WEBVTT - US China Trade Talks Start in London With Aim to Ease Export Curbs 0:00:02.720 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.600 --> 0:00:14.600 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:18.560 Eastern on Applecarplay and Android Auto with the Bloomberg Business App. 0:00:18.640 --> 0:00:21.920 Listen on demand wherever you get your podcasts, or watch 0:00:21.960 --> 0:00:23.240 us live on YouTube. 0:00:23.600 --> 0:00:26.520 So the SMP closed around six thousand on Friday. We 0:00:26.560 --> 0:00:29.840 are above barely that level now, but nonetheless, I mean 0:00:29.880 --> 0:00:32.760 we are now officially in a bowl market. So now 0:00:32.840 --> 0:00:35.440 our eyes turned to the trade talks in London between 0:00:35.560 --> 0:00:38.360 US and China representatives, and that's going to be enough 0:00:38.400 --> 0:00:40.520 to start moving the needle for the equity market higher. 0:00:40.640 --> 0:00:44.519 Joining us now is Brendan Murray. He is Bloomberg Global 0:00:44.600 --> 0:00:48.080 Trade Editor. What's a win for both sides. 0:00:49.479 --> 0:00:52.120 A win for both sides is going back to the 0:00:52.159 --> 0:00:55.280 Geneva agreement from a month ago and saying here are 0:00:55.360 --> 0:00:58.480 the clear goalposts that we set for each other and 0:00:58.520 --> 0:01:00.400 that we're going to try to meet going four forward, 0:01:00.840 --> 0:01:04.600 and then setting the setting the stage for future rounds 0:01:04.600 --> 0:01:08.440 of talks that they have enough in common and the 0:01:08.480 --> 0:01:11.759 tone in the room is good. Remember, these are two 0:01:11.800 --> 0:01:15.040 sides that sat sat together a month ago and came 0:01:15.080 --> 0:01:19.080 away and didn't really understand what they had agreed to. 0:01:19.520 --> 0:01:22.160 So so here we are again. They just started the 0:01:22.240 --> 0:01:25.440 discussions a couple of hours ago here in London. It's 0:01:25.520 --> 0:01:28.600 expected to go well into the into the early evening, 0:01:29.200 --> 0:01:32.480 maybe even into Tuesday if if they get hung up tonight. 0:01:32.840 --> 0:01:36.560 So the the real goal here is to re establish 0:01:36.880 --> 0:01:40.400 the framework for some talks were two months from the 0:01:40.400 --> 0:01:43.080 the end of the ninety day reprieve that that both 0:01:43.280 --> 0:01:45.720 both sides agreed to when they brought their tariffs down. 0:01:46.040 --> 0:01:48.400 So time is ticking and these are complicated talks and 0:01:48.440 --> 0:01:50.480 they can't They're not going to be done in just 0:01:50.520 --> 0:01:51.160 a few meetings. 0:01:51.240 --> 0:01:53.040 So the real the real. 0:01:52.840 --> 0:01:57.160 Goal here is momentum and maintaining the forward momentum. 0:01:57.320 --> 0:01:59.280 I know, my strategy would be just walking down to 0:01:59.320 --> 0:02:01.680 the local pub, you know, have a couple of pints, 0:02:01.720 --> 0:02:03.760 work this thing out. I mean not tough, going to. 0:02:03.680 --> 0:02:05.680 Be Brendan, where are we on terrrifts? 0:02:05.680 --> 0:02:06.000 Are here? 0:02:06.040 --> 0:02:08.760 I can't keep track of where we are on tariffs? 0:02:08.760 --> 0:02:11.000 Could you just remind us kind of what the current 0:02:11.040 --> 0:02:11.600 status is? 0:02:12.560 --> 0:02:15.000 Yeah, So part of that ninety day reprieve was to 0:02:15.040 --> 0:02:18.120 bring the very high tariffs down one hundred and forty 0:02:18.120 --> 0:02:24.000 five percent on Chinese imports into the US. Extremely high 0:02:24.000 --> 0:02:27.960 tariffs for US goods going to China. They brought those down. 0:02:28.000 --> 0:02:31.000 The US is at about thirty percent on Chinese goods 0:02:31.000 --> 0:02:34.120 now China brought theirs down to ten. So those are 0:02:34.120 --> 0:02:37.040 by no means low tariffs. Those are still having an effect. 0:02:37.200 --> 0:02:40.520 They're diminishing the share of trade that's moving between the 0:02:40.520 --> 0:02:43.280 two countries, So tariffs are going to be there for 0:02:43.320 --> 0:02:45.720 a while. Those are Those aren't the kinds of things 0:02:45.800 --> 0:02:48.920 you start taking off this early in a negotiation. Those 0:02:48.919 --> 0:02:52.040 are leverage that you take off later on down the road, 0:02:52.760 --> 0:02:55.000 once you can accomplish some of the other things that 0:02:55.040 --> 0:02:58.200 you accomplish. And for the moment, the US is focused 0:02:58.200 --> 0:03:02.639 on seeing the those rare earth elements, those key magnets 0:03:02.639 --> 0:03:05.080 and other things that are needed to make batteries and 0:03:05.320 --> 0:03:09.520 high tech medical equipment come start flowing back to the 0:03:09.600 --> 0:03:11.720 US so American companies don't have to shut down their 0:03:11.720 --> 0:03:15.320 production lines. And China wants some of the export restrictions 0:03:15.320 --> 0:03:17.560 that the US put on it's high tech exports to 0:03:17.639 --> 0:03:20.799 China some of those lifted. It seems like the two 0:03:20.880 --> 0:03:24.800 sides came into these talks willing to give up some 0:03:24.919 --> 0:03:27.480 of those. So we'll we'll have to wait and see 0:03:27.480 --> 0:03:29.840 where it goes from here, but we're expecting that they 0:03:30.040 --> 0:03:34.280 they'll come away from these discussions with some sort of 0:03:34.320 --> 0:03:38.000 basis to continue the negotiations on a whole host of 0:03:38.040 --> 0:03:40.640 other things. Tariffs, like I said, not going to be 0:03:40.680 --> 0:03:42.600 addressed today, those are further down the road. 0:03:43.440 --> 0:03:46.120 What who is the leverage? This is my favorite question 0:03:46.200 --> 0:03:47.600 in a minute, who's the leverage? 0:03:48.880 --> 0:03:51.680 Well, you could argue that both sides have leverage. Look, 0:03:52.440 --> 0:03:55.920 President Trump has said he'll just take he'll take terriffs 0:03:56.000 --> 0:03:59.280 back up, and he'll cut off the US trade with 0:03:59.280 --> 0:04:03.920 with China as he did. You know initially China would say, yeah, 0:04:03.920 --> 0:04:06.320 well we'll just starveview of rare earth elements and see 0:04:06.360 --> 0:04:08.960 how well your auto industry survives a couple of months 0:04:09.000 --> 0:04:12.960 of that. So both sides have a fair amount of leverage. 0:04:13.360 --> 0:04:16.960 This is a game of pain thresholds. How much pain 0:04:17.000 --> 0:04:19.839 can your economy take? How much backlash can you take 0:04:19.880 --> 0:04:24.320 from the general public, from lawmakers. So we're at the 0:04:24.400 --> 0:04:28.160 very early stage of the leverage that's being applied, and 0:04:28.200 --> 0:04:30.520 you could argue that both sides have a fair amount 0:04:30.520 --> 0:04:33.120 of it. It's just who can withstand it the longest. 0:04:34.120 --> 0:04:34.640 Right, Very good. 0:04:34.680 --> 0:04:37.760 Brenda Murray, global Trade editor for wear Bloomberg News, joining 0:04:37.800 --> 0:04:40.839 us from London, where there's talks are taking place between 0:04:40.880 --> 0:04:44.320 the Chinese and the American trade debt delegations. And again 0:04:45.839 --> 0:04:48.120 it just feels like if they're having dialogue, that's a 0:04:48.160 --> 0:04:51.080 good thing to me. I don't think anything, I don't know, 0:04:51.160 --> 0:04:53.320 necessarily bad, but you got to keep talking and kind 0:04:53.320 --> 0:04:55.240 of pushing the ball down the road. 0:04:55.240 --> 0:04:55.599 I guess. 0:04:55.720 --> 0:04:55.880 Well. 0:04:56.040 --> 0:04:57.720 That's my question too, is like what's going to be 0:04:57.760 --> 0:04:59.440 good news for the market. Do you just need no 0:04:59.560 --> 0:05:00.240 bad news news? 0:05:00.680 --> 0:05:02.080 I think that might be it, or do you. 0:05:02.080 --> 0:05:05.160 Start to need some trade deals where the ink assigned 0:05:05.400 --> 0:05:07.760 not necessarily with China, but with somebody kind of lets 0:05:07.760 --> 0:05:08.400 go yeah. 0:05:08.240 --> 0:05:10.080 I don't know, we'll see. 0:05:10.680 --> 0:05:14.400 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:05:14.480 --> 0:05:17.520 weekdays at ten am Eastern on Apple, Cocklay and Android 0:05:17.560 --> 0:05:20.880 Auto with the Bloomberg Business App, Listen on demand wherever 0:05:20.920 --> 0:05:23.719 you get your podcasts, or watch us live on. 0:05:23.600 --> 0:05:26.160 YouTube in DC. There's still stuff going on as well. 0:05:26.240 --> 0:05:30.200 Nathan Dean, Bloomberg Intelligence Senior policy analyst, joins us now. Nathan, 0:05:30.240 --> 0:05:32.760 obviously the headline over the weekend is the riots in 0:05:32.960 --> 0:05:35.200 LA and then the National Guard being sent in without 0:05:35.200 --> 0:05:36.200 the governor having. 0:05:36.000 --> 0:05:39.279 Asked for it. What is how is that unfurling in 0:05:39.360 --> 0:05:40.240 DC right now? 0:05:41.200 --> 0:05:42.680 So I would say, you know, it was one of 0:05:42.720 --> 0:05:45.240 those things where President Trump wanted this fight because it 0:05:45.279 --> 0:05:47.640 plays to one of his key messages that won him 0:05:47.680 --> 0:05:48.720 the election, and that. 0:05:48.720 --> 0:05:49.520 Was on immigration. 0:05:49.680 --> 0:05:51.479 But you know, in terms of how it plays in 0:05:51.560 --> 0:05:53.760 terms of things like the one big beautiful bill or 0:05:53.839 --> 0:05:55.840 to tariffs or to the you know that's really not 0:05:56.000 --> 0:05:58.400 happening just yet. You know, there was a lot of 0:05:58.400 --> 0:06:02.880 discussions about medicaid cuts and snap reductions and inflation reduction acts, 0:06:02.920 --> 0:06:05.479 and those messages are very difficult for Republicans, but they're 0:06:05.520 --> 0:06:08.280 still moving forward. So when it comes to Los Angeles 0:06:08.279 --> 0:06:10.360 and this idea of troops, I think President Trump certainly 0:06:10.400 --> 0:06:13.360 wants that to try and deflect some that messages away 0:06:13.360 --> 0:06:16.200 from medicaid cuts. For example, the question is, you know, 0:06:16.240 --> 0:06:19.159 we anticipate the one big beautiful build going into July. 0:06:19.720 --> 0:06:23.479 You know, will California go into July? Time will only tell. 0:06:24.240 --> 0:06:28.280 So where are we on either I don't know, cuts 0:06:28.320 --> 0:06:33.280 too expenses like medicaid or new revenue like taxes. Where 0:06:33.320 --> 0:06:34.760 are we in that discussion these days? 0:06:35.560 --> 0:06:37.720 Yeah, So you know, there's really three things that came 0:06:37.760 --> 0:06:40.000 out of the House bill. It's the Medicaid, it's the 0:06:40.040 --> 0:06:43.279 Snap benefits, and it's the Inflation Reduction Act. Now, each 0:06:43.320 --> 0:06:46.200 one of those was given a certain timeframe of when 0:06:46.240 --> 0:06:49.600 those tax you know, tax credits, and then the Medicaid 0:06:49.640 --> 0:06:52.200 cuts an example, when they would actually take into effect. 0:06:52.480 --> 0:06:54.000 Now, the House Conservatives insist if. 0:06:54.040 --> 0:06:56.839 Medicaid, for example, that would start in December twenty twenty six, 0:06:57.080 --> 0:07:00.320 the Inflation Reduction Act twenty twenty eight. All this being said, now, 0:07:00.400 --> 0:07:02.160 what the Senate is doing at the moment is looking 0:07:02.200 --> 0:07:05.640 how to mod moderate it. And so Senator John Thune 0:07:05.680 --> 0:07:07.880 gave a statement just last week saying that we're going 0:07:07.920 --> 0:07:10.360 to anticipate a lot of that pushing back. So what 0:07:10.360 --> 0:07:12.520 we're telling our clients is is that go back to 0:07:12.560 --> 0:07:15.400 the original House in ways and means text where for 0:07:15.480 --> 0:07:17.320 a lot of these tax cuts and a lot of 0:07:17.320 --> 0:07:20.360 these tax extensions they would start taking place in like 0:07:20.360 --> 0:07:23.560 twenty twenty eight or twenty twenty nine, beyond Trump's the 0:07:23.680 --> 0:07:26.400 rest of his administration. That's where we think the Senate 0:07:26.440 --> 0:07:29.080 goes now when it comes to Medicaid in particular. Obviously 0:07:29.080 --> 0:07:31.440 it's a very difficult vote for a lot of Republicans 0:07:31.680 --> 0:07:35.200 that have either constituencies or states that are heavily development 0:07:35.280 --> 0:07:38.080 or heavily reliant on Medicaid. You know, we think that 0:07:38.320 --> 0:07:42.000 most likely that those ultimate decisions, if you will, are 0:07:42.040 --> 0:07:44.040 going to be votes to kick the can and push 0:07:44.080 --> 0:07:46.520 those cuts off, so that if a future president wants 0:07:46.560 --> 0:07:49.520 to come back and revisit it, that person would have flexibility. 0:07:49.640 --> 0:07:49.800 Right. 0:07:49.880 --> 0:07:53.400 Interesting in terms of the few between Elon Musk and 0:07:53.440 --> 0:07:56.320 President Trump, I guess it's a twofer like one. 0:07:56.360 --> 0:07:57.160 Where are we with that? 0:07:57.280 --> 0:07:59.360 But then more importantly, kind of what is dose doing 0:07:59.360 --> 0:08:01.360 within the government without Elon Musk? 0:08:02.560 --> 0:08:04.360 So it seems like we're sort of at a truce 0:08:04.920 --> 0:08:05.480 at the moment. 0:08:05.520 --> 0:08:08.120 Now I say that obviously it could change almost instantly. 0:08:08.200 --> 0:08:10.360 But in terms of where we are with that, well, 0:08:10.400 --> 0:08:12.360 the White House sent what is known as a recissions 0:08:12.440 --> 0:08:15.920 package trying to codify around nine billion dollars in cuts. 0:08:15.960 --> 0:08:19.400 Now this is mostly USAAD State and PR We looked 0:08:19.400 --> 0:08:20.960 at it from an investment point of view, and we 0:08:21.080 --> 0:08:23.600 actually don't think there's much their market moving. But the 0:08:23.600 --> 0:08:25.520 reason why it's important to talk about is that this 0:08:25.600 --> 0:08:28.320 is the first of many recisions packages that will come 0:08:28.960 --> 0:08:31.280 probably throughout the rest of this year. Now the White 0:08:31.280 --> 0:08:34.760 House can literally say, essentially say, look, Doges, identify these 0:08:34.800 --> 0:08:38.000 billion dollars number of cuts. Now we need Congress to 0:08:38.040 --> 0:08:40.200 go in there and actually approve this. Now, you don't 0:08:40.240 --> 0:08:42.600 need a filibuster. It's just a majority vote in the House, 0:08:42.720 --> 0:08:45.959 majority vote in the Senate. But obviously there are differences 0:08:46.040 --> 0:08:48.560 between what Doge wants to do and what Senators want 0:08:48.600 --> 0:08:51.040 to do. This happened one time in twenty eighteen, and 0:08:51.080 --> 0:08:54.439 the Republicans just said, look, I can't vote to cut these. 0:08:54.240 --> 0:08:56.400 Things that are ultimately going to impact my districts. 0:08:56.440 --> 0:08:58.640 So we are going to continue to see things like 0:08:58.760 --> 0:09:02.320 clean energy tax I'm sorry, loans grants, and so forth 0:09:02.360 --> 0:09:06.040 like that. Those recisions packages are most likely coming later 0:09:06.080 --> 0:09:06.480 this year. 0:09:07.840 --> 0:09:11.440 Last week, Alex and I were broadcasting remotely from Washington, 0:09:11.520 --> 0:09:14.360 DC area. One afternoon, I was walking around town, walking 0:09:14.360 --> 0:09:18.000 past a Department of Agriculture, which is a massive building 0:09:18.040 --> 0:09:20.679 taken up like a whole square block, and it was 0:09:20.760 --> 0:09:23.880 quit in time and people were coming out by the thousands. 0:09:25.520 --> 0:09:27.080 I mean, I don't you know, it goes back to 0:09:27.120 --> 0:09:28.920 I don't know what we don't know what these people do, 0:09:28.960 --> 0:09:31.439 and I'm sure they're doing good work. But now that 0:09:31.640 --> 0:09:34.040 Elon Musk is out of the picture, is dose still 0:09:34.120 --> 0:09:36.640 a thing? Are people just going to come back into 0:09:36.640 --> 0:09:38.120 the federal workforce now? 0:09:39.200 --> 0:09:41.640 Well, anecdotally, I would say yes, DOUGH is still a thing. 0:09:41.760 --> 0:09:43.800 Just talking to my friends and family around the region, 0:09:43.880 --> 0:09:47.160 they certainly are still ACQUI and there are DOGE employees 0:09:47.440 --> 0:09:50.480 at pretty much all these agencies. And what I would 0:09:50.520 --> 0:09:52.960 say is is that rather than being the bully pulpit 0:09:53.000 --> 0:09:56.000 of Elon Musk, now each agency leader is the one 0:09:56.000 --> 0:09:58.720 that actually has to make that decision. For example, over 0:09:58.760 --> 0:10:01.520 at the Federal Reserve, DOGE isn't there yet are as 0:10:01.800 --> 0:10:03.400 much as I can tell, they're not there yet. 0:10:03.559 --> 0:10:05.160 But FEDWCE Chair for Supervision. 0:10:05.200 --> 0:10:07.560 If you look at Michelle Boumanever's speech for last week, 0:10:07.679 --> 0:10:09.720 it had a lot of Doughe elements to it in 0:10:09.800 --> 0:10:11.920 terms of saying, look, we need to get cut, we 0:10:12.000 --> 0:10:14.080 need to actually become more streamlined, and so. 0:10:14.000 --> 0:10:14.559 Forth like that. 0:10:14.880 --> 0:10:17.760 So the idea of DOJ is certainly going through the agencies, 0:10:18.160 --> 0:10:20.480 but the bully pulpit of Elon Musk isn't there, so 0:10:20.559 --> 0:10:23.360 you will see cuts and you will see streamline efforts 0:10:23.360 --> 0:10:24.960 continuing throughout the rest of this year. 0:10:25.200 --> 0:10:27.679 A Nathan, thanks a lot, super appreciate Nathan, Dean Bloomberg 0:10:27.720 --> 0:10:31.200 Intelligence and your policy analyst, joining us from Washington, DC. 0:10:33.200 --> 0:10:36.920 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:10:37.000 --> 0:10:40.079 weekdays at ten am Eastern on Apple Corplay and Android 0:10:40.080 --> 0:10:43.400 Auto with the Bloomberg Business App. Listen on demand wherever 0:10:43.440 --> 0:10:46.600 you get your podcasts, or watch us live on YouTube. 0:10:47.080 --> 0:10:50.480 Alex youel here alongside Paul Sweeney. This is Bloomberg Intelligence Radio. 0:10:50.559 --> 0:10:52.559 We bring you all the top news and business, teconomics 0:10:52.559 --> 0:10:54.760 and finance. There are lends of our Bloomberg Intelligence folks. 0:10:54.760 --> 0:10:57.080 They cover two thousand companies and one hundred and thirty 0:10:57.080 --> 0:11:01.120 industries all around the world. Split up, that's not a 0:11:01.160 --> 0:11:03.079 surprise at all for anyone on Wall Street. Is Warner 0:11:03.080 --> 0:11:06.280 Brothers Discovery splitting into two publicly traded companies, one with 0:11:06.480 --> 0:11:08.559 HBO Max film and TV business, the. 0:11:08.520 --> 0:11:10.120 Other with its cable business. 0:11:10.120 --> 0:11:12.400 The stock is up over seven percent and for more 0:11:12.440 --> 0:11:16.320 Keitha Mrangana than Bloomberg Intelligence analysts on US media is 0:11:16.360 --> 0:11:16.920 with us. 0:11:17.320 --> 0:11:19.920 Githa do we like this plan was what in it? 0:11:20.000 --> 0:11:20.080 Was? 0:11:20.120 --> 0:11:20.959 It all surprising? 0:11:22.720 --> 0:11:25.640 We liked the plan, Alex. This has been many months 0:11:25.679 --> 0:11:29.160 in the making, so last December they had actually reorganized 0:11:29.200 --> 0:11:31.840 the existing business into these two separate units, the TV 0:11:31.920 --> 0:11:34.719 business and then the streaming and the studio business, kind 0:11:34.760 --> 0:11:38.240 of eventually paving the way for exactly the announcement today. 0:11:38.960 --> 0:11:40.880 I think the surprising part and this is a little 0:11:40.880 --> 0:11:44.079 bit of a pleasant surprise for Warner Brothers, Discovery has 0:11:44.160 --> 0:11:47.800 really been on the debt side. So as you well know, 0:11:47.920 --> 0:11:51.040 well the linear TV business is challenged, but the bigger 0:11:51.120 --> 0:11:54.760 problem for WBT has really been a huge amount of debt. 0:11:55.280 --> 0:11:58.160 And this debt was really as part of the combination 0:11:58.320 --> 0:12:01.080 of Warner Brothers and Discovery, which happened a few years ago. 0:12:01.320 --> 0:12:04.200 At that point the company had over fifty five billion 0:12:04.240 --> 0:12:07.520 dollars in debt. They've paid about nineteen billion down, but 0:12:07.559 --> 0:12:10.000 they still have thirty five billion. But what they're doing 0:12:10.040 --> 0:12:12.080 now as part of this transaction is they have a 0:12:12.120 --> 0:12:15.080 tender offer out there, really kind of looking to streamline 0:12:15.080 --> 0:12:17.439 the capital structure. So when you have these two new 0:12:17.440 --> 0:12:20.400 public companies, there's going to be a much more manageable 0:12:20.440 --> 0:12:22.800 debt load. At both of those companies, and I think 0:12:22.840 --> 0:12:26.679 investors are really reacting positively to that news Keetha. 0:12:26.720 --> 0:12:28.800 When they put the companies together, one of the arguments 0:12:28.920 --> 0:12:32.920 was to create scale to compete against Netflix and Disney. 0:12:33.240 --> 0:12:34.720 What happened to that argument. 0:12:35.600 --> 0:12:40.240 Yeah, exactly, Paul. You know, yes, they did create scale 0:12:40.240 --> 0:12:43.280 as far as the TV networks part of the business 0:12:43.080 --> 0:12:46.280 was concerned. You know, you have Discovery, which is really 0:12:46.280 --> 0:12:48.839 the leader when it comes to nonfiction. You have you know, 0:12:49.000 --> 0:12:51.760 the Warner Networks and HBO, which is the leader when 0:12:51.800 --> 0:12:55.199 it comes to fiction and quality dramas and scripted series. 0:12:55.559 --> 0:12:58.479 And they thought that that would do well. But unfortunately 0:12:58.520 --> 0:13:01.400 what happened is, you know, and all media companies, as 0:13:01.440 --> 0:13:03.560 you will know, Paul, have this conundrum because they have 0:13:03.679 --> 0:13:06.120 the TV business, which brings in a lot of the cash, 0:13:06.200 --> 0:13:09.040 but is literally a no growth business. In fact, it 0:13:09.040 --> 0:13:12.040 doesn't decline. Both advertising as well as affiliate fees are 0:13:12.040 --> 0:13:14.800 in decline. But then you had the streaming business, which 0:13:14.840 --> 0:13:18.040 initially kind of had a little bit of trouble because 0:13:18.280 --> 0:13:21.480 you know, in that whole game of subscribers and that 0:13:21.640 --> 0:13:24.920 land graph for subscribers, they actually ended up incurring a 0:13:25.000 --> 0:13:28.079 huge amount of losses. But there is this whole wave 0:13:28.120 --> 0:13:31.600 of content cost rationalization. We've seen a turnaround and all 0:13:31.600 --> 0:13:34.200 of the streaming businesses and Warner Brothers Discovery actually has 0:13:34.280 --> 0:13:36.760 kind of led the charge there. So they were actually 0:13:36.760 --> 0:13:39.760 the first to get profitable in terms of streaming, and 0:13:39.800 --> 0:13:42.720 so now we're seeing this huge disconnect, or at least 0:13:42.800 --> 0:13:45.120 they are saying that there is this huge disconnect between 0:13:45.360 --> 0:13:48.360 the TV network's business and the streaming the studios business, 0:13:48.400 --> 0:13:52.040 which should arguably get a much higher multiple, and that's 0:13:52.120 --> 0:13:54.360 kind of the reason for this split. So we're seeing 0:13:54.360 --> 0:13:56.880 how multiple companies do this. Actually, so Comcast, which has 0:13:56.920 --> 0:13:59.480 the NBC division, they're splitting out their cable networks. We 0:13:59.559 --> 0:14:02.040 had Live Skate and Stars, where you have Lion Skate 0:14:02.080 --> 0:14:05.920 as a movie independent movie studio, Stars of the media networks, 0:14:06.000 --> 0:14:07.960 and now you have Warner Brothers Discovery. So there's this 0:14:08.080 --> 0:14:11.760 whole big movement now towards you know, this vertical kind 0:14:11.760 --> 0:14:14.280 of separation if you will, I mean, do. 0:14:14.280 --> 0:14:16.800 They all come together then and create kind of one 0:14:17.080 --> 0:14:20.000 less great TV network thing? 0:14:21.240 --> 0:14:25.320 Yeah, that's kind of the plan. So the most logical combination, 0:14:25.560 --> 0:14:28.040 and this has been floated around for for months now, 0:14:28.200 --> 0:14:31.160 is that with this news of the Comcast, you know, 0:14:31.200 --> 0:14:34.080 the NBC cable network separation. Who would have would that 0:14:34.200 --> 0:14:37.160 become like this kind of roll up vehicle, And that's 0:14:37.200 --> 0:14:39.640 kind of what you know, a lot of the industry 0:14:39.640 --> 0:14:41.840 experts are thinking, they're expecting now that you have this 0:14:41.960 --> 0:14:45.680 news today with Warner Brothers Discovery, everybody's kind of expecting 0:14:45.760 --> 0:14:49.160 down the road, some combination of maybe that Warner Brothers 0:14:49.240 --> 0:14:52.600 Discovery TV assets along with the Comcast assets and who 0:14:52.640 --> 0:14:55.880 knows who else kind of spins off their networks and 0:14:55.920 --> 0:14:59.000 then that becomes this giant kind of TV network umbrella. 0:14:59.120 --> 0:15:02.200 Going back to Paul's point about scale, because scale really 0:15:02.200 --> 0:15:03.600 matters now at this business. 0:15:04.040 --> 0:15:08.360 All right, how about Paramount, the other sick child in 0:15:08.400 --> 0:15:09.920 your coverage, what's going on there? 0:15:11.160 --> 0:15:13.680 Yeah, so we really don't know what's going on there. 0:15:13.720 --> 0:15:15.800 So there's been a lot of ups and downs, Paul, 0:15:15.920 --> 0:15:19.560 with the whole closing of the deal. So the Paramount 0:15:19.560 --> 0:15:24.320 sky Dance transaction, it was announced last year sometime in July. 0:15:24.960 --> 0:15:27.520 It was supposed to close by the first half, by 0:15:27.560 --> 0:15:29.600 the end of the first half of twenty twenty five, 0:15:30.000 --> 0:15:32.880 but there's just been so many different press reports. They've 0:15:32.920 --> 0:15:35.760 had to do different things to appease the current administration 0:15:35.960 --> 0:15:39.160 to a peace President Trump, I'm not sure he is 0:15:39.240 --> 0:15:41.800 yielding so easily. So we're actually it's still kind of 0:15:41.840 --> 0:15:47.040 fifty to fifty Paul, whether that transaction actually, yeah, actually closes. 0:15:47.080 --> 0:15:48.760 So there's just too many things up in the air. 0:15:48.920 --> 0:15:51.200 And then again there's the lingering question because we know 0:15:51.240 --> 0:15:54.560 that sky Dance is really was really only interested in 0:15:55.000 --> 0:15:57.840 the Paramount's studio business. So again what they kind of 0:15:57.960 --> 0:16:00.400 do with the TV network's business they do with the 0:16:00.440 --> 0:16:04.600 streaming business, that's all a huge question mark. So visibility 0:16:04.840 --> 0:16:06.880 very very limited right now for Paramount. 0:16:07.360 --> 0:16:09.800 I guess I just wonder if you stick all the 0:16:09.880 --> 0:16:14.200 cable networks together, how does that actually generate real income? 0:16:14.280 --> 0:16:16.240 I mean, I know that's a cash cow to some extent, right, 0:16:16.240 --> 0:16:17.520 but then you have a lot of debt and there's 0:16:17.560 --> 0:16:20.120 no growth. Like, what kind of asset is that? 0:16:21.680 --> 0:16:24.400 Yeah, it's definitely a melting ice cube kind of an asset, 0:16:24.400 --> 0:16:26.720 which is exactly what you know, the TV networks have 0:16:26.840 --> 0:16:30.040 been the argument that all of these media companies making 0:16:30.280 --> 0:16:34.040 are making alex is that somehow by kind of banding together, 0:16:34.920 --> 0:16:36.840 you know, because each one of them will have one 0:16:36.960 --> 0:16:39.080 or two networks that is kind of a must have networks. 0:16:39.080 --> 0:16:42.479 If you're looking at Warner you have CNN. You know, 0:16:42.160 --> 0:16:45.160 if you're looking at again, if you're looking at the 0:16:45.240 --> 0:16:48.280 NBC networks, you have USAU have MSNBC. So you know, 0:16:48.440 --> 0:16:50.400 there are definitely always going to be some must have 0:16:50.520 --> 0:16:54.000 networks in each portfolio and kind of putting them all 0:16:54.040 --> 0:16:56.640 together will stem that rate of decline, or at least 0:16:56.680 --> 0:16:59.280 that is the argument that they're making. But again we've 0:16:59.320 --> 0:17:02.320 seen that couret cutting has actually been far worse than 0:17:02.400 --> 0:17:06.000 what it was initially projected, So again it remains to 0:17:06.040 --> 0:17:08.600 be seen. But the idea is they want to milk 0:17:08.680 --> 0:17:10.160 it till it kind of runs dry. 0:17:10.960 --> 0:17:13.640 Can do we have any any early feedback from Orlando 0:17:13.720 --> 0:17:17.080 with the new Universal Park? John Tucker's asking it's fun? 0:17:17.280 --> 0:17:19.000 Yeah, so it is. 0:17:19.280 --> 0:17:22.720 It is awesome, and we you know the initial so 0:17:22.840 --> 0:17:25.560 this actually only opened about ten to fifteen days ago, Paul, 0:17:26.040 --> 0:17:28.560 And so far everything seems to be going in the 0:17:28.640 --> 0:17:32.600 right direction for Epic Universe and for Comcast, and we 0:17:32.680 --> 0:17:34.600 know that they are really kind of doubling down on 0:17:34.600 --> 0:17:37.240 their parks business. They actually have a new park coming 0:17:37.280 --> 0:17:38.840 out just out of London, and they have all these 0:17:38.880 --> 0:17:41.119 other attractions that are opening in the US as well, 0:17:41.320 --> 0:17:45.280 but so far from Orlando, the signs are pretty pretty strong. 0:17:45.640 --> 0:17:48.600 So my daughter's ten, she's never once asked to go 0:17:48.640 --> 0:17:51.480 to Disney and she has asked to go to this thing. 0:17:51.520 --> 0:17:51.840 Really. 0:17:52.000 --> 0:17:55.800 Yes see, it's interesting, isn't it. But now you're going 0:17:55.880 --> 0:17:58.120 to go to Orlando, you go to the universal thing. 0:17:58.440 --> 0:18:01.080 You say, since we're here, let's do a couple at 0:18:01.200 --> 0:18:03.120 Disney World, And that's kind of the plan. 0:18:02.960 --> 0:18:05.200 There, right, Yeah, No, we're not doing either of those things. 0:18:05.440 --> 0:18:07.600 I'm just saying more just on like the buzz for 0:18:07.640 --> 0:18:09.480 the actual kids who are going to make their parents 0:18:09.480 --> 0:18:09.720 do that. 0:18:10.040 --> 0:18:11.879 Go figure. All right, Keith. Always good to catch up. 0:18:11.920 --> 0:18:16.120 Keith running off on Boomberg Intelligence Analyst on US media. 0:18:17.440 --> 0:18:21.160 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:18:21.240 --> 0:18:24.600 weekdays at ten am Eastern on Applecarplay and Android Auto 0:18:24.720 --> 0:18:27.800 with the Bloomberg Business app. Listen on demand wherever you 0:18:27.840 --> 0:18:30.800 get your podcasts, or watch us live on YouTube. 0:18:31.119 --> 0:18:33.920 All right, Alex de Oli, Paulsweeni, this is Boomberg Intelligence Rady. 0:18:33.960 --> 0:18:35.800 We bring you all the top news in business, economics 0:18:35.840 --> 0:18:38.119 and finance. There are a lens of our Bloomberg intelligence folks. 0:18:38.119 --> 0:18:39.960 They cover two thousand companies and one hundred and thirty 0:18:39.960 --> 0:18:43.240 industries all around the world. So the SMP is treating 0:18:43.240 --> 0:18:47.520 a six thousand and eight now what Ann Berry is founding. 0:18:47.520 --> 0:18:49.919 A managing partner at Thread Needle joins us now. And 0:18:49.960 --> 0:18:52.000 the question I was asking before break is do we 0:18:52.080 --> 0:18:55.480 need actual good news for a sustained move higher to 0:18:55.600 --> 0:18:58.880 all time highs or is it less bad news going 0:18:58.920 --> 0:18:59.400 to be enough? 0:19:00.520 --> 0:19:03.280 Unfortunately, it feels like less bad news is going to 0:19:03.280 --> 0:19:05.479