't quite panned out the way

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Speaker 1: these two media companies had hoped.

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Speaker 2: So what is the key learning here?

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Speaker 1: Even the most well planned mergers have a chance of

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Speaker 1: not reaching their potential see man.

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Speaker 2: Since Warner Brothers merge with Discovery Channel, the audience size

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Speaker 2: of PATV channels has only gotten smaller.

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Speaker 1: They're on top of that a mountain of debt softening

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Speaker 1: AD market layoffs at the company last month, and.

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Speaker 2: It's pretty clear that Warner Broy's merger with Discovery Channel

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Speaker 2: isn't quite panning out as they'd hope.

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Speaker 1: And Jesseyboy, this isn't as uncommon as you might think.

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Speaker 2: In fact, according to the Harvard Business Review, some mergers

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Speaker 2: actually have a seventy two percent chance of failure.

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Speaker 1: But you can dramatically increase the odds of success if.

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Speaker 2: You understand the select targets, understand how much to pay

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Speaker 2: them and how much to integrate them as well.

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Speaker 1: So it's not too surprising that Warner Brothers Discovery has

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Speaker 1: been considering a breakup and splitting its streaming and its

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Speaker 1: studio business from its old TV networks black Lam.

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Speaker 2: If you want to test your business knowledge as well

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Speaker 2: as earn a tasty little bit of cash for the weekend,

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Speaker 2: there is only one place to be. It is in

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Speaker 2: the Flux app playing quick Sticks Today. You receive a

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Speaker 2: notification at a random time of the day, and the

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Speaker 2: first person to answer correctly win's the fifty bucks.

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Speaker 1: Thanks for listening, and we'll see you on Monday.