WEBVTT - Democratic Party Needs to Focus on Economic Growth, General Clark Says 0:00:09.720 --> 0:00:12.880 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keen with 0:00:13.560 --> 0:00:16.560 David Gura. Daily we bring you insight from the best 0:00:16.560 --> 0:00:22.279 of economics, finance, investment, and international relations. Find Bloomberg Surveillance 0:00:22.320 --> 0:00:27.000 on Apple Podcasts, SoundCloud, Bloomberg dot com, and of course, 0:00:27.320 --> 0:00:34.239 on the Bloomberg. Let's go first to Edward Alden, who 0:00:34.280 --> 0:00:36.239 joins us now from our Bloomberg nine nine one studios 0:00:36.240 --> 0:00:38.080 in Washington, d C. He's a Senior Fellow at the 0:00:38.080 --> 0:00:41.639 Council on Formulations, author of Failure to Adjust, How Americans 0:00:41.680 --> 0:00:44.320 got left behind in the global economy, and expert on 0:00:44.400 --> 0:00:48.200 trade policies. We approached the beginning of renegotiation talks on NAFTA, 0:00:48.280 --> 0:00:50.680 and Ted, let me ask you first of all about 0:00:50.720 --> 0:00:53.120 the use of trade as a weapon and offensive or 0:00:53.120 --> 0:00:56.639 a defensive weapon. Bloomberg News reporting yesterday that the the 0:00:56.640 --> 0:01:00.279 the administration is elected to wait awhile here on an 0:01:00.280 --> 0:01:03.319 investigation into intellectual property violations that may right occurred with 0:01:03.320 --> 0:01:06.000 with China because of China's willingness to vote with the 0:01:06.120 --> 0:01:08.280 U S and the U N Security Council. Over the 0:01:08.280 --> 0:01:10.880 weekend fIF zero was the vote there on new sanctions 0:01:10.880 --> 0:01:14.039 on North Korea. Have we seen this before, that being 0:01:14.040 --> 0:01:17.880 trade policy used as as advice of foreign policy, Oh, yeah, 0:01:17.959 --> 0:01:20.320 very much, David. And and in fact, it was one 0:01:20.360 --> 0:01:24.119 of the things that President Trump criticized as a candidate, 0:01:24.240 --> 0:01:27.200 which which is that the United States does have a 0:01:27.280 --> 0:01:31.040 long record of sometimes putting its trade in economic concerns 0:01:31.080 --> 0:01:35.560 on the back burner because it has bigger diplomatic fish 0:01:35.600 --> 0:01:38.040 to fry. If you look at our trade relations with 0:01:38.120 --> 0:01:41.520 Japan over many years, there's no question that that that 0:01:41.640 --> 0:01:45.200 Japan got advantages from the United States because it was 0:01:45.200 --> 0:01:47.680 such an important ally in Asia. So so this kind 0:01:47.680 --> 0:01:49.760 of thing happens all the time. What's a bit different 0:01:50.360 --> 0:01:53.000 is the President being quite so explicit about it, having 0:01:53.040 --> 0:01:55.160 said to China, look, if you help us out on 0:01:55.200 --> 0:01:57.960 North Korea, we might go easier with you on trade. 0:01:58.560 --> 0:02:03.440 You rarely hear presidents be be quite that forthright about 0:02:03.480 --> 0:02:06.160 what it is they're doing. Tetle and help us understand 0:02:06.200 --> 0:02:10.320 the importance of the trade relationship between China and North Korea. 0:02:10.360 --> 0:02:14.239 These sanctions amounted about a billion dollars in total. Uh, 0:02:14.280 --> 0:02:17.680 this is not a that's very sizeable for North Korea. 0:02:17.720 --> 0:02:21.720 Here explain the importance of that particular trade relationship and 0:02:21.720 --> 0:02:24.040 and the role that China is playing here. Well, I 0:02:24.040 --> 0:02:26.840 mean China and to a lesser extent, Russia. Those are 0:02:26.880 --> 0:02:32.760 North Korea's primary markets for UH, for the country's exports. UM. 0:02:32.800 --> 0:02:35.960 What was significant about the U N sanctions is that 0:02:36.200 --> 0:02:39.720 is that they're going to bite on major raw materials 0:02:39.800 --> 0:02:42.799 exports coming out of North Korea, and if fully implemented, 0:02:43.320 --> 0:02:46.400 will squeeze the North Korean economy to a degree we 0:02:46.440 --> 0:02:49.000 have not seen in the past. That said, there's a 0:02:49.040 --> 0:02:54.639 long history of China looking the other way and allowing 0:02:54.639 --> 0:02:59.320 a lot of this trade to continue despite formal sanctions 0:02:59.360 --> 0:03:01.839 being in play. So I think the real question here 0:03:01.840 --> 0:03:05.160 will be whether China is worried enough about the current 0:03:05.200 --> 0:03:11.480 situation and believes that sanctions might actually UH put North 0:03:11.560 --> 0:03:14.679 Korea on a on a slightly less volatile path. And 0:03:14.720 --> 0:03:16.560 we're just gonna have to to watch how that plays out. 0:03:16.680 --> 0:03:18.640 Tad Alton with the Council on formulations here with us 0:03:18.639 --> 0:03:20.679 on Bloomberg surveillance. Tad, I know you're looking ahead to 0:03:20.720 --> 0:03:23.799 August the sixteenth, that's when negotiations over and AFTA are 0:03:23.800 --> 0:03:25.720 set to begin. What do we know about what's on 0:03:25.760 --> 0:03:28.320 the table? We got this I think eighteen page report 0:03:28.360 --> 0:03:31.320 from the U S. Trade Representative outlining what the the 0:03:31.320 --> 0:03:34.120 the the the the ideal agenda items would be, what's 0:03:34.120 --> 0:03:35.920 the what's the administration said about what they hope to 0:03:35.920 --> 0:03:38.360 accomplish during these talks. Yeah, well, we know quite a 0:03:38.400 --> 0:03:40.600 lot now actually from all three countries. So I would 0:03:40.600 --> 0:03:43.840 put the U S asks into kind of three buckets. Um. 0:03:43.920 --> 0:03:46.720 One is things that we're already done in the Transpacific Partnership, 0:03:46.760 --> 0:03:49.160 which is the deal with Asia that President Trump walked 0:03:49.200 --> 0:03:51.680 away from. Uh Digital trade is a good example, new 0:03:51.760 --> 0:03:54.880 rules for digital trade which are very important, restricting state 0:03:54.880 --> 0:03:58.680 owned enterprises, looking at the issue of currency manipulation, labor, 0:03:58.760 --> 0:04:01.560 environmental standards. A lot of that was on the table 0:04:01.600 --> 0:04:04.960 at tpp UM. There's a kind of second bucket, which 0:04:05.040 --> 0:04:06.960 is hard issues within NAFT. A lot of those have 0:04:07.040 --> 0:04:11.120 to do with dispute settlement. The Trump administration believes that 0:04:11.160 --> 0:04:14.080 American sovereignty has been compromised in various ways by these 0:04:14.160 --> 0:04:19.279 arrangements government procurement. Trump administration wants to expand by America. 0:04:19.600 --> 0:04:21.400 And then there's a third basket, which I think nobody's 0:04:21.480 --> 0:04:24.000 kind of paying attention to, which is all the industries 0:04:24.080 --> 0:04:26.039 that didn't get as good a deal as they wanted 0:04:26.040 --> 0:04:27.560 out of NAFTA are now going to come out of 0:04:27.600 --> 0:04:29.600 the woodwork and say this is our opportunity to make 0:04:29.640 --> 0:04:32.840 it better. You mentioned the t p P. How much 0:04:32.839 --> 0:04:35.200 of that is is a framework for this administration's trade 0:04:35.200 --> 0:04:38.440 policy and going forward they electing not to to sign 0:04:38.480 --> 0:04:40.680 on to that deal. Um, but is it's still the 0:04:40.720 --> 0:04:43.080 framework for for word things you're heading? Yeah, if you, 0:04:43.200 --> 0:04:45.280 I mean, if you look at that the proposal from 0:04:45.360 --> 0:04:48.279 USTR and the negotiating objectives an awful lot of the 0:04:48.360 --> 0:04:51.320 languages straight out of TPP and and and does make 0:04:51.880 --> 0:04:54.960 the president's action on TPP look much more questionable. I mean, 0:04:54.960 --> 0:04:57.039 we were talking about China earlier as well. TPP would 0:04:57.040 --> 0:04:59.719 have been a great way to pressure China on on 0:05:00.040 --> 0:05:02.760 eight issues. So I think the reality is that there 0:05:02.760 --> 0:05:06.000 are things that the United States wants for its own 0:05:06.000 --> 0:05:10.080 economic interests, particularly helping our advanced industries of one sort 0:05:10.160 --> 0:05:12.720 or another in the technology and digital space, and a 0:05:12.720 --> 0:05:14.440 lot of that was done in TPP, and now the 0:05:14.440 --> 0:05:16.760 administration is going to have to redo it on a 0:05:16.800 --> 0:05:20.400 smaller scale and then after renegotiations. Good morning everyone, Bloomberg 0:05:20.440 --> 0:05:23.400 surveillance David Gurha and Tom Kane with Brooklyn Meyer of 0:05:23.760 --> 0:05:27.680 BNP Perry futures deteriorate negative eight down futures a negative 0:05:27.720 --> 0:05:31.320 twenty five, and the vicks, which oh was nine out 0:05:31.320 --> 0:05:35.039 to a ten, jumped up to eleven point five. Eleven 0:05:35.080 --> 0:05:38.240 point six is now out to twelve point one. Seven 0:05:38.279 --> 0:05:41.120 That vis moved through the morning is a big one 0:05:41.279 --> 0:05:46.320 point to one vix points. That's a big move given 0:05:46.320 --> 0:05:49.640 what we've seen through August and July and the quiet 0:05:49.760 --> 0:05:51.960 of the markets. I guess what else I'm looking at? 0:05:52.000 --> 0:05:57.119 David on on yen strong yen uh this morning? Point 0:05:57.160 --> 0:06:02.159 four seven figures on yen as well, Brooklyn. How open 0:06:02.279 --> 0:06:05.560 is the US economy? How much is our export and 0:06:05.640 --> 0:06:10.359 our import economy getting ahead of ourselves? You're ted Aldon first? 0:06:11.080 --> 0:06:17.720 His next next, That's what happens when I walk in 0:06:17.880 --> 0:06:22.800 lake David, continue, Please, I just let's let's let's before 0:06:22.800 --> 0:06:24.240 we before we get into that question, let me let 0:06:24.240 --> 0:06:25.680 me ask you just about the digital e commy. You've 0:06:25.680 --> 0:06:29.120 mentioned that here talking about NAFTA renegotiations, and it's something 0:06:29.160 --> 0:06:32.279 that I talked about with your now colleague, Ambassador Michael Frohman, 0:06:32.320 --> 0:06:35.200 at the Council on Foreign Relations. A lot has changed 0:06:35.240 --> 0:06:37.400 here in the twenty three years that have intervened here 0:06:37.400 --> 0:06:40.320 between when when NAFTA was ratified and where we are today. 0:06:40.400 --> 0:06:42.600 How how desperate is is the need to change trade 0:06:42.640 --> 0:06:46.320 policy because of innovations in the information space? Oh, I mean, 0:06:46.360 --> 0:06:49.680 I think it's pretty desperate, right, I mean NAFTA was 0:06:49.680 --> 0:06:52.599 was ratified, and you know, back in the mid nineteen nineties, 0:06:52.640 --> 0:06:56.160 that was before the Internet, you know, long before smartphones 0:06:56.200 --> 0:06:58.040 and all the other things we take for granted. If 0:06:58.080 --> 0:07:01.880 you look at at at the most successful dynamic companies 0:07:01.920 --> 0:07:04.200 in the United States, you know, the Google's, the Facebook's, 0:07:04.279 --> 0:07:08.360 the Amazon's, you know, these companies didn't exist when when 0:07:08.440 --> 0:07:11.440 NAFTA was negotiated. So I think even if it weren't 0:07:11.520 --> 0:07:15.440 in this this political context of Trump having won the 0:07:15.480 --> 0:07:18.600 election in part on promising to renegotiate NAFTA, I think 0:07:18.600 --> 0:07:22.280 there clearly is a need to update the NAFTA. Mexico 0:07:22.320 --> 0:07:25.000 and Canada are, you know, our our first and third 0:07:25.080 --> 0:07:27.640 largest trading partners. So there's a lot of work that 0:07:27.640 --> 0:07:30.000 that should have been done under any circumstances, to make 0:07:30.000 --> 0:07:32.560 this a better and more modern deal. Help us understand 0:07:32.560 --> 0:07:34.200 who the principles are here, who's going to be at 0:07:34.240 --> 0:07:36.600 the negotiating table. I read that the the chief negotiator 0:07:36.600 --> 0:07:39.680 here on NAFTA is somebody who's been with the US 0:07:39.720 --> 0:07:42.520 Trade Representative Office for for well over a decade. He's 0:07:42.520 --> 0:07:46.960 a he's a career member the US Trade Representative Office. Uh, 0:07:47.080 --> 0:07:49.760 what difference does that make and and what do you expect? 0:07:49.760 --> 0:07:52.240 How politically do you expect these negotiations to be ten Well, 0:07:52.320 --> 0:07:54.360 I think they will probably, at least at the outset, 0:07:54.480 --> 0:07:57.520 be less political than people think because these negotiations are 0:07:57.520 --> 0:08:01.320 extraordinarily complicated. You know, Canada, the United States, and Mexico 0:08:01.480 --> 0:08:06.280 have all appointed experienced expert negotiators who understand the ins 0:08:06.280 --> 0:08:08.400 and outs of everything from you know, digital trade to 0:08:08.480 --> 0:08:11.840 textiles to autos to agriculture. Um, a lot of these 0:08:11.880 --> 0:08:15.520 are are hard grinding sort of issues. That's that's why 0:08:15.560 --> 0:08:16.920 I think this notion that we're going to do a 0:08:16.960 --> 0:08:19.400 quicker negotiation is just a fantasy. This is going to 0:08:19.440 --> 0:08:22.560 be an extremely complex and difficult negotiation and I think 0:08:22.560 --> 0:08:25.960 it's gonna take a lot longer than than people think. 0:08:26.000 --> 0:08:28.680 And the fact that you've got professionals and in each 0:08:28.680 --> 0:08:32.360 of the three countries running it. Uh is evidence of 0:08:32.360 --> 0:08:35.679 of of how serious all three countries are taking it. Ted, 0:08:35.840 --> 0:08:39.280 thank you for stopping by today. Good to be with 0:08:39.400 --> 0:08:42.800 chill them. It's very importantly folks. His book Failure to 0:08:42.920 --> 0:08:46.040 Justice fabulous on the United States trade and with a 0:08:46.080 --> 0:08:49.280 paperback coming out here in a bit with an update. 0:08:49.320 --> 0:08:53.679 I'm President of the United States. His name is Ted Alden. 0:08:54.080 --> 0:08:56.440 David Gura got there right, I did not. That's what 0:08:56.600 --> 0:09:00.040 happens when you stay up late last night watch in 0:09:00.160 --> 0:09:04.520 Yankee baseball torture that I had to goes from anyway, 0:09:04.600 --> 0:09:21.440 Ted Alden with the Council and Foreign Relations. MafA Nathanson 0:09:21.679 --> 0:09:24.600 is a phrase and media of great respect. Michael Nathanson 0:09:24.679 --> 0:09:28.400 out of brandeis legendary at Sanford Bernstein. In a week 0:09:28.440 --> 0:09:31.400 moment decided to join Craig MafA or MafA joined naked 0:09:31.520 --> 0:09:34.280 and no one knows. But anyways, we are honored in 0:09:34.400 --> 0:09:38.400 our studios today. Michael Nathanson. I think we covered today 0:09:38.440 --> 0:09:42.320 a lot, Michael, the news on Disney and Netflix. I 0:09:42.320 --> 0:09:45.040 want to bring up the name Jeffrey Immelt, you Bill 0:09:45.160 --> 0:09:48.520 Ge and things happen and all of a sudden they're 0:09:48.559 --> 0:09:51.839 going Jeff, maybe we need a new pair of eyes. 0:09:52.559 --> 0:09:56.880 Is Iger getting out in front of margin reduction? Is 0:09:57.000 --> 0:10:00.920 Mr Iger getting out in front of a board that's 0:10:00.920 --> 0:10:03.640 gonna go Wait a minute, what's going on here? Yeah, 0:10:03.679 --> 0:10:05.440 that's a good question. I think he's getting out in 0:10:05.480 --> 0:10:07.959 front of the changes that you and I are observing 0:10:08.000 --> 0:10:10.760 in the marketplace, which you're gonna lead to more investment 0:10:10.800 --> 0:10:13.880 spending in the near term. So taking that question is yeah, 0:10:13.920 --> 0:10:16.680 Bob is saying we cannot stay in the path we're 0:10:16.760 --> 0:10:19.920 on now. It's gonna it's not going to the optimal solution, 0:10:20.000 --> 0:10:22.199 so we have to spend. He did this when he 0:10:22.240 --> 0:10:24.520 got there. He bought Picks Are his first his almost 0:10:24.559 --> 0:10:26.800 first month on the job. That was an admission that 0:10:26.880 --> 0:10:29.800 Disney needed to change the entire culture. So Bob has 0:10:29.840 --> 0:10:31.440 done this before, and I think this is the right 0:10:31.480 --> 0:10:33.880 path for Disney. It may not be pretty the near 0:10:33.960 --> 0:10:35.880 term verse what we expected, but it's the right thing 0:10:35.880 --> 0:10:38.000 to do for the long term healthful. They have the 0:10:38.080 --> 0:10:41.720 luxury of a timeline to eighteen nineteen when I see 0:10:41.760 --> 0:10:45.440 margin erosion and two of three businesses is the truth here. 0:10:45.480 --> 0:10:49.400 They really got to get this done faster. It's it's 0:10:49.400 --> 0:10:51.800 really It's funny you asked that. In eighteen and nineteen, 0:10:51.880 --> 0:10:54.760 Disney actually sets up well because of their content slate. 0:10:55.679 --> 0:10:58.720 In twenty you know, last one, there's a new NFL 0:10:58.800 --> 0:11:01.480 deal that comes in for the this new negotiation, and 0:11:01.520 --> 0:11:03.880 the question is what's going to happen to that NFL deal. 0:11:03.920 --> 0:11:05.920 So it's really about twenty one and beyond the next 0:11:05.960 --> 0:11:10.040 couple of years of Disney have has enough engine kicking 0:11:10.080 --> 0:11:12.559 at the parks and and the movie you know movies. 0:11:12.720 --> 0:11:15.520 I know the movies are the David Kurtt help us here, 0:11:15.520 --> 0:11:19.000 because you're the only one watching Disney movies exactly. I mean, 0:11:19.080 --> 0:11:21.760 I get the idea of the movies are predictable. I'm 0:11:21.800 --> 0:11:25.000 looking at margin erosion that at any other company in 0:11:25.000 --> 0:11:28.040 America would stop traffic. But Tom, this was a bad 0:11:28.120 --> 0:11:29.800 This was a bad year. Here's why this was a 0:11:29.840 --> 0:11:32.080 bad year. There was a new NBA contract. It cost 0:11:32.080 --> 0:11:34.400 six hundred million dollars more this year than last year. 0:11:34.920 --> 0:11:38.080 That's a one time hit to this year's numbers. Acting 0:11:38.160 --> 0:11:43.120 that hit. Disney's ESPN growth is modestly zero plus minus one. 0:11:43.880 --> 0:11:46.240 You know, it's so that's the outlook the next one 0:11:46.320 --> 0:11:48.360 or two years. The problem is when the step ups 0:11:48.400 --> 0:11:52.320 come again on the NFL. What is your base of revenues? Right? 0:11:52.320 --> 0:11:54.200 What are you gonna do to your base? And if 0:11:54.240 --> 0:11:56.160 he stays on the panthes on now, he's gonna have 0:11:56.160 --> 0:11:59.319 a much smaller base of revenues to bid for the contract. Right, 0:11:59.360 --> 0:12:01.560 that's his problem. Help us understand the timing here. Visit 0:12:01.640 --> 0:12:03.840 v Mr Igor. He just had his contract with Nude. 0:12:03.840 --> 0:12:06.920 Seems like everybody loves Bob Iger within the Disney world. 0:12:06.920 --> 0:12:09.880 Why do this now? Why why respond, as he said, 0:12:09.920 --> 0:12:12.240 to what's happening in the marketplace? Why didn't this happen earlier? 0:12:12.679 --> 0:12:14.760 Why not wait to see how how another company fair 0:12:14.840 --> 0:12:16.120 is trying to do what he's trying to do, because 0:12:16.160 --> 0:12:19.240 it's the Walt Disney Company, and Bob feels like, you 0:12:19.280 --> 0:12:21.679 know that that company is going to be a survivor, 0:12:21.760 --> 0:12:23.199 and you could do one or two things. You could 0:12:23.240 --> 0:12:25.800 sell the way that scripts are sold, Time Warner sold, 0:12:25.840 --> 0:12:28.040 You could stay in fight. And so Walt Disney Company, 0:12:28.080 --> 0:12:29.520 they look at this is We've got a hundred of 0:12:29.559 --> 0:12:32.600 year history, We've got brands, we have consumer connections. Why 0:12:32.600 --> 0:12:34.920 can't we do this? And Bob has never been a 0:12:34.960 --> 0:12:37.920 short term quarter to quarter guy, and he has to 0:12:37.920 --> 0:12:39.880 do this now. It's the right thing to do for 0:12:39.920 --> 0:12:44.040 the company and probably gonna be tested by it's a 0:12:44.040 --> 0:12:46.080 three or four year question whether or not it's gonna work, 0:12:46.440 --> 0:12:48.160 But it's the right thing to do. What's going to 0:12:48.240 --> 0:12:50.960 happen with with sports rights? I look at the ever 0:12:51.120 --> 0:12:54.960 escalating cost of getting the NBA contract, of the NFL contract, 0:12:55.000 --> 0:12:57.360 you look at what's been happening with the ESPN. There's uh, 0:12:57.400 --> 0:12:58.600 you know, I guess not not a whole lot of 0:12:58.600 --> 0:13:01.599 grounds for optimism. There are the price of all that 0:13:01.640 --> 0:13:03.520 is going to continue to go up, and how is Disney, 0:13:03.520 --> 0:13:05.480 how are the companies going to deal with that? Now, 0:13:06.559 --> 0:13:08.520 that's something that we always talked about the value of 0:13:08.559 --> 0:13:10.360 sports and how the companies and owned sports right now 0:13:10.440 --> 0:13:13.040 or the place you want to invest in the Achilles 0:13:13.120 --> 0:13:16.600 hell that that thesis is well in one beyond, there's 0:13:16.800 --> 0:13:19.880 another cycle that's gonna be a problem. Right, what's gonna 0:13:19.880 --> 0:13:24.080 stop on Amazon, maybe Netflix one day, YouTube from bidding 0:13:24.120 --> 0:13:26.120 on the next set of rights? Right, that is going 0:13:26.160 --> 0:13:29.280 to be a problem. Um, it's really the NFL and 0:13:29.320 --> 0:13:31.960 the NFL. It's interesting that Disney pays a billion nine 0:13:32.000 --> 0:13:34.440 for seventeen Monday night football games that I would say 0:13:34.440 --> 0:13:37.960 to you should not be reextended at that price. Those 0:13:38.000 --> 0:13:41.400 games are lower rated than they ever have been. Well, 0:13:41.400 --> 0:13:43.439 Disney walk away from the NFL, will the move to 0:13:43.480 --> 0:13:46.160 a Sunday and night package, right, so that is going 0:13:46.240 --> 0:13:49.640 to be in two three years. The biggest questions of 0:13:49.679 --> 0:13:51.240 the sector is like, what's going to be the next 0:13:51.280 --> 0:13:53.960 cycle of cost? And it's the glue we have on 0:13:53.960 --> 0:13:56.320 our sector. And I think you're gonna have massive inflation 0:13:56.400 --> 0:13:58.800 the next time you go around, which will lead to 0:13:58.840 --> 0:14:01.880 more margin pressure and more need to find other ways 0:14:01.880 --> 0:14:04.120 to grow revenues. It's just there's there's only around it. 0:14:04.200 --> 0:14:07.240 How does Cable TV respond to this? How does Mr 0:14:07.360 --> 0:14:10.360 Roberts over his morning cup of coffee looking at the 0:14:10.440 --> 0:14:14.400 collapse of the Philadelphia Phillies. How does Mr Roberts at 0:14:14.440 --> 0:14:17.480 depth and adjust to what I grew up? Okay, so 0:14:17.520 --> 0:14:19.760 that's that's Craig's world. But I think he lam an 0:14:19.760 --> 0:14:27.000 answer exactly exactly exactly Okay, So basically I think what 0:14:27.160 --> 0:14:29.600 Brian Roberts and Contact Cable do will say, Look, we 0:14:29.640 --> 0:14:32.320 own the broadband pipe to the home, the best broadband pipe. 0:14:32.720 --> 0:14:36.080 As more content goes over the internet, we've got broadband pricing, 0:14:36.120 --> 0:14:39.600 we have a unique offering on the video front. They 0:14:39.640 --> 0:14:42.920 may start becoming indifferent as to how you and David 0:14:42.960 --> 0:14:45.920 and I get our content right. They may let these 0:14:45.920 --> 0:14:48.280 companies go over the top and get integrated at your 0:14:48.400 --> 0:14:51.920 TV set, so they may trade the property making TV 0:14:52.560 --> 0:14:55.240 for property making broadband and allow the media companies to 0:14:55.520 --> 0:14:58.320 work their way around what's been a set top box, 0:14:58.560 --> 0:15:01.640 closed end system for many years. Do you have confidence 0:15:01.720 --> 0:15:04.920 that cable TVs we know it will exist in ten 0:15:05.040 --> 0:15:09.280 years thirty second adds? Maybe we go to fifteen second adds. 0:15:09.400 --> 0:15:12.520 How will we get the CBS News? How will we 0:15:12.600 --> 0:15:15.800 get PBS and c Span. Well, it's gonna look a 0:15:15.800 --> 0:15:17.880 lot like the paper business, where we have some people 0:15:18.200 --> 0:15:20.840 who prefer the printed copy like you have in your 0:15:20.880 --> 0:15:23.160 desk right now, and the majority of people may not. 0:15:23.360 --> 0:15:25.480 So I think you're gonna have to have two models, right, 0:15:25.520 --> 0:15:27.920 One milet's direct consumer and one that's going to be 0:15:27.960 --> 0:15:31.280 the big bundle deliver the old fashioned way. Where is 0:15:31.320 --> 0:15:34.520 the creativity and content today? You look at what's successful 0:15:34.560 --> 0:15:38.320 for Disney, Uh, it's the Marvel franchise. It's these these 0:15:38.360 --> 0:15:42.840 big sequels and beyond sequels, triquels. What do you know, right, 0:15:42.920 --> 0:15:45.360 right right, where do you see creativity in content today? 0:15:45.400 --> 0:15:47.400 Where's that coming from as a company like Disney equipped 0:15:47.440 --> 0:15:50.920 to do things that are capital creative. Well, let's divide 0:15:50.960 --> 0:15:54.640 that question into television and film. It's clear that television 0:15:54.680 --> 0:15:57.360 has never had a better cycle of content creation, and 0:15:57.360 --> 0:16:00.440 that TV has replaced movies for play for develop helpers 0:16:00.480 --> 0:16:03.560 of great content. On a film side, we are really worried. 0:16:03.920 --> 0:16:06.080 Disney is the exclusion to the rule, but we're very 0:16:06.080 --> 0:16:08.400 worried about the health of the film business because it's 0:16:08.440 --> 0:16:11.640 all been about sequels and global ten poles and just 0:16:11.880 --> 0:16:15.520 redundant copies of of kind the same script. So I 0:16:15.520 --> 0:16:18.160 think on the film side, everyone but Disney has real 0:16:18.280 --> 0:16:22.440 challenges to find unique content. TV has replaced film, right, 0:16:22.480 --> 0:16:27.240 So in HBO, Showtime, Netflix, they've got those developers, but 0:16:27.320 --> 0:16:29.960 films are a big problem. What's TV gonna look like? 0:16:30.000 --> 0:16:31.440 I mean, you must be thinking about this day in 0:16:31.440 --> 0:16:32.920 a day appen light of the news that we got 0:16:33.000 --> 0:16:34.840 yesterday from Disney the way they intend to do this. 0:16:34.880 --> 0:16:38.400 If you get every other h film studio, entertainment company 0:16:38.440 --> 0:16:40.880 pursuing this kind of approach, what is the device? What 0:16:41.000 --> 0:16:43.560 is our engagement with that device. Look like in five 0:16:43.600 --> 0:16:47.080 ten years, Okay, so we see the device being there'll 0:16:47.120 --> 0:16:50.640 be a connected boxing your house for lives live content, 0:16:50.680 --> 0:16:53.480 and we're not gonna trust the internet to deliver ninety 0:16:53.520 --> 0:16:56.720 million homes streaming Eagles games. Right, We're gonna get we 0:16:56.720 --> 0:16:59.200 We're gonna need to pay for live TV, and the 0:16:59.240 --> 0:17:01.840 companies that have live assets will benefit live. But for 0:17:01.840 --> 0:17:04.080 the vast majority of the rest of the networks out there, 0:17:04.359 --> 0:17:06.800 we're living on kind of channel surfing. They're gonna have 0:17:06.800 --> 0:17:08.840 a problem because we're gonna also go to on demand. Right, 0:17:08.840 --> 0:17:11.879 You're gonna basically bifrect into an on demand world, live world, 0:17:11.920 --> 0:17:14.840 and that middle will just drop away, right, And that's 0:17:14.880 --> 0:17:18.840 what's gonna happens. Free cash flow drop away for some 0:17:18.880 --> 0:17:20.480 of these companies out For the people in the middle, 0:17:20.520 --> 0:17:23.240 it's gonna drop away. Well, look, we we have cells 0:17:23.240 --> 0:17:25.439 and AMC networks, we have cells on Discovery and up 0:17:25.480 --> 0:17:28.080 until that deal last week, we have silent scripts. So 0:17:28.119 --> 0:17:30.720 we thought the cable network universe are pure play, the 0:17:30.760 --> 0:17:34.679 CBS world, the BUCAS world, Well, CBS CBS will be 0:17:34.680 --> 0:17:36.919 fine because CBS is going to collect a higher toll 0:17:37.560 --> 0:17:39.520 from the distributors. Right, they're gonna say the value of 0:17:39.560 --> 0:17:42.919 our content is underpriced. Right, But it's time. It's the middle, 0:17:43.840 --> 0:17:46.399 you know, on the dial that basically was was just 0:17:46.480 --> 0:17:50.720 filling time as we channel. This has been wonderful Michael 0:17:50.760 --> 0:17:55.000 Nathans and making a huge effort really off of this 0:17:55.200 --> 0:17:59.200 seismic announcement by Dizzie. Mr Nathanson is with Moffatt Nathanson 0:17:59.240 --> 0:18:01.600 again we protect copyright of all of I guess no, 0:18:02.200 --> 0:18:05.119 I'm not going to send out the Black Book from 0:18:05.200 --> 0:18:19.720 Michael Nathan Sinny how much to talk about this one, David, 0:18:19.760 --> 0:18:22.320 what are your thoughts as we're looking at taking the 0:18:22.359 --> 0:18:28.560 official surveillance nap that we both every afternoon for you 0:18:28.600 --> 0:18:30.679 maybe two Mondays ago, and that was when the Anthony 0:18:30.720 --> 0:18:33.000 Scaramucci news broke. So I had a taste of what 0:18:33.040 --> 0:18:35.119 you must experience every day you're getting up so early 0:18:35.160 --> 0:18:37.760 and trying to sleep as you can. But you know, 0:18:37.800 --> 0:18:40.640 I obviously continuing to watch what's happening in the Asia 0:18:40.640 --> 0:18:43.399 Pacific region light of the tweets we've seen this morning 0:18:43.400 --> 0:18:46.040 and the hot rhetoric conveyed the official statements from the 0:18:46.040 --> 0:18:49.200 president here and from the leader of North Korea as well, 0:18:49.240 --> 0:18:52.400 it's making a diplomatic option returned to the negotiating table. 0:18:52.440 --> 0:18:54.960 Looked like a farther off and farther off thing. David, 0:18:55.000 --> 0:18:57.160 you do the politics here. But I want to say 0:18:57.160 --> 0:19:00.280 that we have made every effort to speak to our mility, Harry, 0:19:00.320 --> 0:19:04.280 including the great services of James Travitis, A Fletcher School 0:19:04.320 --> 0:19:07.760 Tufts for Admiral Navy. Uh, and much can be saved 0:19:07.760 --> 0:19:11.080 with Wesley Clark has been much more visible. But what 0:19:11.200 --> 0:19:14.359 I think is so important in introduction is General Clark, 0:19:14.400 --> 0:19:16.760 you were first in your class at West Point. How 0:19:16.800 --> 0:19:19.239 did you do that? How did you go into the 0:19:19.280 --> 0:19:23.080 Lincoln Building overlooking the Hudson and defeat the rest of 0:19:23.119 --> 0:19:26.879 the troops or was it really defeat? I mean I was. 0:19:27.400 --> 0:19:30.399 I really enjoyed. I love being there. I love the 0:19:30.680 --> 0:19:33.720 officers that mentored me and helped me. And Uh, it 0:19:33.880 --> 0:19:39.600 was privileged to be my class. It was been had 0:19:39.600 --> 0:19:43.680 a great inundication school of arts on its being stare 0:19:44.280 --> 0:19:46.679 General Clark, let me ask you how much this situation 0:19:46.760 --> 0:19:49.359 has changed the situation with regard to to North Korea 0:19:50.160 --> 0:19:53.480 since you were serving General. Of course, we've had to 0:19:53.520 --> 0:19:56.479 test these two tests at these Intercontinental Ballistic missiles UH 0:19:56.480 --> 0:19:57.960 and a new round of sanctions, I think the eighth 0:19:58.040 --> 0:20:00.240 round of sanctions from the U N. Security Council. How 0:20:00.280 --> 0:20:02.719 much has this story changed as you've watched it unfold? 0:20:03.680 --> 0:20:07.760 So In I was in the Joint Staff and I 0:20:07.840 --> 0:20:12.440 was part of the team that helped do the response 0:20:12.560 --> 0:20:16.480 to the North Korean nuclear crisis at that time, and 0:20:16.560 --> 0:20:21.040 we came out of it with negotiated settlement to provide 0:20:21.080 --> 0:20:25.159 two nuclear reactors. At that time, North Korea didn't have 0:20:25.280 --> 0:20:28.879 nuclear weapons, but they did have a very very powerful 0:20:28.960 --> 0:20:34.480 conventional artillery system that at rockets that could have devastated 0:20:34.520 --> 0:20:38.080 South Korea and could have struck Japan. And they did 0:20:38.119 --> 0:20:43.000 have biological and chemical weapons. So we wanted to hint 0:20:43.080 --> 0:20:47.120 off their nuclear challenge. We did it by promising them 0:20:47.119 --> 0:20:50.400 two nuclear reactors for electric power, that's what they said 0:20:50.400 --> 0:20:54.679 they really wanted, and fuel oil to sustain their electricity 0:20:54.680 --> 0:20:58.560 grid until the reactors came online. Um, there was a 0:20:58.560 --> 0:21:02.639 lot of fumbling around. One agree it was shaded. People 0:21:02.720 --> 0:21:05.920 had money at the South LANs Japanese. We had to 0:21:05.960 --> 0:21:08.080 put some money up and had to go through Congress. 0:21:08.119 --> 0:21:11.600 Congress had to appropriate money for the fuel oil. People 0:21:11.640 --> 0:21:15.160 didn't like the North Koreans. They didn't like USA blah blah, 0:21:15.680 --> 0:21:17.840 and they probably didn't trust it, and then we didn't 0:21:17.840 --> 0:21:23.200