WEBVTT - SCOTUS Strikes Down Tariffs, West Virginia Sues Apple 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, podcasts, radio news. 0:00:09.600 --> 0:00:10.680 Welcome to Bloomberg Tech. 0:00:10.720 --> 0:00:13.320 In the last hour, the US Supreme Court has struck 0:00:13.360 --> 0:00:16.759 down President Donald trump sweeping global tariffs in a six 0:00:16.800 --> 0:00:20.160 to three decision. CNN is reporting that the President has 0:00:20.160 --> 0:00:23.320 a backup plan and has labeled the decision a disgrace. 0:00:23.480 --> 0:00:25.919 If we get official comment from the White House or 0:00:25.960 --> 0:00:28.040 the President, we'll bring it to you live. Let's get 0:00:28.080 --> 0:00:31.200 to markets and to summarize the reaction when the headlines 0:00:31.280 --> 0:00:35.680 hit equity search, particular tech, particularly technology stocks. You look 0:00:35.760 --> 0:00:38.880 at both the NASA one hundred in the Philadelphia Semiconductor Index, 0:00:38.920 --> 0:00:42.680 they've actually continue to push to session highs. Bonds fell, 0:00:42.960 --> 0:00:45.839 the dollar fell, particularly duration, looking at US ten year 0:00:45.920 --> 0:00:48.879 yield up a little more than two basis points at 0:00:48.920 --> 0:00:51.199 four point zero nine percent, but also in terms of 0:00:51.320 --> 0:00:52.800 duration thirty year as well. 0:00:53.120 --> 0:00:53.720 On the move. 0:00:53.920 --> 0:00:56.240 Let's get the key details and go to Bloomberg's a 0:00:56.320 --> 0:00:59.360 Marie Horden, who needs to also talk us through like 0:00:59.360 --> 0:01:01.560 the what happens. I'm looking at names like Amazon and 0:01:01.600 --> 0:01:06.119 Etsy pushing higher because this is about duties paid, right, 0:01:06.360 --> 0:01:09.559 and the next question will turn to refunds, but they'll 0:01:09.600 --> 0:01:12.280 start the beginning, tell us about the decision, tell us 0:01:12.280 --> 0:01:14.319 about the voting on the decision, and what we need 0:01:14.360 --> 0:01:14.560 to know. 0:01:14.720 --> 0:01:16.720 What we see with the decision is six'. Three that 0:01:16.880 --> 0:01:17.520 was what the court. 0:01:17.560 --> 0:01:21.040 Said that was the voting about striking down the use 0:01:21.080 --> 0:01:24.760 OF aipa to enact his tariff. Policies, NOW aipa tariffs 0:01:24.800 --> 0:01:27.000 have been used for about seventy five percent of where 0:01:27.040 --> 0:01:29.960 we are right now with The United states when it comes. 0:01:29.720 --> 0:01:30.800 To tariff policies and. 0:01:30.840 --> 0:01:35.160 Negotiations we have seen the entire year this administration take. On, 0:01:35.640 --> 0:01:38.960 Now Brett, cavanaugh in, dissenting was talking about the fact 0:01:39.000 --> 0:01:41.840 that this court does not outline how the rebates are 0:01:41.840 --> 0:01:44.080 going to, go and he actually said that probably is 0:01:44.160 --> 0:01:47.600 going to be a. Mess Supreme court is just deciding 0:01:47.680 --> 0:01:50.720 whether or NOT aipa was legal or not for reciprocal 0:01:50.760 --> 0:01:53.200 tariffs and for the use of the fentanyl. Terriffs they 0:01:53.240 --> 0:01:55.560 are not the ones that are going to be deciding 0:01:55.560 --> 0:01:58.640 how the rebates. GO a lot of you already seen 0:01:58.760 --> 0:02:02.840 a lot of retailers companies line up at trade courts 0:02:02.880 --> 0:02:06.040 signing up to sue the administration basically to get those. 0:02:06.080 --> 0:02:10.399 Rebates if The Supreme court came down with THIS iepa, 0:02:10.520 --> 0:02:14.280 ruling which they did today saying that the, presidents which 0:02:14.440 --> 0:02:18.960 is for, him this was a paramount. Policy this was incredibly. 0:02:19.000 --> 0:02:22.240 Important it was really a key pillar for this. Administration 0:02:22.639 --> 0:02:26.040 they're now saying this is. Illegal what comes, next ed 0:02:26.440 --> 0:02:28.760 is we've known this administration has had A PLAN, b 0:02:28.919 --> 0:02:33.080 whether or not It's Ambassador Jamison, Greer Treasury Secretary, Besston Peter, 0:02:33.240 --> 0:02:36.720 navarro they have all talked about the other avenues they can. 0:02:36.880 --> 0:02:40.320 Use So PLAN b includes also some of the sections 0:02:40.360 --> 0:02:43.480 we've already seen this administration use And trump has used 0:02:43.520 --> 0:02:46.720 also In trump One section two thirty two's things that 0:02:46.800 --> 0:02:51.880 have happened on commodities copper, aluminum Also section three toh, 0:02:51.919 --> 0:02:54.800 One section one twenty, two and thirty thirty. Eight get 0:02:54.880 --> 0:02:57.560 used to hearing these. Names the issue with a lot 0:02:57.600 --> 0:03:00.320 of these other avenues is and some of them environ acquire, 0:03:00.400 --> 0:03:03.720 investigations and some of them have certain limits to how 0:03:03.840 --> 0:03:07.760 high the teriff rate could. BE aiba really was this, 0:03:07.880 --> 0:03:11.280 blunt flexible tool that the administration could. Use so now 0:03:11.320 --> 0:03:14.520 this is just going to create some potential hurdles when 0:03:14.520 --> 0:03:16.480 they are trying to enact the next tariff. 0:03:16.480 --> 0:03:21.000 Policy so let's be clear This Supreme court decision voids 0:03:21.120 --> 0:03:24.160 The April Liberation day. Tariffs, right they range from ten 0:03:24.200 --> 0:03:28.640 to fifty percent fentanyl related. Duties they Impacted, Canada mexico And. 0:03:28.760 --> 0:03:35.240 China those tariffs did not affect those the, decision, sorry 0:03:35.280 --> 0:03:38.120 does not affect those under separate. Authorities and as you, 0:03:38.240 --> 0:03:42.119 note like that's why in the moment steel aluminum autos 0:03:42.280 --> 0:03:45.640 they're not covered by. This one other piece of breaking, 0:03:45.680 --> 0:03:48.800 news literally in the last ten minutes or, so is 0:03:48.800 --> 0:03:52.080 we have some details of The president's visit To. China 0:03:52.360 --> 0:03:54.800 SO i wanted to give that context to the audience because, 0:03:55.200 --> 0:03:57.600 actually Like china was a big part of this story either. 0:03:57.600 --> 0:04:00.440 Way, absolutely, so The president will be going To china 0:04:00.480 --> 0:04:03.760 Starting march thirty first Through april. Second that was going 0:04:03.760 --> 0:04:05.600 to be a visit he's been talking About he's going To. 0:04:05.680 --> 0:04:08.240 China but how awkward almost in a, way that The 0:04:08.280 --> 0:04:11.280 Supreme court strikes down HIS aepa terriffs when he has 0:04:11.360 --> 0:04:15.000 been using that authority when it comes To china and 0:04:15.040 --> 0:04:18.640 the tit for tat trade war we've seen Between washington And. Beijing, 0:04:18.960 --> 0:04:22.280 now not all the terrorfs placed On china will. Evaporate 0:04:22.400 --> 0:04:24.680 AS i, mentioned there are two thirty twos And section 0:04:24.720 --> 0:04:26.839 three zho ones that are still being used when it 0:04:26.880 --> 0:04:29.800 comes To, beijing but some of those sky high levels 0:04:29.839 --> 0:04:32.920 when it comes to fentanyl and the reciprocal, rate, well 0:04:32.920 --> 0:04:36.440 The Supreme court says that is. Illegal ALTHOUGH i have 0:04:36.720 --> 0:04:40.599 been talking to some of my sources abroad and some 0:04:40.680 --> 0:04:42.800 of these foreign officials who have been in the room 0:04:43.120 --> 0:04:45.800 with this trade team are talking about the fact that 0:04:46.160 --> 0:04:49.840 nothing really changes because for, them they understand the administration 0:04:49.920 --> 0:04:53.960 has been preparing for alternative scenarios under three oh. One 0:04:54.320 --> 0:04:57.520 so not quite sure they're saying what happens with specific, 0:04:57.600 --> 0:05:02.440 companies but when it comes to the bilateral, relationships what 0:05:02.560 --> 0:05:06.040 they've gone is the same information we've, received which, is 0:05:06.120 --> 0:05:09.880 if The Supreme court decides to strike down our, tariffs 0:05:09.960 --> 0:05:12.720 we are going to make sure we enact similar policy 0:05:13.160 --> 0:05:15.640 using other. Forms and one Individual i'm talking about is 0:05:15.720 --> 0:05:17.400 the fact that they are very well prepared for this 0:05:17.440 --> 0:05:19.960 administration to come back to them in the negotiating room 0:05:20.120 --> 0:05:22.320 and say we're going to do the same sort of tariff. 0:05:22.320 --> 0:05:24.719 Scenario we're just going to use a different, avenue and 0:05:24.720 --> 0:05:26.200 for them it's going to Be section three oh. 0:05:26.240 --> 0:05:29.440 One we have not yet heard directly from The. President 0:05:29.480 --> 0:05:31.520 will bring that reporting when it. Comes but of course 0:05:31.520 --> 0:05:33.440 we Have state of The Union tuesday night that was 0:05:33.480 --> 0:05:35.919 supposed to be focused on the, economy And i'm sure 0:05:35.960 --> 0:05:38.440 now we'll look forward to. THAT bloombagx and Re horden 0:05:38.720 --> 0:05:41.320 on the breaking news, Decision thank you very. Much we 0:05:41.320 --> 0:05:45.080 should talk more about markets prior to that headline hitting 0:05:45.279 --> 0:05:49.400 about The Supreme court decision ON iepah and. Tariffs, then 0:05:49.400 --> 0:05:52.599 as that one hundred was headed for its fourth straight weekly, 0:05:52.640 --> 0:05:56.359 decline its longest run of weekly declines Since march of last, 0:05:56.400 --> 0:06:00.560 year that has turned. Around equities continue pushing. Higher technology 0:06:00.720 --> 0:06:04.920 in the moment right now is outperforming at the index 0:06:05.040 --> 0:06:10.280 level as reaction to This Supreme court decision on, tariffs 0:06:10.600 --> 0:06:13.479 while bonds and the dollar. Fell let's bring In Scott 0:06:13.520 --> 0:06:17.159 ladner for more C Io horizon twelve billion dollars of 0:06:17.240 --> 0:06:20.000 assets under, management who had planned to come onto the 0:06:20.040 --> 0:06:23.360 program to talk about the technology. Sector what was going 0:06:23.360 --> 0:06:26.640 on in? Software we need to react to This Supreme court. 0:06:26.640 --> 0:06:28.320 Decision what does it mean for? You what does it 0:06:28.360 --> 0:06:31.480 mean for your? Strategies what does it mean for the technology? 0:06:31.480 --> 0:06:34.120 Sector, yeah look at, it and thanks for having me 0:06:34.160 --> 0:06:35.960 On this is always interesting when we get news like, 0:06:36.000 --> 0:06:37.560 this you, know right right before we go. 0:06:37.640 --> 0:06:40.159 On but it's it is you, know this is this. 0:06:40.279 --> 0:06:42.320 Interesting but there's just, look there is just like one 0:06:42.400 --> 0:06:44.520 part of the thing that we need to. Understand and you, 0:06:44.520 --> 0:06:46.600 know like now we have The Supreme. Court this was, 0:06:46.640 --> 0:06:48.479 expected you, know like let's be clear with. That you, 0:06:48.480 --> 0:06:50.359 know the market had priced in or sort of like 0:06:50.440 --> 0:06:52.719 understood that this was the most likely outcome from The Supreme. 0:06:52.760 --> 0:06:54.400 Court but now we have to, understand, like what is 0:06:54.440 --> 0:06:56.360 it going to Be trump's reaction because there obviously will 0:06:56.400 --> 0:06:58.960 be a reaction not only in the you, know sort 0:06:58.960 --> 0:07:02.040 of the tweetstor That i'm sure is, forthcombing but but 0:07:02.240 --> 0:07:04.400 also from some of the policy actions that that you 0:07:04.440 --> 0:07:05.240 And marie were just. 0:07:05.279 --> 0:07:06.560 Discussing you. 0:07:06.560 --> 0:07:08.279 Know on top of, that we need to understand like 0:07:08.320 --> 0:07:11.040 what are individual, companies you, know how are individual companies 0:07:11.080 --> 0:07:12.600 is going to? React so you, know this is really 0:07:12.640 --> 0:07:14.120 just sort of the first ending of how this is 0:07:14.120 --> 0:07:16.080 going to end up playing. Out BUT i do want 0:07:16.080 --> 0:07:17.760 to make one point at and that, is you, know 0:07:17.840 --> 0:07:20.560 if the market was convinced that this was sort of 0:07:20.600 --> 0:07:23.320 the end, game you'd see you wouldn't see technology leading 0:07:23.320 --> 0:07:25.680 today you'd see something like small caps and more of 0:07:25.680 --> 0:07:27.960 the cyclical stuff really sort of, leading and you see 0:07:27.960 --> 0:07:30.200 more of a reaction out of the long end of 0:07:29.600 --> 0:07:32.360 the yield. Curve you, see you would you see ten 0:07:32.400 --> 0:07:35.200 years and thirty, year you, know probably up, ten fifteen 0:07:35.200 --> 0:07:38.200 to twenty basis points because of the you, know both 0:07:38.240 --> 0:07:40.760 taking a tax, away you know that sort of the 0:07:40.800 --> 0:07:43.760 positive growth impulse that would, imply and also the sort 0:07:43.760 --> 0:07:45.440 of the damage that this does to the to the 0:07:45.480 --> 0:07:47.360 to the budget. Deficit so you know, that you, know 0:07:47.440 --> 0:07:49.960 those things together would lead to a larger reaction in 0:07:49.960 --> 0:07:51.920 the bond market and the small caps that we're frankly 0:07:51.960 --> 0:07:53.760 seeing right. Now so that's the that's the market saying 0:07:54.120 --> 0:07:55.680 we don't exactly know how this is going to end 0:07:55.760 --> 0:07:56.000 up just. 0:07:56.080 --> 0:08:01.880 Yet some research and academic institutions have actually crunching numbers on. 0:08:01.880 --> 0:08:03.680 That So i'm going to pose your question That i'm 0:08:03.720 --> 0:08:05.480 going to jump into My bloomberg term and look up 0:08:05.480 --> 0:08:07.400 that data for it for it later on in this, 0:08:07.400 --> 0:08:10.560 conversation we're Showing amazon And etsy right both pushing. Higher 0:08:11.000 --> 0:08:13.920 think about what those companies do the duties that have been. 0:08:13.960 --> 0:08:15.080 PAID a lot of this is. 0:08:15.120 --> 0:08:19.800 Logical As amory outlined very, clearly a question for a 0:08:19.840 --> 0:08:23.760 lot of, companies including across the technology, sector is refunds 0:08:24.680 --> 0:08:27.360 that will go to the lower. Courts but you, know 0:08:27.560 --> 0:08:32.080 does this fundamentally alter the fortunes and projections for growth 0:08:32.200 --> 0:08:34.840 of some of those names E commerce being, One amazon And. 0:08:34.880 --> 0:08:38.360 Etsy, LOOK i think it makes their operations a little 0:08:38.400 --> 0:08:41.280 bit more simple because you, know one policy tool that 0:08:41.440 --> 0:08:44.600 was really just at the whim of one individual, person 0:08:44.640 --> 0:08:46.559 that policy tool has been taken, away or at least 0:08:46.559 --> 0:08:48.880 at least at least it's not taken away then then blunted. 0:08:48.920 --> 0:08:51.880 Somewhat so it does increase the visibility and sort of 0:08:51.880 --> 0:08:55.600 the understandability of their operating. Environment so that is, helpful 0:08:55.600 --> 0:08:56.960 and that is you, know part of the reason why 0:08:57.000 --> 0:08:58.839 you're seeing the reaction in some of those stocks. Today 0:08:59.080 --> 0:09:00.640 but we do need to see How trump is going 0:09:00.640 --> 0:09:02.040 to react to this and how the administration is going 0:09:02.080 --> 0:09:04.360 to react to. This you, know what is the counter 0:09:04.440 --> 0:09:06.680 to what The Supreme court just. Did so you, know 0:09:06.720 --> 0:09:08.800 these games makes, sense but in order for them to be, 0:09:09.120 --> 0:09:12.640 maintained you, know that's sort of future you know that you, 0:09:12.640 --> 0:09:14.400 know sort of the look through in the future about 0:09:14.400 --> 0:09:16.800 how we're going to operate these. Companies needs to be 0:09:17.120 --> 0:09:18.520 a little bit more in cment Ess, man needs to 0:09:18.520 --> 0:09:19.760 be a little bit more dry than it is right. 0:09:19.800 --> 0:09:23.400 Now so the data is just referencing in the blog 0:09:23.440 --> 0:09:26.360 comes from The Yale budget lab and without ER pa, 0:09:26.480 --> 0:09:29.600 tariffs consumers will face an overall average effective tariff of 0:09:29.679 --> 0:09:33.520 nine point one. Percent had those tariffs been left in, 0:09:33.559 --> 0:09:36.120 place it would be nearer to seventeen. Percent but your 0:09:36.160 --> 0:09:38.600 point on the, budget you, know in the long, run 0:09:38.600 --> 0:09:42.080 THE us economy will be persistently smaller a bit of 0:09:42.280 --> 0:09:45.680 zero point one percent based on this. Decision and they're 0:09:45.720 --> 0:09:49.640 talking about the kind of shortfall and impact on, growth economic, 0:09:49.679 --> 0:09:52.360 growth trying to balance like what The treasury would have 0:09:52.360 --> 0:09:56.280 brought in from these tariffs versus, basically like In layman's, 0:09:56.360 --> 0:10:00.400 terms people being put off buying right because of higher 0:10:00.480 --> 0:10:04.160 higher cost. Pressures just try and cast us forward what 0:10:04.200 --> 0:10:07.679 you think happens next and any real impact on this 0:10:07.800 --> 0:10:09.360 market and this economy longer. 0:10:09.440 --> 0:10:11.640 Term so, LOOK i, MEAN i think that you know 0:10:11.679 --> 0:10:13.600 there's one thing that is that is relatively, clear and 0:10:13.640 --> 0:10:15.920 that is this is a tax. Cut so you know 0:10:15.960 --> 0:10:18.400 that you know the tariffs are, taxes and and you, 0:10:18.400 --> 0:10:20.120 know at the end of the, day tariffs are going 0:10:20.120 --> 0:10:22.640 to be lower than they otherwise would have been had 0:10:22.640 --> 0:10:25.360 this decision not been ruled this. Way and so you, 0:10:25.400 --> 0:10:27.000 know at the, margin this is a tax Cit now 0:10:27.000 --> 0:10:28.840 what what we have to figure out is what does 0:10:28.880 --> 0:10:30.920 exactly what does that does exactly look? Like you, know 0:10:30.960 --> 0:10:34.680 what sectors are most impacted, directly and how big is 0:10:34.720 --> 0:10:36.520 this is this ultimate tax cut going to end up? 0:10:36.520 --> 0:10:38.720 Being you, know so those are things that they're going 0:10:38.800 --> 0:10:40.720 to have topletely be played out in you, know not 0:10:40.760 --> 0:10:43.600 only the, market but in the courts, obviously but but but, 0:10:43.800 --> 0:10:46.360 ultimately this is a positive thing FOR us. Growth this 0:10:46.440 --> 0:10:48.880 is a positive thing for NOMINAL gdp. Growth it is 0:10:48.880 --> 0:10:51.599 a negative thing for the budget. Deficits the, magnitude you, 0:10:51.600 --> 0:10:54.560 know so directionally we know these things that the magnitude 0:10:54.640 --> 0:10:55.679 is the thing that we're going to all have to 0:10:55.720 --> 0:10:57.920 sort of figure out over the coming, weeks and that 0:10:57.960 --> 0:11:00.400 magnitude will obviously impact you, know the ultimately impact on. 0:11:00.440 --> 0:11:03.240 Markets all, Right Scott ladner s At. 0:11:03.240 --> 0:11:06.400 Horizon thank, You and actually some news crossing The Bloomberg. 0:11:06.400 --> 0:11:09.080 Tunnel The European Parliament's Trade committee is going to meet On, 0:11:09.160 --> 0:11:13.439 monday to discuss A us trade. Deal the committee also 0:11:13.480 --> 0:11:17.160 will assess this trade ruling and its implications that's coming 0:11:17.160 --> 0:11:19.040 from THE, eu of, course a key trade partner in 0:11:19.040 --> 0:11:22.360 The United. States coming, up the battle for The Bugs 0:11:22.360 --> 0:11:25.080 bunny brand. Continues we're going to discuss the latest efforts 0:11:25.320 --> 0:11:27.040 to make a deal For Warner. 0:11:27.040 --> 0:11:28.680 Brothers this Is Bloomberg. 0:11:28.720 --> 0:11:37.400 Tech netflix CO Ceo Ted sarandos says the company's bid 0:11:37.400 --> 0:11:41.160 to Acquire Warner Brothers discovery will close even After warner 0:11:41.160 --> 0:11:44.920 reopen talks with Paramount. S, guidarce speaking With, Bloomberg serrando's 0:11:44.920 --> 0:11:48.480 accused its Rival bidder of spreading misinformation about the. 0:11:48.520 --> 0:11:50.079 Offers what we. 0:11:50.080 --> 0:11:53.560 Believe is in what The Warner Brothers discovery board agrees 0:11:53.600 --> 0:11:55.560 with us on as, well is that our deal is 0:11:55.559 --> 0:11:56.160 the superior. 0:11:56.200 --> 0:11:58.720 Deal you believe it's good for, Them, no it's good for, 0:11:58.840 --> 0:12:00.719 us and we are EXCITED i did about getting it. 0:12:00.760 --> 0:12:05.160 Done when you talk about kind of clarity and, certainty you, 0:12:05.200 --> 0:12:07.640 know one of the aspects of The paramount deal that 0:12:07.679 --> 0:12:09.680 they have stressed is, better AND i think some of 0:12:09.679 --> 0:12:12.080 The Warner brothers shareholders seem to agree or at least 0:12:12.440 --> 0:12:14.640 entertain it. Is you, know they're offering to buy the whole, 0:12:14.679 --> 0:12:16.920 company they will just take it out thirty dollars a. 0:12:17.000 --> 0:12:20.000 Share Warner brothers doesn't have to proceed with a spin. 0:12:20.080 --> 0:12:23.920 Beforehand what is your argument for why your more complex 0:12:24.000 --> 0:12:26.760 deal is better for all those shareholders than just getting 0:12:26.760 --> 0:12:27.200 the cash. 0:12:27.679 --> 0:12:30.200 Tomorrow this deal is not complicated at. 0:12:30.200 --> 0:12:33.719 All is twenty seven to seventy five at plus the 0:12:33.800 --> 0:12:35.280 value Of Discovery. 0:12:35.280 --> 0:12:37.520 Global by the, way it's the deal that they. 0:12:37.559 --> 0:12:40.280 Want it is the deal that they ask for those 0:12:40.320 --> 0:12:41.560 these are the assets network for. 0:12:41.640 --> 0:12:45.440 Sale so the more complex thing is buying the whole. 0:12:45.440 --> 0:12:48.560 Company you do, that then you're buying These european sports. 0:12:48.600 --> 0:12:52.320 Networks as you, know sports rights In europe are incredibly highly, 0:12:52.320 --> 0:12:56.440 regulated as is the television, landscape which may be stepping themselves. 0:12:56.440 --> 0:12:58.600 Into SO i would argue that our deal is quite. 0:12:58.600 --> 0:13:00.880 Simple twenty seven to seventy five for, sure plus the. 0:13:00.920 --> 0:13:04.840 Value Of Discovery, global and WHICH i think is an incredible, 0:13:04.840 --> 0:13:06.160 asset and they. 0:13:06.200 --> 0:13:08.000 Do they do. Too that's why that they said that 0:13:08.040 --> 0:13:10.840 the offer up this. Way that's why when we were, 0:13:10.920 --> 0:13:12.560 bidding we bid for the assets that were for. 0:13:12.640 --> 0:13:18.000 Sale If Discovery global is a great, Asset i'm just 0:13:18.000 --> 0:13:21.000 wondering have you guys talked about just buying the whole company. 0:13:20.800 --> 0:13:21.400 And doing the spin. 0:13:21.480 --> 0:13:25.680 Yourself as you, know we're the linear broadcast business is 0:13:25.720 --> 0:13:28.640 not something that we're interested, in but others. 0:13:28.640 --> 0:13:30.960 Are AND i think WHEN i look at the, business 0:13:30.960 --> 0:13:32.720 particularly Those european. 0:13:32.280 --> 0:13:35.080 Networks are are not in decline the way that some 0:13:35.160 --> 0:13:37.960 of the way they are in THE. Us so it 0:13:38.000 --> 0:13:39.800 is not of our, interest but it's Sure i'm sure 0:13:39.800 --> 0:13:40.400 of interest In. 0:13:40.360 --> 0:13:41.359 Many buyers. 0:13:42.679 --> 0:13:47.240 Said you are competing in a in a politically sensitive media. 0:13:47.360 --> 0:13:52.080 Deal there is reporting and and we are in a 0:13:52.120 --> 0:13:55.560 time where The ellisons are in their relationship to The 0:13:55.559 --> 0:13:58.760 trump administration has been. Discussed it's also, reported of course 0:13:58.800 --> 0:14:01.240 that that you met with The PRESIDENT i think On 0:14:01.280 --> 0:14:05.080 november twenty. Fourth how are you weighing that and assessing 0:14:05.120 --> 0:14:10.120 that in this, scenario that relationship Between paramount's leadership and. 0:14:11.679 --> 0:14:11.760 This. 0:14:11.880 --> 0:14:16.280 Administration, LOOK i have spoke to The president about the 0:14:16.320 --> 0:14:17.319 state of the entertainment. 0:14:17.360 --> 0:14:20.360 Industry we've had multiple conversations. 0:14:19.760 --> 0:14:22.120 About how do we Protect american, jobs how do we 0:14:22.200 --> 0:14:23.360 keep the entertainment industry? 0:14:23.480 --> 0:14:26.160 Healthis what are those head what are those things that 0:14:26.200 --> 0:14:29.120 we're working on to try to keep production? 0:14:29.480 --> 0:14:32.960 Up in The United. States we are built besting of. 0:14:33.000 --> 0:14:35.560 Billion dollars into a new state of the art production 0:14:35.680 --> 0:14:38.640 facility at the old For Momba military base In New. Jersey, 0:14:39.240 --> 0:14:42.840 obviously The president is very keenly interested in entertainment and 0:14:42.840 --> 0:14:45.280 he's very interested In american industry And american. 0:14:45.360 --> 0:14:49.200 Jobs but those are the conversations that we've. HAD i 0:14:49.200 --> 0:14:49.720 don't know. 0:14:49.640 --> 0:14:53.200 Why The ellisons intimate that they have some direct line 0:14:53.240 --> 0:14:56.000 to The department Of justice for a faster path of, 0:14:56.080 --> 0:14:58.680 clearance BUT i doubt that they. 0:14:58.680 --> 0:15:01.040 Do this is a says it is being run by 0:15:01.080 --> 0:15:02.840 The department Of. Justice The president has been. 0:15:02.800 --> 0:15:03.280 Very clear on. 0:15:03.360 --> 0:15:04.640 That we've been very clear on. 0:15:04.680 --> 0:15:07.960 That The department Of justice published in twenty twenty three 0:15:08.040 --> 0:15:10.720 the guidelines for mergers that they are following right. 0:15:10.760 --> 0:15:13.760 Now so that's what's happening. Here this is a business 0:15:13.760 --> 0:15:15.040 deal that not a political. 0:15:15.080 --> 0:15:20.440 Deal that Was netflix CO Ceo Ted surrandos that stick 0:15:20.520 --> 0:15:22.880 with the media drama and Bringing Rich. Greenfield he's a 0:15:22.880 --> 0:15:26.800 partner at media technology analyst At Lightshed. Partners there was 0:15:26.800 --> 0:15:29.760 a lot in, that you, KNOW i think to, START 0:15:29.800 --> 0:15:32.480 i welcome your thoughts on, it but to be, frank you, 0:15:32.480 --> 0:15:36.120 know we open that conversation by, saying given the current 0:15:36.160 --> 0:15:40.480 scenario where there's a waiver Until monday For Warner Brothers 0:15:40.520 --> 0:15:44.040 discovery to speech, paramount Has netflix got the means and 0:15:44.080 --> 0:15:46.160 the will to improve its bid if it needs? 0:15:46.200 --> 0:15:47.320 To and that wasn't really. 0:15:47.400 --> 0:15:50.880 Answered, WELL i think you got to step, back you. 0:15:50.920 --> 0:15:53.560 KNOW i think one of the things that were one 0:15:53.600 --> 0:15:55.960 of the points THAT i Think lucas sort of ignored 0:15:56.840 --> 0:15:59.200 in Asking, ted you know he was talking, about isn't 0:15:59.240 --> 0:16:03.040 the big for the whole company? Simpler and the answer, is, 0:16:03.080 --> 0:16:06.600 obviously bidding for one whole company is obviously. Simpler but 0:16:07.240 --> 0:16:11.920 what he's missing is The warner. Board and what really 0:16:12.000 --> 0:16:15.600 started this entire process was a desire to split the, company, 0:16:15.960 --> 0:16:23.880 right to separate the the studio streaming assets from the 0:16:24.000 --> 0:16:27.720 LINEAR tv business that was considered mission. Critical AND i, 0:16:27.720 --> 0:16:32.160 think you, know the challenge now Is, netflix by buying 0:16:32.200 --> 0:16:35.920 only the streaming and, studio is not Preventing Warner brothers 0:16:35.960 --> 0:16:40.120 from affecting the. Split this summer paramount is they want 0:16:40.120 --> 0:16:43.360 to stop the. Split they need the cash flow from 0:16:43.400 --> 0:16:46.800 those you know they're dying but you know those high 0:16:46.840 --> 0:16:51.280 free cash flow cable network assets to finance, this and 0:16:51.320 --> 0:16:54.320 so they're trying to stop the, split but the board 0:16:54.560 --> 0:16:57.760 wants to split Because god. Forbid trump changes his, mind 0:16:57.800 --> 0:16:59.480 like we've Seen Tegna Next. 0:16:59.480 --> 0:17:01.280 Star like, You i've certainly Seen trump change his. 0:17:01.320 --> 0:17:04.560 Mind if for any, Reason trump or even a foreign 0:17:04.600 --> 0:17:09.119 regulator blocks The Paramount Warner brothers, deal you would not 0:17:09.160 --> 0:17:11.240 have split the, company and you'd be in twenty twenty. 0:17:11.280 --> 0:17:13.440 Seven AND i think that is there's a lot more 0:17:13.640 --> 0:17:17.560 value sort of an intangible but a real value to 0:17:17.720 --> 0:17:20.919 that split THAT i think there's been a tremendous amount 0:17:20.960 --> 0:17:23.879 of just ignoring and What i've read in sort of 0:17:23.880 --> 0:17:26.160 the press about, this and SO i think that piece 0:17:26.240 --> 0:17:28.760 is really. Important but to answer your very specific, QUESTION 0:17:29.200 --> 0:17:31.640 i do think If netflix had a raise by five 0:17:31.720 --> 0:17:34.280 to ten percent their, BID i think they Would and 0:17:34.320 --> 0:17:36.280 SO i think the only Way paramount wins is with 0:17:36.320 --> 0:17:39.720 a knockout, bid something in the thirty five to forty, 0:17:39.840 --> 0:17:41.320 range probably thirty six thirty. 0:17:41.359 --> 0:17:43.680 SEVEN i Doubt netflix chases that. 0:17:43.720 --> 0:17:46.680 High on the network's liking A tv. PIECE i think 0:17:46.680 --> 0:17:50.040 we asked him later on why you, know in Miss 0:17:50.119 --> 0:17:52.760 surrenders's Answers, forseonmble we're not in that, business but he'd 0:17:52.800 --> 0:17:55.320 already said those are the assets for. Sale what we 0:17:55.320 --> 0:17:57.800 did talk about was the movie, business. Theatres right And 0:17:57.840 --> 0:18:01.720 bloomberg had reported that the DOJ's talking to that industry 0:18:01.760 --> 0:18:04.600 to assess what they think will. Happen and you, know 0:18:04.880 --> 0:18:07.600 the simple argument miss The surrenders makes is That Warner 0:18:07.600 --> 0:18:10.200 brothers has not just been making THE ip for one hundred. 0:18:10.240 --> 0:18:13.879 Years their distribution at theaters is. Excellent that would be 0:18:13.880 --> 0:18:15.880 an advantage To. Netflix do you do you see? 0:18:15.880 --> 0:18:20.440 That, Look netflix is not in the theatrical distribution. BUSINESS 0:18:20.920 --> 0:18:25.200 i think they certainly have recognized that theatrical can add 0:18:25.240 --> 0:18:29.120 a marketing power to some of their. Content you look 0:18:29.119 --> 0:18:32.720 at how they Put Stranger things in movie. Theaters you, 0:18:32.760 --> 0:18:35.399 know they PUT K Pop Demon hunters a couple of 0:18:35.400 --> 0:18:38.360 times in movie. Theaters so you, know they actually released 0:18:38.400 --> 0:18:40.439 a lot of movies with you, know shorter. Windows but 0:18:40.480 --> 0:18:42.440 there was a lot of, MOVIES i think probably twenty 0:18:42.480 --> 0:18:45.600 movies released in theaters last year By, netflix and so you, 0:18:45.600 --> 0:18:48.920 KNOW i don't think there's a wholesale. Aversion do they 0:18:49.000 --> 0:18:52.360 believe that the movie business needs to? CHANGE i think they. 0:18:52.400 --> 0:18:55.639 DO i, mean, look movie theater. Attendants forget about this 0:18:55.640 --> 0:19:00.240 Whole netflix discussion for a second. Movie theater box office 0:19:00.400 --> 0:19:04.199 in the last twelve months is twenty five percent below 0:19:04.240 --> 0:19:08.320 where it was pre, pandemic and that's just box office 0:19:08.920 --> 0:19:13.880 actual butts in seats attendance is down fifty percent from pre. 0:19:13.960 --> 0:19:17.399 Pandemic so the bottom line is the theater business is 0:19:17.440 --> 0:19:21.679 in a very very, dark troubled. Place the reality is 0:19:21.720 --> 0:19:24.880 you need people that are investing in the entertainment. Business 0:19:25.480 --> 0:19:28.520 and you, know the reality Is netflix has certainly shown 0:19:28.600 --> 0:19:31.560 a history of investing very aggressively. 0:19:31.400 --> 0:19:32.800