1 00:00:02,720 --> 00:00:10,600 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,600 --> 00:00:14,560 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:14,600 --> 00:00:17,880 Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg 4 00:00:17,920 --> 00:00:21,040 Speaker 1: Business app. Listen on demand wherever you get your podcasts, 5 00:00:21,360 --> 00:00:23,080 Speaker 1: or watch us live on YouTube. 6 00:00:23,920 --> 00:00:26,320 Speaker 2: Really interesting headline came across the tape just a couple 7 00:00:26,320 --> 00:00:29,080 Speaker 2: of minutes ago. According to a Wall Street Journal, the 8 00:00:29,120 --> 00:00:32,760 Speaker 2: Department of Justice opens probe into the NFL on anti 9 00:00:32,880 --> 00:00:34,320 Speaker 2: competitive concerns. 10 00:00:34,360 --> 00:00:36,159 Speaker 3: I mean, who wants to mess with the NFL? I 11 00:00:36,159 --> 00:00:37,159 Speaker 3: guess the federal government. 12 00:00:37,280 --> 00:00:39,599 Speaker 4: You can. But let's break it down a little bit 13 00:00:39,640 --> 00:00:39,960 Speaker 4: if we can. 14 00:00:40,040 --> 00:00:43,559 Speaker 2: Randa Williams, Bloomberg Business of Sports reporter, random, what's the 15 00:00:43,560 --> 00:00:44,120 Speaker 2: story here? 16 00:00:44,720 --> 00:00:48,280 Speaker 5: So basically Senator Mike Lee, he's from Utah. He sent 17 00:00:48,360 --> 00:00:50,400 Speaker 5: a letter about a month ago, maybe a little bit 18 00:00:50,440 --> 00:00:54,440 Speaker 5: longer than that, and he encouraged the Federal Trade Commission, 19 00:00:54,480 --> 00:00:57,640 Speaker 5: the SEC in the Department of Justice to review this 20 00:00:57,760 --> 00:01:00,360 Speaker 5: Sports Broadcasting Act because of the fact that it cost 21 00:01:00,440 --> 00:01:03,400 Speaker 5: over one thousand dollars to watch NFL games. Now, rising 22 00:01:03,520 --> 00:01:07,480 Speaker 5: costs over broadcasting gals is pretty normal. I mean we've 23 00:01:07,520 --> 00:01:10,120 Speaker 5: seen every single time a league goes to the negotiating table. 24 00:01:10,360 --> 00:01:12,399 Speaker 5: Normally the costs are passed down to the consumer, but 25 00:01:12,440 --> 00:01:15,160 Speaker 5: also the games grow and so I think that it'll 26 00:01:15,160 --> 00:01:18,880 Speaker 5: be interesting to see how they approach this if anything changes. 27 00:01:18,920 --> 00:01:21,360 Speaker 5: But the NFL still has four years left on its 28 00:01:21,400 --> 00:01:23,760 Speaker 5: broadcasting rights agreement. There have been reports that they want 29 00:01:23,800 --> 00:01:25,959 Speaker 5: to opt out of that and negotiate early. 30 00:01:26,000 --> 00:01:28,840 Speaker 4: Those talks are very very early, so we'll see. 31 00:01:29,520 --> 00:01:33,640 Speaker 6: Could there be possible political motivations behind this. 32 00:01:34,280 --> 00:01:37,160 Speaker 5: I think with everything happening in the country right now, 33 00:01:37,200 --> 00:01:40,080 Speaker 5: you never know who is setting your sights on the NFL. 34 00:01:40,160 --> 00:01:43,080 Speaker 5: And I mean, you see what's happening with the Rooney Rule. 35 00:01:43,120 --> 00:01:46,240 Speaker 5: There is a Florida Attorney General who has turned his 36 00:01:46,319 --> 00:01:48,480 Speaker 5: sites towards the NFL and saying that the Rooney Rule 37 00:01:48,720 --> 00:01:51,320 Speaker 5: goes against federal law. We'll see how that plays out. 38 00:01:51,400 --> 00:01:53,280 Speaker 5: And I mean, there are no reports right now that 39 00:01:53,720 --> 00:01:58,520 Speaker 5: those two things are connected, but we've seen different areas 40 00:01:58,600 --> 00:02:01,800 Speaker 5: of this administration set the sites on sporting leagues and 41 00:02:01,840 --> 00:02:04,520 Speaker 5: other organizations out there, so it wouldn't surprise me, but 42 00:02:04,560 --> 00:02:05,800 Speaker 5: it hasn't been reported yet. 43 00:02:05,880 --> 00:02:08,520 Speaker 2: So Randa, this is focusing primarily on the media rights 44 00:02:08,520 --> 00:02:09,440 Speaker 2: deals for the NFL. 45 00:02:09,680 --> 00:02:10,480 Speaker 3: Now most of those. 46 00:02:11,240 --> 00:02:12,120 Speaker 4: Even going back. 47 00:02:12,160 --> 00:02:14,919 Speaker 3: Thirty years, forty years, there's. 48 00:02:14,720 --> 00:02:16,960 Speaker 2: Been some paid component to it because even if I want 49 00:02:16,960 --> 00:02:19,320 Speaker 2: to watch my CBS game, I'm probably getting it through 50 00:02:19,320 --> 00:02:22,200 Speaker 2: my cable package as opposed to having my rabbit ears that. 51 00:02:22,639 --> 00:02:27,240 Speaker 2: So it's always been some consumers directly paying for sports. 52 00:02:27,480 --> 00:02:29,679 Speaker 2: Is it different now that it's streaming? 53 00:02:30,800 --> 00:02:32,040 Speaker 4: There are more partners now. 54 00:02:32,360 --> 00:02:34,919 Speaker 5: So Amazon has a Thursday night football game you can 55 00:02:34,960 --> 00:02:38,280 Speaker 5: stream on Peacock. Occasionally YouTube has streamed the game before. 56 00:02:38,560 --> 00:02:42,320 Speaker 5: The NFL has been selling rights to these streamers and 57 00:02:42,360 --> 00:02:46,239 Speaker 5: these broadcasting companies for many, many years, and as the 58 00:02:46,360 --> 00:02:48,600 Speaker 5: game has grown, as the business has grown, the costs 59 00:02:48,600 --> 00:02:51,280 Speaker 5: have grown as well. And I think in reference to 60 00:02:51,440 --> 00:02:54,120 Speaker 5: what it costs to watch all NFL games, yes, it 61 00:02:54,120 --> 00:02:56,600 Speaker 5: would be expensive because you would then be paying for 62 00:02:57,120 --> 00:02:59,399 Speaker 5: NFL Sunday ticket, you could be paying for red Zone, 63 00:02:59,400 --> 00:03:04,000 Speaker 5: you could be paying for each individual subscription of you know, 64 00:03:04,040 --> 00:03:06,360 Speaker 5: some of these games. With that in mind, of course, 65 00:03:06,400 --> 00:03:08,639 Speaker 5: the costs have gone up because they've added partners, they've 66 00:03:08,639 --> 00:03:10,840 Speaker 5: added games, you know, all of those things. 67 00:03:11,280 --> 00:03:13,440 Speaker 4: But again, like we're talking about. 68 00:03:13,200 --> 00:03:17,480 Speaker 5: ABC, NBCCBS, i'm ESPN, all of these things are you 69 00:03:17,520 --> 00:03:20,360 Speaker 5: could walk into a bar or just subscribe to your 70 00:03:20,400 --> 00:03:22,400 Speaker 5: local cable and they would be right there. Now, you 71 00:03:22,400 --> 00:03:24,960 Speaker 5: wouldn't be able to choose a game. And here in 72 00:03:24,960 --> 00:03:27,359 Speaker 5: New York you would probably be subject to the Jets 73 00:03:27,360 --> 00:03:29,480 Speaker 5: and Giants and other places. It would be the local 74 00:03:29,800 --> 00:03:32,120 Speaker 5: markets there. So it really depends on if the customer 75 00:03:32,160 --> 00:03:34,640 Speaker 5: wants to pay for all of these games that the 76 00:03:34,720 --> 00:03:35,640 Speaker 5: NFL broadcast. 77 00:03:36,120 --> 00:03:38,880 Speaker 6: In the letter here by Senator Mike Lee, he said 78 00:03:38,880 --> 00:03:41,400 Speaker 6: to watch every NFL game during the past season, football 79 00:03:41,440 --> 00:03:45,839 Speaker 6: fans spent almost one thousand dollars on cable and streaming descriptions. Yeah, 80 00:03:46,080 --> 00:03:47,360 Speaker 6: I guess if you're a fan, Yeah. 81 00:03:47,200 --> 00:03:47,640 Speaker 3: It's with it. 82 00:03:47,680 --> 00:03:48,440 Speaker 4: I mean, it depends. 83 00:03:48,480 --> 00:03:50,480 Speaker 5: I would just say this that the last Super Bowl 84 00:03:50,600 --> 00:03:52,240 Speaker 5: was twelve to zero and then had one hundred and 85 00:03:52,240 --> 00:03:55,040 Speaker 5: twenty five million viewers, And it was twelve to zero 86 00:03:55,160 --> 00:03:57,080 Speaker 5: at one point heading I believe, heading into the fourth 87 00:03:57,160 --> 00:03:59,800 Speaker 5: or you know, fairly well into the game. And it 88 00:03:59,920 --> 00:04:02,160 Speaker 5: was the second most watched Super Bowl of all time. 89 00:04:02,360 --> 00:04:04,280 Speaker 5: And with that in mind, if you're the NFL, of 90 00:04:04,320 --> 00:04:07,920 Speaker 5: course you would like to go back to the negotiating 91 00:04:07,960 --> 00:04:10,760 Speaker 5: table to try to get more money. Now, if let's 92 00:04:10,800 --> 00:04:13,880 Speaker 5: just say that this investigation kicks things down the road. 93 00:04:14,440 --> 00:04:16,520 Speaker 5: If your Super Bowl is twelve to zero and it's 94 00:04:16,520 --> 00:04:19,880 Speaker 5: the second most watched game ever four years down the 95 00:04:19,880 --> 00:04:21,839 Speaker 5: line might not be a bad thing. You just want 96 00:04:21,880 --> 00:04:23,880 Speaker 5: that money right now. So evidently I do think that 97 00:04:23,920 --> 00:04:27,000 Speaker 5: the NFL will get their money. It's just about when to. 98 00:04:26,880 --> 00:04:27,839 Speaker 3: Get even more money. 99 00:04:27,880 --> 00:04:31,280 Speaker 2: There's obviously very advanced talks to add an eighteenth game, 100 00:04:31,440 --> 00:04:32,960 Speaker 2: and that would be that would be it. 101 00:04:32,839 --> 00:04:36,000 Speaker 4: And that would well, see, I mean that is I 102 00:04:36,040 --> 00:04:36,720 Speaker 4: would say it happen. 103 00:04:36,760 --> 00:04:39,000 Speaker 3: You have to open up the whole agreement with the players. 104 00:04:38,839 --> 00:04:41,760 Speaker 5: Of course, yeah, And the Players Association has been in 105 00:04:42,600 --> 00:04:46,040 Speaker 5: flux for over a year. They've had three executive directors 106 00:04:46,080 --> 00:04:48,760 Speaker 5: in under a year. And when you have three executive directors, 107 00:04:48,880 --> 00:04:52,080 Speaker 5: the NFL then has to go to the players Association, 108 00:04:52,240 --> 00:04:54,560 Speaker 5: rip up the collective bargaining agreements, and then they have 109 00:04:54,640 --> 00:04:57,159 Speaker 5: to come to terms on a deal. Those negotiations have 110 00:04:57,279 --> 00:04:59,880 Speaker 5: not started at all. So an eighteenth game, a six 111 00:05:00,000 --> 00:05:03,440 Speaker 5: sixteen international game package that the NFL could sell, those 112 00:05:03,480 --> 00:05:05,960 Speaker 5: negotiations haven't started at all. So I think that Roger, 113 00:05:06,279 --> 00:05:09,120 Speaker 5: I've heard Jerry Jones, I've heard Robert Kraft. And those 114 00:05:09,120 --> 00:05:11,240 Speaker 5: are the Patriots and the Cowboys owners all talk about 115 00:05:11,320 --> 00:05:13,800 Speaker 5: adding these things, and I do think that they want to, 116 00:05:14,040 --> 00:05:16,159 Speaker 5: but it's so so early, which is why, you know, 117 00:05:16,200 --> 00:05:18,640 Speaker 5: going back to this investigation, in a worst case scenario 118 00:05:18,720 --> 00:05:21,440 Speaker 5: for the NFL, if they had to wait four years, 119 00:05:21,480 --> 00:05:23,440 Speaker 5: it might work out in their favor because of the 120 00:05:23,480 --> 00:05:25,720 Speaker 5: fact that they haven't negotiated as CBA. 121 00:05:25,839 --> 00:05:27,720 Speaker 4: So you know, I think that we'll see how this 122 00:05:27,800 --> 00:05:28,400 Speaker 4: plays out. 123 00:05:28,480 --> 00:05:31,120 Speaker 5: But right now, I think that if I'm the NFL 124 00:05:31,200 --> 00:05:33,159 Speaker 5: watching this, it's like, Okay, we'll see. 125 00:05:33,600 --> 00:05:36,719 Speaker 6: Yeah, what could possibly be the endgame here? 126 00:05:38,200 --> 00:05:39,839 Speaker 4: I'm not exactly sure. 127 00:05:40,000 --> 00:05:43,320 Speaker 5: I think that it could be to congregate some of 128 00:05:43,320 --> 00:05:47,880 Speaker 5: these costs to make sure that the CBS and the 129 00:05:47,880 --> 00:05:50,480 Speaker 5: ABC that there are less streamers involved, that it is 130 00:05:50,520 --> 00:05:52,760 Speaker 5: not passed down to the customer as much. But again, 131 00:05:53,240 --> 00:05:54,880 Speaker 5: like you got to think, this was one of the 132 00:05:54,920 --> 00:05:57,360 Speaker 5: most watched NFL seasons of all time, So really, are 133 00:05:57,400 --> 00:05:59,599 Speaker 5: the streamers hurting and I mean, excuse me, are the 134 00:05:59,640 --> 00:06:02,600 Speaker 5: customer is hurting if they're continuing to tune in that 135 00:06:02,600 --> 00:06:05,000 Speaker 5: That is what I think the NFL's defense to this 136 00:06:05,040 --> 00:06:08,960 Speaker 5: would be is that people are watching regardless and they're paying. 137 00:06:10,080 --> 00:06:13,159 Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this. 138 00:06:16,640 --> 00:06:20,320 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 139 00:06:20,400 --> 00:06:23,520 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 140 00:06:23,520 --> 00:06:26,839 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 141 00:06:26,880 --> 00:06:30,200 Speaker 1: you get your podcasts, or watch us live on YouTube. 142 00:06:31,120 --> 00:06:32,520 Speaker 2: One of the news that we covered earlier today, I 143 00:06:32,560 --> 00:06:34,719 Speaker 2: want to cover it from a different angles the NFL. 144 00:06:35,400 --> 00:06:38,880 Speaker 2: The DJ is investigating the NFL on anti competitive terrifs 145 00:06:38,920 --> 00:06:41,080 Speaker 2: and it relates to the media rights deals that they have, 146 00:06:42,080 --> 00:06:44,880 Speaker 2: and the media rights deals are so important to these leagues. 147 00:06:44,920 --> 00:06:45,360 Speaker 4: It is a. 148 00:06:45,320 --> 00:06:49,800 Speaker 2: Primary driver of value for the franchises across pretty much 149 00:06:49,839 --> 00:06:53,960 Speaker 2: all sports. And it's equally valuable to the broadcast networks 150 00:06:54,000 --> 00:06:55,880 Speaker 2: and to the cable networks and to the streamers that 151 00:06:55,920 --> 00:06:59,560 Speaker 2: put this stuff out there, because boy, advertisers love live programming. 152 00:06:59,560 --> 00:07:02,080 Speaker 2: Ethan Ynek, and she's the expert here, she's a US 153 00:07:02,200 --> 00:07:04,480 Speaker 2: media analyst here. So Keitha just talk to us a 154 00:07:04,520 --> 00:07:08,360 Speaker 2: little bit about this dooja investigation into the NFL. What 155 00:07:08,680 --> 00:07:10,760 Speaker 2: are the big media companies who are so vested into this, 156 00:07:11,160 --> 00:07:11,840 Speaker 2: What are they saying? 157 00:07:13,280 --> 00:07:15,920 Speaker 7: This is actually good news, Paul, for the media companies. 158 00:07:16,000 --> 00:07:19,120 Speaker 7: So remember we are right smack in the middle of 159 00:07:19,560 --> 00:07:23,600 Speaker 7: what is expected to become a very very contentious media 160 00:07:23,720 --> 00:07:27,680 Speaker 7: rights renegotiation process with the NFL. So the NFL is 161 00:07:27,880 --> 00:07:31,400 Speaker 7: seeking something like about a sixty percent increase in its 162 00:07:31,480 --> 00:07:36,960 Speaker 7: rights fees basically from companies like Fox, Paramount Skuidance from Comcasts, 163 00:07:36,960 --> 00:07:38,880 Speaker 7: and be Seeing from Walt Disney. Those are the companies 164 00:07:38,920 --> 00:07:40,080 Speaker 7: that are the most exposed. 165 00:07:40,400 --> 00:07:40,960 Speaker 3: And with the. 166 00:07:40,920 --> 00:07:44,960 Speaker 7: DOJ going after the NFL on anti competitive practices, it 167 00:07:45,000 --> 00:07:47,560 Speaker 7: looks like what they're saying is that the NFL is 168 00:07:47,600 --> 00:07:50,960 Speaker 7: trying to harm consumers by basically making it more and 169 00:07:51,040 --> 00:07:53,640 Speaker 7: more difficult to access their programming. So we know that 170 00:07:53,680 --> 00:07:56,360 Speaker 7: the NFL in the past has tried to sell these 171 00:07:56,360 --> 00:08:00,120 Speaker 7: smaller packages to streamers, you know, whether it's Christmas Day 172 00:08:00,160 --> 00:08:04,200 Speaker 7: games to Netflix or the Thursday night football package to Amazon. 173 00:08:04,480 --> 00:08:07,840 Speaker 7: They try to carve out these smaller deals basically in 174 00:08:07,880 --> 00:08:12,360 Speaker 7: a move to kind of maximize you know, monetization. But 175 00:08:12,440 --> 00:08:14,600 Speaker 7: obviously that's not sitting well with the DOJ. But this 176 00:08:14,640 --> 00:08:16,680 Speaker 7: is good news for the broadcasters because I think, you know, 177 00:08:16,720 --> 00:08:20,280 Speaker 7: we think it gives them definitely better negotiating leverage when 178 00:08:20,320 --> 00:08:23,200 Speaker 7: they go back to renegotiate deals this year with the NFL. 179 00:08:24,240 --> 00:08:27,360 Speaker 6: What about let's now head to Disney, they're reading to 180 00:08:27,400 --> 00:08:30,280 Speaker 6: cut a thousand jobs, largely in marketing. You've talked a 181 00:08:30,280 --> 00:08:33,160 Speaker 6: lot about efficiency, So where exactly are these job cuts 182 00:08:33,160 --> 00:08:36,000 Speaker 6: happening and how do you make sure that or as 183 00:08:36,000 --> 00:08:39,440 Speaker 6: an analyst, how do you make sure that these don't 184 00:08:39,480 --> 00:08:43,440 Speaker 6: hit the creative engines of Disney and really affect the 185 00:08:43,480 --> 00:08:44,480 Speaker 6: future of the company. 186 00:08:45,400 --> 00:08:48,000 Speaker 7: Yeah, so it looks like it's about these job cuts 187 00:08:48,040 --> 00:08:51,160 Speaker 7: are really happening in the marketing departments. So let's just 188 00:08:51,240 --> 00:08:52,920 Speaker 7: look at you know, if you kind of take a 189 00:08:52,920 --> 00:08:55,240 Speaker 7: step back and look at the whole Disney engine. I mean, 190 00:08:55,240 --> 00:08:59,040 Speaker 7: they have over two hundred and thirty thousand employees, so, 191 00:08:59,200 --> 00:09:01,839 Speaker 7: you know, cutting about one thousand jobs, it's less than 192 00:09:01,840 --> 00:09:04,240 Speaker 7: one percent. It's really just a drop in the bucket. 193 00:09:04,840 --> 00:09:07,280 Speaker 7: But you know, the layoffs are really part of this 194 00:09:07,400 --> 00:09:10,800 Speaker 7: whole cost cutting and as you just said, the efficiencies. 195 00:09:10,840 --> 00:09:14,439 Speaker 7: You know, Ever since Barb Byger returned to Disney as 196 00:09:14,480 --> 00:09:17,480 Speaker 7: the CEO in November of twenty twenty two, he embarked 197 00:09:17,520 --> 00:09:20,600 Speaker 7: on this whole efficiency cost cutting program. He eliminated about 198 00:09:20,640 --> 00:09:24,040 Speaker 7: eight thousand jobs, which resulted in about seven and a 199 00:09:24,080 --> 00:09:28,000 Speaker 7: half billion dollars of cost cuts. And really this latest 200 00:09:28,040 --> 00:09:31,200 Speaker 7: wave of another thousand layoffs is just part of that. 201 00:09:31,360 --> 00:09:34,920 Speaker 7: So it is not in any of the creative parts 202 00:09:34,960 --> 00:09:38,079 Speaker 7: of the company. This is really more in the marketing department. 203 00:09:38,800 --> 00:09:41,520 Speaker 7: So we already know that, you know, Disney has many 204 00:09:41,720 --> 00:09:45,560 Speaker 7: multiple operations, so they have like a whole team supporting 205 00:09:45,559 --> 00:09:48,280 Speaker 7: Disney Plus. They have a very similar team supporting Hulu, 206 00:09:48,400 --> 00:09:51,400 Speaker 7: which is basically, you know, a product that is very 207 00:09:51,440 --> 00:09:53,760 Speaker 7: soon going to be integrated. So Disney Plus and Hulu 208 00:09:53,760 --> 00:09:57,320 Speaker 7: are going to become one consolidated, integrated product, which means 209 00:09:57,320 --> 00:10:00,280 Speaker 7: there's really no need to have two separate treat teas teams, 210 00:10:00,520 --> 00:10:03,080 Speaker 7: and so this is just really a process of streamlining 211 00:10:03,160 --> 00:10:08,640 Speaker 7: and removing redundancies and increasing the efficiency in the business. 212 00:10:09,280 --> 00:10:13,760 Speaker 2: KEITHA, what's the latest on the Paramount Skydiance and Warner 213 00:10:13,760 --> 00:10:14,520 Speaker 2: Brothers Discovery. 214 00:10:14,520 --> 00:10:15,920 Speaker 3: When is that deal going to close? 215 00:10:16,000 --> 00:10:18,959 Speaker 2: And what's some of the feedback you're getting from investors 216 00:10:18,960 --> 00:10:19,600 Speaker 2: about this deal? 217 00:10:20,720 --> 00:10:24,679 Speaker 7: The deal Paul is expected to get regulatory approval and 218 00:10:24,760 --> 00:10:28,320 Speaker 7: to close by September thirtieth of this year, so we 219 00:10:28,400 --> 00:10:31,280 Speaker 7: have a few more months. It looks like some of 220 00:10:31,320 --> 00:10:36,080 Speaker 7: the biggest investors are recommending that Warner Brothers shareholders obviously 221 00:10:36,160 --> 00:10:38,600 Speaker 7: vote in favor of the deal. That vote is set 222 00:10:38,640 --> 00:10:41,440 Speaker 7: for April twenty third, So it definitely looks like they're 223 00:10:41,480 --> 00:10:45,880 Speaker 7: not going to head into any big regulatory problem, something 224 00:10:45,880 --> 00:10:48,439 Speaker 7: that we were kind of anticipating with Netflix. This path 225 00:10:48,480 --> 00:10:51,760 Speaker 7: seems a lot more cleaner, a lot more smoother, and 226 00:10:52,600 --> 00:10:54,760 Speaker 7: in good news for Paramount, what they've done is they've 227 00:10:54,840 --> 00:10:57,760 Speaker 7: kind of secured the Middle Eastern funding, so they've got 228 00:10:57,760 --> 00:11:01,480 Speaker 7: about twenty four billion dollars, you know, some sovereign wealth 229 00:11:01,520 --> 00:11:04,160 Speaker 7: management funds. This was kind of a little bit of 230 00:11:04,160 --> 00:11:06,080 Speaker 7: an investor concern just kind of given all of the 231 00:11:06,120 --> 00:11:09,720 Speaker 7: geopolitical tensions and the regional conflicts there. But with that 232 00:11:09,800 --> 00:11:12,760 Speaker 7: kind of locked and loaded, I think investors are definitely 233 00:11:12,840 --> 00:11:15,720 Speaker 7: kind of heaving a sigh of relief here, and it 234 00:11:15,760 --> 00:11:20,240 Speaker 7: looks like everything will go, you know, as per plan. 235 00:11:20,559 --> 00:11:23,280 Speaker 7: The question, really, Paul, is whether they're going to be 236 00:11:23,360 --> 00:11:26,840 Speaker 7: able to deliver after the deal closes. That's really what 237 00:11:26,920 --> 00:11:29,480 Speaker 7: investors are going to be looking for, especially with the 238 00:11:29,520 --> 00:11:33,000 Speaker 7: six billion dollars of synergies that they've outlined and. 239 00:11:33,000 --> 00:11:34,560 Speaker 2: A lot of debt on the boundaryt talked to us 240 00:11:34,559 --> 00:11:36,920 Speaker 2: just real quickly how the market's thinking about their leverage 241 00:11:36,920 --> 00:11:38,559 Speaker 2: profile because they're gonna be the most or one of 242 00:11:38,600 --> 00:11:40,080 Speaker 2: the most levered media companies out. 243 00:11:40,000 --> 00:11:44,480 Speaker 7: There, absolutely right, Paul seven times leverage about eight billion 244 00:11:44,520 --> 00:11:47,480 Speaker 7: dollars in debt when the deal closes. So that is 245 00:11:47,559 --> 00:11:49,640 Speaker 7: really what you know, the market is worried about, as 246 00:11:49,679 --> 00:11:53,280 Speaker 7: you pointed pointed out, and you know, again we have 247 00:11:53,440 --> 00:11:55,880 Speaker 7: so many different parts here, but I think the biggest 248 00:11:55,960 --> 00:11:59,280 Speaker 7: worry is really the exposure to the linear TV ecosystem. 249 00:11:59,360 --> 00:12:02,280 Speaker 7: It's you know, at fifty five percent of revenue still 250 00:12:02,360 --> 00:12:05,280 Speaker 7: is going to come from, you know, the linear TV bundle, 251 00:12:06,240 --> 00:12:08,560 Speaker 7: and really it's about how well they can manage that. 252 00:12:08,760 --> 00:12:11,000 Speaker 7: So this is going to be a wait and wat story. 253 00:12:11,240 --> 00:12:13,320 Speaker 7: We've not seen very good results in the past, so 254 00:12:13,440 --> 00:12:14,240 Speaker 7: fingers crossed. 255 00:12:14,960 --> 00:12:18,080 Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this. 256 00:12:21,960 --> 00:12:25,640 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 257 00:12:25,720 --> 00:12:28,840 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 258 00:12:28,840 --> 00:12:32,160 Speaker 1: Auto with the Bloomberg Business app, Listen on demand wherever 259 00:12:32,200 --> 00:12:35,320 Speaker 1: you get your podcasts, or watch us live on YouTube. 260 00:12:36,360 --> 00:12:37,640 Speaker 2: You know, it seems like a lot of these big 261 00:12:37,640 --> 00:12:40,400 Speaker 2: tech companies are almost tripping over themselves to get press 262 00:12:40,440 --> 00:12:43,480 Speaker 2: releases out, saying how big their AI revenue is, how 263 00:12:43,559 --> 00:12:45,560 Speaker 2: fast it's growing, and. 264 00:12:45,640 --> 00:12:46,720 Speaker 3: Amazon's no difference. 265 00:12:46,760 --> 00:12:50,800 Speaker 2: Amazon CEO Andy Jase, in a shareholder letter set aws's 266 00:12:50,880 --> 00:12:53,960 Speaker 2: AI revenue run rate is over twenty billion dollars, as 267 00:12:53,960 --> 00:12:56,440 Speaker 2: Selections was just reporting. That's up from fifteen billion just 268 00:12:56,480 --> 00:12:59,240 Speaker 2: in first quarter. So that's pretty good. Stocks trading higher 269 00:12:59,240 --> 00:13:03,440 Speaker 2: on rog ranaj here technology channels for Bloomberg Intelligence. He's 270 00:13:03,480 --> 00:13:07,600 Speaker 2: out there in Chicago anrah Amazon twenty billion. 271 00:13:07,640 --> 00:13:09,000 Speaker 3: It seems big to me, how about you? 272 00:13:10,120 --> 00:13:11,760 Speaker 8: Yeah, no, it's a very big deal. In fact, this 273 00:13:11,800 --> 00:13:13,760 Speaker 8: is the first time they are actually putting a number 274 00:13:13,760 --> 00:13:16,360 Speaker 8: around it, because if you remember a couple of years ago, 275 00:13:16,440 --> 00:13:19,400 Speaker 8: Microsoft was throwing its number out and everybody else was 276 00:13:19,400 --> 00:13:21,960 Speaker 8: asking Amazon, where is your number? Where are you? But 277 00:13:22,160 --> 00:13:23,640 Speaker 8: you know, one of the things we talked about at 278 00:13:23,640 --> 00:13:27,080 Speaker 8: that point, Amazon's writing on the chat GPT wave where 279 00:13:27,120 --> 00:13:30,720 Speaker 8: Amazon's more enterprise focus, and now those enterprise workloads are 280 00:13:30,720 --> 00:13:33,800 Speaker 8: coming in and that's where we see the AI revenue 281 00:13:33,920 --> 00:13:35,040 Speaker 8: for Amazon. 282 00:13:35,600 --> 00:13:38,080 Speaker 6: How does this change the calculus for the outlook of 283 00:13:38,080 --> 00:13:40,720 Speaker 6: the company, like the are you more bullish than you 284 00:13:40,800 --> 00:13:41,400 Speaker 6: already are? 285 00:13:42,559 --> 00:13:44,600 Speaker 8: That's a very good question. In fact, we published a 286 00:13:44,640 --> 00:13:48,120 Speaker 8: note yesterday saying that we anticipate aw's growth to pick 287 00:13:48,200 --> 00:13:50,360 Speaker 8: up this year, in fact even in the first quarter, 288 00:13:50,440 --> 00:13:53,000 Speaker 8: because one of the things we saw just now it's 289 00:13:53,040 --> 00:13:55,840 Speaker 8: two days ago was Anthropics revenue went from I think 290 00:13:55,960 --> 00:13:59,359 Speaker 8: nine billion to thirty billion within no time. And AWS 291 00:13:59,480 --> 00:14:02,480 Speaker 8: is one of the preferred partners. And if you remember 292 00:14:02,559 --> 00:14:05,160 Speaker 8: two years ago, it was all Opening II Microsoft. Now 293 00:14:05,200 --> 00:14:07,760 Speaker 8: we are seeing Anthropic doing really well and that helps 294 00:14:07,800 --> 00:14:11,000 Speaker 8: Amazon Web Services. So this year we think Amazon Web 295 00:14:11,040 --> 00:14:14,160 Speaker 8: Service is going to do better than what most people anticipate. 296 00:14:14,960 --> 00:14:18,240 Speaker 2: And rag updates on kind of the competitive landscape. Now 297 00:14:18,240 --> 00:14:20,600 Speaker 2: where is Amazon fit in these days? 298 00:14:21,400 --> 00:14:24,080 Speaker 8: Yeah, so you go back and look at it. Prior 299 00:14:24,160 --> 00:14:27,720 Speaker 8: to the AI era, Amazon Web Services was the largest. 300 00:14:27,840 --> 00:14:30,640 Speaker 8: It's still the largest, but it was the largest by 301 00:14:30,640 --> 00:14:34,480 Speaker 8: a massive amount compared to Microsoft and Google. Since then, 302 00:14:34,520 --> 00:14:37,480 Speaker 8: after charge GPT, Microsoft really closed the gap with them 303 00:14:37,800 --> 00:14:41,520 Speaker 8: and became a much bigger cloud vendor, you know, compared 304 00:14:41,520 --> 00:14:45,280 Speaker 8: to Google, but not as big as Amazon. But all 305 00:14:45,320 --> 00:14:48,440 Speaker 8: three of them are doing phenomenally well. Because remember, this 306 00:14:48,560 --> 00:14:50,320 Speaker 8: is a business where you need to put in a 307 00:14:50,360 --> 00:14:54,040 Speaker 8: lot of CAPEX and data centers in order to gain 308 00:14:54,080 --> 00:14:56,280 Speaker 8: this revenue. This is not something you and I can 309 00:14:56,320 --> 00:14:59,240 Speaker 8: build in house using you know, either Claude or anything, 310 00:14:59,280 --> 00:15:04,240 Speaker 8: because you need physical infrastructure, data center chips. Amazon talked 311 00:15:04,240 --> 00:15:07,120 Speaker 8: about their chip business for example. So Amazon still is 312 00:15:07,280 --> 00:15:10,680 Speaker 8: in the driver's seat with the largest market share, but 313 00:15:10,840 --> 00:15:13,480 Speaker 8: both the others I would say Microsoft and Google are 314 00:15:13,520 --> 00:15:15,600 Speaker 8: catching up fairly faster at this point. 315 00:15:15,760 --> 00:15:17,760 Speaker 6: So speaking of this flu of deals, we also have Core. 316 00:15:17,800 --> 00:15:20,720 Speaker 6: We've expanding their metadal for AIA computing the twenty one 317 00:15:20,800 --> 00:15:23,880 Speaker 6: billion dollars. At a headline level, what does the deal 318 00:15:24,000 --> 00:15:26,520 Speaker 6: tell you the size and duration was what is that 319 00:15:26,600 --> 00:15:29,800 Speaker 6: signal and does it tell you METASAI demand is stronger 320 00:15:29,840 --> 00:15:30,520 Speaker 6: than expected? 321 00:15:31,880 --> 00:15:33,960 Speaker 8: I think Beta is spending so much because they need 322 00:15:34,000 --> 00:15:36,880 Speaker 8: to be relevant. Also in the large language model space, 323 00:15:37,200 --> 00:15:40,160 Speaker 8: it seems to me that this particular deal is tied 324 00:15:40,240 --> 00:15:43,360 Speaker 8: more so for the training of the model rather than infancing. 325 00:15:43,400 --> 00:15:45,200 Speaker 8: Because one of the things what we are seeing is 326 00:15:45,440 --> 00:15:48,320 Speaker 8: when it comes to even hyperskid cloud providers, whether that's 327 00:15:48,360 --> 00:15:51,080 Speaker 8: Microsoft or Google, they're doing some of the work in 328 00:15:51,120 --> 00:15:53,760 Speaker 8: house with their own data centers, but as they can't 329 00:15:53,880 --> 00:15:57,040 Speaker 8: expand that rapidly, they're going out to these neoclouds, whether 330 00:15:57,080 --> 00:16:02,440 Speaker 8: it's Nebeis or code and renting out their capacity so 331 00:16:02,480 --> 00:16:04,280 Speaker 8: that they can parse out some of that work to 332 00:16:04,320 --> 00:16:06,800 Speaker 8: them as well. So this is just a continuation of that. 333 00:16:07,120 --> 00:16:10,120 Speaker 8: The bottom line is AI infrastructure demand is very strong 334 00:16:10,440 --> 00:16:13,440 Speaker 8: and it actually helps out everybody, not just the hyperscal 335 00:16:13,600 --> 00:16:16,400 Speaker 8: cloud providers, but also the neoclouds. 336 00:16:16,000 --> 00:16:18,320 Speaker 4: And you cover all the software providers. 337 00:16:19,400 --> 00:16:20,960 Speaker 2: They've had a tough go over it over the last 338 00:16:21,000 --> 00:16:23,440 Speaker 2: several months, four or five months as investors try to 339 00:16:23,520 --> 00:16:26,400 Speaker 2: sense which one of these software companies and sectors and 340 00:16:26,480 --> 00:16:28,880 Speaker 2: verticals could be at risk from AI. 341 00:16:29,520 --> 00:16:31,520 Speaker 3: Where are we now? Where Where's what's the market selling 342 00:16:31,560 --> 00:16:32,200 Speaker 3: these days? 343 00:16:32,840 --> 00:16:34,280 Speaker 8: So you can see them. I mean the index is 344 00:16:34,320 --> 00:16:36,960 Speaker 8: down quite a bit even today. Every software company is down, 345 00:16:37,240 --> 00:16:39,280 Speaker 8: and yesterday we heard that, you know, there's going to 346 00:16:39,280 --> 00:16:41,760 Speaker 8: be some new model by Clouds. So every time there 347 00:16:41,840 --> 00:16:44,400 Speaker 8: is a brand new model from Anthropic or anybody else, 348 00:16:44,440 --> 00:16:46,680 Speaker 8: there is pressure on these names, and I don't think 349 00:16:46,680 --> 00:16:49,520 Speaker 8: that's going to change anytime soon. What these companies have 350 00:16:49,600 --> 00:16:51,800 Speaker 8: to do is show that they are not going to 351 00:16:51,800 --> 00:16:55,240 Speaker 8: get cannibalized by these large language models, but actually embed 352 00:16:55,320 --> 00:16:58,240 Speaker 8: them in their core product and can continue with that 353 00:16:58,480 --> 00:17:01,280 Speaker 8: profitabil growth that they have. But that's not an argument 354 00:17:01,320 --> 00:17:04,040 Speaker 8: that gets settled in the next twelve months. It's going 355 00:17:04,080 --> 00:17:06,600 Speaker 8: to take a few years to build that out. What 356 00:17:06,640 --> 00:17:09,280 Speaker 8: we want to see from companies like Salesforce is to 357 00:17:09,280 --> 00:17:10,879 Speaker 8: go out and buy back a lot of the shares, 358 00:17:10,880 --> 00:17:13,520 Speaker 8: which they did twenty five billion dollar buy back that 359 00:17:13,600 --> 00:17:16,960 Speaker 8: they have announced. If these guys are able to embed 360 00:17:17,119 --> 00:17:20,159 Speaker 8: some of these models in their own products and protect 361 00:17:20,240 --> 00:17:22,359 Speaker 8: what they have, I think this is going to be 362 00:17:22,400 --> 00:17:24,879 Speaker 8: a change around in sentiment. But again, that's not going 363 00:17:24,920 --> 00:17:27,080 Speaker 8: to happen anytime soon. It's going to be a few 364 00:17:27,119 --> 00:17:28,320 Speaker 8: years before that shows up. 365 00:17:29,720 --> 00:17:32,520 Speaker 3: Stay with us more from Bloomberg Intelligence coming up there 366 00:17:32,560 --> 00:17:32,760 Speaker 3: for this. 367 00:17:35,880 --> 00:17:39,560 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 368 00:17:39,640 --> 00:17:42,720 Speaker 1: weekdays at ten am Eastern on Apple Coarclay, and Android 369 00:17:42,760 --> 00:17:46,040 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 370 00:17:46,119 --> 00:17:49,240 Speaker 1: you get your podcasts, or watch us live on YouTube. 371 00:17:50,119 --> 00:17:51,160 Speaker 3: Bernie's they're out there. 372 00:17:51,200 --> 00:17:55,560 Speaker 2: Constellation Brands was last night after the close, stock straining 373 00:17:55,600 --> 00:17:56,960 Speaker 2: higher here. I thought some of the guidance was a 374 00:17:57,000 --> 00:17:59,199 Speaker 2: little soft, but I guess the street says, hey, it's 375 00:17:59,240 --> 00:18:00,560 Speaker 2: better than we thought it was to be able. Let's 376 00:18:00,560 --> 00:18:03,400 Speaker 2: break it down with the red Brown Bloomberg consumer reporter 377 00:18:04,040 --> 00:18:06,720 Speaker 2: read what do we hear from Constellation about their business. 378 00:18:07,080 --> 00:18:10,800 Speaker 9: Yeah, you're right, the guidance was a little soft last night, 379 00:18:10,840 --> 00:18:12,399 Speaker 9: but I think this morning on the call, the company 380 00:18:12,480 --> 00:18:17,359 Speaker 9: kind of made the case that March sales were quite strong. 381 00:18:17,640 --> 00:18:19,520 Speaker 9: They feel like that momentum in this early part of 382 00:18:19,560 --> 00:18:21,560 Speaker 9: the year is going to kind of carry on through 383 00:18:21,600 --> 00:18:24,240 Speaker 9: the summer, and with that, they're planning to kind of 384 00:18:24,240 --> 00:18:27,720 Speaker 9: support the early momentum with I think the word they 385 00:18:27,800 --> 00:18:30,040 Speaker 9: use was an aggressive marketing campaign. So if you think 386 00:18:30,080 --> 00:18:32,160 Speaker 9: about the big events we have in the summer, makes 387 00:18:32,160 --> 00:18:33,840 Speaker 9: a lot of sense. Of the World Cup, the company 388 00:18:33,840 --> 00:18:36,719 Speaker 9: expects that to be kind of a growth driver, especially 389 00:18:36,760 --> 00:18:39,640 Speaker 9: for their bigger brands Modello Corona, you know, we associate 390 00:18:39,680 --> 00:18:41,439 Speaker 9: those with the summer as well, so makes a lot 391 00:18:41,440 --> 00:18:43,000 Speaker 9: of sense. So I think that's kind of explaining a 392 00:18:43,040 --> 00:18:45,040 Speaker 9: little bit of the share move that we're seeing. The 393 00:18:45,160 --> 00:18:47,119 Speaker 9: question now, I guess, becomes whether or not that this 394 00:18:47,240 --> 00:18:49,800 Speaker 9: is just a blip or they're still kind of subject 395 00:18:49,800 --> 00:18:51,760 Speaker 9: to the sort of secular decline we're seeing in the 396 00:18:51,840 --> 00:18:53,200 Speaker 9: other parts of the alcohol industry. 397 00:18:53,480 --> 00:18:55,879 Speaker 6: How much of this softer outlook is macro driven. We 398 00:18:55,960 --> 00:18:58,760 Speaker 6: know that it's not really a good economy consumers are 399 00:18:58,760 --> 00:19:01,480 Speaker 6: feeling pinch as opposed to with the products themselves. 400 00:19:01,800 --> 00:19:05,240 Speaker 9: Yeah, no, the company is making the case with the 401 00:19:05,359 --> 00:19:07,680 Speaker 9: when they kind of justified their guidance and it is 402 00:19:07,840 --> 00:19:11,800 Speaker 9: the lack of economic visibility. They also withdrew their twenty 403 00:19:11,840 --> 00:19:14,640 Speaker 9: twenty eight guidance as well for the same reason. They say, 404 00:19:14,640 --> 00:19:16,879 Speaker 9: we just can't see that far out in advance at 405 00:19:16,920 --> 00:19:18,760 Speaker 9: the moment. But again, it kind of comes back to 406 00:19:18,800 --> 00:19:20,760 Speaker 9: this question about whether or not it is an economic 407 00:19:20,800 --> 00:19:23,720 Speaker 9: situation that they're kind of dealing with right now or 408 00:19:23,720 --> 00:19:26,600 Speaker 9: it is just their subject to the kind of consistent 409 00:19:26,640 --> 00:19:29,399 Speaker 9: decline we see in the beer market. Analysts are kind 410 00:19:29,440 --> 00:19:32,320 Speaker 9: of split on what the real situation is. 411 00:19:32,640 --> 00:19:37,560 Speaker 2: You mentioned some of their brands, Modello and Corona, brands 412 00:19:37,600 --> 00:19:40,919 Speaker 2: that identify with the Hispanic audience in this country. 413 00:19:40,920 --> 00:19:42,200 Speaker 3: The companies in the past has. 414 00:19:42,160 --> 00:19:45,520 Speaker 2: Caught out the change in immigration policy is impacting having 415 00:19:45,560 --> 00:19:46,440 Speaker 2: an impact what they have. 416 00:19:46,480 --> 00:19:47,919 Speaker 3: They updated their thoughts there. 417 00:19:47,920 --> 00:19:49,439 Speaker 9: So during the call they said they actually saw a 418 00:19:49,440 --> 00:19:52,240 Speaker 9: sequential improvement and those zip codes that have. 419 00:19:52,359 --> 00:19:55,080 Speaker 4: A higher Hispanic population. 420 00:19:56,000 --> 00:19:58,439 Speaker 9: So you know, I guess it doesn't tell us a 421 00:19:58,480 --> 00:20:01,879 Speaker 9: ton if it just a sequential improvement from sort of 422 00:20:01,880 --> 00:20:02,720 Speaker 9: a lower start. 423 00:20:02,840 --> 00:20:03,000 Speaker 4: Right. 424 00:20:03,480 --> 00:20:05,720 Speaker 9: They didn't give any sort of specific details on just 425 00:20:05,760 --> 00:20:07,360 Speaker 9: how much of an improvement it was, so I guess 426 00:20:07,359 --> 00:20:08,639 Speaker 9: it's something that we still need to kind of keep 427 00:20:08,640 --> 00:20:09,040 Speaker 9: an eye on. 428 00:20:09,520 --> 00:20:12,000 Speaker 6: What about I mean, the company in general has benefited 429 00:20:12,040 --> 00:20:16,840 Speaker 6: from premiumization. Are we seeing customers trade down and what 430 00:20:16,960 --> 00:20:18,600 Speaker 6: trends are they pointing to? 431 00:20:18,960 --> 00:20:21,280 Speaker 9: Yeah, the company said that that trend is continuing, so 432 00:20:21,359 --> 00:20:24,240 Speaker 9: they're still seeing some strength within their premium brands. I 433 00:20:24,280 --> 00:20:26,159 Speaker 9: think what may be going on is that people are 434 00:20:26,200 --> 00:20:28,200 Speaker 9: drinking less, but when they do drink, you know, maybe 435 00:20:28,240 --> 00:20:31,000 Speaker 9: I'll reach for the nicer options. So we've seen that 436 00:20:31,040 --> 00:20:32,919 Speaker 9: in other parts of the alcohol industry as well, So, 437 00:20:33,040 --> 00:20:37,080 Speaker 9: like you know, Spirits tend To has been pushing premiumization 438 00:20:37,200 --> 00:20:40,280 Speaker 9: as well, so that that trend might you know, maybe 439 00:20:40,280 --> 00:20:42,080 Speaker 9: we don't think of beer as necessarily always like a 440 00:20:42,080 --> 00:20:44,560 Speaker 9: premium option, but there are sort of ways to trade 441 00:20:44,560 --> 00:20:45,720 Speaker 9: within the category. 442 00:20:46,520 --> 00:20:49,439 Speaker 3: All Right, you're of that demo, a younger demo, Thank you? 443 00:20:49,520 --> 00:20:51,120 Speaker 4: Are you guys drinking beer? 444 00:20:51,280 --> 00:20:54,080 Speaker 2: Drinking the Red White Claws and all that iced tea 445 00:20:54,080 --> 00:20:54,760 Speaker 2: stuff and all that. 446 00:20:55,280 --> 00:20:57,439 Speaker 9: Yeah, No, it's I guess when you go. I mean, 447 00:20:57,480 --> 00:21:00,119 Speaker 9: obviously in New York's a specific you know beer, I 448 00:21:00,119 --> 00:21:03,119 Speaker 9: mean alcohol culture, bar culture. But I guess when you 449 00:21:03,119 --> 00:21:04,600 Speaker 9: do go out there, you do see more people kind 450 00:21:04,640 --> 00:21:08,720 Speaker 9: of holding cans. A lot of the times, it's less 451 00:21:09,280 --> 00:21:11,680 Speaker 9: a white claw, that's it's more less seltzers. These days, 452 00:21:11,680 --> 00:21:13,600 Speaker 9: it's more theas ready to drink. So think of like 453 00:21:13,600 --> 00:21:15,720 Speaker 9: a serf side, which is like a spiked lemonade, a 454 00:21:15,800 --> 00:21:18,080 Speaker 9: spiked ice tea. Those are really popular right now. And 455 00:21:18,119 --> 00:21:19,679 Speaker 9: it all kind of comes back to this idea that 456 00:21:19,720 --> 00:21:22,560 Speaker 9: people are just changing the way they drink. They're being 457 00:21:22,600 --> 00:21:24,840 Speaker 9: more conscientious with how they drink. You know, they still 458 00:21:24,880 --> 00:21:27,080 Speaker 9: want to be social, be out talking to people, you know, 459 00:21:27,600 --> 00:21:31,359 Speaker 9: like their inhibitions go, but they want to not deal 460 00:21:31,400 --> 00:21:33,520 Speaker 9: with all that all of the health consequences when it 461 00:21:33,520 --> 00:21:35,480 Speaker 9: comes to drinking. They don't want they want something that's 462 00:21:35,480 --> 00:21:38,000 Speaker 9: a lower calorie. They want something that's lighter, easier to drink. 463 00:21:38,680 --> 00:21:42,080 Speaker 9: So I guess you know, that's it's a debate that's 464 00:21:42,119 --> 00:21:43,680 Speaker 9: been going on for a long time of like our 465 00:21:43,760 --> 00:21:46,800 Speaker 9: younger people actually drinking less. It's it's really kind of 466 00:21:46,840 --> 00:21:48,840 Speaker 9: hard to like tease out in the data or they're 467 00:21:48,880 --> 00:21:51,040 Speaker 9: just like changing, like we're saying, they're just picking difference 468 00:21:51,080 --> 00:21:51,720 Speaker 9: in constellation. 469 00:21:51,800 --> 00:21:54,720 Speaker 2: Are they happy with their portfolio of brands or they 470 00:21:54,720 --> 00:21:56,240 Speaker 2: think are they always buying and selling stuff? 471 00:21:56,280 --> 00:21:58,879 Speaker 3: But I think right now they should be happy. 472 00:21:58,880 --> 00:22:01,320 Speaker 9: They have some of the most popular brands like Modella 473 00:22:01,359 --> 00:22:03,639 Speaker 9: obviously unseated bud Light a few years ago as the 474 00:22:03,640 --> 00:22:07,640 Speaker 9: most popular beer brand in the country. Corona, I think 475 00:22:07,720 --> 00:22:10,440 Speaker 9: is fifth. They also have Pacifico is one of the 476 00:22:10,520 --> 00:22:13,639 Speaker 9: highest growing brands as well, So I think that they 477 00:22:13,680 --> 00:22:16,280 Speaker 9: should be pretty happy with that stable. But you know, 478 00:22:16,320 --> 00:22:19,040 Speaker 9: we've seen deals happening in obviously the sort of rumors 479 00:22:19,040 --> 00:22:24,080 Speaker 9: around Brown Foreman potentially merging in a couple of weeks ago, 480 00:22:24,200 --> 00:22:26,879 Speaker 9: so they're, you know, in this sort of shrinking market 481 00:22:26,880 --> 00:22:29,679 Speaker 9: to gain growth, there's going to be probably more of 482 00:22:29,720 --> 00:22:31,920 Speaker 9: these sort of swaps, you know, in portfolios. 483 00:22:33,280 --> 00:22:37,960 Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify, 484 00:22:38,160 --> 00:22:41,640 Speaker 1: and anywhere else you get your podcasts. 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