WEBVTT - Bloomberg Intelligence: Oil Mega-Merger, Super Bowl 0:00:02.920 --> 0:00:10.840 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.880 --> 0:00:15.040 Bloomberg Intelligence podcast. Catch us live weekdays at ten am 0:00:15.080 --> 0:00:18.079 Eastern on affle Card playing Android Auto with the Bloomberg 0:00:18.120 --> 0:00:21.440 Business app. Listen on demand wherever you get your podcasts, 0:00:21.640 --> 0:00:24.040 or watch us live on YouTube. 0:00:25.480 --> 0:00:29.120 I'm looking at that oil deal a diamondback buying endeavor. 0:00:29.680 --> 0:00:33.600 You have bangstock, which is diamondbackstock. It is up by 0:00:33.720 --> 0:00:37.280 ten percent. Wow, that is a really nice move. Vince 0:00:37.320 --> 0:00:40.440 Piasa is Bloomberg Intelligence Senior Energy Research analyst, and he 0:00:40.560 --> 0:00:42.000 joins us now vinced you like the deal. 0:00:43.440 --> 0:00:46.960 I think the deal ticks all the boxes that we're 0:00:47.000 --> 0:00:50.519 going to need to see in this MNA wave. In 0:00:50.560 --> 0:00:56.400 the permium, it grows diamondbacks, acreage, it grows locations, so 0:00:56.520 --> 0:00:59.560 inventory is not going to be an issue in terms 0:00:59.600 --> 0:01:04.080 of the that they paid. Look diamondback in my universe 0:01:04.480 --> 0:01:08.480 of coverage, it was the highest had the highest premium. 0:01:08.880 --> 0:01:12.720 So they're using their multiple to get this deal done 0:01:12.920 --> 0:01:17.920 and so elevated currency along with some. 0:01:18.240 --> 0:01:22.640 Cash and debt they are They do have a fairly 0:01:22.760 --> 0:01:25.600 low leverage on their balance sheet, so I think this 0:01:25.720 --> 0:01:28.920 picks all of the boxes they'll throw off significant free 0:01:28.959 --> 0:01:32.280 cash flow in twenty twenty four and twenty twenty five. 0:01:32.360 --> 0:01:35.720 So in terms of paying off whatever bank loans that 0:01:35.720 --> 0:01:37.959 they're going to take on for this, I think it 0:01:38.040 --> 0:01:41.440 works out extremely well, and you're seeing the response by 0:01:41.480 --> 0:01:44.760 the investors in the marketplace. It also works out for 0:01:44.800 --> 0:01:50.080 the founding family of Endeavor. They get to monetize decades 0:01:50.120 --> 0:01:50.760 of hard work. 0:01:50.920 --> 0:01:55.600 So, hey, I've got a question with that. I mentioned 0:01:56.080 --> 0:01:57.680 that this is a merger of equals, and I got 0:01:57.720 --> 0:01:59.560 kind of laughed at, like, there's no merger of equals 0:01:59.560 --> 0:02:02.120 and it comes to M and A, but in this case, 0:02:02.200 --> 0:02:03.520 like is there though? 0:02:05.040 --> 0:02:07.360 Well, in this case, think about what Endeavor brings to 0:02:07.400 --> 0:02:13.920 the table. It almost doubles of diamondbacks Midlan acreage, and 0:02:13.960 --> 0:02:19.680 it brings sizeable oil production for the broader diamondback franchise. 0:02:19.720 --> 0:02:22.640 So I would tell you that in terms of size, 0:02:23.120 --> 0:02:27.359 it is a merger of equals, but the family will 0:02:27.360 --> 0:02:35.000 get roughly thirty percent of diamondback with selling off almost 0:02:35.320 --> 0:02:40.880 half the resource to diamondbacks, So it basically doubles diamondbacks 0:02:41.639 --> 0:02:45.200 total size, and the founding family gets about thirty percent 0:02:45.240 --> 0:02:46.880 of the new diamondback. 0:02:46.960 --> 0:02:50.120 Let's say Vince are there any regulatory issues here. A 0:02:50.200 --> 0:02:52.160 lot of M and A going on in this space here. 0:02:53.240 --> 0:02:54.799 Yeah, you know it's going to get a looked at. 0:02:55.800 --> 0:03:01.239 So Southwestern and Chesapeake getting together out in Apalachia, that's 0:03:01.280 --> 0:03:05.000 a gas deal, but that will get a very very 0:03:05.040 --> 0:03:08.359 clear look, a very very deep look by the regulators. 0:03:08.520 --> 0:03:11.079 This will as well. I don't see why it wouldn't 0:03:11.760 --> 0:03:15.360 because of the actual size of this entity. It's going 0:03:15.400 --> 0:03:18.200 to be an enterprise value of north with sixty billion. 0:03:18.240 --> 0:03:22.760 It will be the largest Permian pure play, So it'll 0:03:22.760 --> 0:03:25.600 get looked at. All these deals will get looked at, 0:03:25.639 --> 0:03:29.840 and it'll take a deeper look, same as Southwestern and Chesapeake. 0:03:29.960 --> 0:03:32.320 I was talking to Jenrey this morning. She covers Anti 0:03:32.360 --> 0:03:36.040 Trust for Bloowberg Intelligence, and she's like, yes, like all 0:03:36.080 --> 0:03:37.280 of these are going to have to get looked at. 0:03:37.280 --> 0:03:40.760 They're particularly interested in the exon Permian Pioneer deal and 0:03:40.840 --> 0:03:42.800 that all these deals are definitely gonna have the FTC 0:03:43.280 --> 0:03:46.640 sort of wide eyed looking at it. But you have 0:03:46.720 --> 0:03:49.680 to wonder, though, if they want more oil, they're going 0:03:49.720 --> 0:03:51.800 to have to do it, right, Vince, I mean, it's 0:03:51.840 --> 0:03:53.520 gonna I'm just trying to think of, like what the 0:03:53.720 --> 0:03:56.360 rational will be to block and say this deal, but 0:03:56.480 --> 0:03:59.440 like let Excell Pioneer go through, Like you can't. 0:04:01.240 --> 0:04:04.839 This deal is much more North America centric, much more 0:04:04.880 --> 0:04:07.920 North America focused. So when you think about you know, 0:04:08.080 --> 0:04:13.760 Exon and Pioneer Pioneer fits within Exon's Permian portfolio. But 0:04:13.840 --> 0:04:19.520 Exon is a large, integrated multinational franchise. This is more 0:04:19.720 --> 0:04:24.720 US centric and Permian centric as well. But look, they're 0:04:24.760 --> 0:04:27.520 all going to get looked at. It is what it is. 0:04:28.160 --> 0:04:31.800 This is a very large transaction. Like I said, Southwestern 0:04:31.960 --> 0:04:34.120 Chesapeake is getting looked at. This will get looked at 0:04:34.160 --> 0:04:37.000 as well. It's an important resource. What you have here, though, 0:04:37.240 --> 0:04:44.880 is you have resources now in stronger hands. You have Exon, Mobile, Chevron, 0:04:45.320 --> 0:04:50.040 you have Diamondback. You have very large entities with big 0:04:50.160 --> 0:04:55.159 balance sheets and the capability to take down even greater 0:04:55.279 --> 0:05:00.400 levels of capital in order to move production from the 0:05:00.480 --> 0:05:03.240 delineation phase into the production phase. 0:05:04.200 --> 0:05:07.680 So give me a sense, Vincent, I'm putting my banker 0:05:07.720 --> 0:05:10.400 hat on. Can I keep doing a bunch of deals here? 0:05:10.520 --> 0:05:12.640 I mean, how many players are left? 0:05:13.720 --> 0:05:15.839 Yeah, it's a very interesting question. So we put out 0:05:15.920 --> 0:05:22.120 last year the top twenty private privately held PE sponsored 0:05:22.200 --> 0:05:26.480 names in the permian, in this case Endeavor being the 0:05:26.520 --> 0:05:32.920 second largest Mewborn, which has mentioned that it wishes to sell. 0:05:33.400 --> 0:05:37.360 That's the largest of the top twenty that'll go out, 0:05:38.600 --> 0:05:42.440 we think, because it has been mentioned as a takeover candidate. 0:05:42.480 --> 0:05:48.080 Similar situation Founding family looking to move the assets. If 0:05:48.080 --> 0:05:51.039 you think about the top five, three are now gone, 0:05:52.040 --> 0:05:55.080 so there is a great deal of interest. There's interest 0:05:55.520 --> 0:05:59.279 by the private players as well, especially the PE sponsored players. 0:05:59.560 --> 0:06:02.600 Your gay being close to these vintages that are aged 0:06:03.040 --> 0:06:06.600 and now this capital needs to be recycled, so you 0:06:06.680 --> 0:06:10.279 will see more of that. You will see public buying private. 0:06:10.880 --> 0:06:14.680 Public does have the currency. In the case of Diamondback, 0:06:14.760 --> 0:06:18.600 they had a premium multiple elevated currency that they were 0:06:18.640 --> 0:06:23.960 able to use to monetize the Founding families investment. And 0:06:24.000 --> 0:06:27.120 you'll see that as well, especially in the permium, where 0:06:27.160 --> 0:06:31.599 you do have this difference of large cap premium valuations 0:06:31.800 --> 0:06:36.360 looking for assets and the smaller cap names trading at 0:06:36.400 --> 0:06:39.920 a relative discount to peers, but trading at a discount 0:06:39.960 --> 0:06:41.320 to the larger names as well. 0:06:41.400 --> 0:06:41.520 Well. 0:06:41.720 --> 0:06:44.080 Well, that's really the thing. Private equity being like, oh, 0:06:44.080 --> 0:06:47.320 thank god, we can kind of get these things out there. 0:06:47.360 --> 0:06:49.040 Is a vincement. I also found interesting I was reading 0:06:49.040 --> 0:06:50.640 through some of your research on this just to get 0:06:50.640 --> 0:06:52.760 more background on some of the private players, is just 0:06:52.880 --> 0:06:56.000 how much these private guys have been responsible for bulk 0:06:56.040 --> 0:06:57.599 of the drilling. And in some ways it makes sense, 0:06:57.680 --> 0:07:00.760 right shareholders want the big guys to become capital discipline. 0:07:00.800 --> 0:07:03.320 They're public, they got to report, so therefore they have 0:07:03.400 --> 0:07:05.440 to be capital discipline. But a private guy doesn't have 0:07:05.480 --> 0:07:08.280 to do that. They can do whatever they want. Walk 0:07:08.320 --> 0:07:11.520 me through the importance though, of these guys within the 0:07:11.560 --> 0:07:12.320 shell development. 0:07:13.240 --> 0:07:16.680 Yeah, so we tend to think that the private players 0:07:16.720 --> 0:07:19.720 have been responsible for at least half of the production 0:07:19.880 --> 0:07:23.000 growth in the last few years. What we have seen 0:07:23.360 --> 0:07:28.320 is these privately sponsored players putting out that production growth 0:07:28.720 --> 0:07:35.440 to entice the public players to buy that asset. And 0:07:35.480 --> 0:07:38.320 what the public players tend to do once they integrate 0:07:38.360 --> 0:07:42.320 that asset is to slow that production growth down, remove 0:07:42.440 --> 0:07:47.640 the rigs from that private player, and generate cash flow. 0:07:47.760 --> 0:07:51.760 This enhances free cash flow and allows the public player 0:07:51.880 --> 0:07:57.360 to pay down that debt to push out payouts, give 0:07:57.400 --> 0:08:01.400 it ends or stop buybacks to the investment for rewarding 0:08:01.480 --> 0:08:04.600 them sticking around post a deal. So that's what we've 0:08:04.640 --> 0:08:08.080 seen production growth by the private guys. Public guys come 0:08:08.120 --> 0:08:12.960 on in, buy the asset, turn down the volume, ratchet 0:08:13.080 --> 0:08:17.320 down the speed, generate that free cash flow so that 0:08:17.520 --> 0:08:21.360 the balance sheet, so that the income statement looks stronger 0:08:21.760 --> 0:08:23.960 post a deal. And it's been working for the last 0:08:23.960 --> 0:08:26.560 couple of years. And that's why you see such a 0:08:26.560 --> 0:08:30.480 great reaction in the aftermarket whence these deals are announced, 0:08:30.560 --> 0:08:33.400 especially this deal, and also if you take a look 0:08:33.400 --> 0:08:35.080 at some of the gas deals that have been done 0:08:35.080 --> 0:08:35.520 as well. 0:08:35.880 --> 0:08:39.760 Hey, Vince, as an investor, do ike care about where 0:08:39.800 --> 0:08:42.600 the rock is located? As Pennsylvania shale better than Texas 0:08:42.600 --> 0:08:44.560 Shale's who whoa whoa? 0:08:44.640 --> 0:08:45.480 Yes, yeah you care? 0:08:45.679 --> 0:08:46.000 You care? 0:08:46.360 --> 0:08:49.760 Tell me, yes, you care? You care? Because when you're 0:08:49.880 --> 0:08:57.520 selling a commodity, concentration drives synergies, efficiency and productivity, but 0:08:57.760 --> 0:09:01.560 especially so in places like elegacy play like the Permian, 0:09:02.360 --> 0:09:06.800 or in places like Appalachia or in the Hainesville. Interestingly, 0:09:07.120 --> 0:09:10.040 these last few deals that we've seen, we've seen in 0:09:10.120 --> 0:09:16.000 those plays, those prominent legacy plays, those proven plays where 0:09:16.040 --> 0:09:18.600 you have a lot of runway and you can buy 0:09:18.640 --> 0:09:26.480 these assets, integrate them, grow that concentration and generate those efficiencies, 0:09:26.600 --> 0:09:29.280 generate that productivity going forward. 0:09:29.400 --> 0:09:31.120 Who's next? Who's the next buyer? 0:09:32.880 --> 0:09:36.240 You know what, I will tease the audience. Go on 0:09:36.320 --> 0:09:39.880 to the terminal, look up our research. We put out 0:09:39.920 --> 0:09:45.839 a piece highlighting the twenty private private sponsored E and 0:09:45.920 --> 0:09:49.480 p's in the Permian. We go through that list. Mewborn 0:09:49.600 --> 0:09:52.400 has been mentioned, so we can throw that name out there, 0:09:52.440 --> 0:09:55.160 but there are plenty of names in that top twenty 0:09:55.240 --> 0:09:59.840 list that seem to be putting themselves in a position 0:10:00.080 --> 0:10:03.080 where some type of capital event could be announced. 0:10:03.520 --> 0:10:06.480 Events great stuff. Really appreciate it. Deep teas there, everybody. 0:10:06.880 --> 0:10:11.400 Check out Vincent's research on the Bloomberg Intelligence on the terminal. 0:10:11.679 --> 0:10:14.839 He's Bloomberg Intelligence senior Energy research analyst. You have to 0:10:14.840 --> 0:10:17.200 wonder how many buyers they're going to be right. 0:10:17.840 --> 0:10:20.400 So rock is not rock, Rock is not rock? 0:10:20.440 --> 0:10:22.320 Well, rock is rock, but some rock is better than 0:10:22.360 --> 0:10:22.719 other rocks. 0:10:22.720 --> 0:10:23.800 Some rock is better than other rock. 0:10:23.880 --> 0:10:24.280 Definitely. 0:10:25.760 --> 0:10:29.640 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:10:29.720 --> 0:10:33.240 weekdays at ten am Eastern on applecar Play and Android 0:10:33.280 --> 0:10:36.439 Otto with the Bloomberg Business. You can also listen live 0:10:36.520 --> 0:10:39.720 on Amazon Alexa from our flagship New York station just 0:10:39.760 --> 0:10:44.199 say Alexa playing Bloomberg eleven thirty A. 0:10:44.160 --> 0:10:47.880 Great, great game, big, big platform for advertisers, arguably the 0:10:47.880 --> 0:10:49.439 biggest day of the year for the advertisers. 0:10:49.520 --> 0:10:51.520 The question is these seems even work? 0:10:51.640 --> 0:10:53.520 I mean as it worth. It is a worth seven 0:10:53.600 --> 0:10:54.960 mili plus whatever your production. 0:10:55.120 --> 0:10:56.120 I was not impressed. 0:10:56.600 --> 0:10:59.319 I thought some good ones, some some ads were good. 0:10:59.320 --> 0:11:01.199 I like to don't donuts. But there's some people who 0:11:01.240 --> 0:11:04.120 actually measure this as a business. They don't just watch it. 0:11:04.120 --> 0:11:06.280 They measured as a business. Our next guest Kevin Krim. 0:11:06.480 --> 0:11:10.319 He's the CEO of Entertainment Data Oracle. Kids call it EDEO. 0:11:10.800 --> 0:11:13.240 He joined his live here in our Bloomberg Interactive Broker studio. 0:11:13.280 --> 0:11:16.560 He knows his way here. He's been in Bloomberg before. Kevin, 0:11:17.160 --> 0:11:19.280 thanks so much for joining us here. We really appreciate 0:11:19.320 --> 0:11:22.160 coming in. I thought there was some pretty cool ads. 0:11:23.120 --> 0:11:26.880 From your perspective, What are brands trying to do here 0:11:26.920 --> 0:11:29.839 at the Super Bowl and how do they measure if 0:11:29.840 --> 0:11:31.600 it even worked or it was successful? 0:11:31.600 --> 0:11:33.720 How do you think about it when marketers are thinking 0:11:33.720 --> 0:11:36.120 about what they're trying to achieve in any marketing, but 0:11:36.240 --> 0:11:39.800 especially on television, which is at the top of the 0:11:39.840 --> 0:11:43.800 pyramid of value in advertising. At the very pinnacle of 0:11:43.840 --> 0:11:46.679 that peak is the NFL and the Super Bowl is 0:11:47.440 --> 0:11:51.680 at the absolute top when we've measured, we've measured nine 0:11:51.720 --> 0:11:54.920 super bowls now, and what we're measuring is the consumer 0:11:55.040 --> 0:11:59.000 engagement with the brands or products being advertised and any 0:11:59.040 --> 0:12:03.320 marketers trying to achieve awareness and then engagement with their brands. 0:12:03.440 --> 0:12:07.560 And we're measuring engagement as searches and branded website visits, 0:12:07.840 --> 0:12:10.800 app usage, the kind of digital behaviors that are predictive 0:12:10.840 --> 0:12:14.120 of sales lift, but they're immediate and they're easy to 0:12:14.160 --> 0:12:15.600 collect large amounts. 0:12:15.240 --> 0:12:17.160 Of what's the time frame for that? Is it like 0:12:17.559 --> 0:12:19.400 right after the ad airs? Is it in the next 0:12:19.440 --> 0:12:20.440 twenty four hours? 0:12:20.960 --> 0:12:24.360 Most of that engagement happens within minutes of the ad airing, 0:12:24.480 --> 0:12:27.720 But because of streaming, because of the ability to DVR 0:12:28.000 --> 0:12:30.600 or tvo it, you do have a tail to that. 0:12:30.720 --> 0:12:33.760 And we'll see activity for a week or more after 0:12:34.400 --> 0:12:36.840 a big ad airing like like the Super Bowl, And 0:12:36.920 --> 0:12:40.320 when we see what kind of engagement is driven relative 0:12:40.360 --> 0:12:43.160 to what else you can get on TV, like let's 0:12:43.160 --> 0:12:47.000 say an average thirty second spot on primetime broadcaster cable, 0:12:47.760 --> 0:12:51.040 the Super Bowl does many, many, many multiples of that. 0:12:51.120 --> 0:12:54.200 We're talking the average advertiser would have to buy hundreds 0:12:54.240 --> 0:12:57.439 of those thirty second spots on regular primetime to get 0:12:57.440 --> 0:13:00.520 the same impact as a single area on this So 0:13:00.559 --> 0:13:03.000 on a dollars basis, we find that the Super Bowl 0:13:03.080 --> 0:13:06.640 is a very good rational decision for most marketers. But 0:13:06.679 --> 0:13:09.480 then the pressures on the creative, and the creative has 0:13:09.520 --> 0:13:12.120 to be strong or you're not getting your money's worth. 0:13:12.200 --> 0:13:14.679 And that's where you know. We saw ads yesterday. Some 0:13:14.720 --> 0:13:17.920 of them were fantastic, others I think played it too safe, 0:13:18.200 --> 0:13:20.840 and you're going to see quite a range in how 0:13:20.920 --> 0:13:23.040 much engagement is driven from those ads. 0:13:23.080 --> 0:13:25.360 So from your perspective, maybe from the data's perspective. 0:13:25.480 --> 0:13:26.839 Yeah, a winner or two? 0:13:26.880 --> 0:13:28.680 Which one did you? 0:13:28.760 --> 0:13:31.240 Let's talk about real quick. The top five Number one 0:13:31.280 --> 0:13:33.000 was Deadpool three number two. 0:13:33.360 --> 0:13:35.800 I have thoughts on that because I'm a huge deput person. 0:13:36.520 --> 0:13:38.800 Love it, but then again, he could come on, Ryan 0:13:38.800 --> 0:13:40.440 Renns could come on and say hello, and I'd be like, 0:13:40.480 --> 0:13:42.240 that was brilliant, that was amazing. 0:13:42.280 --> 0:13:44.280 It was a fun spot and the tease of having 0:13:44.320 --> 0:13:48.360 Wolverine joining him is very satisfying for any Marvel fan. 0:13:49.040 --> 0:13:52.720 Number two is the film that adaptation of Wicked. Another 0:13:52.760 --> 0:13:57.280 interesting teaser Ariana Grande in one of the starring roles there, 0:13:57.320 --> 0:13:58.840 So that's going to pick up a lot of attention. 0:13:59.320 --> 0:14:03.000 And then number three three was the Volkswagen ad that 0:14:03.280 --> 0:14:05.560 you know of harkened back to their heritage of bringing 0:14:05.559 --> 0:14:09.240 the Beatle to UH to America and then it teased 0:14:09.320 --> 0:14:14.160 their new all electric UH bus, so the VW Bus 0:14:14.200 --> 0:14:17.480 returning to America after a long long gap. Number four 0:14:19.240 --> 0:14:21.680 was Team or Temu as we all learned was how 0:14:21.680 --> 0:14:25.600 to pronounce it? Last yesterday they ran six spots between pregame, 0:14:25.760 --> 0:14:29.400 in game, and postgame. Six spots. That's a huge investment. 0:14:29.800 --> 0:14:31.720 But this is an interesting one. A lot of people's 0:14:31.760 --> 0:14:33.880 opinion of that kind of spot would say that it 0:14:33.920 --> 0:14:34.760 was one of the worst. 0:14:35.760 --> 0:14:38.400 And you know, actually, it doesn't even resonate with me. 0:14:38.440 --> 0:14:39.400 What what what is it? 0:14:39.400 --> 0:14:41.760 Coppening? It was, it's a it's a mobile shopping app 0:14:42.760 --> 0:14:46.600 and uh. They they started their first real kind of 0:14:46.600 --> 0:14:49.800 advertising in the US was last year's Super Bowl. That 0:14:49.960 --> 0:14:52.760 kicked it off. They were one of the most downloaded 0:14:52.760 --> 0:14:55.120 apps in the Google App Store and the Apple App 0:14:55.160 --> 0:14:57.400 Store all of last year. They followed up with a 0:14:57.440 --> 0:14:59.480 bigger bet this year, and it. 0:14:59.360 --> 0:15:02.360 Is discounts are insanity like it like if you go 0:15:02.440 --> 0:15:04.640 on there, I mean you have to measure, like what 0:15:04.680 --> 0:15:07.400 am I actually buying? Like there's that conversation we had, 0:15:07.480 --> 0:15:10.960 but the number price, it's it's unreal. And there's like 0:15:11.000 --> 0:15:12.800 extra deals like it's it's huge. 0:15:13.640 --> 0:15:16.200 Temu and Shine or Sheen, I'm not sure how to 0:15:16.200 --> 0:15:20.600 do it properly. Are both China based apps that are 0:15:20.640 --> 0:15:25.760 about these giant discounts and are very popular apparently with 0:15:25.760 --> 0:15:27.480 with Barbain discount shoppers. 0:15:27.640 --> 0:15:28.520 How about Booze. 0:15:29.120 --> 0:15:32.360 You know, we saw really interesting. We saw no liquor 0:15:32.360 --> 0:15:34.480 ads this year. We saw a smaller number of beer 0:15:34.520 --> 0:15:36.840 ads than last year. What we did see was some 0:15:36.920 --> 0:15:41.560 top performers were soda ads, and we had Poppy in 0:15:41.600 --> 0:15:46.360 our top five. Hoppy is this new? Yes, premium priced? 0:15:47.160 --> 0:15:49.360 Would you call it? Like kind of like more popularized 0:15:49.480 --> 0:15:51.160 kombucha maybe. 0:15:50.920 --> 0:15:53.640 The way without the fermentation, Like I'll get poppy to 0:15:53.680 --> 0:15:56.040 my daughter, but you can't have ka. 0:15:55.640 --> 0:15:59.760 Right because it's trace mounts of Alcoholah, so it's got 0:16:00.200 --> 0:16:02.840 slow sugar supposed to be good for you and two 0:16:02.840 --> 0:16:05.640 dollars a can. Oh so the margins are incredible. It's 0:16:05.680 --> 0:16:10.440 an independent soda company from Austin, Texas, husband and wife founders, 0:16:10.480 --> 0:16:13.640 and you know, they made a big statement in popping 0:16:13.680 --> 0:16:15.800 into the top five. That's gonna lead to a big 0:16:15.840 --> 0:16:17.520 lift in their sales. I mean we can say that 0:16:17.560 --> 0:16:21.720 with total confidence whether that stix or not is alex 0:16:21.800 --> 0:16:24.320 Is saying it's it's it's it's good. So you know 0:16:24.520 --> 0:16:25.440 they may have a shot at. 0:16:25.400 --> 0:16:29.640 Being a to Okay, how about nostalgia In the nostalgia 0:16:29.720 --> 0:16:33.720 driven TV reunions, a lot of reunions, I would say 0:16:33.720 --> 0:16:35.400 they were a mixed bag and sort of in terms 0:16:35.400 --> 0:16:36.000 of performance. 0:16:36.040 --> 0:16:38.280 I loved most of those spots. I mean, the Duncan 0:16:38.360 --> 0:16:40.320 spot was in our top twenty. That was probably the 0:16:40.320 --> 0:16:45.600 best performing of the nostalgia based ads. We saw Jennifer 0:16:45.640 --> 0:16:48.160 Anison and David Shwimmer reunite and. 0:16:48.120 --> 0:16:50.120 The Uber eats like that one. 0:16:50.360 --> 0:16:52.600 I thought that was a fun moment. Yeah, it was 0:16:52.640 --> 0:16:55.440 a fun moment, you know. But again, Oh, and I'd 0:16:55.440 --> 0:16:58.120 say the other top performing spot we had the parks 0:16:58.120 --> 0:17:00.480 and Rec several of the leads in Park and Rec, 0:17:00.920 --> 0:17:03.880 in the in the in the app for in the 0:17:03.920 --> 0:17:09.480 ad for Mountain Dews, Baja Blast Soda, and that was 0:17:09.520 --> 0:17:10.320 a lot of fun. 0:17:10.800 --> 0:17:13.440 Interesting and we had to you know, I like you 0:17:13.480 --> 0:17:17.280 putting in your notes here that streaming is the new syndication. Yeah, 0:17:17.359 --> 0:17:21.040 that's where shows go to live forever. And one of 0:17:21.080 --> 0:17:24.159 the examples and then maybe become popular again. One of 0:17:24.200 --> 0:17:27.119 which is Suits, Suits, which is all over my social 0:17:27.160 --> 0:17:29.399 media feed and I never even paid attention to it 0:17:29.440 --> 0:17:31.560 when it was on whatever network it was years ago, 0:17:32.000 --> 0:17:34.600 but they're making a huge comeback, right, So. 0:17:34.560 --> 0:17:37.640 That was NBCUniversal originally, I think it was USA Network 0:17:37.920 --> 0:17:42.200 when in its first run the top streaming series on 0:17:42.240 --> 0:17:48.040 Netflix for last year, and you saw the Suits stars 0:17:48.080 --> 0:17:50.600 and a bunch of other stars from a bunch of 0:17:50.640 --> 0:17:54.440 the series that were hot maybe fifteen twenty some years 0:17:54.480 --> 0:17:58.280 ago and are now top streaming series in their sort 0:17:58.280 --> 0:18:01.160 of rerun stage on what it's Pea Cock or Netflix 0:18:01.280 --> 0:18:02.320 or or others. 0:18:02.400 --> 0:18:04.520 What else did out to you? What was like a 0:18:04.520 --> 0:18:05.159 wild factor? 0:18:05.400 --> 0:18:05.600 Yeah? 0:18:05.640 --> 0:18:08.639 I mean, I would say besides those those things that 0:18:08.680 --> 0:18:11.800 we talked about, I would say the automotive category was 0:18:11.840 --> 0:18:16.080 really interesting. All the ads outperformed the average. They were 0:18:16.080 --> 0:18:19.480 all import or foreign automakers. They were not any of 0:18:19.520 --> 0:18:21.880 the Big three and from Detroit, which is very unusual. 0:18:22.520 --> 0:18:24.159 Was was that a did you hear anyth coming out 0:18:24.160 --> 0:18:25.320 of Detroit saying hey, we're just. 0:18:27.000 --> 0:18:28.919 You know, I didn't talk directly to all of them. 0:18:28.960 --> 0:18:31.359 Some of them are my clients. I'll be discreet, but 0:18:32.359 --> 0:18:34.520 I would say what I heard loud and clear. From 0:18:34.520 --> 0:18:36.919 the industry overall, you've got to have the right product 0:18:36.960 --> 0:18:39.800 to launch. You don't want to have a disruptive supply 0:18:39.920 --> 0:18:42.720 chain when you're when you're doing a big Super Bowl ad, 0:18:42.760 --> 0:18:44.760 it usually is best to use a Super Bowl as 0:18:44.800 --> 0:18:47.560 the start of a big campaign, So to launch a 0:18:47.560 --> 0:18:50.040 new model is key. And then, yes, if you're coming 0:18:50.040 --> 0:18:53.800 off of bruising, you know, negotiations with your unions, probably 0:18:53.800 --> 0:18:55.320 one of the better things to do is maybe just 0:18:55.320 --> 0:18:57.359 sit it out, wait till next year. 0:18:57.680 --> 0:18:59.840 Well, what's their messaging. It's like, hey, guys, you know 0:18:59.880 --> 0:19:01.760 the we're still making them. You should buy one, but 0:19:01.800 --> 0:19:04.120 we're also gonna do these ices and these are really cool. 0:19:04.200 --> 0:19:06.040 Go buy those like It's like they're enough, We're gonna 0:19:06.080 --> 0:19:07.600 do all that money over there. I mean, it's a 0:19:07.600 --> 0:19:08.560 pretty tricky line. 0:19:08.680 --> 0:19:11.480 It's a tough balancing so to sit on the sidelines 0:19:11.480 --> 0:19:12.800 for this year smart move. 0:19:12.840 --> 0:19:15.359 Were you surprised that we didn't see any price inflation 0:19:15.400 --> 0:19:17.200 this year from last year. Seven million dollars for a 0:19:17.240 --> 0:19:20.160 thirty second spot. Usually we've seen you know, mid single 0:19:20.200 --> 0:19:21.840 high single digit inflation year to year. 0:19:21.920 --> 0:19:24.560 You know, I think it's it's it's a challenging market 0:19:24.720 --> 0:19:28.560 as we shift from traditional to streaming. But I would 0:19:28.560 --> 0:19:31.200 say anyone who bought an ad from CBS this year 0:19:31.480 --> 0:19:34.800 got a fantastic deal, right, I mean, you know, it's 0:19:34.840 --> 0:19:38.119 the super Bowl always performs consistently. But on top of that, 0:19:38.200 --> 0:19:42.119 you had the Taylor Swift effect and you can't plan 0:19:42.200 --> 0:19:44.800 on her team being in the super Bowl. That's that's 0:19:44.840 --> 0:19:47.280 a bit much. But just if you were sitting there 0:19:48.240 --> 0:19:50.880 last September as the season got started and you made 0:19:50.880 --> 0:19:53.479 a commitment to seven million dollars, you you had a 0:19:53.520 --> 0:19:57.040 good hunch that this would be a sustainable positive effect, 0:19:57.119 --> 0:20:01.119 a tailwind, if you will, for the whole sport with 0:20:01.240 --> 0:20:01.919 Taylor involved. 0:20:01.920 --> 0:20:03.560 All right, good stuff, Kevin Krim, thank you so much 0:20:03.560 --> 0:20:06.240 for joining us. Kevin Crime to CEO of Entertainment Data 0:20:06.440 --> 0:20:10.800 oracle Edo, joining slave here on our Bloomberg Interactive Brooker Studio. 0:20:11.680 --> 0:20:15.560 You're listening to the Bloomberg Intelligence podcast Catch US Live 0:20:15.640 --> 0:20:18.240 weekdays at ten am Eastern on Apple car Play and 0:20:18.320 --> 0:20:20.919 then broud Otto with the Bloomberg Business app. Listen on 0:20:21.000 --> 0:20:24.280 demand wherever you get your podcasts, or watch US live 0:20:24.359 --> 0:20:25.720 on YouTube. 0:20:26.400 --> 0:20:28.680 So SMP five hundred, like you were saying, right, fifty 0:20:28.720 --> 0:20:31.160 twenty eight, and I take a look at the strategists 0:20:31.240 --> 0:20:34.920 call for this year. The average is forty eight sixty seven, 0:20:35.440 --> 0:20:39.159 the median forty nine fifty, the high fifty two hundred, 0:20:39.560 --> 0:20:42.119 the low forty two hundred. So it's like either a 0:20:42.119 --> 0:20:43.639 lot of people are wrong, We're gonna see a lot 0:20:43.680 --> 0:20:45.400 of upgrades, or we're just gonna have a crash out 0:20:45.440 --> 0:20:47.080 at some point, which is quite of interesting. 0:20:47.359 --> 0:20:49.240 At the end of the day, it's all about making money. 0:20:49.359 --> 0:20:51.359 So you do the earnings analysis on the S and 0:20:51.359 --> 0:20:54.199 P five hundred, and the earning surprises so far this 0:20:54.320 --> 0:20:56.960 quarter of those companies that have reported is something like 0:20:57.040 --> 0:21:01.080 eighty percent at this point, so it's impressive. 0:21:01.240 --> 0:21:03.480 Yeah, you can make the argument that it's legit, and 0:21:03.520 --> 0:21:07.000 then it's actually broadening out to a certain extent. Let's 0:21:07.040 --> 0:21:09.640 ask Kim Forrest. She is founder in CIO, a book 0:21:09.640 --> 0:21:12.479 of capital partners. Hey, Kim, I take a look at 0:21:12.480 --> 0:21:15.600 the strategist notespend for this year where we're trading at 0:21:15.720 --> 0:21:18.760 right now? Is this a crash up, a melt up? 0:21:18.800 --> 0:21:21.439 Does it continue or is it fundamental here at this point? 0:21:22.400 --> 0:21:25.040