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Speaker 2: Delta Airlines came out some better expected results for the quarter,
Speaker 2: saying that helped by leisure travelers and a rebounding corporate travel.
Speaker 2: How about that, said Philip joins us. He's deputy team
Speaker 2: leader for Global Aviation. Join us live here in our
Speaker 2: Bloomberg Interactive Brokers studio. Are we kind of back to
Speaker 2: pre pandemic levels in terms of air travel?
Speaker 3: Also, there is a Dichoto me in the aviation industry
Speaker 3: at the moment where we're seeing airlines profitability, especially at
Speaker 3: the top end of the market in the premium and
Speaker 3: corporate sector. So they're doing really well. So Delta air Lines,
Speaker 3: United Airlines doing really well. At the other end of
Speaker 3: the market, does the the likes of Spirit Airlines that's
Speaker 3: in its second bankruptcy. You've got the other sort of
Speaker 3: low cost carriers that are struggling to fill up seats,
Speaker 3: and that's partly on account of the fact that low
Speaker 3: cost carriers their customer base is still hurting from the
Speaker 3: sort of tariffs and the economic uncertainty, whereas for the
Speaker 3: top end of the market, they seem to be traveling
Speaker 3: and as normal.
Speaker 4: Actually, yeah, it's the manifestation of the key shaped economy
Speaker 4: right where the higher income consumer is doing much better
Speaker 4: than the lower end consumer.
Speaker 5: The CEO of Delta at Bastion said.
Speaker 4: In the earnings report that our customer is financially in
Speaker 4: a good spot. Said, who exactly is Delta's customer because
Speaker 4: it's not the same as you said as for instance,
Speaker 4: Spirit or Southwest or even you can argue United, sure.
Speaker 3: I mean Delta air Lines. I mean they frequently talk
Speaker 3: about how their customer is in the sort of average
Speaker 3: of over one hundred thousand earnings in one hundred thousand
Speaker 3: dollars a year in terms of earnings, and they sort
Speaker 3: of are looking for experiences. They're looking to sort of
Speaker 3: travel premium. They're not looking to sort of go coach
Speaker 3: and sort of nickel and dime their way through the
Speaker 3: aviation experience. And they're sort of more willing to splurge
Speaker 3: on experiences. And that's sort of the post pandemic revenge
Speaker 3: traveler who is now continuing to sort of spend money
Speaker 3: on travel, and they seem to be suggesting that airlines
Speaker 3: are willing. People are willing to keep going and keep
Speaker 3: traveling and keep spending money on experiences and holidays.
Speaker 2: If United beach their numbers this quarter, it's because what
Speaker 2: I spent ticket or really spared no expense to get
Speaker 2: over there, I needed the rest. Talk to us about
Speaker 2: just visibility. These airlines they put they have some pretty
Speaker 2: decent visibility on on their bookings.
Speaker 5: So they do.
Speaker 3: They've been talking about how the visibility into the into
Speaker 3: the holiday quarta, into the fourth quarter of the year
Speaker 3: is looking good at the moment they see they're seeing
Speaker 3: demand being strong as they get into the close of
Speaker 3: the year, and that's at least. Delta Airlines is talking
Speaker 3: about how they expect corporate travel to continue to be
Speaker 3: so a solid and robust in twenty twenty six. Are
Speaker 3: saying that companies that they surveyed are seeing continued appetite
Speaker 3: for corporate travels. So it remains to be seeing what
Speaker 3: actually materializes. I mean, airlines had massive forecasts for record
Speaker 3: growth this year and then sort of liberation they came
Speaker 3: around and that sort of torpedo that and they've now
Speaker 3: sort of come back to those levels, but will remains
Speaker 3: as be seeing what surprises come out next year.
Speaker 4: I'm so glad you bring that up because earlier this
Speaker 4: year Delta warned of an abrupt slowdown or I don't
Speaker 4: know that it actually saw when it just said it
Speaker 4: kind of was seeing it on the horizon. Has that
Speaker 4: been completely a race and turned around?
Speaker 3: Now for the moment, it does look like it is smooth,
Speaker 3: smooth skies for them. But at the same time, we
Speaker 3: don't really know what's going to happen in the current
Speaker 3: economic environment or what demand looks like as we go
Speaker 3: into twenty twenty six, and that's something that we need
Speaker 3: to watch as the airline sort of report their fourth
Speaker 3: quarter results and sort of about their future vocalsts.
Speaker 2: What are the big airlines, the big ones you mentioned
Speaker 2: United Deltas. What are they doing with capacity? Are they
Speaker 2: adding capacity trimming it back? I mean, I don't know
Speaker 2: if they're doing with routes. I don't know if they
Speaker 2: have enough planes, all that kind of stuff.
Speaker 3: So they have been so Delta has been adding capacity,
Speaker 3: They've been retiring older planes and taking on new planes,
Speaker 3: and so they seem to be adding a little bit
Speaker 3: of capacity.
Speaker 5: And we're also.
Speaker 3: Seeing, like so United talk about how they are upgrading
Speaker 3: their fleet. They're replacing their old aircraft with seven eighty
Speaker 3: seven's and Maxes, and so we are seeing the US
Speaker 3: carriers upgrade their fleets, and that's sort of adding more capacity,
Speaker 3: especially as they upgate aircraft, so they sort of replace
Speaker 3: smaller narrow bodies with the larger eight three twenty one
Speaker 3: or the Max nine, and that sort of adds more
Speaker 3: seats and more capacity. But then at the same time,
Speaker 3: they're also premiumizing the cabins, so they're adding more business
Speaker 3: class cabins and more premium economy than they ever did before.
Speaker 5: Premiumizing. That is a new word. I had not heard
Speaker 5: of it.
Speaker 2: But economy coming back from Italy was actually like the
Speaker 2: old first class in terms of really I was shocked
Speaker 2: at how much room there was this.
Speaker 5: How how far back can you recline?
Speaker 6: Just the normal one?
Speaker 2: Okay, but it was just way more like mouse And
Speaker 2: it wasn't that much money. It was a couple hundred
Speaker 2: bucks to uperate, So that was pretty interesting.
Speaker 4: No, and that's that's a big part of Delta's push right,
Speaker 4: pushing these premium products in the cabin.
Speaker 5: What about on the ground.
Speaker 4: What is Delta doing on the ground to really harness
Speaker 4: its customers desire for a premium experience.
Speaker 3: So they bartnering with they have that partnership with Uber
Speaker 3: the they've sort of added more of those Delta one lounges,
Speaker 3: and they're sort of doing those credit card partnerships, and
Speaker 3: those are all sort of ways to keep customers sticky
Speaker 3: and keep them engaged because, I mean, the moment you're
Speaker 3: sort of signed into the ecosystem, you're more likely to
Speaker 3: book with them and sort of not really use price
Speaker 3: comparison websites. You're more likely to sort of keep.
Speaker 5: Going customer for life kind of thing.
Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
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Speaker 2: You know, I'm a coke guy. Be with PEPSI in
Speaker 2: front of me. Fine, I'm just as happy I can
Speaker 2: realize it. But Ken Chase. He follows this stuff for living.
Speaker 2: Ken Chase, the senior consumer products analysts of Bloomberg Intelligence. Pepsi,
Speaker 2: reported some numbers a little bit better than expected. Here, Ken,
Speaker 2: tell us what you heard from our good friends at PEPSI.
Speaker 6: Yeah, Hi, Paul, Well, PepsiCo report a number today, numbers
Speaker 6: today that we're pretty much in line, maybe a little
Speaker 6: bit above expectations. But I think they also masked persistent
Speaker 6: weak market conditions of the US across its broad food, snack,
Speaker 6: and beverage businesses. The company pretty much, you know, hit
Speaker 6: their numbers, as I said, but it didn't do much
Speaker 6: to relieve the pressure it's getting from activists, an activist
Speaker 6: who's asking the company to do more. Basically, flat performance
Speaker 6: is just not good enough for something that's perceived or
Speaker 6: a company that's perceived as a growth company. I guess
Speaker 6: the good news is their language during the call, though,
Speaker 6: did provide investors a bit of optimism. It sounds like
Speaker 6: the company is getting it. They said they're going to
Speaker 6: ramp up innovation, they're going to be more aggressive with
Speaker 6: cost cutting. They're listening to the activist points and they
Speaker 6: said buy a Laerds. They agree with many of them.
Speaker 6: So those are all, you know, good things to hear.
Speaker 6: You know, from an investor point of view, it's just
Speaker 6: a matter of executing and actually following through with them,
Speaker 6: I think is where the jury is out.
Speaker 4: So I guess ken the question is is this enough
Speaker 4: for Elliott the activist semester which took about a four
Speaker 4: billion dollar steak in PepsiCo and called for a strategic
Speaker 4: review a streamlining of a snack portfolio in particular, Well.
Speaker 6: I think think the CEO of PepsiCo mentioned that they
Speaker 6: are on the same page on a lot of fronts,
Speaker 6: but what they didn't say is one of the big
Speaker 6: things that Elliott is calling for is basically, you know,
Speaker 6: the beverage business to refranchise itself, sort of what Coca
Speaker 6: Cola does, to let the bottlers be independent rather than
Speaker 6: own those very capital intentsive businesses. They didn't go there.
Speaker 6: I'm sure that's going to be a big sticky point.
Speaker 6: What they are in agreement, though, is that innovation is
Speaker 6: needed to be even more on Trent. You know, I
Speaker 6: covered PepsiCo. I've covered PepsiCo for a long time. They
Speaker 6: are probably on the forefront of the most innovative companies
Speaker 6: across the beverage world that I cover, and yet they're
Speaker 6: even ramping it up even more aggressively across food, aggressively
Speaker 6: across beverage to be as on trend as possible. And
Speaker 6: on that note, you know, Bloomberg Intelligence came out with
Speaker 6: its annual consumer Beverage survey just on Monday, and some
Speaker 6: of the big findings that we're seeing is that advanced,
Speaker 6: high duration, wellness, and value are more more important than
Speaker 6: ever in the world of beverages. And it was interesting
Speaker 6: to hear PepsiCo pretty much address all three of those
Speaker 6: areas with their new product innovation. So that's encouraging.
Speaker 2: At the end of the day, can as a company
Speaker 2: like Pepsi, is that nothing more than really a GDP
Speaker 2: kind of growth story. There's not much more you can
Speaker 2: do to goose it above that? Or is that or
Speaker 2: can they do better? Maybe that may be true in
Speaker 2: the US pool. I mean, it's such a large business,
Speaker 2: it's in most channels, it's you know, it's been around
Speaker 2: a long time obviously, but I think most people looking
Speaker 2: at this company would say, look, you have great opportunities
Speaker 2: outside the US. There's much less price competition. You know,
Speaker 2: outside the US, people are embracing you know, these consumer
Speaker 2: goods and these brands outside the US. So that's one
Speaker 2: of the things Elliet is actually saying, provide you know,
Speaker 2: feed the capital needed outside the US to grow these
Speaker 2: business in these big growing markets, you know, like China
Speaker 2: and India and so on, Latin America. These are really
Speaker 2: big growing markets. And to the extent that they could
Speaker 2: play more in those markets I think would be good
Speaker 2: for the enterprise in the whole.
Speaker 4: But for those markets, would they need to take a
Speaker 4: similar approach as what they do in the US. Be
Speaker 4: more innovative, keep up with this shifting consumer taste towards
Speaker 4: healthier offerings, higher protein, portion controlled, less sugary drinks, or
Speaker 4: can they go with their old playbook.
Speaker 6: I think it's a combination of doing what they're doing.
Speaker 6: You know, in some of these markets they have to
Speaker 6: adhere to local tastes. My guess is that a lot
Speaker 6: of these consumers are seeking the same kind of things
Speaker 6: the US though is or I should say, you know,
Speaker 6: wellness value, but the portfolios are not quite as broad
Speaker 6: outside the US. So I think it's tailoranto's the local
Speaker 6: areas and bringing some of their learnings from the US
Speaker 6: to these markets over time.
Speaker 2: Ken talk to us about the They got about a
Speaker 2: four percent dividend yield on PEPSI. That seems pretty solid.
Speaker 2: What's their policy on dividends these days?
Speaker 6: Oh, they're committed. I mean they know that a big
Speaker 6: shareholder base, you know, is income investors. So they are
Speaker 6: there committed. In every quarter like this one, they said, Look,
Speaker 6: we're committed to have a multi prong capital allocation policy.
Speaker 6: We're going to you know, invest in the business, you know, innovation,
Speaker 6: like I said, but they're also going to buy stockback
Speaker 6: on a you know, selected basis. They're going to commit
Speaker 6: to their growing dividend, and their balance sheet would support
Speaker 6: them doing that. I mean, the balance sheet is in
Speaker 6: good shapes and good investment grade, and so I see
Speaker 6: this company continue to have a balanced allocation going forward.
Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
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Speaker 1: weekdays at ten am Eastern on Apple, cock Play and
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Speaker 1: wherever you get your podcasts, or watch us live on YouTube.
Speaker 2: We were talking about the auto business in Ferrari or Ferrari,
Speaker 2: thinking this brings to mind, I don't know how these
Speaker 2: companies are going to go for the next five years,
Speaker 2: ten years in terms of that evolution, because it's kind
Speaker 2: of fits and starts.
Speaker 5: They can't figure out next year, and some point.
Speaker 2: The market rewards them for it. At some point the
Speaker 2: market penalizes before Craig Trudell it's his job to make
Speaker 2: a sense out of all this. He's a Global autos
Speaker 2: editor for Bloomberg News. So, Craig, can you see news
Speaker 2: from Ferrari about its cautious forecast maybe just kind of
Speaker 2: cautious commera territory on EV's. What does it tell you
Speaker 2: here from Ferrari?
Speaker 7: Yeah, I mean, I think the market was taking in stride,
Speaker 7: you know, the the caution on EV's. I think even
Speaker 7: you know, sort of among the investor base and certainly
Speaker 7: the analysts too, there's some real concerns about, you know,
Speaker 7: just how sort of incongruous Evs are with Ferrari, and
Speaker 7: some questions about whether you know, whether they should even
Speaker 7: bother uh going in that in that direction. Uh, you know,
Speaker 7: I think I think the shares were down a little bit,
Speaker 7: what you know, earlier this morning when they were talking
Speaker 7: about that. I think where we saw the stock really
Speaker 7: just take it on the chin, was when they came
Speaker 7: out with their their outlook you know, for through twenty
Speaker 7: thirty and I you know, I think that the profit
Speaker 7: uh you know, growth was was underwhelming. I should you know,
Speaker 7: sort of say it. It also is the case that
Speaker 7: they are still you know, calling for growth. I think
Speaker 7: some analysts were maybe hoping for for uh you know,
Speaker 7: also some some increase in volumes, but it's not really
Speaker 7: you know what what Ferrari is about. They you know,
Speaker 7: are sort of like clockwork, you know, making a pretty
Speaker 7: set number of vehicles every year and uh, charging an
Speaker 7: awful lot of money for them, and and uh that's
Speaker 7: that's really been you know, something that's that's paid off.
Speaker 7: And I think, you know, just the other thing to
Speaker 7: sort of keep in mind here when you look at
Speaker 7: what these shares have done, you know since they listed.
Speaker 7: You know, the shares in Milan have been trading since
Speaker 7: early twenty sixteen, the New York ones a little bit
Speaker 7: earlier than that. But this is a stock that has
Speaker 7: absolutely been on a tear all those years since. And
Speaker 7: so you know, I yes, a sixteen percent to decline
Speaker 7: and one day, you know, sort of makes your eyes pop.
Speaker 7: But this is a company that is still valued very richly,
Speaker 7: and that makes a little bit more sense in hindsight.
Speaker 4: And Frari also of course coming out with its first
Speaker 4: EV too, and that might be accounting for some of
Speaker 4: the caution in terms.
Speaker 5: Of what it sees going forward.
Speaker 4: In the story, you and your colleagues Craig talk about
Speaker 4: how not just Ferrari, but Portia and Mercedes Benz have
Speaker 4: also struggled with the electric transition. Why are wealthy buyers
Speaker 4: somewhat resistant to switching over to plug in EV's what's
Speaker 4: behind that?
Speaker 7: Yeah, it's a really good question. I think you know,
Speaker 7: there was just this sort of working assumption that you know,
Speaker 7: the only thing that you were going to have to
Speaker 7: overcome was caught, and so you know, there was this,
Speaker 7: i think, sort of conventional wisdom. Well, oh, we'll just
Speaker 7: have you know, the folks who are most able to
Speaker 7: afford this incremental additional costs, they'll they'll fit the bill,
Speaker 7: and we'll be sort of off and running as an
Speaker 7: industry and gradually sort of work our way down price wise.
Speaker 7: I think if if you're a luxury car buyer and
Speaker 7: you're having to pay a significant premium over you know,
Speaker 7: looking at at models that are that are the same
Speaker 7: one combustion and one electric, the electric ones a lot more.
Speaker 7: You know, it is still a decision and sort of
Speaker 7: a rational decision to a sort of second guess whether
Speaker 7: or not you want to go electric. And I think
Speaker 7: that's what what you're seeing is is that you know,
Speaker 7: BMW and Mercedes until and unless they sort of you know,
Speaker 7: price their models closer to one another, you're you're going
Speaker 7: to have, you know, some pushback on the part of
Speaker 7: the consumer to make that transition, even as as we
Speaker 7: make progress and things like charging infrastructure and some of
Speaker 7: these hurdles that you have to overcome that or unique
Speaker 7: to EBS.
Speaker 2: My biggest question for you know, the supercars going electric
Speaker 2: is I think a big part of the reason people
Speaker 2: buy the Ferraris the Lamborghinis is for the cool sound
Speaker 2: when they're coming down the street. What's Ferrari doing with
Speaker 2: with that part of it?
Speaker 7: Yeah, it's it's interesting and we saw sort of, you know,
Speaker 7: and we had the indications that Ferrari was working on
Speaker 7: something in this regard to to try and sort of
Speaker 7: preserve the noise that you can make driving a Ferrari
Speaker 7: that they patented, you know, systems to kind of create
Speaker 7: essentially artificial noise, or at least to play up the
Speaker 7: noise that is made by you know, electric motors in
Speaker 7: electric vehicles. You know, I think that being said, well,
Speaker 7: we see Ferraris externally make you know, nearly as much
Speaker 7: noise as a Ferrari supercar. I suspect that the answer
Speaker 7: to that is probably no. But I've been I've been
Speaker 7: very entertained that, you know, Dodge came out with an
Speaker 7: electric vehicle last year, and I saw a report recently
Speaker 7: that you know, an owner in Canada was ticketed for
Speaker 7: a noise violation with his electric Dodge vehicle. So, you know,
Speaker 7: maybe maybe it's for the best actually that this will
Speaker 7: become a thing of the path.
Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
Speaker 1: weekdays at ten am Eastern on Apple Coarcklay, and Android
Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
Speaker 1: you get your podcasts, or watch us live on YouTube.
Speaker 2: Let's talk a little bit about the media business there.
Speaker 2: It's undergoing a certain degree of consolidation here as it
Speaker 2: tries to deal with the rising tide of YouTube among
Speaker 2: other streaming type services and digital services that have really
Speaker 2: displaced many of the traditional media businesses. And one of
Speaker 2: those is Paramount Global that was so bought by sky Dance.
Speaker 2: Larry Ellison's family now looking to take a look at
Speaker 2: Warner Brothers Discovery, another publicly traded company. Maybe those two
Speaker 2: might get together. Check in with Githa rang Aanath and
Speaker 2: she's the media analyso over Bloomberg Intelligence. Githa talk to
Speaker 2: us about the likelihood of Paramount merging with or acquiring
Speaker 2: Warner Brothers Discovery and how that might look.
Speaker 8: Yeah, thank you so much, Paul. So it's been a
Speaker 8: while actually, so there's been these on again, off again reports.
Speaker 8: The first time the news broke was almost a month ago.
Speaker 8: It was on September eleventh that there was this swall
Speaker 8: Street Journal article which suggested that Paramount was kind of
Speaker 8: exploring this bid. There hasn't actually been any formal bid
Speaker 8: from Paramount, however, you know, the shares of both those
Speaker 8: companies have kind of really gone up very nicely on
Speaker 8: the news, kind of just telling us how important it
Speaker 8: is for both of them to have this consolate. If
Speaker 8: you look at Paramount. Obviously they just went through that merger.
Speaker 8: There is really very little details when it comes to
Speaker 8: what is, you know, kind of the strategy for this business.
Speaker 8: They definitely need something big. Having a studio like Warner
Speaker 8: having a service like HBO Max, it really kind of
Speaker 8: puts them on that global media map, so they I
Speaker 8: think they definitely need it in order to kind of
Speaker 8: make this big splash in the media ecosystem. But there,
Speaker 8: you know, as days pass along and we don't get
Speaker 8: a bit, it just seems like the probability of this
Speaker 8: happening gets smaller and smaller.
Speaker 4: Yeah, it's curious because we've been waiting for so long
Speaker 4: and the industry has been ripe for consolidation, and David Zazov,
Speaker 4: who of course runs Warner Brothers Discovery, has been talking
Speaker 4: about how consolidation is something that he anticipates and he
Speaker 4: wants to see happen. Is there role here for regulators?
Speaker 4: Is this something that they would weigh in on. Is
Speaker 4: Brendan Carr going to play any kind of role here.
Speaker 8: So a Paramount, Yes, there is potentially a role for
Speaker 8: for any and all types of regulatory scrutiny in the Paramount.
Speaker 8: A Warner Brothers deal or a potential deal, the FCC's
Speaker 8: involvement likely wouldn't be as heavy just because there is
Speaker 8: no merger of two broadcast assets, so Warner Brothers only
Speaker 8: has streaming studio and cable networks, no broadcast networks like
Speaker 8: a Paramount which owns the CBS broadcast network. So they
Speaker 8: should get like a fairly you know, quick green signal
Speaker 8: from the FCC. Well, all mergers are ultimately, you know,
Speaker 8: kind of a subject regulatory scrutiny. But let's remember Paramount
Speaker 8: has just gone through this whole process with the regulators,
Speaker 8: kind of getting that skydance, so they kind of know
Speaker 8: how to navigate their whole way around, you know, the
Speaker 8: regulatory ecosystem, if you will. So I don't think it
Speaker 8: should be much of a problem at all, Scarlett.
Speaker 2: Now the New York Post, I saw some reporting, and
Speaker 2: by the way, then your post.
Speaker 5: They do a great job covering.
Speaker 2: The media sector, particularly on the M and A front,
Speaker 2: always have, always have. They're suggesting maybe paramount S Guidance
Speaker 2: might be talking with some private equity players about participating
Speaker 2: any potential deal, and I think they mentioned Apollo as
Speaker 2: one that they were talking with. What does that mean
Speaker 2: to you.
Speaker 8: What that means to us is that, you know, obviously
Speaker 8: funding is a problem here. I mean, this is a
Speaker 8: big deal, Paul. You know, there was an initial a
Speaker 8: price range that was suggested by CNBC of about twenty
Speaker 8: two to twenty four dollars a share. I think David
Speaker 8: Zaslav is looking for something much much higher than that.
Speaker 8: You know, the New York Post themselves had reported that
Speaker 8: he was probably looking for something in the range of
Speaker 8: forty dollars a share. Not sure whether he's going to
Speaker 8: be yeah, not sure whether he's going to get that,
Speaker 8: but regardless, I mean, this is a huge deal. I mean,
Speaker 8: even at that twenty two to twenty four dollars, we're
Speaker 8: looking at about a sixty billion dollar deal. So funding
Speaker 8: is definitely going to be, you know, an issue. And
Speaker 8: that's kind of what it suggests the news article from
Speaker 8: yesterday suggests to us, Because if Paramount is kind of
Speaker 8: scouting for all of these different partners, they've talked to Apollo,
Speaker 8: as you just suggested, they're talking to Legendary. You know,
Speaker 8: funding doesn't seem to be as easy as you know,
Speaker 8: maybe we initially thought.
Speaker 5: And also Warner Brothers is carrying a lot of debt.
Speaker 4: I know Zaslov has made a priority of reducing leverage
Speaker 4: and he you know, has executed on a lot of that,
Speaker 4: but there is still quite a bit of debt involved here.
Speaker 5: How willing is Skydance to take that on.
Speaker 8: They are willing to take that on because Scarlett, you know,
Speaker 8: Warner Brothers is actually in the midst of their own restructuring.
Speaker 8: So what they had planned, even before all of this
Speaker 8: Paramount news broke, they had planned to actually split their company.
Speaker 8: So they have a TV network's business and they have
Speaker 8: their streaming and studio business, so kind of the no
Speaker 8: growth assets and the high growth assets, they're kind of
Speaker 8: splitting those two out, and majority of the debt. They
Speaker 8: started with about fifty five billion dollars in debt, they've
Speaker 8: kind of whittled that down to about thirty thirty two billion,
Speaker 8: but majority of that thirty two billion dollars debt was
Speaker 8: actually supposed to travel with the TV network's business, with
Speaker 8: Paramount kind of coming in and making a bid for
Speaker 8: the entire company. Even before that split actually took place,
Speaker 8: just kind of signaled that they wanted to get, you know,
Speaker 8: the entire business, and they were willing to take all
Speaker 8: of the debt, not wait for the split and wait
Speaker 8: for you know, kind of the debt to go away
Speaker 8: and then just go scoop in on the on the
Speaker 8: streaming assets. So they definitely know about the situation and
Speaker 8: seemed like they were willing to take it.
Speaker 2: Another company that's talked that I announced they're splitting their
Speaker 2: networks away with Comcasts. Where are we on that?
Speaker 8: So that seems to be coming pretty close now in
Speaker 8: contrast to the whole Warner Brothers Discovery split. The nice
Speaker 8: thing about the Comcast cable network split, which is by
Speaker 8: the way going to be called worsened, is that it
Speaker 8: doesn't have a lot of debt, so it has it's
Speaker 8: really a well capitalized company. Uh they're throwing about they're
Speaker 8: throwing they're throwing off about three billion dollars in ebit DA,
Speaker 8: but debt is only going to be close to about
Speaker 8: two and a half to three billion dollars. So really
Speaker 8: well capitalized. The problem is with the cable network business,
Speaker 8: as you well know, Paul, that just the options are
Speaker 8: not looking that great U you know, affiliate revenue as
Speaker 8: we know, and is it decline with cord cutting again,
Speaker 8: advertising is going to be you know that most these
Speaker 8: ad dollars are going away from linear TV to digital outlets,
Speaker 8: so again the outlook is just very bleak, but you
Speaker 8: know that company should come on the market sometime pretty soon.
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