1 00:00:02,720 --> 00:00:10,559 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: easterne 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 00:00:24,320 --> 00:00:26,920 Speaker 2: It is earning season right now, and one of the 7 00:00:26,920 --> 00:00:29,920 Speaker 2: most anticipated results set of results that came out today 8 00:00:30,040 --> 00:00:33,000 Speaker 2: came from Craft Highs, mainly because the food company had 9 00:00:33,040 --> 00:00:35,480 Speaker 2: been on this mission to split itself up into two 10 00:00:36,120 --> 00:00:40,400 Speaker 2: in order to really free up its faster growing business 11 00:00:40,400 --> 00:00:43,480 Speaker 2: from its slower growing business. Christina Peterson is our food 12 00:00:43,520 --> 00:00:47,159 Speaker 2: industry reporter and has been reporting on Craft Times, and Christina, 13 00:00:47,240 --> 00:00:50,760 Speaker 2: the new CEO over at Craft Times, surprise everyone by saying, 14 00:00:50,800 --> 00:00:52,640 Speaker 2: you know what, I'm not going to split up the company. 15 00:00:53,040 --> 00:00:54,000 Speaker 2: What's the thinking here? 16 00:00:54,520 --> 00:00:55,040 Speaker 3: That's right. 17 00:00:55,200 --> 00:00:57,760 Speaker 4: He's only been on the job since January first, so 18 00:00:57,800 --> 00:00:59,760 Speaker 4: I think this came as a surprise to folks at 19 00:00:59,800 --> 00:01:02,800 Speaker 4: The split was called off about five months after it 20 00:01:02,840 --> 00:01:06,560 Speaker 4: was announced or paused. There is no end date to 21 00:01:06,600 --> 00:01:08,679 Speaker 4: the pause, so we don't know if it will at 22 00:01:08,720 --> 00:01:12,880 Speaker 4: some point rezuom, but the CEO, Steve Kahleane said that 23 00:01:13,480 --> 00:01:15,800 Speaker 4: he came on the job knowing that there had been 24 00:01:16,040 --> 00:01:20,120 Speaker 4: levels of under investment in Kraft Heins's brands and decided 25 00:01:20,120 --> 00:01:22,320 Speaker 4: that after reviewing all of them, that there were brands 26 00:01:22,360 --> 00:01:25,240 Speaker 4: that would respond to more investment. So they announced that 27 00:01:25,240 --> 00:01:28,080 Speaker 4: they would be putting six hundred million dollars into things 28 00:01:28,120 --> 00:01:32,399 Speaker 4: like R and D marketing and lowering some prices in 29 00:01:32,480 --> 00:01:35,920 Speaker 4: hopes that that would bolster the entire company and that 30 00:01:35,920 --> 00:01:38,039 Speaker 4: that would be in a better position put them in 31 00:01:38,040 --> 00:01:40,760 Speaker 4: a better position to evaluate whether they should move forward 32 00:01:40,800 --> 00:01:41,279 Speaker 4: with the split. 33 00:01:42,160 --> 00:01:45,039 Speaker 5: So what a most investors want? Did they you think 34 00:01:45,040 --> 00:01:47,480 Speaker 5: they want the split up? Sometimes split ups work, a 35 00:01:47,480 --> 00:01:51,000 Speaker 5: lot of times they don't. What if investor's been saying 36 00:01:51,040 --> 00:01:53,120 Speaker 5: over the past months, There's. 37 00:01:52,920 --> 00:01:56,920 Speaker 4: Clearly been some anxiety among investors since the news of 38 00:01:56,920 --> 00:02:00,680 Speaker 4: the split was announced. I think that the new CEO 39 00:02:01,080 --> 00:02:04,720 Speaker 4: was seen as there were hopes that he would do 40 00:02:04,800 --> 00:02:07,400 Speaker 4: what he had done with the Kellgg company, which split 41 00:02:07,440 --> 00:02:10,760 Speaker 4: into two publicly traded entities and then where both both 42 00:02:10,800 --> 00:02:14,200 Speaker 4: of those companies were bought by privately held entities. So 43 00:02:14,280 --> 00:02:17,160 Speaker 4: there was some speculation that the same thing would occur 44 00:02:17,280 --> 00:02:21,520 Speaker 4: at Kraft Higns, and Kaylaine said basically not yet real. 45 00:02:22,400 --> 00:02:24,440 Speaker 2: There's another twist to all of this, which is that 46 00:02:24,520 --> 00:02:27,960 Speaker 2: Kraft Tigns's biggest shareholder is Berkshire Hathway and Warren Buffett, 47 00:02:27,960 --> 00:02:30,400 Speaker 2: who runs Berkshire Hathway until he handed the raise to 48 00:02:30,440 --> 00:02:33,640 Speaker 2: Greg Abel, said he was never a fan of that 49 00:02:33,800 --> 00:02:35,760 Speaker 2: idea to split up the company. I mean, he was 50 00:02:35,840 --> 00:02:38,720 Speaker 2: kind of mastermind behind craft Higns becoming the behemoth it was, 51 00:02:38,760 --> 00:02:41,119 Speaker 2: and that didn't work out so well. But he made 52 00:02:41,160 --> 00:02:42,800 Speaker 2: clear that the split was not a good thing in 53 00:02:42,840 --> 00:02:45,400 Speaker 2: his mind. Do we think that has anything to do 54 00:02:45,440 --> 00:02:46,400 Speaker 2: with this about face? 55 00:02:47,560 --> 00:02:50,040 Speaker 4: I don't know. It is clear that he had publicly 56 00:02:50,080 --> 00:02:54,119 Speaker 4: expressed disappointment in the split, and his successor had said 57 00:02:54,160 --> 00:02:57,000 Speaker 4: in a filing that Berkshire Hathaway was taking steps to 58 00:02:57,120 --> 00:03:00,680 Speaker 4: sell its twenty eight percent stake in craft Tigns. So 59 00:03:00,800 --> 00:03:03,560 Speaker 4: clearly they were nervous about this and not fans of 60 00:03:03,600 --> 00:03:04,320 Speaker 4: the news. 61 00:03:04,560 --> 00:03:07,000 Speaker 5: So do we have any idea how long this pause 62 00:03:07,600 --> 00:03:11,600 Speaker 5: will last? I mean, is he trying to turn stuff around, 63 00:03:11,680 --> 00:03:14,000 Speaker 5: make it maybe better, so if when they do split 64 00:03:14,000 --> 00:03:15,880 Speaker 5: it up it be worth more. What do we know? 65 00:03:17,000 --> 00:03:19,320 Speaker 4: They clearly are not going to make the decision this year. 66 00:03:19,480 --> 00:03:22,040 Speaker 4: They talked about returning to growth in twenty twenty seven, 67 00:03:22,280 --> 00:03:25,079 Speaker 4: So it seems like this is a month's away decision. 68 00:03:25,720 --> 00:03:27,799 Speaker 5: Oh the investment bankers who had that on their deal 69 00:03:27,800 --> 00:03:29,080 Speaker 5: sheet for twenty twenty six. 70 00:03:29,720 --> 00:03:31,400 Speaker 2: But they get paid in the meantime for the work 71 00:03:31,440 --> 00:03:31,919 Speaker 2: that they've done. 72 00:03:31,960 --> 00:03:32,320 Speaker 6: Right now. 73 00:03:32,320 --> 00:03:33,520 Speaker 3: You don't get paid to closes. 74 00:03:33,560 --> 00:03:35,320 Speaker 2: Oh really, you can't build them along the way. 75 00:03:35,600 --> 00:03:37,720 Speaker 6: We're not lawyers. Okay, we get paid. 76 00:03:37,800 --> 00:03:40,720 Speaker 2: We take the I like how you still say we yeah, yeah, 77 00:03:40,800 --> 00:03:42,320 Speaker 2: exactly cause you feel for these guys. 78 00:03:42,400 --> 00:03:47,240 Speaker 5: Yeah, what's next for Kellogg? What what's the company want 79 00:03:47,280 --> 00:03:50,600 Speaker 5: to do now? Is as a standalone company. 80 00:03:50,400 --> 00:03:54,119 Speaker 4: For craft Hens. Yeah, well, they've talked about releasing some 81 00:03:54,280 --> 00:03:58,200 Speaker 4: healthier products. They are launching a craft Heines Mac and 82 00:03:58,280 --> 00:04:02,120 Speaker 4: cheese PowerMac nice protein it. I knew iber, I knew it. 83 00:04:02,160 --> 00:04:02,760 Speaker 2: I knew it. 84 00:04:03,960 --> 00:04:06,640 Speaker 4: And they will be lowering prices. They talked about the 85 00:04:06,680 --> 00:04:11,680 Speaker 4: opening price points being important for low income families. So 86 00:04:11,720 --> 00:04:13,160 Speaker 4: those are some of the areas that they're going to 87 00:04:13,200 --> 00:04:16,560 Speaker 4: be focusing on, some healthier options, more affordable price points. 88 00:04:16,880 --> 00:04:19,279 Speaker 2: So Kellogg was the example of a company that split 89 00:04:19,279 --> 00:04:21,480 Speaker 2: into two and then both got taken private. I mean, 90 00:04:21,560 --> 00:04:23,840 Speaker 2: is that a trend overall? In the food industry to 91 00:04:24,080 --> 00:04:26,720 Speaker 2: split yourself up after being kind of a big overall 92 00:04:26,720 --> 00:04:28,560 Speaker 2: food company. 93 00:04:28,839 --> 00:04:30,920 Speaker 4: You know, I think we're seeing examples of both of 94 00:04:31,000 --> 00:04:35,280 Speaker 4: companies getting smaller and bigger. There's obviously a lot more 95 00:04:35,880 --> 00:04:40,520 Speaker 4: criticism and focus on ultra processed foods. Packaged food companies 96 00:04:40,560 --> 00:04:43,679 Speaker 4: are dealing with this. We saw the Super Bowl ad 97 00:04:43,680 --> 00:04:47,360 Speaker 4: this weekend saying processed food kills. So I think big food, 98 00:04:47,760 --> 00:04:50,360 Speaker 4: generally speaking, is trying to figure out what to do 99 00:04:50,440 --> 00:04:52,159 Speaker 4: with these headwinds. 100 00:04:52,920 --> 00:04:56,000 Speaker 6: So what is the story there? 101 00:04:56,080 --> 00:04:59,320 Speaker 5: Is this a short term blip, this whole processed food thing, 102 00:04:59,800 --> 00:05:01,880 Speaker 5: or is it's been brewing because I hear more and 103 00:05:01,920 --> 00:05:04,839 Speaker 5: more and more about that being a cause for so 104 00:05:04,880 --> 00:05:07,920 Speaker 5: many the ills in healthcare and people's health. 105 00:05:08,279 --> 00:05:10,240 Speaker 4: I think this is the first time we've seen an 106 00:05:10,279 --> 00:05:15,560 Speaker 4: administration come down so harshly on ultra processed food. That's 107 00:05:15,600 --> 00:05:19,240 Speaker 4: clearly been a huge focus of Health Secretary Kennedy and 108 00:05:19,279 --> 00:05:22,240 Speaker 4: the White Houses backed him up on this. Of course, 109 00:05:22,480 --> 00:05:25,760 Speaker 4: Americans don't always eat the way they say they want 110 00:05:25,800 --> 00:05:29,640 Speaker 4: to eat, so you know, there's plenty of Dorito's still 111 00:05:29,640 --> 00:05:32,160 Speaker 4: being eaten even as people say they're trying to move 112 00:05:32,200 --> 00:05:33,320 Speaker 4: away from process foods. 113 00:05:34,120 --> 00:05:37,280 Speaker 6: Stay with us. More from Bloomberg Intelligence coming up after this. 114 00:05:41,120 --> 00:05:44,839 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 115 00:05:44,920 --> 00:05:48,000 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 116 00:05:48,000 --> 00:05:51,320 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 117 00:05:51,360 --> 00:05:56,600 Speaker 1: you get your podcasts, or watch us live on youtubelt. 118 00:05:55,360 --> 00:05:59,880 Speaker 5: In Hotel reporting some numbers here today beat expectation. 119 00:06:00,400 --> 00:06:02,320 Speaker 6: You know, people can't get a room anywhere. 120 00:06:02,320 --> 00:06:03,520 Speaker 5: If you do, you got to pay through the nose, 121 00:06:03,880 --> 00:06:05,520 Speaker 5: and the consumer seems to be doing finding. 122 00:06:05,600 --> 00:06:06,560 Speaker 3: Look at some of that stuff. 123 00:06:06,720 --> 00:06:08,919 Speaker 6: Brian Egger, Senior Gaming and Lodging Analysts. 124 00:06:08,640 --> 00:06:10,600 Speaker 5: Joints is here in our Bloomberg Interactive Brooker Studio. 125 00:06:11,200 --> 00:06:14,720 Speaker 6: Hilton Worldwide stocks up about one percent today, fifty two 126 00:06:14,760 --> 00:06:17,200 Speaker 6: week high today, so pretty good for them. It's got 127 00:06:17,200 --> 00:06:19,080 Speaker 6: a market cap ISS seventy five billion. What did Hilton 128 00:06:19,120 --> 00:06:21,520 Speaker 6: report from an earning perspective. 129 00:06:21,160 --> 00:06:22,919 Speaker 7: Yeah, so, I mean what we saw in the quarter 130 00:06:23,320 --> 00:06:26,360 Speaker 7: was kind of mixed in terms of US being down 131 00:06:26,400 --> 00:06:27,960 Speaker 7: a little bit or maybe a little blow of rep 132 00:06:27,960 --> 00:06:31,200 Speaker 7: part in the fourth quarter, mostly because of the government shutdown, 133 00:06:31,360 --> 00:06:35,359 Speaker 7: So a bit weaker in bound travel to the US, 134 00:06:35,360 --> 00:06:37,279 Speaker 7: a little bit weaker government travel, but the ALC for 135 00:06:37,320 --> 00:06:39,720 Speaker 7: next year. I should say for this year one twenty 136 00:06:39,760 --> 00:06:42,279 Speaker 7: six is pretty good. One to two percent rep part growth. 137 00:06:42,200 --> 00:06:44,560 Speaker 3: That's revenue per available per available room. 138 00:06:44,680 --> 00:06:49,839 Speaker 7: Yeah, and so leisure group, luxury all kind of strong international, 139 00:06:50,200 --> 00:06:52,480 Speaker 7: a little stronger than the US. But although this is 140 00:06:52,520 --> 00:06:55,520 Speaker 7: an aging up cycle in the lodging industry, it's still 141 00:06:55,560 --> 00:06:56,120 Speaker 7: got some WI. 142 00:06:56,040 --> 00:06:56,480 Speaker 3: Likes to it. 143 00:06:57,320 --> 00:06:57,520 Speaker 4: Now. 144 00:06:57,640 --> 00:07:00,760 Speaker 2: Hilton, along with many of the other hotel company like Marriott, 145 00:07:01,080 --> 00:07:03,680 Speaker 2: has an asset light business model, which means that it's 146 00:07:03,720 --> 00:07:06,480 Speaker 2: brand licensing right. They don't actually own and manage any 147 00:07:06,520 --> 00:07:09,320 Speaker 2: of their own properties, and that, you know, allows it 148 00:07:09,360 --> 00:07:11,600 Speaker 2: to move more nimbly. The profit margins are much higher. 149 00:07:11,800 --> 00:07:13,200 Speaker 2: What's the downside of that, Brian? 150 00:07:13,800 --> 00:07:15,600 Speaker 7: So, I mean, there's some benefit to actually owning the 151 00:07:15,600 --> 00:07:17,520 Speaker 7: real estate when you're really in an up cycle. But 152 00:07:17,680 --> 00:07:21,080 Speaker 7: this kind of feebase model is a very capital efficient 153 00:07:21,120 --> 00:07:23,840 Speaker 7: way to expand and grow. You get your franchise fees 154 00:07:23,880 --> 00:07:25,680 Speaker 7: and management fees. They've got a little bit of own 155 00:07:25,680 --> 00:07:30,520 Speaker 7: hotel exposure as well. But most of the lodging companies 156 00:07:30,560 --> 00:07:34,800 Speaker 7: separate from the reads are actually asset light manager franchisers 157 00:07:35,040 --> 00:07:36,360 Speaker 7: with some own assets. 158 00:07:36,480 --> 00:07:38,280 Speaker 5: Yeah, I'm looking at you know, you've got a company 159 00:07:38,280 --> 00:07:41,360 Speaker 5: with you know, thirteen billion of revenue call it, you know, 160 00:07:41,760 --> 00:07:45,320 Speaker 5: four billion of EBATA, one hundred million of cappecs. 161 00:07:45,480 --> 00:07:46,280 Speaker 6: Are you kidding me? 162 00:07:46,960 --> 00:07:47,760 Speaker 3: That is awesome? 163 00:07:48,080 --> 00:07:51,320 Speaker 6: So we who builds a If Hilton wants to. 164 00:07:51,240 --> 00:07:54,200 Speaker 5: Build a new hotel in South Beach, they don't build it. 165 00:07:54,200 --> 00:07:54,920 Speaker 5: Somebody else builds it. 166 00:07:55,000 --> 00:07:57,840 Speaker 7: Yeah, so you're you have like ownership entities. Obviously you've 167 00:07:57,840 --> 00:08:01,080 Speaker 7: got the ds like park hotels, resorts and others that 168 00:08:01,200 --> 00:08:03,400 Speaker 7: own the real estate. So this is, as you said, 169 00:08:03,480 --> 00:08:06,880 Speaker 7: like an asset white franchised management, tree driven business with 170 00:08:06,960 --> 00:08:09,520 Speaker 7: some own hotels. There is some otel exposure. 171 00:08:10,120 --> 00:08:11,440 Speaker 5: So what do they do with all the free cashal 172 00:08:11,480 --> 00:08:13,280 Speaker 5: review they get? You know, most of that debada goes 173 00:08:13,280 --> 00:08:14,440 Speaker 5: down to the free cashle line. 174 00:08:14,440 --> 00:08:18,160 Speaker 7: They have been returning capital, right, so they've got capital returns. Uh. 175 00:08:18,400 --> 00:08:21,800 Speaker 7: And you know there is real opportunity for growth within 176 00:08:21,840 --> 00:08:24,280 Speaker 7: their business model, and a while of that is international, 177 00:08:24,400 --> 00:08:26,560 Speaker 7: a lot of conversions, a lot of conversions from other 178 00:08:26,600 --> 00:08:29,280 Speaker 7: assets that fit very well under their brand flags. And 179 00:08:29,280 --> 00:08:32,000 Speaker 7: they have also been launching some new brands as well, 180 00:08:32,080 --> 00:08:34,000 Speaker 7: and kind of that white style category. 181 00:08:34,080 --> 00:08:35,520 Speaker 2: How many brands do they have right now? 182 00:08:36,080 --> 00:08:38,320 Speaker 7: So where are they now I know Marriott's thirty one. 183 00:08:38,320 --> 00:08:41,480 Speaker 7: I'm turning to remember, well, that's all those thirty one 184 00:08:41,640 --> 00:08:44,680 Speaker 7: is such a slice it is. I mean, yeah, I 185 00:08:44,679 --> 00:08:47,960 Speaker 7: think over all of you slice the market segment wise, 186 00:08:48,440 --> 00:08:51,400 Speaker 7: Hyatt and Marriott are more prominent in the luxury high stand. 187 00:08:52,480 --> 00:08:54,800 Speaker 7: Hilton has some luxury, but it's also got a very 188 00:08:54,840 --> 00:08:58,200 Speaker 7: solid kind of mid scale women as service portfolio. And 189 00:08:58,280 --> 00:09:00,480 Speaker 7: so what you tend to see is that in this environment, 190 00:09:00,920 --> 00:09:05,840 Speaker 7: luxury upscale is tends to outperforming, and the limited services 191 00:09:06,000 --> 00:09:09,080 Speaker 7: is somewhat weaker, partly because that's where you've got the 192 00:09:09,080 --> 00:09:13,400 Speaker 7: government travel, you've got the transit, independent business travel, but 193 00:09:13,520 --> 00:09:20,160 Speaker 7: stuff like leisure group luxury, particularly international markets UA, Europe, 194 00:09:20,320 --> 00:09:23,240 Speaker 7: Non China, Asia, all have been really quite strong. 195 00:09:24,200 --> 00:09:26,600 Speaker 2: I wonder, Brian, do you I know you don't cover 196 00:09:26,679 --> 00:09:29,400 Speaker 2: air Andbnb as a company, but do you ever see 197 00:09:29,440 --> 00:09:33,040 Speaker 2: any correlation between the performance of Airbnb and you know, 198 00:09:33,160 --> 00:09:36,360 Speaker 2: a Hilton or Marriott, Because I'm sure in markets where 199 00:09:36,440 --> 00:09:39,400 Speaker 2: Airbnb is not allowed, like New York City for instance, 200 00:09:40,040 --> 00:09:40,880 Speaker 2: Hilton benefits. 201 00:09:40,960 --> 00:09:41,320 Speaker 3: Yeah. 202 00:09:41,360 --> 00:09:44,199 Speaker 7: I tend to think of, you know, the the OTAs 203 00:09:44,240 --> 00:09:46,760 Speaker 7: the Airbnb's of the world, as being a factor with 204 00:09:46,840 --> 00:09:50,079 Speaker 7: respect to both las Vegas watching particularly and kind of 205 00:09:50,120 --> 00:09:52,959 Speaker 7: the value conscious consumer women at service. You know, you've 206 00:09:52,960 --> 00:09:54,960 Speaker 7: got some extra invagery there where it's good for that 207 00:09:55,040 --> 00:09:57,760 Speaker 7: kind of last minute imagery management. But the big focus 208 00:09:57,760 --> 00:10:01,480 Speaker 7: of Hilton Marriott High has been for loyalty programs and 209 00:10:01,520 --> 00:10:05,640 Speaker 7: a strong correlation between loyalty members and kind of booking directly. 210 00:10:06,320 --> 00:10:08,040 Speaker 7: So there's there's that aspect as well. 211 00:10:08,200 --> 00:10:10,440 Speaker 5: The Walt Disney Company called out in their theme park 212 00:10:10,480 --> 00:10:14,119 Speaker 5: business some weakness on inbound international travel. 213 00:10:14,520 --> 00:10:16,000 Speaker 6: Is that are the hotels seeing. 214 00:10:15,880 --> 00:10:17,559 Speaker 7: There as well? There are some of that, I mean, 215 00:10:17,559 --> 00:10:21,240 Speaker 7: some of it's from Canada terriff related. I think kind 216 00:10:21,280 --> 00:10:25,160 Speaker 7: of that globally, the weaker areas maybe your inbound US travel, 217 00:10:25,520 --> 00:10:29,480 Speaker 7: US governor travel, China's kind of flat as strong areas 218 00:10:29,559 --> 00:10:31,640 Speaker 7: or all the other categories we talked about, you know, 219 00:10:31,760 --> 00:10:33,040 Speaker 7: luxuries group travel. 220 00:10:33,160 --> 00:10:34,720 Speaker 6: I always stayed in my Canadian fans. 221 00:10:34,800 --> 00:10:37,920 Speaker 5: You know, the first time it drops like below twenty 222 00:10:37,960 --> 00:10:40,959 Speaker 5: degrees or ten degrees in like November, you guys are 223 00:10:41,160 --> 00:10:42,480 Speaker 5: booking your flights down the Florida. 224 00:10:42,559 --> 00:10:45,480 Speaker 2: It can be Holling a different too, sing it different, Brian. 225 00:10:45,640 --> 00:10:48,680 Speaker 2: How exposed are the Hilton's and the Mariots of the 226 00:10:48,679 --> 00:10:51,920 Speaker 2: world to you know, the whole credit card debate. You 227 00:10:51,920 --> 00:10:55,000 Speaker 2: know the President wanting to cap interest rates to ten 228 00:10:55,000 --> 00:10:57,600 Speaker 2: percent on credit card companies and that putting at risk 229 00:10:57,679 --> 00:10:59,240 Speaker 2: all these reward credit cards. 230 00:10:59,400 --> 00:11:03,080 Speaker 7: Right well, I mean it's a consideration partly because a 231 00:11:03,120 --> 00:11:06,160 Speaker 7: big part of that franchise fee line you see for 232 00:11:06,200 --> 00:11:09,840 Speaker 7: health and merit is actually fees from co branded credit cards. 233 00:11:10,120 --> 00:11:13,240 Speaker 7: That's actually a big kind of fee source. So all 234 00:11:13,320 --> 00:11:16,600 Speaker 7: us being the same, the royalty rates and the level 235 00:11:16,640 --> 00:11:20,200 Speaker 7: of credit card activity are somewhat of a driver for 236 00:11:20,280 --> 00:11:23,640 Speaker 7: these franchise fees. These i should say co branded credit 237 00:11:23,720 --> 00:11:26,400 Speaker 7: card license fees, which which kind of find their way 238 00:11:26,400 --> 00:11:27,720 Speaker 7: into the franchise fee line. 239 00:11:27,880 --> 00:11:30,320 Speaker 3: So it is important stay with us. 240 00:11:30,480 --> 00:11:32,839 Speaker 6: More from Bloomberg Intelligence coming up after this. 241 00:11:36,720 --> 00:11:40,439 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 242 00:11:40,520 --> 00:11:43,560 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 243 00:11:43,600 --> 00:11:46,920 Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever 244 00:11:46,960 --> 00:11:50,080 Speaker 1: you get your podcasts, or watch us live on YouTube. 245 00:11:51,000 --> 00:11:53,200 Speaker 2: Let's get back to earnings right now, because plenty of 246 00:11:53,200 --> 00:11:56,240 Speaker 2: companies reporting. We're past the point where big tech is reporting. 247 00:11:56,480 --> 00:11:59,920 Speaker 2: Now it's consumer related companies. We have a telecom name 248 00:12:00,280 --> 00:12:04,119 Speaker 2: reporting one of the biggest. T Mobile adding fewer subscribers 249 00:12:04,120 --> 00:12:07,559 Speaker 2: that anticipated, yet the stock is moving higher. John Butler 250 00:12:07,679 --> 00:12:10,960 Speaker 2: is our senior telecom analyst, and John, in terms of 251 00:12:11,000 --> 00:12:15,319 Speaker 2: the actual growth in its subscribers, this was a disappointing 252 00:12:15,360 --> 00:12:16,280 Speaker 2: quarter for T Mobile. 253 00:12:17,679 --> 00:12:20,880 Speaker 8: It was a bit of a disappointment for T Mobile Scarlet. 254 00:12:20,920 --> 00:12:23,680 Speaker 8: I think one of the things that really impacted them 255 00:12:23,800 --> 00:12:27,880 Speaker 8: is we've seen Verizon, which now has a new CEO 256 00:12:28,080 --> 00:12:32,240 Speaker 8: who's come in. He's very volume focused, so he's out there. 257 00:12:32,760 --> 00:12:36,800 Speaker 8: They're promoting heavily. They're trying to win new subscribers, and 258 00:12:36,880 --> 00:12:38,880 Speaker 8: I think it took a bit of a den out 259 00:12:38,920 --> 00:12:42,360 Speaker 8: of T Mobile's growth in the fourth quarter. I think 260 00:12:42,400 --> 00:12:45,240 Speaker 8: one thing T Mobile did which was smart is they 261 00:12:45,280 --> 00:12:50,400 Speaker 8: combined the four Q report with a capital market stay update. 262 00:12:50,480 --> 00:12:55,200 Speaker 8: They updated their twenty twenty seven guidance, and they increased 263 00:12:55,240 --> 00:12:58,880 Speaker 8: their free cash flow outlook for twenty seven by one 264 00:12:58,920 --> 00:13:01,920 Speaker 8: point five billion. And so when you saw them do that, 265 00:13:02,559 --> 00:13:08,280 Speaker 8: you saw an inflection and investor sentiment almost instantly, because 266 00:13:08,480 --> 00:13:12,600 Speaker 8: again this has this has gone from a story of 267 00:13:13,200 --> 00:13:16,800 Speaker 8: revenue growth. Now they're pivoting more to free cash flow growth. 268 00:13:16,840 --> 00:13:21,280 Speaker 8: They're really pointing investors to that bottom line to to 269 00:13:22,760 --> 00:13:25,800 Speaker 8: you know, get the focus off of revenue growth as 270 00:13:25,920 --> 00:13:29,920 Speaker 8: things get more promotional and as industry growth slows. 271 00:13:30,400 --> 00:13:33,040 Speaker 5: So is this a new wave of just I guess 272 00:13:33,080 --> 00:13:34,920 Speaker 5: across the board. If you know, Verizon is getting a 273 00:13:34,920 --> 00:13:38,240 Speaker 5: little bit more promotional this T Mobile to AT and T, 274 00:13:38,400 --> 00:13:40,800 Speaker 5: do they have to respond or the other things they 275 00:13:40,800 --> 00:13:41,120 Speaker 5: can do? 276 00:13:42,880 --> 00:13:47,360 Speaker 8: So great question, Paul. Right, We're in a mature industry backdrop. Now, 277 00:13:47,440 --> 00:13:52,120 Speaker 8: growth overall is slowing for everyone. T Mobile is not 278 00:13:52,280 --> 00:13:56,200 Speaker 8: alone in point pointing to pree cash flow growth. You've 279 00:13:56,200 --> 00:13:59,000 Speaker 8: got AT and T and Verizon doing the same thing. 280 00:13:59,679 --> 00:14:03,800 Speaker 8: And so I think again, with that new CEO in place, 281 00:14:03,920 --> 00:14:07,760 Speaker 8: now you've got T Mobiles sort of driving a growth 282 00:14:07,840 --> 00:14:13,120 Speaker 8: story that centers on not only smart promotion, but also 283 00:14:13,320 --> 00:14:18,959 Speaker 8: driving into adjacent markets like advertising and even credit cards. 284 00:14:20,160 --> 00:14:20,360 Speaker 9: Yeah. 285 00:14:20,360 --> 00:14:22,520 Speaker 2: I'm a Team Mobile subscriber, and there's always a ton 286 00:14:22,560 --> 00:14:25,080 Speaker 2: of emails from the company offering all kinds of different 287 00:14:25,160 --> 00:14:27,480 Speaker 2: services and deals, and it really feels like they're just 288 00:14:27,560 --> 00:14:30,960 Speaker 2: trying to develop you into their ecosystem. John, I kind 289 00:14:30,960 --> 00:14:34,560 Speaker 2: of call the effort to sell internet access to AT 290 00:14:34,600 --> 00:14:37,880 Speaker 2: broadband customers a side hustle for these telecoms companies. But 291 00:14:37,920 --> 00:14:40,800 Speaker 2: this is how they can make sure that they continue 292 00:14:40,840 --> 00:14:43,840 Speaker 2: to build out their customer base even as they try 293 00:14:43,840 --> 00:14:46,240 Speaker 2: to fight for market share when it comes to mobile 294 00:14:46,280 --> 00:14:49,440 Speaker 2: phone subscribers. How is that side hustle going for TEA Mobile. 295 00:14:51,200 --> 00:14:53,760 Speaker 8: So the side hustle, as you call it, and I 296 00:14:53,800 --> 00:14:57,080 Speaker 8: think that's a good word for it, is still small 297 00:14:57,200 --> 00:15:00,360 Speaker 8: right now. I think they're real opportunity for them in 298 00:15:00,400 --> 00:15:04,280 Speaker 8: the near term. Scarlet lies in the broadband business. They're 299 00:15:04,440 --> 00:15:09,320 Speaker 8: pushing into fiber, another side hustle. It's small, but I 300 00:15:09,360 --> 00:15:12,680 Speaker 8: think over the next couple of years it could increasingly 301 00:15:12,760 --> 00:15:16,000 Speaker 8: contribute to growth. And then at the core of the 302 00:15:16,040 --> 00:15:21,360 Speaker 8: broadband business is their fixed wireless access business, so delivering 303 00:15:21,400 --> 00:15:26,520 Speaker 8: broadband to the home over cellular spectrum. That's been very 304 00:15:26,600 --> 00:15:30,680 Speaker 8: popular and T Mobile remains a real leader there. It 305 00:15:30,800 --> 00:15:33,800 Speaker 8: continues to be a growth engine for them. And so 306 00:15:33,920 --> 00:15:37,680 Speaker 8: I think when you pair that with the the ad business, 307 00:15:38,240 --> 00:15:41,960 Speaker 8: the credit card business, and more importantly the fiber business, 308 00:15:42,520 --> 00:15:46,600 Speaker 8: it all adds up to help sustain that free cash 309 00:15:46,640 --> 00:15:51,640 Speaker 8: flow growth and call it the five to six percent range, 310 00:15:51,640 --> 00:15:54,240 Speaker 8: maybe even more as we go forward over the next 311 00:15:54,280 --> 00:15:55,160 Speaker 8: three years. 312 00:15:55,640 --> 00:15:58,680 Speaker 5: John about thirty seconds dividend policy. T Mobile's got a 313 00:15:58,720 --> 00:16:01,960 Speaker 5: one point eight percent yield, Verizon five point six percent 314 00:16:02,040 --> 00:16:04,200 Speaker 5: and eight and T three point nine percent, So there's 315 00:16:04,200 --> 00:16:06,760 Speaker 5: something for everybody. In terms of investors, does T Mobile 316 00:16:06,800 --> 00:16:08,560 Speaker 5: DoD They worry about their dividend yield. 317 00:16:10,520 --> 00:16:13,200 Speaker 8: Little less so than share buybacks. In fact, one of 318 00:16:13,280 --> 00:16:16,400 Speaker 8: the things they did with Capital Markets Day was announced 319 00:16:16,400 --> 00:16:19,880 Speaker 8: that they're buying back five billion in shares over the 320 00:16:19,920 --> 00:16:22,960 Speaker 8: course of the first quarter here, which is double the 321 00:16:23,040 --> 00:16:26,640 Speaker 8: normal rate. So you know, I think they're leaning more 322 00:16:26,720 --> 00:16:30,200 Speaker 8: into that than dividend growth, although it's part of that 323 00:16:30,320 --> 00:16:33,320 Speaker 8: share buyback program and it's going to continue to be 324 00:16:33,360 --> 00:16:34,680 Speaker 8: as we go forward here. 325 00:16:35,560 --> 00:16:38,000 Speaker 6: Stay with us. More from Bloomberg Intelligence coming up. 326 00:16:41,720 --> 00:16:45,400 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 327 00:16:45,480 --> 00:16:48,880 Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto 328 00:16:48,960 --> 00:16:52,040 Speaker 1: with the Bloomberg Business App. Listen on demand wherever you 329 00:16:52,080 --> 00:16:55,080 Speaker 1: get your podcasts, or watch us live on YouTube. 330 00:16:55,800 --> 00:16:57,960 Speaker 5: Let's check in with somebody who's in the TV business, 331 00:16:57,960 --> 00:17:00,960 Speaker 5: in the TV advertising business, trying to make it easier 332 00:17:01,120 --> 00:17:04,440 Speaker 5: for smaller midsized businesses to really get their message out 333 00:17:04,440 --> 00:17:08,440 Speaker 5: there versus via all these digital opportunities here, including television. 334 00:17:08,440 --> 00:17:11,240 Speaker 5: Mark Douglas, President and CEO of Mountain that is a 335 00:17:11,240 --> 00:17:14,800 Speaker 5: publicly traded company, a newly publican traded company tickers and 336 00:17:15,720 --> 00:17:19,520 Speaker 5: the reported numbers just today, I think stocks up thirty percent, 337 00:17:19,560 --> 00:17:21,480 Speaker 5: so I guess them just today, So I guess the 338 00:17:21,760 --> 00:17:24,400 Speaker 5: market likes what they heard here. Mark, appreciate you coming 339 00:17:24,440 --> 00:17:27,040 Speaker 5: in our studio here talk to us about Mountain. I 340 00:17:27,080 --> 00:17:28,679 Speaker 5: know you guys are trying to work with small and 341 00:17:28,680 --> 00:17:32,080 Speaker 5: mid sized businesses and help them get their advertising message 342 00:17:32,080 --> 00:17:34,480 Speaker 5: out in the world. That's got tons of digital and 343 00:17:34,520 --> 00:17:35,440 Speaker 5: analog opportunities. 344 00:17:35,560 --> 00:17:37,240 Speaker 6: So what's going on in your business? 345 00:17:37,320 --> 00:17:37,520 Speaker 2: Yeah? 346 00:17:37,520 --> 00:17:42,600 Speaker 9: Absolutely, So what we do is television and streaming television 347 00:17:42,800 --> 00:17:46,800 Speaker 9: in particular has been underserved, but for small businesses. It's 348 00:17:46,880 --> 00:17:50,320 Speaker 9: just been very hard, very expensive for small mid sized 349 00:17:50,359 --> 00:17:52,960 Speaker 9: businesses to use that medium. And what we did is 350 00:17:52,960 --> 00:17:56,080 Speaker 9: we turned it into performance marketing channel, like something that 351 00:17:56,119 --> 00:17:58,919 Speaker 9: they can add to their marketing mix a long search 352 00:17:59,000 --> 00:18:03,280 Speaker 9: along social and use streaming TV to get the next customers. 353 00:18:03,320 --> 00:18:06,640 Speaker 9: And we've been consistently growing. And you know, we did 354 00:18:06,680 --> 00:18:10,320 Speaker 9: earnings last night and I had a very strong quarter 355 00:18:10,359 --> 00:18:12,800 Speaker 9: in Q four, very strong, ended a very strong year, 356 00:18:13,400 --> 00:18:17,280 Speaker 9: and we're you know, our focus is on continuing to 357 00:18:17,359 --> 00:18:19,000 Speaker 9: just exeget the business and do the same. 358 00:18:19,760 --> 00:18:22,080 Speaker 2: And I am assuming for even the small businesses, the 359 00:18:22,119 --> 00:18:25,440 Speaker 2: opportunities lie in things like live sporting events, because those 360 00:18:25,480 --> 00:18:29,120 Speaker 2: are must view, appointment watching that you don't get from 361 00:18:29,119 --> 00:18:29,800 Speaker 2: other shows. 362 00:18:29,920 --> 00:18:30,240 Speaker 3: Yeah. 363 00:18:30,280 --> 00:18:32,720 Speaker 9: Absolutely, Well, the nice thing about streaming is you can 364 00:18:32,880 --> 00:18:36,879 Speaker 9: everyone can find whatever is their you know, thing that 365 00:18:36,920 --> 00:18:39,159 Speaker 9: they love to watch. For me, actually, one of the 366 00:18:39,280 --> 00:18:42,040 Speaker 9: things I love talking about in this business is just 367 00:18:42,119 --> 00:18:43,159 Speaker 9: like the shows I like. 368 00:18:43,240 --> 00:18:45,359 Speaker 3: So, I'm a big fan of Traders right now. 369 00:18:46,880 --> 00:18:49,800 Speaker 9: I love that show on Peacock cannot wait till they 370 00:18:49,880 --> 00:18:52,520 Speaker 9: only released one episode of the week. I'm like, kind 371 00:18:52,560 --> 00:18:55,680 Speaker 9: of damn, well, I just get all tet episodes and once. 372 00:18:56,119 --> 00:18:58,480 Speaker 9: But you know live sports, I watch the super Bowl, 373 00:18:58,600 --> 00:19:01,440 Speaker 9: you have March and it's coming up. You have a 374 00:19:01,480 --> 00:19:03,240 Speaker 9: lot of dating shows for Valentine's say. 375 00:19:03,240 --> 00:19:04,000 Speaker 3: So all of that. 376 00:19:04,080 --> 00:19:06,920 Speaker 9: We give our customers access to all of that kind 377 00:19:06,920 --> 00:19:10,679 Speaker 9: of content, get their message and really target it and 378 00:19:10,720 --> 00:19:14,280 Speaker 9: most importantly, measure the impact how much revenue that drive 379 00:19:14,359 --> 00:19:17,320 Speaker 9: to their business. And so we pioneered this space. We 380 00:19:17,400 --> 00:19:21,560 Speaker 9: call it performance TV. We literally created the term performance TV. 381 00:19:21,680 --> 00:19:24,760 Speaker 9: It's now ubiquitous in the advertising industry, and we just 382 00:19:24,880 --> 00:19:27,920 Speaker 9: kind of keep growing into the scaley opportunity, which we 383 00:19:27,960 --> 00:19:28,880 Speaker 9: think is enormous. 384 00:19:29,320 --> 00:19:30,160 Speaker 6: Talk to about AI. 385 00:19:30,240 --> 00:19:34,520 Speaker 5: How's AI impacting the advertising business? Meta calls it out. 386 00:19:34,680 --> 00:19:36,320 Speaker 5: Google calls it out as. 387 00:19:36,240 --> 00:19:38,080 Speaker 6: Relates to their YouTube business and or search business. 388 00:19:38,560 --> 00:19:39,480 Speaker 5: How do you see it impacting it? 389 00:19:40,160 --> 00:19:42,960 Speaker 9: It's having an impact across the board. The obvious is 390 00:19:43,000 --> 00:19:47,440 Speaker 9: on the creative the time they get creative, like meaning 391 00:19:47,720 --> 00:19:50,160 Speaker 9: what does it take to get a TV commercial? Used 392 00:19:50,200 --> 00:19:53,640 Speaker 9: to be a lot of costs, very time consuming, lots 393 00:19:53,640 --> 00:19:56,919 Speaker 9: of people involved. That still occurs for some of the creative, 394 00:19:56,920 --> 00:20:00,639 Speaker 9: but increasingly there's AI creative. We ourselves are now putting 395 00:20:00,680 --> 00:20:04,760 Speaker 9: out two to three Mountain branded TV commercials a week 396 00:20:04,920 --> 00:20:07,639 Speaker 9: that are being created like in the under a day. 397 00:20:08,640 --> 00:20:11,800 Speaker 9: We have what we now refer to as AI creators 398 00:20:11,880 --> 00:20:15,119 Speaker 9: using our own tools to do that, and it's just 399 00:20:15,359 --> 00:20:18,879 Speaker 9: substantially lowered the cost. We did a video last week 400 00:20:19,359 --> 00:20:22,359 Speaker 9: for around the show Heated Rivalry, which is kind of 401 00:20:22,359 --> 00:20:25,280 Speaker 9: a hot show right now. So video has hockey players 402 00:20:25,359 --> 00:20:28,080 Speaker 9: in it and so forth got created. An under a 403 00:20:28,160 --> 00:20:31,399 Speaker 9: day costs five hundred dollars. If we tried to do 404 00:20:31,480 --> 00:20:33,919 Speaker 9: that in the physical world, that would have been like 405 00:20:34,040 --> 00:20:37,720 Speaker 9: six weeks fifty grand one hundred grand to film that, 406 00:20:38,280 --> 00:20:41,000 Speaker 9: And so I think there's a mixture of still filmed 407 00:20:41,080 --> 00:20:46,080 Speaker 9: video AI video and you use like you use what's 408 00:20:46,119 --> 00:20:49,000 Speaker 9: appropriate for exactly what you're trying to do. 409 00:20:49,000 --> 00:20:51,600 Speaker 2: Does that mean that the images that the viewer sees 410 00:20:51,720 --> 00:20:52,720 Speaker 2: is AI generated? 411 00:20:53,320 --> 00:20:55,879 Speaker 3: Yes, fully, AI generated thirty second? 412 00:20:56,119 --> 00:20:57,879 Speaker 2: Do you have to put a disclaimer disclosure on that 413 00:20:58,000 --> 00:20:59,159 Speaker 2: or that that doesn't come up? 414 00:21:00,000 --> 00:21:02,480 Speaker 3: You don't have to, I actually would like to. 415 00:21:03,160 --> 00:21:05,919 Speaker 9: My personal view is all AI videos should be labeled 416 00:21:05,960 --> 00:21:08,720 Speaker 9: AI period. I actually, you know there's a can Spam 417 00:21:08,760 --> 00:21:11,520 Speaker 9: Act for email. I think there should be a similar 418 00:21:11,560 --> 00:21:15,199 Speaker 9: act for AI content that if I'm on Instagram or 419 00:21:15,320 --> 00:21:17,720 Speaker 9: watching commercial on TV, I should know that this is 420 00:21:18,160 --> 00:21:21,280 Speaker 9: you know, AI created. And that's that's kind of a 421 00:21:21,280 --> 00:21:23,639 Speaker 9: personal opinion. I don't see a downside to that, And 422 00:21:23,720 --> 00:21:26,640 Speaker 9: I think people would appreciate the transparency. They don't want 423 00:21:26,680 --> 00:21:29,480 Speaker 9: to guess what they're looking at, you know, is it 424 00:21:29,640 --> 00:21:33,879 Speaker 9: kind of real? Ironically, we ran another ad campaign the 425 00:21:33,920 --> 00:21:39,639 Speaker 9: other day with Jamil White, who's u a famous child 426 00:21:39,680 --> 00:21:42,280 Speaker 9: actor and now is involved in a lot of projects 427 00:21:42,280 --> 00:21:45,240 Speaker 9: as an adult, and the campaign was is it AI? 428 00:21:46,800 --> 00:21:51,560 Speaker 9: So yeah, yeah, yeah, and so. 429 00:21:51,000 --> 00:21:52,240 Speaker 6: I know you guys are with your company. 430 00:21:52,280 --> 00:21:54,280 Speaker 5: You guys are so involved in the media space in 431 00:21:54,320 --> 00:21:56,960 Speaker 5: general from the advertising site. What do you make of 432 00:21:57,000 --> 00:22:00,240 Speaker 5: what's going on with Warner Brothers Discovery? It just seems 433 00:22:00,280 --> 00:22:01,480 Speaker 5: to be kind of out there. I don't know if 434 00:22:01,520 --> 00:22:03,800 Speaker 5: Netflix is gonna buy him, Paramoun's gonna buy him. If 435 00:22:03,800 --> 00:22:06,480 Speaker 5: Paramount doesn't buy them, what happens to Paramount? What do 436 00:22:06,480 --> 00:22:08,520 Speaker 5: you guys, what's the scot about out there? 437 00:22:08,680 --> 00:22:13,160 Speaker 9: Well, for full disclosure, I worked for Larry Ellison liter 438 00:22:13,200 --> 00:22:16,399 Speaker 9: early in my career, and I didn't see him lose 439 00:22:16,960 --> 00:22:23,359 Speaker 9: very often, and so I mean, when he's determined, he's ferocious. 440 00:22:23,400 --> 00:22:26,560 Speaker 9: But obviously Netflix is very capable. They have an incredible 441 00:22:26,600 --> 00:22:30,360 Speaker 9: management team. I think ultimately it comes down the dollars. 442 00:22:30,440 --> 00:22:33,080 Speaker 9: I don't know how it doesn't. I mean, and at 443 00:22:33,119 --> 00:22:35,840 Speaker 9: the moment, I believe that, you know, Paramount has a 444 00:22:35,840 --> 00:22:39,760 Speaker 9: bigger offer on the table, but unless there's elements of 445 00:22:39,800 --> 00:22:42,920 Speaker 9: the offer that haven't been published, so you know, and 446 00:22:43,480 --> 00:22:46,720 Speaker 9: I think paramount strategy is let's take let's literally take 447 00:22:46,760 --> 00:22:48,919 Speaker 9: it to the streets and do a tender offer, so 448 00:22:49,440 --> 00:22:52,080 Speaker 9: we'll see how that plays out. I'm pretty bullish on Paramount, 449 00:22:52,119 --> 00:22:54,080 Speaker 9: but I know a lot of people on Netflix and 450 00:22:54,119 --> 00:22:57,639 Speaker 9: they determined also, so unless they're going to come in 451 00:22:57,680 --> 00:22:59,960 Speaker 9: over the top, I think Paramount has a real shot there. 452 00:23:00,240 --> 00:23:03,760 Speaker 3: Can I just jump in here absolutely, Matt Miller. 453 00:23:03,840 --> 00:23:07,000 Speaker 10: I just wanted to swing by Matt Miller from Bloomberg Television. 454 00:23:07,000 --> 00:23:09,639 Speaker 6: I anchor Open Interest every weekday from nine to eleven, 455 00:23:11,080 --> 00:23:12,560 Speaker 6: and as friends of the program. 456 00:23:12,760 --> 00:23:15,480 Speaker 10: Yes, I've been friends with Mark Douglass for a number 457 00:23:15,520 --> 00:23:18,440 Speaker 10: of years, and I feel like you're being really diplomatic. 458 00:23:19,200 --> 00:23:23,040 Speaker 10: This does not look good for Paramount at all. Even 459 00:23:23,080 --> 00:23:24,960 Speaker 10: if they get it across the line. At this level, 460 00:23:25,000 --> 00:23:27,439 Speaker 10: they're so levered up that they're going to have trouble 461 00:23:27,480 --> 00:23:29,600 Speaker 10: meeting their payments. I mean, freak cash flow isn't going 462 00:23:29,640 --> 00:23:33,040 Speaker 10: to be that strong. So it seems like a dead 463 00:23:33,200 --> 00:23:35,040 Speaker 10: deal like Netflix has won. 464 00:23:35,880 --> 00:23:38,360 Speaker 3: Well. I mean Netflix certainly. 465 00:23:38,440 --> 00:23:41,120 Speaker 9: Has access to a tremendous amount of capital and they 466 00:23:41,119 --> 00:23:45,280 Speaker 9: have the capitol. But I mean, Larry Ellison, if he's guaranteed, 467 00:23:45,280 --> 00:23:47,879 Speaker 9: you know, if he's providing guarantees, I think that carries 468 00:23:47,880 --> 00:23:48,480 Speaker 9: a lot of weight. 469 00:23:48,640 --> 00:23:50,679 Speaker 2: But he hasn't raised his price yet. That's what everyone's 470 00:23:50,720 --> 00:23:51,200 Speaker 2: waiting for. 471 00:23:51,440 --> 00:23:53,920 Speaker 5: Nobody can I think that he can and why isn't 472 00:23:53,920 --> 00:23:57,560 Speaker 5: he well, because he's he's doing everything but that, and 473 00:23:57,680 --> 00:24:00,480 Speaker 5: he has the ability to do that. But his Matt 474 00:24:00,560 --> 00:24:02,520 Speaker 5: was pointing out, you still got to do something to 475 00:24:02,560 --> 00:24:04,040 Speaker 5: improve the pro former capital structure. 476 00:24:04,080 --> 00:24:05,879 Speaker 6: That's just a banker speaking. I don't know. 477 00:24:06,000 --> 00:24:08,320 Speaker 9: I Also my thoughts on the deal is the deal 478 00:24:08,440 --> 00:24:10,800 Speaker 9: is a nice half for Netflix. It's a must have 479 00:24:11,000 --> 00:24:14,280 Speaker 9: for parents, Like it just literally is a must have 480 00:24:14,440 --> 00:24:19,320 Speaker 9: for parent. Yeah, and so so, you know, I think 481 00:24:19,400 --> 00:24:23,560 Speaker 9: when some things must have for that way you kind 482 00:24:23,560 --> 00:24:24,959 Speaker 9: of get to the finish line. 483 00:24:26,160 --> 00:24:30,840 Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify, 484 00:24:31,040 --> 00:24:34,520 Speaker 1: and anywhere else you get your podcasts. Listen live each 485 00:24:34,560 --> 00:24:38,280 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com, 486 00:24:38,400 --> 00:24:41,960 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 487 00:24:42,359 --> 00:24:45,320 Speaker 1: You can also watch us live every weekday on YouTube 488 00:24:45,680 --> 00:24:47,920 Speaker 1: and always on the Bloomberg terminal.