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: Eastern on Apple, Cocklay and Android Auto with the Bloomberg 4 00:00:17,920 --> 00:00:21,040 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:21,360 --> 00:00:23,080 Speaker 1: or watch us live on YouTube. 6 00:00:24,000 --> 00:00:28,000 Speaker 2: We have sk heinez ADRs opening for trade. They opened 7 00:00:28,120 --> 00:00:30,760 Speaker 2: fourteen percent above the offer price. They opened at one 8 00:00:30,840 --> 00:00:34,400 Speaker 2: hundred and seventy dollars. The offering was at one hundred 9 00:00:34,440 --> 00:00:37,280 Speaker 2: and forty nine dollars. The company raised twenty six and 10 00:00:37,280 --> 00:00:40,839 Speaker 2: a half billion dollars in selling American Depository receipts on 11 00:00:40,840 --> 00:00:41,440 Speaker 2: the Nasdaq. 12 00:00:41,720 --> 00:00:42,960 Speaker 3: Let's bring in Anthony Hughes. 13 00:00:43,000 --> 00:00:46,519 Speaker 2: He is our senior equity capital markets reporter here at 14 00:00:46,520 --> 00:00:49,480 Speaker 2: Bloomberg News, and Anthony, you've been monitoring this. 15 00:00:49,520 --> 00:00:51,879 Speaker 3: This was a very oversubscribed offering. 16 00:00:51,920 --> 00:00:54,840 Speaker 2: There's a lot of demand for it, and this opening 17 00:00:54,960 --> 00:00:57,200 Speaker 2: indicates the demand has not stopped. 18 00:00:57,800 --> 00:01:00,240 Speaker 4: Yes, for the size that is offering this game that 19 00:01:00,480 --> 00:01:04,240 Speaker 4: you can see here, you know, around fifteen percent is 20 00:01:04,480 --> 00:01:07,720 Speaker 4: what you'd expect for perhaps a deal like this where 21 00:01:07,720 --> 00:01:10,080 Speaker 4: it's pretty large, you would expect maybe to go up, 22 00:01:11,120 --> 00:01:12,640 Speaker 4: you know, like fifty one hundred percent or. 23 00:01:12,640 --> 00:01:13,120 Speaker 5: Something like that. 24 00:01:13,160 --> 00:01:16,319 Speaker 4: But you know, really what this confirms is that s 25 00:01:16,400 --> 00:01:19,480 Speaker 4: k Heinez has been able to achieve a premium to 26 00:01:19,680 --> 00:01:21,760 Speaker 4: it's you know, the price at which the stock trades 27 00:01:21,959 --> 00:01:24,760 Speaker 4: in Korea, and that was part of the part of 28 00:01:24,800 --> 00:01:29,240 Speaker 4: this exercise here. This was a offering which was designed 29 00:01:29,240 --> 00:01:32,360 Speaker 4: to fund the capital expenditure of the company, but it 30 00:01:32,440 --> 00:01:34,839 Speaker 4: was also trying to do that in a way which 31 00:01:34,920 --> 00:01:38,400 Speaker 4: was most efficient for the company and enabling the company 32 00:01:38,400 --> 00:01:41,880 Speaker 4: to get a cost of capital that was more the 33 00:01:41,920 --> 00:01:46,600 Speaker 4: best the lowest they could and you know, basically as 34 00:01:46,640 --> 00:01:49,000 Speaker 4: good as Micron's getting in the US. So you know, 35 00:01:49,080 --> 00:01:51,560 Speaker 4: obviously it's an efficient way for the company to raise 36 00:01:51,600 --> 00:01:54,240 Speaker 4: money in the US. This is the way they did it. 37 00:01:54,320 --> 00:01:56,920 Speaker 5: What does the company said about their need for additional 38 00:01:56,960 --> 00:02:00,360 Speaker 5: capital going forward? Did they put out a message we 39 00:02:00,400 --> 00:02:03,120 Speaker 5: may come back for equity, we may access to the 40 00:02:03,280 --> 00:02:05,800 Speaker 5: US debt markets would did they say anything about that? Yeah? 41 00:02:05,800 --> 00:02:07,360 Speaker 4: I think if you see the interview with the chairman, 42 00:02:07,400 --> 00:02:09,760 Speaker 4: he did say that there was a possibility they could sell 43 00:02:09,760 --> 00:02:11,840 Speaker 4: more ad rs and obviously they can raise debt in 44 00:02:11,880 --> 00:02:13,800 Speaker 4: the future as well. So I think the company is 45 00:02:13,840 --> 00:02:18,240 Speaker 4: going to have significant capital expenditure needs and This is 46 00:02:18,280 --> 00:02:19,880 Speaker 4: the sort of interesting thing about the mark at the 47 00:02:19,919 --> 00:02:21,800 Speaker 4: moment where there's a lot of interesting companies that do 48 00:02:21,919 --> 00:02:24,200 Speaker 4: have heavy capital expansion needs, and I think in the 49 00:02:24,240 --> 00:02:26,919 Speaker 4: past we'd probably think they were not the best companies 50 00:02:26,919 --> 00:02:29,040 Speaker 4: to invest in, but these things are different these days. 51 00:02:29,040 --> 00:02:34,960 Speaker 4: But obviously they're generating a huge, huge amount of huge 52 00:02:34,960 --> 00:02:37,840 Speaker 4: return on the assets they have the moment. But you know, 53 00:02:37,880 --> 00:02:39,440 Speaker 4: I think the really interesting thing from that interview I 54 00:02:39,480 --> 00:02:41,160 Speaker 4: thought with the chairman was that you know, he has 55 00:02:41,160 --> 00:02:44,680 Speaker 4: to balance off really you know, maximizing profit for the shareholders, 56 00:02:44,680 --> 00:02:47,960 Speaker 4: but he's also got a supply his customers with the product, 57 00:02:47,960 --> 00:02:52,200 Speaker 4: and you know, obviously he has to expand the production 58 00:02:52,280 --> 00:02:54,799 Speaker 4: of the memoryships and doing this is something that you 59 00:02:54,880 --> 00:02:57,400 Speaker 4: know could subtract a little bit away from shareholder returns 60 00:02:57,639 --> 00:02:59,440 Speaker 4: at a time. But that's a balancing act that you know, 61 00:02:59,480 --> 00:03:02,760 Speaker 4: management has to has to achieve, and that's really interesting 62 00:03:03,080 --> 00:03:05,239 Speaker 4: challenge for the company looking forward here. 63 00:03:05,639 --> 00:03:09,280 Speaker 2: So the market where eske Heinez has its primary listing, 64 00:03:09,400 --> 00:03:13,080 Speaker 2: SOUL is the world's best performing stock market, right. I mean, 65 00:03:13,120 --> 00:03:16,079 Speaker 2: it's done incredibly well, and this is even after it 66 00:03:16,760 --> 00:03:21,120 Speaker 2: basically had this moment of whiplash the last couple of weeks. 67 00:03:21,120 --> 00:03:22,800 Speaker 3: You know, it's been very, very volatile. 68 00:03:22,919 --> 00:03:25,480 Speaker 2: Just this week alone, I'm looking at it, the costpy, 69 00:03:25,639 --> 00:03:28,959 Speaker 2: the benchmark index. They're closed down five percent. Last night 70 00:03:29,000 --> 00:03:31,600 Speaker 2: it rose three percent, So it's kind of all over 71 00:03:31,639 --> 00:03:34,560 Speaker 2: the place. Is there a sense that this was kind 72 00:03:34,600 --> 00:03:36,800 Speaker 2: of the not I don't want to say the top, 73 00:03:36,840 --> 00:03:38,640 Speaker 2: but you know, it was kind of a dicey time 74 00:03:38,720 --> 00:03:41,680 Speaker 2: for eske Heinis to go public in the US, given 75 00:03:41,760 --> 00:03:44,160 Speaker 2: that there's so much volatility in its home market. 76 00:03:44,520 --> 00:03:44,680 Speaker 6: Yeah. 77 00:03:44,760 --> 00:03:46,960 Speaker 4: Well, I think when the stock's up six or seven 78 00:03:47,040 --> 00:03:50,080 Speaker 4: hundred percent in the last year, finding the right price 79 00:03:50,120 --> 00:03:51,960 Speaker 4: here it was always going to be a little bit challenging. 80 00:03:51,960 --> 00:03:54,440 Speaker 4: And I think although the offering did price at a 81 00:03:54,440 --> 00:03:57,160 Speaker 4: premium to the translated value of the stock in career, 82 00:03:57,960 --> 00:04:00,040 Speaker 4: you know, it did come back twenty five percent and 83 00:04:00,160 --> 00:04:02,080 Speaker 4: thirty percent ahead of this offering and in the past 84 00:04:02,120 --> 00:04:04,600 Speaker 4: few weeks, and that was something that I think the 85 00:04:04,640 --> 00:04:06,800 Speaker 4: investors in the offering, the US investors that came into 86 00:04:06,800 --> 00:04:09,880 Speaker 4: for the ADRs, were pleased about. I mean, obviously it'd 87 00:04:09,880 --> 00:04:12,040 Speaker 4: be much better to have bought the stock a year 88 00:04:12,040 --> 00:04:14,000 Speaker 4: ago when it was before it had gone up six 89 00:04:14,080 --> 00:04:16,760 Speaker 4: hundred percent, But you know, the investment opportunity was laid 90 00:04:16,760 --> 00:04:19,040 Speaker 4: out to them here, and you know, the stock did 91 00:04:19,080 --> 00:04:20,680 Speaker 4: come back ahead of the offering, and then it priced 92 00:04:20,680 --> 00:04:23,559 Speaker 4: a premium and now it's trading, you know, up again, 93 00:04:23,680 --> 00:04:26,960 Speaker 4: so you know that the company is trying to get 94 00:04:26,960 --> 00:04:30,240 Speaker 4: a multiple that's closer to Micron, which has been an 95 00:04:30,240 --> 00:04:33,600 Speaker 4: outstanding stock in the US. And you know, but whenever 96 00:04:33,640 --> 00:04:36,039 Speaker 4: you see stock prices go up in a a in 97 00:04:36,080 --> 00:04:38,039 Speaker 4: a straight line like they have, or at least go 98 00:04:38,160 --> 00:04:40,520 Speaker 4: up very, very sharply over a short period of time, 99 00:04:40,520 --> 00:04:43,000 Speaker 4: there's always a chance for retlacement. But to your point, 100 00:04:43,040 --> 00:04:45,760 Speaker 4: the Korean market has been hugely volatile. It's been very 101 00:04:46,000 --> 00:04:49,400 Speaker 4: it's been very strong, yes, one of the strongest market 102 00:04:49,400 --> 00:04:51,600 Speaker 4: in the world, but it's highly it's very volatile. So 103 00:04:51,640 --> 00:04:53,640 Speaker 4: I think the interesting thing for investors is whether this 104 00:04:53,720 --> 00:04:56,279 Speaker 4: stock is going to be volatile now that it's trading 105 00:04:56,279 --> 00:04:58,320 Speaker 4: in the US, and so that is some of that 106 00:04:58,400 --> 00:05:01,320 Speaker 4: volatility in career get imported into the US. 107 00:05:01,400 --> 00:05:03,680 Speaker 2: Very well said, Okay, you keep bringing up my Cron 108 00:05:03,720 --> 00:05:06,240 Speaker 2: and that's because that's the US's biggest memory chip maker, 109 00:05:06,279 --> 00:05:08,640 Speaker 2: But ask heinez has a rival at home, and that's 110 00:05:08,640 --> 00:05:13,080 Speaker 2: Samsung Electronics. Does Samsung Electronics trade in any way in 111 00:05:13,160 --> 00:05:16,279 Speaker 2: the US, and if not, would it consider listing in 112 00:05:16,320 --> 00:05:18,240 Speaker 2: the US because aske Heinez. 113 00:05:17,880 --> 00:05:20,599 Speaker 4: Has Yeah, well, I think people are expecting other companies 114 00:05:20,640 --> 00:05:25,680 Speaker 4: to look at ADR programs. I mean Kiyoksa kiyoksya of Japan. 115 00:05:26,080 --> 00:05:28,440 Speaker 3: Oh right here, Sarah, right, yeah, yeah, I've got the 116 00:05:28,520 --> 00:05:28,880 Speaker 3: name right. 117 00:05:29,839 --> 00:05:33,400 Speaker 4: But you know, I think ADR programs are not necessarily 118 00:05:34,200 --> 00:05:36,160 Speaker 4: simple things for companies to roll out, and I think 119 00:05:36,160 --> 00:05:37,760 Speaker 4: a lot of Asian companies have probably shyed away them 120 00:05:37,839 --> 00:05:40,360 Speaker 4: in recent years. Certainly Chinese companies have not really been 121 00:05:40,440 --> 00:05:43,839 Speaker 4: encouraged to in either direction to do ADR programs. So 122 00:05:44,120 --> 00:05:45,400 Speaker 4: you know, this might be a little bit of one 123 00:05:45,400 --> 00:05:48,479 Speaker 4: off and really reflective of these amazing conditions in the 124 00:05:48,560 --> 00:05:53,840 Speaker 4: in the memory chip market, but yeah, it's this has 125 00:05:53,880 --> 00:05:55,560 Speaker 4: been a pretty orderly outcome so far. 126 00:05:56,240 --> 00:05:59,400 Speaker 5: Real quick, Do we expect Stark the treaty to Premium 127 00:05:59,440 --> 00:06:02,880 Speaker 5: in the US for career from evaluation perspective? Yeah? 128 00:06:02,960 --> 00:06:07,040 Speaker 4: So, I guess to Scarlet's point there, even though Samsung 129 00:06:07,120 --> 00:06:10,239 Speaker 4: is a rival, they're really the direct camp here was Micron, 130 00:06:10,279 --> 00:06:14,520 Speaker 4: and Micron does trade it to premium to to s 131 00:06:14,600 --> 00:06:17,120 Speaker 4: k Heinex based on forward earnings. I mean, obviously you 132 00:06:17,120 --> 00:06:20,040 Speaker 4: can value companies in different ways. But and part of 133 00:06:20,040 --> 00:06:22,080 Speaker 4: the exercise here was to close that gap at least 134 00:06:22,120 --> 00:06:25,599 Speaker 4: as far as the stock trades in the US. And obviously, 135 00:06:26,240 --> 00:06:28,760 Speaker 4: when the company goes to look to raise further capital 136 00:06:28,720 --> 00:06:30,680 Speaker 4: a little bit, raise it in the cheapest way possible. 137 00:06:30,680 --> 00:06:32,680 Speaker 4: And if stock is trading at a premium in the 138 00:06:32,760 --> 00:06:34,839 Speaker 4: US versus career, there's obviously going to be an incentive 139 00:06:34,880 --> 00:06:36,400 Speaker 4: for them to raise the money in the US. And 140 00:06:36,400 --> 00:06:37,920 Speaker 4: obviously the other thing about the US is there's a 141 00:06:37,960 --> 00:06:38,560 Speaker 4: lot of money in the. 142 00:06:38,520 --> 00:06:40,400 Speaker 5: US as well to play that arbitrage. 143 00:06:40,600 --> 00:06:43,360 Speaker 4: Yeah, but that was very much expected that there would 144 00:06:43,360 --> 00:06:46,160 Speaker 4: be a premium here and that's part of the exercise 145 00:06:46,200 --> 00:06:46,760 Speaker 4: that that that. 146 00:06:48,279 --> 00:06:49,200 Speaker 3: They've been able to do that. 147 00:06:49,240 --> 00:06:51,400 Speaker 4: But obviously there is a Korean discount that people talk 148 00:06:51,440 --> 00:06:53,560 Speaker 4: about that reflects the fact that there's a lot of 149 00:06:53,560 --> 00:06:56,320 Speaker 4: governance concerns about the way Korean business. 150 00:06:56,880 --> 00:06:58,840 Speaker 5: Korea does business a little bit differently to America. 151 00:06:58,880 --> 00:07:01,279 Speaker 4: I think they're less the Korean companies are less focused 152 00:07:01,360 --> 00:07:06,560 Speaker 4: on capital returns and dividends end Also, just you know, 153 00:07:06,560 --> 00:07:08,320 Speaker 4: Americans is a bit more shape price focused. 154 00:07:08,400 --> 00:07:11,920 Speaker 2: For more accounts, stay with us more from Bloomberg Intelligence 155 00:07:11,960 --> 00:07:12,880 Speaker 2: coming up after this. 156 00:07:16,680 --> 00:07:20,360 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 157 00:07:20,440 --> 00:07:23,560 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 158 00:07:23,560 --> 00:07:26,880 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 159 00:07:26,920 --> 00:07:30,040 Speaker 1: you get your podcasts, or watch us live on YouTube. 160 00:07:30,760 --> 00:07:33,880 Speaker 5: All right, let's switch gears to the airspace business, the 161 00:07:33,920 --> 00:07:38,280 Speaker 5: airlines business. We do that with George Ferguson, and he's 162 00:07:38,280 --> 00:07:41,160 Speaker 5: a senior airspace analyst at Bloomberg Intelligence. And George, the 163 00:07:41,200 --> 00:07:44,000 Speaker 5: only thing between me and the beach is this discussion 164 00:07:44,160 --> 00:07:47,000 Speaker 5: with you. So I want to get through this. George 165 00:07:47,000 --> 00:07:50,640 Speaker 5: talk to us about Delta earnings came out. I thought 166 00:07:50,640 --> 00:07:53,760 Speaker 5: they were pretty good here. It seems like demand's holding 167 00:07:53,800 --> 00:07:54,680 Speaker 5: up for these airlines. 168 00:07:56,080 --> 00:08:00,600 Speaker 6: Yeah, I mean I think that, you know, Delta United 169 00:08:00,640 --> 00:08:03,240 Speaker 6: and to a lesser extent, American are going to probably 170 00:08:03,240 --> 00:08:04,320 Speaker 6: be the best part of. 171 00:08:04,280 --> 00:08:06,160 Speaker 3: The story this quarter. 172 00:08:06,200 --> 00:08:09,720 Speaker 6: And I think Delta showed some resilience in that in 173 00:08:09,760 --> 00:08:12,640 Speaker 6: the revenue lines, right, and I think you know, if 174 00:08:12,680 --> 00:08:16,320 Speaker 6: you remember, this is a pretty diversified from a revenue 175 00:08:16,360 --> 00:08:19,960 Speaker 6: standpoint company. They have maintenance business that brought in some 176 00:08:20,000 --> 00:08:25,280 Speaker 6: great double digit gains They've got They had cargo, they 177 00:08:25,320 --> 00:08:28,200 Speaker 6: had loyalty that all sort of brought in gains as 178 00:08:28,200 --> 00:08:31,600 Speaker 6: well as premium. Uh and then and Basic lagged a 179 00:08:31,600 --> 00:08:34,840 Speaker 6: little bit, although they indicated that, you know, they've been 180 00:08:34,840 --> 00:08:37,240 Speaker 6: cutting down a number of Basic seats. But I think 181 00:08:37,320 --> 00:08:40,520 Speaker 6: Jenner of this story was pretty good on the revenue front. 182 00:08:40,960 --> 00:08:43,880 Speaker 6: They grew less than United in Americans, so I think 183 00:08:43,920 --> 00:08:46,920 Speaker 6: that means they could support some of those higher faares. 184 00:08:46,920 --> 00:08:49,760 Speaker 6: They were like, at one percent seat count growth, We're 185 00:08:49,760 --> 00:08:52,319 Speaker 6: going to see United and they come in closer to six. 186 00:08:52,760 --> 00:08:56,120 Speaker 6: We're going to see American around three ish, so they 187 00:08:56,320 --> 00:08:58,960 Speaker 6: I think this might be the best part again of 188 00:08:59,000 --> 00:09:02,240 Speaker 6: the revenue story for US airlines as we get into 189 00:09:02,240 --> 00:09:04,880 Speaker 6: this earning season. And one of the challenges I think 190 00:09:04,880 --> 00:09:08,400 Speaker 6: too and growing a little slower on the capacity front, 191 00:09:08,600 --> 00:09:11,640 Speaker 6: is that some of their cost ballooned a little bit. 192 00:09:12,240 --> 00:09:14,160 Speaker 6: But look again, I think they made some good ground. 193 00:09:14,160 --> 00:09:17,160 Speaker 6: They haven't totally compensated for higher fuel prices, but they 194 00:09:17,200 --> 00:09:19,400 Speaker 6: made some good ground. I think it was a it 195 00:09:19,440 --> 00:09:23,880 Speaker 6: was it was a pretty decent earnings you know, earnings numbers. 196 00:09:24,120 --> 00:09:26,400 Speaker 5: Hey, George, talk to us about just maybe the trend 197 00:09:26,400 --> 00:09:30,000 Speaker 5: in the industry to maybe taking out some economy seats, 198 00:09:30,040 --> 00:09:32,880 Speaker 5: putting in more business or first class seats. How is 199 00:09:32,920 --> 00:09:36,040 Speaker 5: a cabin changing within the industry these days? 200 00:09:36,880 --> 00:09:38,400 Speaker 6: Yeah, I think you're just you know, on the big 201 00:09:38,440 --> 00:09:41,360 Speaker 6: full service guys, you're seeing a lot of I don't 202 00:09:41,400 --> 00:09:46,280 Speaker 6: know what we call it, upgrading improving, right, And remember 203 00:09:46,440 --> 00:09:49,600 Speaker 6: like that premium seat, you know, that can stretch anything 204 00:09:49,679 --> 00:09:54,439 Speaker 6: from premium economy to more business seats. And you know, 205 00:09:54,480 --> 00:09:56,840 Speaker 6: I think they're finding again, you know, they're sort of 206 00:09:58,080 --> 00:10:02,080 Speaker 6: they're focusing on the well healed concer tumor your retiree 207 00:10:02,200 --> 00:10:05,599 Speaker 6: you know, and your four to one K accounts. I 208 00:10:05,640 --> 00:10:08,160 Speaker 6: guess it's not a former anymore. Your investment accounts are 209 00:10:08,240 --> 00:10:11,599 Speaker 6: rocking and rolling. You don't want to fly overseas, you 210 00:10:11,640 --> 00:10:14,080 Speaker 6: don't want to fly to the West coast in something 211 00:10:14,080 --> 00:10:16,080 Speaker 6: that's has cramped as some of that basic economy in 212 00:10:16,080 --> 00:10:19,080 Speaker 6: the back of the airplane. So those carriers are sort 213 00:10:19,080 --> 00:10:22,000 Speaker 6: of pushing that upgraded seat, trying to get more money 214 00:10:22,040 --> 00:10:25,920 Speaker 6: from it. And again I think, you know, Delta has 215 00:10:25,960 --> 00:10:28,160 Speaker 6: shown some success on that front, and I would expect 216 00:10:28,200 --> 00:10:30,760 Speaker 6: to get to see the same out of United an 217 00:10:30,800 --> 00:10:32,320 Speaker 6: American but to a lesser extent. 218 00:10:33,120 --> 00:10:36,240 Speaker 5: But what happens, what about guys, what happens to the 219 00:10:37,040 --> 00:10:39,280 Speaker 5: lower end consumer? Where does that consumer go? Do I 220 00:10:39,280 --> 00:10:41,200 Speaker 5: have to fly? I mean, aren't some of these airlines 221 00:10:41,200 --> 00:10:43,280 Speaker 5: going out of business, these discount airlines. 222 00:10:43,880 --> 00:10:46,000 Speaker 6: So we saw spirit, you know, we saw a spirit 223 00:10:46,120 --> 00:10:49,760 Speaker 6: leave the business. I think that helped. Look, I think 224 00:10:49,760 --> 00:10:52,400 Speaker 6: still at the bottom end of the scale, right, that 225 00:10:52,840 --> 00:10:57,480 Speaker 6: basic economy traveler one, they're under a little more pressure economically. 226 00:10:57,800 --> 00:11:00,880 Speaker 6: I think inflation's hurting them a little harder. Right, if 227 00:11:00,920 --> 00:11:04,560 Speaker 6: when you raise the price of gas, it hits them 228 00:11:04,559 --> 00:11:06,560 Speaker 6: in the pocketbook a little further too, Right, you know, 229 00:11:06,640 --> 00:11:08,800 Speaker 6: the cost of the more to commute to work of 230 00:11:08,840 --> 00:11:12,480 Speaker 6: their total income. And so I think that means demand 231 00:11:12,600 --> 00:11:15,880 Speaker 6: is probably a little bit softer in that basic economy 232 00:11:15,880 --> 00:11:18,960 Speaker 6: world than it is in the premium world. And so 233 00:11:19,160 --> 00:11:20,760 Speaker 6: and so I think, you know, that kind of took 234 00:11:20,800 --> 00:11:23,520 Speaker 6: away some of the gains we might have seen as 235 00:11:23,880 --> 00:11:26,559 Speaker 6: spirit left. And again, I think, you know, you've got 236 00:11:26,600 --> 00:11:30,480 Speaker 6: to bear in mind that Delta, United and American are 237 00:11:30,559 --> 00:11:34,640 Speaker 6: going for that basic economy travel Right, there's still a 238 00:11:34,720 --> 00:11:38,080 Speaker 6: basic economy section in the back of those airplanes that, 239 00:11:38,320 --> 00:11:41,560 Speaker 6: you know, provided they can sell that seat at a 240 00:11:41,600 --> 00:11:45,160 Speaker 6: price that's higher than their incremental cost to deliver it. 241 00:11:46,160 --> 00:11:48,560 Speaker 6: They're going to do it to that basic economy traveler. 242 00:11:49,000 --> 00:11:52,320 Speaker 6: Fill out those load factors and create you know, efficiencies, 243 00:11:52,360 --> 00:11:55,520 Speaker 6: which improves profitability. And so that's the challenge in this 244 00:11:55,720 --> 00:12:01,640 Speaker 6: businesses United Delta, especially under the again six percent seats, 245 00:12:01,960 --> 00:12:04,800 Speaker 6: there's probably going to be about that much in basic 246 00:12:04,920 --> 00:12:08,240 Speaker 6: economy growth. They do that for long enough, and they 247 00:12:08,320 --> 00:12:11,240 Speaker 6: kind of make up pretty quickly for Spirit Airlines leaving 248 00:12:11,240 --> 00:12:13,440 Speaker 6: the business. So there's still a lot of competition. I 249 00:12:13,440 --> 00:12:16,240 Speaker 6: think in that basic economy we'll see as earning season 250 00:12:16,280 --> 00:12:16,600 Speaker 6: goes on. 251 00:12:16,880 --> 00:12:19,120 Speaker 5: All right, folks, George, in addition to covering the airlines, 252 00:12:19,120 --> 00:12:22,160 Speaker 5: also covers the airspace companies think Boeing. And all I 253 00:12:22,200 --> 00:12:25,120 Speaker 5: know is every summer right around this time he gets 254 00:12:25,120 --> 00:12:27,880 Speaker 5: to go to these lavish trips to your One year 255 00:12:27,920 --> 00:12:31,240 Speaker 5: it's London, the next year's Paris. They alternate, and they're 256 00:12:31,280 --> 00:12:33,640 Speaker 5: these air shows. I have no idea what happens to 257 00:12:33,720 --> 00:12:36,280 Speaker 5: djash shows, but George tells us he must go, So 258 00:12:36,320 --> 00:12:40,240 Speaker 5: we send them George, where are you going this summer? 259 00:12:40,280 --> 00:12:44,040 Speaker 5: I see the week of July twentieth might be penciled in. 260 00:12:44,840 --> 00:12:49,120 Speaker 6: It is, so July twentieth, Farmborough Air show in the 261 00:12:49,120 --> 00:12:55,280 Speaker 6: the verbs around London, and so you know, we go 262 00:12:55,320 --> 00:12:58,880 Speaker 6: there to sort of keep a pulse on demand for airplanes. 263 00:12:58,920 --> 00:13:01,400 Speaker 6: Usually there's a fair amount of orders placed the show 264 00:13:02,200 --> 00:13:04,640 Speaker 6: for airplanes, but you know, by airlines around the world 265 00:13:05,160 --> 00:13:06,760 Speaker 6: this year may be a little bit muted, you know, 266 00:13:06,840 --> 00:13:09,680 Speaker 6: sort of the on again, off again of the sort 267 00:13:09,720 --> 00:13:13,400 Speaker 6: of Iran fight has fuel prices sort of bouncing all 268 00:13:13,400 --> 00:13:15,640 Speaker 6: over the place. So we'll see how much airlines want 269 00:13:15,679 --> 00:13:19,000 Speaker 6: to get in the back of very large cues for airplanes. 270 00:13:18,559 --> 00:13:21,760 Speaker 5: Don't work too hard over there. I heard the Rose flows. 271 00:13:22,240 --> 00:13:25,160 Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this. 272 00:13:28,960 --> 00:13:32,600 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 273 00:13:32,679 --> 00:13:35,720 Speaker 1: weekdays at ten am Eastern on Apple Corplay and Android 274 00:13:35,760 --> 00:13:39,040 Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever 275 00:13:39,080 --> 00:13:42,200 Speaker 1: you get your podcasts, or watch us live on YouTube. 276 00:13:42,840 --> 00:13:47,280 Speaker 5: Great Bloomberg opinion column out here Today, Meta ushers in 277 00:13:47,320 --> 00:13:50,079 Speaker 5: the ear of the K shaped company. A new class 278 00:13:50,120 --> 00:13:52,840 Speaker 5: divide is emerging in big tech between those at the 279 00:13:52,840 --> 00:13:56,480 Speaker 5: top of the artificial intelligence hierarchy and everyone else, with 280 00:13:56,520 --> 00:13:59,280 Speaker 5: the former receiving high salaries and resources and the latter 281 00:13:59,360 --> 00:14:02,400 Speaker 5: being viewed as disposed well. Beth poh It joins us here. 282 00:14:02,559 --> 00:14:06,640 Speaker 5: She has a Bloomberg Opinion columnist author of this piece. Beth, 283 00:14:06,840 --> 00:14:08,400 Speaker 5: what's going on out there with some of these big 284 00:14:08,400 --> 00:14:12,439 Speaker 5: tech companies. It seems like we are if you're an AI, 285 00:14:12,880 --> 00:14:13,360 Speaker 5: they love you. 286 00:14:13,840 --> 00:14:14,080 Speaker 3: Yeah. 287 00:14:14,120 --> 00:14:16,319 Speaker 7: I mean it's really interesting because I think tech has 288 00:14:16,400 --> 00:14:20,520 Speaker 7: long thought of itself as this egalitarian utopia and that 289 00:14:20,880 --> 00:14:22,960 Speaker 7: you know, that's a much more complicated story, and we're 290 00:14:22,960 --> 00:14:25,280 Speaker 7: seeing that play out again here where I really think 291 00:14:25,320 --> 00:14:28,720 Speaker 7: there is an AI hierarchy. There's the AI elite and 292 00:14:28,760 --> 00:14:32,480 Speaker 7: then there's everybody else. And even if you're doing things 293 00:14:32,480 --> 00:14:34,880 Speaker 7: with AI, even if you're using AI tools, unless you 294 00:14:34,920 --> 00:14:37,680 Speaker 7: are at the very top of this hierarchy. 295 00:14:37,280 --> 00:14:38,680 Speaker 3: You are at risk less. 296 00:14:39,480 --> 00:14:41,760 Speaker 2: Unless you're the kind of person who is recruited to 297 00:14:41,800 --> 00:14:44,560 Speaker 2: work at say a Meta and in charge of developing 298 00:14:44,600 --> 00:14:48,440 Speaker 2: the AI capabilities, everyone else just feels like they're you know, 299 00:14:48,560 --> 00:14:52,840 Speaker 2: hired hands and disposable. Increasingly, what is happening at Meta 300 00:14:52,960 --> 00:14:55,440 Speaker 2: that is really exacerbating this divide. 301 00:14:55,560 --> 00:14:57,160 Speaker 3: So we really are seeing this here. 302 00:14:57,200 --> 00:15:03,000 Speaker 7: So there's you know therecutives have thrown massive paypack like 303 00:15:03,120 --> 00:15:08,160 Speaker 7: nine figure salaries at developers, researchers, engineers who are really 304 00:15:08,200 --> 00:15:11,200 Speaker 7: at the top of this field. Everybody else is really 305 00:15:11,240 --> 00:15:15,000 Speaker 7: has faced the prospect of mass layoffs. I mean we're talking, 306 00:15:15,160 --> 00:15:17,840 Speaker 7: you know, ten percent of the company multiple multiple times 307 00:15:17,840 --> 00:15:20,720 Speaker 7: over right, We've we've seen multiple rounds of mass layoffs here. 308 00:15:21,640 --> 00:15:24,720 Speaker 7: Workers have been surveyed in order to basically train their 309 00:15:24,720 --> 00:15:29,520 Speaker 7: AI replacements. They've been drafted onto teams that are described 310 00:15:29,520 --> 00:15:32,560 Speaker 7: as sort of soullless gulogs. So it's it's, you know, 311 00:15:32,600 --> 00:15:35,960 Speaker 7: this company that once was really one of the most 312 00:15:36,000 --> 00:15:39,120 Speaker 7: coveted employers in Silicon Valley for a lot of people 313 00:15:39,480 --> 00:15:42,680 Speaker 7: has now become you know, it's people are sort of 314 00:15:42,720 --> 00:15:43,680 Speaker 7: hoping to get laid off. 315 00:15:43,680 --> 00:15:44,240 Speaker 3: They want out. 316 00:15:45,200 --> 00:15:48,680 Speaker 5: What are the companies saying, if anything? Are they responding? 317 00:15:48,840 --> 00:15:51,360 Speaker 7: Well, what's really interesting here is Meta has walked some 318 00:15:51,440 --> 00:15:55,880 Speaker 7: of this back. They've acknowledged recently that the way some 319 00:15:55,960 --> 00:15:58,960 Speaker 7: of their various initiatives were rolled that was atrocious. They've 320 00:15:58,960 --> 00:16:01,960 Speaker 7: said the environment is rutal. And I don't think this 321 00:16:02,000 --> 00:16:04,360 Speaker 7: is because all of a sudden they've discovered empathy. I 322 00:16:04,440 --> 00:16:06,840 Speaker 7: think this is because it wasn't working right, Like they 323 00:16:06,840 --> 00:16:10,280 Speaker 7: are not winning the AI race, and I mean that's 324 00:16:10,320 --> 00:16:12,840 Speaker 7: not a big surprise that if you treat employees this way, 325 00:16:12,840 --> 00:16:15,600 Speaker 7: they're not going to perform for you. So I think 326 00:16:15,720 --> 00:16:17,440 Speaker 7: they I think they've kind of realized that a little bit. 327 00:16:17,480 --> 00:16:19,320 Speaker 7: They know what the problem. 328 00:16:19,000 --> 00:16:22,360 Speaker 2: Is, they know what the problem is. How are they 329 00:16:22,400 --> 00:16:24,840 Speaker 2: solving it because there is a talent war. You just 330 00:16:24,840 --> 00:16:27,800 Speaker 2: talked about these nine figure salaries for folks who are 331 00:16:27,800 --> 00:16:29,640 Speaker 2: at the top of the AI game, but at some 332 00:16:29,720 --> 00:16:33,240 Speaker 2: point you also need everyone else to kind of continue 333 00:16:33,280 --> 00:16:34,760 Speaker 2: to keep the ship moving in the right direction. 334 00:16:35,120 --> 00:16:37,080 Speaker 7: Yeah, so it's interesting they've said things like, we're not 335 00:16:37,080 --> 00:16:40,480 Speaker 7: going to have any more mass layoffs this year, better 336 00:16:40,560 --> 00:16:44,680 Speaker 7: micro kitchens, you know, smaller teams they were having in 337 00:16:44,720 --> 00:16:47,640 Speaker 7: some cases where one manager would have fifty reports, so it's. 338 00:16:47,800 --> 00:16:49,480 Speaker 3: More attentive leadership. 339 00:16:51,120 --> 00:16:54,480 Speaker 7: They stopped their surveillance program because there actually was a 340 00:16:54,560 --> 00:16:56,760 Speaker 7: data leak attached to that. 341 00:16:56,760 --> 00:16:58,600 Speaker 3: That's why they stopped it, and that's why they stopped it. 342 00:16:58,600 --> 00:17:01,080 Speaker 7: That's why they stopped it, And so we're kind of 343 00:17:01,120 --> 00:17:03,320 Speaker 7: seeing that they're saying, Okay, we're going to try to 344 00:17:03,360 --> 00:17:05,720 Speaker 7: move back to how things were a little bit. 345 00:17:05,800 --> 00:17:07,359 Speaker 3: But I don't think it's that simple. 346 00:17:07,400 --> 00:17:09,879 Speaker 7: It's once you break the trust of employees, it's really 347 00:17:09,920 --> 00:17:11,400 Speaker 7: not that easy to gain it back. 348 00:17:12,280 --> 00:17:16,160 Speaker 5: So are the established Silicon Valley companies like the Metas 349 00:17:16,200 --> 00:17:19,160 Speaker 5: of the world of Google's are they seeing AI startups 350 00:17:19,160 --> 00:17:21,760 Speaker 5: in the valley take poaching talent away? Is that is 351 00:17:21,800 --> 00:17:22,720 Speaker 5: that at risk as well? 352 00:17:22,880 --> 00:17:24,920 Speaker 7: Yeah, Well, what's what's interesting here is that the way 353 00:17:25,680 --> 00:17:28,720 Speaker 7: Meta actually got some of its top AI talent was 354 00:17:28,720 --> 00:17:31,720 Speaker 7: by acquiring, but investing in and then bringing on some 355 00:17:31,760 --> 00:17:34,040 Speaker 7: of the Yeah, it was a big investment. They invested 356 00:17:34,080 --> 00:17:36,680 Speaker 7: and then brought in some of the talent. So this 357 00:17:36,760 --> 00:17:39,879 Speaker 7: is you know, this is these are the employees that 358 00:17:39,920 --> 00:17:42,440 Speaker 7: they are really focused on, and then there's sort of 359 00:17:42,480 --> 00:17:45,960 Speaker 7: the bottom of the pyramid. And you know, I think, 360 00:17:46,040 --> 00:17:48,520 Speaker 7: just like we see in the ke shaped economy, these 361 00:17:48,520 --> 00:17:54,120 Speaker 7: employees they are fearful. They they really they resent what's happening, 362 00:17:54,280 --> 00:17:58,000 Speaker 7: and you know that is also happening here at in 363 00:17:58,119 --> 00:17:58,840 Speaker 7: corporate America. 364 00:18:00,560 --> 00:18:03,480 Speaker 2: Stay with us more from Bloomberg Intelligence coming up after this. 365 00:18:07,640 --> 00:18:11,359 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 366 00:18:11,440 --> 00:18:14,479 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 367 00:18:14,520 --> 00:18:17,840 Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever 368 00:18:17,880 --> 00:18:21,000 Speaker 1: you get your podcasts, or watch us live on YouTube. 369 00:18:21,600 --> 00:18:23,880 Speaker 5: I tell you. One of the many, many, many industries 370 00:18:23,920 --> 00:18:26,920 Speaker 5: that were hurt by the pandemic was the theater business 371 00:18:26,920 --> 00:18:29,280 Speaker 5: going out to movies. A lot of folks said, that's 372 00:18:29,280 --> 00:18:30,960 Speaker 5: gonna be the final nail on the coffin of the 373 00:18:30,960 --> 00:18:35,200 Speaker 5: theatrical window. It's been tough, but they're getting an inch 374 00:18:35,240 --> 00:18:37,800 Speaker 5: and a way back there. Kevinnier follows this industry. He's 375 00:18:37,880 --> 00:18:41,560 Speaker 5: senior equity researchannels from Bloomberg Intelligence in studio. 376 00:18:42,760 --> 00:18:45,040 Speaker 3: In studio, it's a Friday in the summer. 377 00:18:45,800 --> 00:18:49,760 Speaker 5: The BI management team ascons at their various locations. We 378 00:18:49,800 --> 00:18:52,439 Speaker 5: appreciate Kevin coming in here talk to us about the 379 00:18:52,440 --> 00:18:53,320 Speaker 5: theatrical business. 380 00:18:53,320 --> 00:18:53,520 Speaker 8: Here. 381 00:18:53,640 --> 00:18:57,239 Speaker 5: Where are we kind of historical levels pre pandemic to 382 00:18:57,280 --> 00:18:58,399 Speaker 5: now what's going on there? 383 00:18:58,480 --> 00:19:00,320 Speaker 8: Yeah, Paul, you set it up nicely. I mean, you said, 384 00:19:00,320 --> 00:19:02,680 Speaker 8: it's been a really tough road back from the pandemic. 385 00:19:02,680 --> 00:19:05,760 Speaker 8: We've had just years of stunted supply. Theorters have been 386 00:19:05,760 --> 00:19:08,399 Speaker 8: struggling really in survival mode for a long time. This 387 00:19:08,520 --> 00:19:11,520 Speaker 8: year we're seeing a total inflection in demand, and really 388 00:19:11,760 --> 00:19:14,080 Speaker 8: that's coming from the supply side. We're seeing more movies 389 00:19:14,280 --> 00:19:16,639 Speaker 8: and really just as importantly, these movies are staying in 390 00:19:16,680 --> 00:19:20,400 Speaker 8: theaters for longer. That's retraining the consumer that you don't 391 00:19:20,440 --> 00:19:22,359 Speaker 8: have to go and see these movies at home, go 392 00:19:22,400 --> 00:19:25,160 Speaker 8: to the theater, go out on a midweek see the movie. 393 00:19:25,480 --> 00:19:28,440 Speaker 8: And we're seeing that's a really really driving the box 394 00:19:28,480 --> 00:19:29,840 Speaker 8: office to a post pandemic record. 395 00:19:29,880 --> 00:19:30,000 Speaker 5: Hall. 396 00:19:30,080 --> 00:19:31,640 Speaker 2: Okay, so you set it up for me to ask 397 00:19:31,840 --> 00:19:35,200 Speaker 2: obvious next question, which movies are convincing people to pay 398 00:19:35,280 --> 00:19:36,400 Speaker 2: up and go to the movie theater? 399 00:19:36,560 --> 00:19:36,760 Speaker 5: Yeah? 400 00:19:36,800 --> 00:19:38,520 Speaker 8: I mean Scarlet is a great question because I think 401 00:19:38,520 --> 00:19:41,720 Speaker 8: it's the totality. Right, it's a diverse slate. We're not 402 00:19:41,840 --> 00:19:44,920 Speaker 8: seeing nearly as much emphasis on a single blockbuster carrying 403 00:19:44,960 --> 00:19:47,040 Speaker 8: an entire month or the entire summer like we saw 404 00:19:47,080 --> 00:19:49,320 Speaker 8: with with Top Gun Maverick just a few years ago. 405 00:19:50,040 --> 00:19:52,480 Speaker 8: This year, there's just more content, right, So there's horror, 406 00:19:52,520 --> 00:19:56,600 Speaker 8: there's something for different audiences, family audiences. We're seeing more 407 00:19:56,600 --> 00:19:59,280 Speaker 8: IP back in theaters, so there's something for everyone. 408 00:19:59,320 --> 00:20:03,800 Speaker 5: Really, how about the demos? Here are you said training 409 00:20:03,840 --> 00:20:06,680 Speaker 5: an audience to go back into the theaters? Is that? 410 00:20:06,880 --> 00:20:08,720 Speaker 5: What are we seeing? Are younger people going to the 411 00:20:08,800 --> 00:20:12,199 Speaker 5: theaters differently as much less than older folks. Houses that work. 412 00:20:12,280 --> 00:20:14,639 Speaker 8: You picked up on my next point, younger audiences have 413 00:20:14,680 --> 00:20:17,000 Speaker 8: been some of the strongest to come back to the 414 00:20:17,000 --> 00:20:20,240 Speaker 8: theaters really honestly, surprisingly, we think of these younger people 415 00:20:20,320 --> 00:20:22,200 Speaker 8: gen z more as the digital age. You know, they're 416 00:20:22,560 --> 00:20:25,480 Speaker 8: particul to their phones. That hasn't been the case, and 417 00:20:25,720 --> 00:20:28,000 Speaker 8: a big reason is because of the pandemic. You know, 418 00:20:28,000 --> 00:20:30,640 Speaker 8: they lost out a lot of the communal experience, whether 419 00:20:30,640 --> 00:20:32,040 Speaker 8: it was prom, whether it was all these things that 420 00:20:32,040 --> 00:20:34,280 Speaker 8: a lot of us have taken for granted. Now that 421 00:20:34,320 --> 00:20:38,080 Speaker 8: we're back, they really value in person experiences. And it's 422 00:20:38,080 --> 00:20:40,560 Speaker 8: not just theaters, right, it's concerts, it's sporting events. We're 423 00:20:40,560 --> 00:20:42,400 Speaker 8: seeing these hillwinds in a lot of different verticals. 424 00:20:42,480 --> 00:20:44,480 Speaker 2: And going to the movie theater is a lot cheaper 425 00:20:44,520 --> 00:20:46,880 Speaker 2: than going to a concert. So there's that to keep 426 00:20:46,920 --> 00:20:49,119 Speaker 2: in mind as well. What are the theaters doing to 427 00:20:49,200 --> 00:20:51,240 Speaker 2: make sure that once customers go in there they have 428 00:20:51,240 --> 00:20:53,280 Speaker 2: a good experience, because you know a lot of times 429 00:20:53,320 --> 00:20:55,520 Speaker 2: you go in there and the floor is sticky, there's 430 00:20:55,520 --> 00:20:58,440 Speaker 2: popcorn on the seats, like, it's not a great experience. 431 00:20:58,560 --> 00:21:00,600 Speaker 8: Yeah, yeah, it's true. And you know a lot of 432 00:21:00,640 --> 00:21:03,280 Speaker 8: those underperforming theaters have gone away, right, So we're thinking 433 00:21:03,320 --> 00:21:05,520 Speaker 8: about more high quality. We want to improve the consumer 434 00:21:05,600 --> 00:21:08,560 Speaker 8: experience because when people are in there once foot traffic 435 00:21:08,680 --> 00:21:12,040 Speaker 8: rises with a high quality slate, naturally, concession spending goes up. 436 00:21:12,080 --> 00:21:12,880 Speaker 5: Food and beverage. 437 00:21:12,920 --> 00:21:16,200 Speaker 8: That's where profit comes from the movie theaters. So movie 438 00:21:16,200 --> 00:21:20,159 Speaker 8: theaters are investing more in premium options. I think, you know, 439 00:21:20,200 --> 00:21:22,240 Speaker 8: popcorn and soda are still the biggest profit drivers, but 440 00:21:22,320 --> 00:21:25,760 Speaker 8: think like you know, chicken fingers, pizzas, even alcohol. A 441 00:21:25,800 --> 00:21:28,880 Speaker 8: lot of theaters are getting alcohol licenses now and that's 442 00:21:28,920 --> 00:21:30,680 Speaker 8: been a really big success story as well. 443 00:21:30,760 --> 00:21:32,359 Speaker 5: One of the key things that you mentioned earlier is 444 00:21:32,520 --> 00:21:35,960 Speaker 5: at the theatrical window. What are the are the studios 445 00:21:35,960 --> 00:21:40,880 Speaker 5: making a conscious decision to keep movies in theaters longer? 446 00:21:41,040 --> 00:21:43,520 Speaker 8: They are? They are and this is a direct reaction 447 00:21:43,600 --> 00:21:46,000 Speaker 8: to the demand, right, So the demand has risen now, 448 00:21:46,280 --> 00:21:50,280 Speaker 8: studios are investing more in the contents. We've heard of promises, 449 00:21:50,320 --> 00:21:52,960 Speaker 8: we've heard of vocal commitments. The proof is actually showing 450 00:21:53,000 --> 00:21:55,359 Speaker 8: up with the data, and we've seen a material materially 451 00:21:55,440 --> 00:21:58,720 Speaker 8: higher dollar recovery in midweek gross box office. There could 452 00:21:58,760 --> 00:22:00,800 Speaker 8: be some things going on there. Maybe some people are 453 00:22:01,040 --> 00:22:04,000 Speaker 8: putting less emphasis on those expensive opening weekends and just 454 00:22:04,040 --> 00:22:07,400 Speaker 8: going to the discounted tickets on you know, Tuesdays or Wednesdays. 455 00:22:07,880 --> 00:22:09,879 Speaker 8: But really, you know, the flip side of that is 456 00:22:09,920 --> 00:22:11,840 Speaker 8: just there's now as much emphasis to see it on 457 00:22:11,840 --> 00:22:14,359 Speaker 8: that opening weekend where there can be capacity constraints, especially 458 00:22:14,400 --> 00:22:16,359 Speaker 8: during the summer. So I don't need to see it 459 00:22:16,359 --> 00:22:17,800 Speaker 8: on a Friday. I'll go see it on a Wednesday. 460 00:22:17,960 --> 00:22:20,480 Speaker 2: Last movie that you went to the theater for, thank 461 00:22:20,480 --> 00:22:23,520 Speaker 2: God past I can't remember. 462 00:22:23,240 --> 00:22:25,240 Speaker 3: Devil Worre's Prada. What's devil wors. 463 00:22:25,480 --> 00:22:26,280 Speaker 5: Double Wor's product thing? 464 00:22:26,320 --> 00:22:26,600 Speaker 7: Yeah, I. 465 00:22:28,119 --> 00:22:28,679 Speaker 4: Fantastic. 466 00:22:28,720 --> 00:22:30,840 Speaker 5: What did you see most recently? 467 00:22:30,920 --> 00:22:32,000 Speaker 8: I saw Session, which. 468 00:22:31,840 --> 00:22:33,720 Speaker 2: Was just, oh yeah, So that's the hard movie that 469 00:22:33,760 --> 00:22:35,960 Speaker 2: you're talking about. Write something for everyone, John Tucker. 470 00:22:36,400 --> 00:22:38,919 Speaker 5: The last one, my son Dragon went seen Dune or 471 00:22:39,119 --> 00:22:40,800 Speaker 5: Dune that wasn't recent. 472 00:22:41,400 --> 00:22:44,520 Speaker 3: Well, that's the last time. I there's way too much 473 00:22:44,560 --> 00:22:45,600 Speaker 3: sand in that movie too. 474 00:22:45,920 --> 00:22:48,840 Speaker 5: Nixon was resident. So what's the slate coming out of 475 00:22:48,880 --> 00:22:50,160 Speaker 5: Hollywood over the next couple of years. 476 00:22:50,240 --> 00:22:53,480 Speaker 8: Yeah, absolutely, So we have much much better visibility, not 477 00:22:53,520 --> 00:22:56,000 Speaker 8: only into the second half but also into twenty twenty seven, right, 478 00:22:56,000 --> 00:22:57,680 Speaker 8: And that's just something that's been a big change from 479 00:22:57,720 --> 00:23:00,000 Speaker 8: the prior years. That's giving us a lot of confidence 480 00:23:00,119 --> 00:23:02,000 Speaker 8: and why we see kind of a structural reduction in 481 00:23:02,040 --> 00:23:07,280 Speaker 8: downside risk where the visibility goes away is twenty twenty eight, right, 482 00:23:07,280 --> 00:23:09,359 Speaker 8: And this is where we're just not sure what's going 483 00:23:09,440 --> 00:23:12,359 Speaker 8: to happen, especially if the studios consolidate, which it very 484 00:23:12,400 --> 00:23:14,320 Speaker 8: much seems like the windsor point in that direction. We 485 00:23:14,359 --> 00:23:17,800 Speaker 8: have Paramounts set to take over Warner Bros's Discovery comcasts. 486 00:23:17,920 --> 00:23:21,240 Speaker 8: NBCUniversal is now kind of a question mark two extremely 487 00:23:21,280 --> 00:23:24,960 Speaker 8: important healthy studios for this ecosystem. So there is a 488 00:23:24,960 --> 00:23:27,960 Speaker 8: historical precedent. When Disney bought twentieth Century Fox, we saw 489 00:23:27,960 --> 00:23:30,920 Speaker 8: that their combined output really really dwindled over the last 490 00:23:30,960 --> 00:23:34,920 Speaker 8: seven years. That's the same concern with these other studios combining, 491 00:23:35,200 --> 00:23:37,919 Speaker 8: I think in naturally defensive moves, is if the studios 492 00:23:38,040 --> 00:23:40,640 Speaker 8: or excuse me, that the cinema is combined to get 493 00:23:40,640 --> 00:23:43,480 Speaker 8: better to negotiating terms with the rental costs. But we'll 494 00:23:43,520 --> 00:23:44,359 Speaker 8: just have to see what happens. 495 00:23:45,240 --> 00:23:49,919 Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify, 496 00:23:50,119 --> 00:23:53,600 Speaker 1: and anywhere else you get your podcasts. Listen live each 497 00:23:53,600 --> 00:23:57,360 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot Com, 498 00:23:57,480 --> 00:24:01,000 Speaker 1: the iHeartRadio app tune In, and the Blue Bomberg Business app. 499 00:24:01,440 --> 00:24:04,360 Speaker 1: You can also watch us live every weekday on YouTube 500 00:24:04,760 --> 00:24:07,000 Speaker 1: and always on the Bloomberg Terminal