Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: From Mahart where Innovation, money and power Collie in Silicon Valley, NBN.
Speaker 3: This is Bloomberg Technology with Caroline Hyde and Ed loved Love.
Speaker 4: I'm Caroline Hein and Bloomberg's World headquarters in New York
Speaker 4: and I'm Ed Ludlow in San Francisco.
Speaker 5: This is Bloomberg Technology.
Speaker 4: Coming up paramount for places at CEO as M and
Speaker 4: a buzz over shadows results.
Speaker 6: Full coverage ahead, plus.
Speaker 7: We push ahead to result from Amazon, AMD and Pinterest,
Speaker 7: all reporting after the belt.
Speaker 6: And former finance CEO at CZ heads.
Speaker 4: To court as prosecutors seek three years in prison. Will
Speaker 4: bring you the latest headlines as they cross, but first
Speaker 4: a check in on these markets and look, the macro
Speaker 4: picture not looking so pretty today and it forces stocks lower.
Speaker 4: You get well the cost of labor at the moment,
Speaker 4: the ECI number coming in higher than expected, and well
Speaker 4: overall confidence from a consumer plunging.
Speaker 6: That means we're not looking so pretty.
Speaker 4: Heading into a Federal Reserve meeting that of course ends tomorrow,
Speaker 4: and we hear from Jaypower off by four ten percent
Speaker 4: on the NASDAK tenure yield pushing higher of course, where
Speaker 4: boring costs rise, So stock's full.
Speaker 6: We're at four point sixty six, that's what usually the
Speaker 6: trend is.
Speaker 4: We're seeing dollar stronger versus the Japanese end today, a
Speaker 4: completely flip reverse from yesterday. Looks as though Japan did
Speaker 4: indeed have some intervention into the markets to try and
Speaker 4: prop up the yen. For now it's weaker against the
Speaker 4: US dollar. Let's move on to have a look at
Speaker 4: what's also we could get versus the US dollar. Bitcoin
Speaker 4: along with other risk asset said on the downside, rob
Speaker 4: by two point percent, sixty one thousand. This is wrapping
Speaker 4: up to be a pretty poor month of April, the worst.
Speaker 6: Since, of course the FTX scandal.
Speaker 4: Down somewhat sixteen percent over the course of April for bitcoin,
Speaker 4: and indeed we're seeing a pretty.
Speaker 6: Poor month for stocks.
Speaker 4: More overall, Nasdaq I think having its worst months since October.
Speaker 6: What do you think of the micro today?
Speaker 5: Okay, so there's a lot going on real quick.
Speaker 7: Tesla is down more than four percent, the information reporting
Speaker 7: the entire supercharger team is gone. But remember twenty four
Speaker 7: hours ago in Monday session, fifteen percent gain, biggest jump
Speaker 7: since March of twenty twenty one on FSD tentative approval
Speaker 7: on China. We'll dig into that later. Then there's earnings
Speaker 7: AMD after the Bell. We know the story how well,
Speaker 7: but above or below is the mi I three hundred
Speaker 7: x done relative to expectations. Then you've got Amazon after
Speaker 7: Alphabet and Microsoft Cloud growth driven by AI. We know
Speaker 7: those stories and were look ahead to that later in
Speaker 7: the program. Our top story is Paramount Global, so CEO
Speaker 7: Bob Bakish is gone, replaced by basically a committee of executives.
Speaker 7: They release earnings. No one seems to care. The question
Speaker 7: is about M and A in the future. The stockdown
Speaker 7: three point three percent. Let's go right to Bloomberg Intelligence
Speaker 7: and this guita rangon Nathan to try and understand what's
Speaker 7: going on. I love the kind of headline of your
Speaker 7: research overnight, basically earnings and non.
Speaker 5: Av I on M and A.
Speaker 7: But just summarize what last night was like for you
Speaker 7: and what you learned.
Speaker 3: Yes, yeah, the earnings call ed was was kind of
Speaker 3: really bizarre. I mean it was, you know, a seven
Speaker 3: to eight minute call, basically one of the shortest I've
Speaker 3: ever seen in the history of media earnings. There were
Speaker 3: no questions from the analyst or the investment community, and
Speaker 3: it was just basically the CFO outlining the details of
Speaker 3: the quarter, and you know, the three person committee kind
Speaker 3: of giving their little spiel. But I think yes, there
Speaker 3: were some encouraging elements from the first quarter results, but
Speaker 3: of course M and A is stop and center overall.
Speaker 3: I think that the key takeaway is that this is
Speaker 3: peak uncertainty right now at Paramount. We really don't know
Speaker 3: what's happening with ownership. We don't know what's happening with
Speaker 3: leadership other than there is this committee. But obviously it's
Speaker 3: a stop gap arrangement and there's no clue in terms
Speaker 3: of what the future direction or the strategy is.
Speaker 4: Have you ever experienced this, Ketha, this lack of clarity
Speaker 4: coming from leadership, coming from the company itself.
Speaker 3: Yeah, I mean this is kind of one of a
Speaker 3: kind situation, Caroline. I mean, obviously, Sherry Redstone here is
Speaker 3: desperately trying to get a deal done with sky Dance,
Speaker 3: which is why she had to get rid of Barb Bakish,
Speaker 3: who was opposing the deal pretty vocally from the get go.
Speaker 6: You know, there is a looming deadline.
Speaker 3: May third is the day which is Friday is the
Speaker 3: day when the period of exclusive negotiations ends, and so
Speaker 3: they're trying to do everything in their power to get
Speaker 3: to that finish line as quickly as possible.
Speaker 4: Well, we dig into what is a very evolving story,
Speaker 4: but ultimately with some decent streaming numbers come from Paramount,
Speaker 4: we want to dig into all of that. First, we
Speaker 4: thanks Bloomberg Intelligence ANALYSTKEITHA. Rangnath, and let's continue the conversation
Speaker 4: with an expert in the field of media and ultimately
Speaker 4: what on earth this landscape is like to try to
Speaker 4: evolve Paramount. Going forward John Clines with US co founder
Speaker 4: SEO of the sports streaming platform Handed Media. We'll also
Speaker 4: form a president of CNN executive VP of CBS New Boyd.
Speaker 4: Do you understand the internal workings of these sorts of
Speaker 4: companies And I put it to you again, I mean,
Speaker 4: there's a corporate governance issue going on at the moment.
Speaker 4: But what should Paramount try you to be doing in
Speaker 4: terms of its fundamentals right now?
Speaker 2: Well, you know I have experienced this before because I
Speaker 2: was the media advisor to the show Succession, and I
Speaker 2: have to tell you if you know so.
Speaker 1: Mayhem was our middle name. But if they'd come.
Speaker 2: To me with a plot twist that said they were
Speaker 2: going to dump the CEO two hours before earnings, I
Speaker 2: would have thrown it right back in their faces. I
Speaker 2: would have said, no way anyway. You know, look, every
Speaker 2: acquirer feels they can either grow an asset, or squeeze
Speaker 2: additional profit out of the distressed parts, or just sell
Speaker 2: off the parts. I wouldn't be surprised if David Ellison
Speaker 2: feels that he lands in the growth camp. You know,
Speaker 2: he's young, he's energetic, he has excellent taste. I love
Speaker 2: some of the movies that he's produced, and he's got
Speaker 2: Jeff Shell as a partner in Jeff is a really
Speaker 2: savvy operator, you know, as he was when he was
Speaker 2: CEO of NBC Universal. I think that the challenge for
Speaker 2: any traditional media company in a landscape that is dominated
Speaker 2: by the tech giants, right Apple, Amazon, Google. You know,
Speaker 2: YouTube alone accounts for ten percent of the of the
Speaker 2: TV viewing now on televisions, not not on devices. The
Speaker 2: tech giants are dominating the media landscape, and so whoever
Speaker 2: ends up owning Paramount has to think hard about that.
Speaker 2: They have to think about streaming as a strategy you know,
Speaker 2: because what streaming does is on the line.
Speaker 7: Let me just jump in real quick, John, because I
Speaker 7: get that that they're technology companies. They're good at technology.
Speaker 7: Caroline and I were discussing before the show. I quite
Speaker 7: like Paramount. I like the streaming platform. I watch all
Speaker 7: my Champions League football on Paramount Plus. I liked Taylo
Speaker 7: it was pretty good. I like some of the Paramount movies.
Speaker 7: Top Gun as an example of the Transformers movies. Who
Speaker 7: doesn't what's missing, then what's the fix?
Speaker 1: I'll tell you what's missing.
Speaker 2: AI AI is what's driving streaming because it powers all
Speaker 2: those deep audience insights that allow you to make smarter
Speaker 2: programming decisions, more precision targeted marketing decisions. On my streaming
Speaker 2: platform has seen our cost of acquiring a customer drop
Speaker 2: from thirty four dollars to two dollars in one year's
Speaker 2: time thanks to precision targeting AI. And David Ellison knows
Speaker 2: somebody who is pretty good at the aipiece of it,
Speaker 2: and that's his dad. And his dad is one of
Speaker 2: the investor. Or Oracle is going to be among the
Speaker 2: investors in this. And if you add Oracle AI power
Speaker 2: to some of the assets that paramount owns you inch
Speaker 2: closer anyway toward the giants.
Speaker 1: You're not a giant yet.
Speaker 2: Their market cap, I think is three hundred and fifty
Speaker 2: times smaller than the big boys, but you're heading in
Speaker 2: the right direction and that would be a smart thing
Speaker 2: for them to do.
Speaker 4: So for you, this is a tech growth perspective coming
Speaker 4: from Skydance Media. A lot of investors, though, have completely
Speaker 4: seen an erosion in the value of their non voting stock.
Speaker 4: They're frustrated that this isn't going to be some more
Speaker 4: open bidding competition going on. John, is there a better,
Speaker 4: more clear way of doing this to try? And we'll
Speaker 4: hear clarity from Skydance and then see what others say.
Speaker 4: The reports of an Apollo and a Sony could add themselves.
Speaker 2: Yeah, I mean, Skydance, you know, needs to play its
Speaker 2: cards close to the vest in the short run. And
Speaker 2: of course, if they end up winning the prize versus
Speaker 2: Apollo slash Sony, you know, then they've got to lay
Speaker 2: out a strategy and you know that's what the street
Speaker 2: is going to be looking for work. And you know,
Speaker 2: AI can't be ignored and you know, should obviously be
Speaker 2: a central part of things. But look, family controlled or
Speaker 2: single entity controlled companies invariably lead.
Speaker 1: To this kind of messiness.
Speaker 2: And if whoever ends up with it, at least you
Speaker 2: would hope that things will the operation will run more cleanly.
Speaker 7: Moving forward, John, Of all the subscriptions you can have,
Speaker 7: where does powamount rank?
Speaker 2: Look, I'm not alone in saying I churn constantly. Did
Speaker 2: you know that only seven percent of people will tell
Speaker 2: you that they plan to stick with the streaming platform
Speaker 2: that they currently subscribe to. This month, ninety three percent
Speaker 2: of viewers intend to leave. And that's because people watch
Speaker 2: shows and stars, they don't watch platforms. That's equally applicable
Speaker 2: to Netflix and Disney Plus and all of them. And
Speaker 2: so you know, you've got to think in terms of
Speaker 2: franchises that are driving the bus for a business. So,
Speaker 2: you know, for paramount, the first one that jumps into
Speaker 2: my mind.
Speaker 1: Is the NFL.
Speaker 2: I mean, the NFL dominates viewership on whatever platform at Arizona,
Speaker 2: whether it's streaming on Amazon Prime or it's the traditional
Speaker 2: broadcast networks.
Speaker 1: You know, they news.
Speaker 2: Streaming services are also drivers of streaming, and CBS just
Speaker 2: rebranded their entire CBS News Streaming entity into CBS News
Speaker 2: twenty four to seven, and so they've got to be
Speaker 2: thinking streaming first, direct to consumer first, AI.
Speaker 5: Right, and the masters as well.
Speaker 7: Good example, if you're going to get one chunk off
Speaker 7: or divest a bit, what would it be.
Speaker 2: The cable channels just you know, they're they're they're kind
Speaker 2: of hopeless.
Speaker 1: I mean, they've lost their luster.
Speaker 2: I think you know, they tend to just play the
Speaker 2: same show fifty thousand times in a row and a block,
Speaker 2: which I like as a consumer. I can put the
Speaker 2: Office on on other channels, you know, and all that.
Speaker 2: But it's a dwindling asset. Everyone knows that. It's not
Speaker 2: a surprise. I think they had some offers for some
Speaker 2: of the cable channels in the past year. Part of
Speaker 2: the friction between Redstone and Backish was that he didn't
Speaker 2: sell some of.
Speaker 1: Them fast enough or at all. But that's where you'd
Speaker 1: have to look.
Speaker 6: John.
Speaker 4: I'm just going to go bigger here because it's so
Speaker 4: interesting what you bring about the technology story that needs
Speaker 4: to be injected into Powermount. Of course, you were at
Speaker 4: berninks AI, which was sold to Apple. You've got a
Speaker 4: big focus on the AI compartment, but do you think
Speaker 4: were broadly this is going to be happening elsewhere in
Speaker 4: the industry. Paramount is a but one where we think
Speaker 4: m and A or rejuvenation is needed within some of
Speaker 4: these legacy businesses.
Speaker 2: Oh yeah, I mean, look, the market cap gap is
Speaker 2: just enormous.
Speaker 1: I mean, the tech.
Speaker 2: Giants are three hundred and fifty times bigger than even
Speaker 2: the you know, the biggest, most well known traditional media companies,
Speaker 2: Warner Brothers, Discovery, you know, Netflix, even I think we
Speaker 2: have to start thinking of as a traditional media company
Speaker 2: because the only thing they do is entertainment programming and
Speaker 2: now they're introducing sports, but they have no tech component.
Speaker 2: They have no theme parks, you know, to mitigate risk
Speaker 2: or anything. So they're a pure playing media company. I
Speaker 2: think there's bound to be consolidation amidst those and if
Speaker 2: Paramount is smart about pursuing the AI and streaming opportunities,
Speaker 2: they become a more attractive merger or acquisition target as
Speaker 2: those smaller players, the smaller planets come.
Speaker 7: Together joining Bloomberg Technology, a show available live and on
Speaker 7: demand on lots of platforms. Looking around for a long time.
Speaker 7: Hang Media co founder and CEO John Klin. Great to
Speaker 7: have your perspective. Thank you, know, coming up, we're going
Speaker 7: to take a look at the intensifying tech war between
Speaker 7: the US and China. Just days after Elon Musk reached
Speaker 7: that big milestone on FSD. That conversation coming up, this
Speaker 7: is Bloomberg technology. The law requiring TikTok to divest or
Speaker 7: be banned could be a pivotal moment in what is
Speaker 7: an escalating rivalry between the US and China in the
Speaker 7: context of technology. TikTok for the US would almost certainly
Speaker 7: head to the Supreme Court, which would have to weigh
Speaker 7: the government's security concerns against the free speech of the company.
Speaker 7: And it's all but certain that China will retaliate against
Speaker 7: the US. And that is according to those that watch
Speaker 7: China's government in its responses closely. There's a lot to
Speaker 7: discuss right now in the relationship between China and US
Speaker 7: in the context of tech.
Speaker 5: And to do that we bring in Jen Haglee.
Speaker 7: The CEO and founder and head of researcher JL Warren Capital.
Speaker 7: Let's just start with the TikTok case study. You know,
Speaker 7: byte Dance is the world's most valuable startup, a Chinese giant,
Speaker 7: but private, and it's said we have no plan to
Speaker 7: sell divest TikTok in the States, but it's somewhere that
Speaker 7: the States is just not going to accept your view
Speaker 7: on that outcome.
Speaker 8: Well, I think it's inevitable that the two entities US
Speaker 8: operation will be separated from the parent because consumer data
Speaker 8: in US are just way too way too rich in
Speaker 8: content and the way too sensitive for the same poken.
Speaker 1: I mean, I just think the.
Speaker 8: Reason announcement of Testda Bayd is a very case specific situation.
Speaker 8: It's not applicable to sort of the broad de escalating
Speaker 8: tension between the US and China China argument.
Speaker 4: Okay, that's so interesting because it feels as though there
Speaker 4: are these two different narratives. If you're a company that's
Speaker 4: already within China that's able to do ultimately partnerships within China,
Speaker 4: as we've seen Tesla and Minding, for example, you will
Speaker 4: be allowed to continue and indeed potentially to thrive. But
Speaker 4: others this is not going to be occurring. What do
Speaker 4: you think of some of the Chinese companies trying to
Speaker 4: make their presence known here in the United States team
Speaker 4: and for example, become quite the addiction.
Speaker 1: Will that be allowed?
Speaker 6: Do you think it is right case by case.
Speaker 8: Well, I think it's okay if you are small and
Speaker 8: you are under the radar, but when you get to
Speaker 8: a certain scale and when you catch at tension, that
Speaker 8: it becomes sensitive.
Speaker 1: And topical and political.
Speaker 8: And I think the broad sort of the political tension
Speaker 8: definitely is a headwing and it's unlikely to be resolved
Speaker 8: in any time soon.
Speaker 7: Jinang, your specialty, Your research is largely on US companies
Speaker 7: with exposure to China. So what was your reaction to
Speaker 7: Tesla getting tentative approval for FSD.
Speaker 8: I think the market runs ahead of yourself by so much.
Speaker 1: The partnership.
Speaker 8: You can say it's a milestone, but it's really light
Speaker 8: in the terms. So think about twenty five years ago
Speaker 8: when Ford, the gm BMW mer Cites came to the
Speaker 8: came to China need to have a joint venture to
Speaker 8: gain the license or ability to manufacture and sell cars
Speaker 8: to China. So in this case it's kind of similar.
Speaker 8: So Tesla is a foreign entity. To be able to
Speaker 8: collect data and do what it does in the US,
Speaker 8: which is oftens striving, it needs a local partner. So
Speaker 8: in this case it's by doing it can be anyone,
Speaker 8: So by do will be storing all the data Tesla
Speaker 8: collects on the road and supervise the data usage and
Speaker 8: the filtered before the data gets returned to Tesla for
Speaker 8: you know, for computing. And what we do not know,
Speaker 8: and it's critical to this puzzle, is that how the
Speaker 8: data will be computed, whether it's onshore or offshore, and
Speaker 8: using what capability. So I mean, I think that's the
Speaker 8: critical sort of piece that's missing.
Speaker 1: And yet the market just runs ahead of yourself.
Speaker 7: It's in It's such an interesting point to Caro's question
Speaker 7: on partnership. You know, in my study of China's autonomous
Speaker 7: driving landscape, you know, by Doo is a domestic champion.
Speaker 7: Bydo has its own ambitions for autonomous driving, and Tesla
Speaker 7: could have gone with anyone. As you point out, why
Speaker 7: do you think they went with Baydoo as opposed to
Speaker 7: another robotaxi company.
Speaker 8: I think it could be anyone. It could be by Do,
Speaker 8: it could be Pencent, it could be any mapping company.
Speaker 8: By Do is just the gatekeeper on behalf of the government.
Speaker 8: And what's also unknown is whether this kickoff of f
Speaker 8: SE program in China, whether it's broadly applicable to all
Speaker 8: Tesla vehicles on the road in China, or whether it's
Speaker 8: just applicable to a group of demo demo fleet, which
Speaker 8: is about a couple of dozens of you know, driving
Speaker 8: by do stuff supervising or understanding the data collection process.
Speaker 1: That's unknown and that's critical.
Speaker 4: And it's critical for its long term value as a
Speaker 4: business that's going to be standing apart from other auto companies,
Speaker 4: legacy businesses because of its AI plan. And I'm interested
Speaker 4: in therefore, whether you think there's that much value with
Speaker 4: what's just going on between Tesla and China, and if
Speaker 4: or that's a sacrifice that ultimately has to be made.
Speaker 8: Okay, in China, Tesla is actually not the leader in
Speaker 8: a f speed because it didn't or automs atas autons driving,
Speaker 8: because it doesn't have the license to collect data. It
Speaker 8: doesn't have the data. Where it adds the competition Huawei
Speaker 8: x pun meal, they all have their you know, uh
Speaker 8: autians driving.
Speaker 1: System uh that's on the road.
Speaker 8: So they use ambidious orange chip with in house coding, right,
Speaker 8: So that's their respective solution. So I think this partnership
Speaker 8: is Beijing expressing sort of the relaxation of discrimination against
Speaker 8: American companies. Say now we allow you to have access
Speaker 8: to the marking data under the supervision of a Chinese entity,
Speaker 8: and you can you know, make good use of the
Speaker 8: data so that you are on the equal footy. Where's
Speaker 8: your competition in China. That's the extent of that.
Speaker 4: It's an interesting landscape that you continue to bring clarity
Speaker 4: on Jail. Warren Capital CEO and founder Trinhangmi, thank you
Speaker 4: for deep diving. Now, colleges in the United States, many
Speaker 4: are rushing to confront some pro Palestinian demonstrations on campuses,
Speaker 4: with disciplinary actions escalating and campus life really thrown into turmoil.
Speaker 4: So as the academic year comes to a close. Over
Speaker 4: Columbia and New York, dozens of students entered a campus
Speaker 4: building known as Hamilton Hall after midnight on Tuesday. Marracaded
Speaker 4: themselves in side piling tables, chairs to brock doors and
Speaker 4: covering security cameras. We want to go live to Columbia
Speaker 4: University on the ground as Bloomberg Scarlet Foo and want
Speaker 4: to make clear this is something that's happening across the US,
Speaker 4: but it's also happening across Europe. Outside German Parliament at
Speaker 4: the moment, we're seeing it happen at the Sorbonne in
Speaker 4: Paris is a global element. But what's happening on the
Speaker 4: ground right now with you, Scarlet.
Speaker 9: Yeah, this is ground zero, Carol line for the pro
Speaker 9: Palestinian protests sweeping across the US college campuses and around
Speaker 9: the world. As you said, about eleven hours ago, dozens
Speaker 9: of Columbia students entered Hamilton Hall, which is behind me here.
Speaker 9: They've unfurled banners, one is Free Palestine. On the other side,
Speaker 9: there's another banner in front of Hamilton Hall that says
Speaker 9: into Fada in red. As you mentioned, they've barricaded themselves inside.
Speaker 9: They're occupying the building. They've covered security cameras with black
Speaker 9: trash bags. And this is a building that is of
Speaker 9: course a story because it has a history of student occupation.
Speaker 9: In nineteen sixty eight, students protested against the Vietnam War.
Speaker 9: In nineteen eighty five, students took over Hamilton Hall to
Speaker 9: demand that Columbia divests from companies that do business in
Speaker 9: South Africa during apartheid, and it is from that that
Speaker 9: they take inspiration in making their demands this time around. Clearly,
Speaker 9: this is an escalation, Caroline, and ed from the encampments
Speaker 9: that Columbia and Barnard students set up about two weeks
Speaker 9: ago out on the south lawn in front of Hamilton Hall.
Speaker 9: When the President of Columbia, Manusha Figue, testified before Congress,
Speaker 9: the school had given students a deadline of two pm
Speaker 9: Monday yesterday to clear the encampments. Some did, but clearly
Speaker 9: some had chosen to double.
Speaker 5: Down Scarlet real quick.
Speaker 7: What specifically they're demanding, I just don't get it.
Speaker 9: Yeah, what they're demanding is financial transparency when it comes
Speaker 9: to the almost fourteen.
Speaker 1: Billion dollar endowment.
Speaker 9: That Columbia has, as well as divestment divesting from Israeli
Speaker 9: companies and companies that do business with the Israeli government.
Speaker 9: Now that's obviously are said than done, given that endowments
Speaker 9: don't just invest in companies and bonds directly, they invest
Speaker 9: in private equity, hedge funds, hard assets. So it's difficult
Speaker 9: to entangle all of that.
Speaker 7: Bloomberg Scarlett food on the ground at Columbia. Thank you
Speaker 7: say with us, We'll be right back. This is Bloomberg Technology.
Speaker 4: We welcome now our Bloomberg TV and radio audiences worldwide
Speaker 4: to discuss what is occurring at Paramount. Currently, we'll shine
Speaker 4: a light on how shares have been trading lower after
Speaker 4: well first quarter earnings.
Speaker 6: Actually beat expectations.
Speaker 4: But what's actually taken the focus of Wall Street is
Speaker 4: a CEO, Bob Backish stepping down, being replaced by a
Speaker 4: trio of executives now being depended on, seemingly on an
Speaker 4: interim basis to lead Paramount amid what seems to be
Speaker 4: ongoing speculation of a deal with Skydance. We want to
Speaker 4: get to a key long term investor in Paramount who's
Speaker 4: been in the name since two thousand and six, who
Speaker 4: believe eves in the streaming opportunity and the value of
Speaker 4: its content. It's John Rodgers, a real investments founder co CEO.
Speaker 4: You've been throughout this business in its many iterations, and
Speaker 4: I just want to focus first John, on yesterday growth
Speaker 4: being born out being shown by the business, particularly in
Speaker 4: its streaming, thanks in many ways to the Super Bowl,
Speaker 4: but it was overshadowed by the departure of Bob Backish.
Speaker 6: What did you make of the move now?
Speaker 1: It was pretty shocking to us.
Speaker 10: I've been Ariel's been in business for forty one years.
Speaker 10: We've not seen anything remotely like this. It's just extraordinary,
Speaker 10: and it can't be good for shareholders to be able
Speaker 10: to have all this uncertainty at earning season. You're in
Speaker 10: the middle of a merger and acquisition transaction, you're negotiating
Speaker 10: with Charter Communications. All these important things are happening all
Speaker 10: at once, and you need the CEO in place. So
Speaker 10: this has just been very very disappointing, disheartening, and also,
Speaker 10: in the context of what you said, business has been
Speaker 10: getting better. A lot of the initiatives that Bob and
Speaker 10: Bob and his executive team have worked on are really
Speaker 10: starting to show fruition. So the timing just seems extremely,
Speaker 10: extremely problematic.
Speaker 4: Let's just talk about probably why Bob Backish has exited,
Speaker 4: and it is because he felt that the negotiations reportedly
Speaker 4: underway with Skydance were not within his agreement. Now, Sherry
Speaker 4: Redstone is a controlling shareholder at the moment with FUS
Speaker 4: National Amusements. It seems to be the deal that she's
Speaker 4: looking for with skuy Dance. How are you currently dealing
Speaker 4: with the reports of a so called sweetened deal. What
Speaker 4: would you make of a combination of paramount with Skuydance.
Speaker 10: Well, we don't know enough We've read all the same
Speaker 10: pieces that have been written about this, and institutions like
Speaker 10: Puck have had really good information that we've had confirmed.
Speaker 10: And so this transaction is really is focused on Skydance.
Speaker 10: We think that that may possibly have a chance to work,
Speaker 10: but we really would much rather see the Apollo deal
Speaker 10: with Sony that's been so rumored to be out there,
Speaker 10: to get certainty of a you know, Apollo's a world
Speaker 10: class firm with extraordinary resources. Sony has proven to be
Speaker 10: so successful, you know, in this industry that seems like
Speaker 10: a marriage made in heaven, and so we wouldn't rush
Speaker 10: to the altar with a smaller company that's not as
Speaker 10: proven as the Apollo and Sony.
Speaker 5: John, Good morning, it's ed in San Francisco.
Speaker 7: Do you get any sense because you've held this idea
Speaker 7: that we should look at other offers on the table
Speaker 7: for a while.
Speaker 5: Do you still hold.
Speaker 7: That belief but actually the hope that other offers will
Speaker 7: be looked at, Well.
Speaker 10: That's we hear.
Speaker 2: We have.
Speaker 10: You know, we had a lot of confidence in management
Speaker 10: that's been nothing but straightforward and candidate with us, that
Speaker 10: they cared about all shareholders and you know, as you know,
Speaker 10: the employee bases all own the secondary shares, So we
Speaker 10: really have been very, very hopeful that they were going
Speaker 10: to do the right thing for shareholders, and that's been
Speaker 10: something that's been committed to us consistently, and we believe them,
Speaker 10: and we just continue to think that you don't need
Speaker 10: to rush when things are getting going well. This is
Speaker 10: not a melting ice cube. This is a company in recovery,
Speaker 10: in a turnaround mode. We want to make sure that
Speaker 10: all shareholders get to be able to take advantage of that.
Speaker 10: And the price that Skuydance is suggesting seems to us
Speaker 10: what we've read, much lower than what we would get
Speaker 10: from the Apollo Sony deal and many others that could
Speaker 10: possibly be out there if this company was truly shopped around.
Speaker 10: And the final thing I would say is the directors.
Speaker 10: We know several as independent directors, and we know that
Speaker 10: they're committed to doing what's fair for all shareholders. So
Speaker 10: I'm hoping they'll be able to get to the finish line.
Speaker 7: John, what does a change of ownership structure or this
Speaker 7: M and a path fix to Paramount?
Speaker 10: Well, I think that with Apollo and Sony you would
Speaker 10: end up with enormous resources. It would help them with
Speaker 10: their balance sheet that has, you know, gotten higher than
Speaker 10: we would have hoped. You'll be able if you're working
Speaker 10: with Sony. Sony has been an expert of being an
Speaker 10: arms dealer, being able to use content and ways to
Speaker 10: generate cash flow and profits, and have the extraordinary library
Speaker 10: that Paramount brings, the history of Paramount's lot where they
Speaker 10: have been able to make movies for generations, and there'll
Speaker 10: be enormous synergies, you know. I think the synergies between
Speaker 10: Sony and Paramount Paramount are much much greater than you
Speaker 10: can imagine with a smaller company like Skydance. So we're
Speaker 10: really hopeful that you'd be able to get great synergies,
Speaker 10: higher cash flow and an experienced management team that will
Speaker 10: be able to make those tough calls of what happens
Speaker 10: with Pike Paramount, plus how much do you use content there?
Speaker 10: How do you use it in selling into other competing
Speaker 10: services like Netflix. We want that kind of experience leadership
Speaker 10: that has been proven, and I know there are some
Speaker 10: other large streamers out there they could possibly also get
Speaker 10: into the mix.
Speaker 4: We are of course with John Rogers of Aerial Investments
Speaker 4: found of Coco to our radio and TV audience. John,
Speaker 4: regulatory issues though with both potential tie ups, is that
Speaker 4: a concern for you?
Speaker 10: I think it's a modest concern for the real large
Speaker 10: guys that are out there. I understand that people would
Speaker 10: be worried if Netflix, for example, was to buy Paramount Global.
Speaker 10: But ultimately, I think if people are really looking this
Speaker 10: for the long run, you know, there's been lots of
Speaker 10: litigation around some of the regulatory constraints that are out
Speaker 10: there in today's economic system, I think ultimately rational people
Speaker 10: will see do you want to see Paramount Plus collapse?
Speaker 10: Do you want to see all those jobs lost? Do
Speaker 10: you want to see a world class American company in disarray?
Speaker 10: Or do you want to see it find a great
Speaker 10: parent where they can merge and have a successful, growing
Speaker 10: business over over the next decade or so. So I
Speaker 10: think I'm hopeful that regulators will be able to make
Speaker 10: the right decision, have it open mind about all the
Speaker 10: various different possible combinations that are out there, And I
Speaker 10: certainly think the Apollo a Sony deal should not have
Speaker 10: any significant regulatory concerns.
Speaker 4: John, You've written to your own investors in your Q
Speaker 4: one report really saying, look, you're not an activist investor,
Speaker 4: but you feel it's your fiduciary duty to raise concerns,
Speaker 4: particularly from a corporate governance perspective here. And I want
Speaker 4: to go back to the fact that you have held
Speaker 4: this stock throughout these iterations, and you've seen the fact
Speaker 4: that there was this controlling shareholder. Did you sort of
Speaker 4: worry this might ever evolve from this corporate governance structure?
Speaker 6: That particularly you're worry was.
Speaker 4: The fact that three independent board members have recently stepped
Speaker 4: down amid this m and A speculation.
Speaker 10: You know, over the years, I've mentioned, you know, the
Speaker 10: forty one years, we've not seen anything like this. I've
Speaker 10: never in all the years of owning stocks that have
Speaker 10: dual class shares, I've never seen a scenario where the
Speaker 10: A shareholders were going to get a significantly larger premium
Speaker 10: than the B shareholders. And that's just something we've never
Speaker 10: seen before. And there's been a lot of smart investors,
Speaker 10: it's youeno factual over the years. You know, Warren Buffett's
Speaker 10: been a shareholder, We know Mario Gabelly, my friend Mario
Speaker 10: has been a shareholder. We had other several good, smart
Speaker 10: people looking at this and we've always felt that people
Speaker 10: would do the rational thing and do the right thing
Speaker 10: for all shareholders. That's what management's told us, Frankly, that's
Speaker 10: what Sherry has said over time. And so we think
Speaker 10: that this is something that came as a real, true surprise,
Speaker 10: and it's something again like we've never seen before.
Speaker 7: John, I watched The Masters on Paramount Plus. I get
Speaker 7: my Champions League football through Paramount Plus.
Speaker 5: I liked Halo.
Speaker 7: What is it that you like about paramounts existing portfolio
Speaker 7: and offering.
Speaker 10: Well, you started at the right place. They have extraordinary
Speaker 10: content that you know you must see. The super Bowl,
Speaker 10: you know, had great, great ratings, Grammys were great. You
Speaker 10: mentioned the Masters.
Speaker 5: They've got great scripted shows.
Speaker 10: The CSI franchise, the news franchise, CBS Sunday Morning sixty Minutes,
Speaker 10: CBS Evening News, and this is robust history. But then
Speaker 10: you put on top of it this extraordinary library with
Speaker 10: the Paramount Greats, Mission Impossible and The Godfather. You could
Speaker 10: go on and on and on. They've got Pluto, which
Speaker 10: is an extremely successful streaming service. You've got worldwide assets
Speaker 10: the Bob Backish used to run that are extremely valuable
Speaker 10: and seem to get ignored by the analyst community and
Speaker 10: the value that's there. So they have a well diversified
Speaker 10: group of assets, many hidden assets, real estate that it
Speaker 10: hasn't completely been utilized, institutions like Showtime and BT that
Speaker 10: I wish they had found a way to have sold earlier.
Speaker 10: But these are real, true assets to this company. And
Speaker 10: I think sometimes people get into the group think of
Speaker 10: the moment, they're worried about the cord cutting, and they're
Speaker 10: forgetting to value all of the assets that Paramount Global has.
Speaker 4: You're a value investor, you look at the value. John,
Speaker 4: You'll also say, you don't sell into chaos. What do
Speaker 4: you do though, if a deal with Skuydance goes ahead.
Speaker 10: Well, we have been looking at all of our options.
Speaker 10: We did write a letter to the board of directors
Speaker 10: explaining our position. We've been, of course talking to expert
Speaker 10: legal counsel, and our general counsel is terrific and she's
Speaker 10: been on top of those issues. So we're looking at
Speaker 10: all of our alternatives and we'll see how this all
Speaker 10: plays out. But we would like to see this play
Speaker 10: out in a way that is very constructive because it
Speaker 10: would be not a good thing for a sky dancer
Speaker 10: trying to buy a company where you're in litigation with
Speaker 10: all of your shareholders or many of your shareholders, I
Speaker 10: should say many of your shareholders, and at the same time,
Speaker 10: your senior management is not going to be happy if
Speaker 10: the deal isn't fair for the b shareholders. That's the
Speaker 10: management team owns. And we all know M and A
Speaker 10: is difficult in the best of circumstances getting all the
Speaker 10: synergies done and all the tough calls that have to
Speaker 10: be made, and it would be a difficult environment I
Speaker 10: think for them to be able to be successful, while
Speaker 10: you could have such a cleaner deal with an extraordinary
Speaker 10: company like Apollo and Sony.
Speaker 7: John Rogers, Aerio Investments, founder and co CEO, grateful for
Speaker 7: your time, Thank you, Welcome back to Member of Technology.
Speaker 7: A quick check on the markets and three names that
Speaker 7: we're looking because they report earnings after the bell. You're
Speaker 7: either an AI or advertising story or you're both. AMD
Speaker 7: up four ten to percent. The story is really clear.
Speaker 7: The three hundred X is their current generation AI accelerator.
Speaker 7: They were on track to do three and a half
Speaker 7: billion dollars of sales this year. Will they catch up
Speaker 7: with Nvidia? Will they pull ahead of Intel? The above
Speaker 7: or below. That's the story. Then Amazon's down a percentage point.
Speaker 7: It is interesting the bar so high following alphabet the
Speaker 7: parent of Google and Microsoft earnings because both showed growth
Speaker 7: in their cloud sales, but both gave us either numbers
Speaker 7: or evidence that contrab to cloud growth specifically came from AI.
Speaker 7: In Amazon's case, advertising is also really interesting, right, so
Speaker 7: twelve percent overall top line growth, but it's the first
Speaker 7: quarter where since January they've included ads in Prime Video?
Speaker 5: Does that show up as revenue? Really interesting?
Speaker 7: In mpinterest they're not seeing any user growth, but the
Speaker 7: street car I thinks they might be okay because it's
Speaker 7: been a mixed picture so far. But on the whole,
Speaker 7: maybe advertising not so bad.
Speaker 4: Pinterest is just a different type of a business, isn't it.
Speaker 4: Aired Then the fact that we've seen pinterest try to
Speaker 4: really focus in on, well, this is a safe space,
Speaker 4: an optimistic place, particularly in the current political narrative.
Speaker 5: I'd say yeah.
Speaker 7: And one thing I want to know as well is
Speaker 7: like ads, meaning what like AI, ads ads or AI?
Speaker 5: I still don't quite get that story.
Speaker 4: We've got someone who knows everything about ads and AI
Speaker 4: luckily joining us now Integral Ads Science CEO Lisa Uchneiner,
Speaker 4: Integral ad Science actually helps advertisers at Fortune five hundred
Speaker 4: brands measure if their campaigns are appearing next to safe,
Speaker 4: suitable content across Metro, Instagram, TikTok, yout Pinterest, We're just
Speaker 4: talking about Spotify, linkedins.
Speaker 6: Now, you name it, you measure it.
Speaker 4: And I'm really interested by what ultimately your bread and
Speaker 4: buster business been looking like of late. Have brands felt
Speaker 4: more secure through your data to come and align the
Speaker 4: ads next to those of well use more Metapinterest, Snap
Speaker 4: and I like.
Speaker 11: Sure Integral ads Science and thank you for having me.
Speaker 11: We're a leading digital media quality company and we focus
Speaker 11: on exactly what you're speaking to measurement optimization for over
Speaker 11: two thousand brands worldwide. We work with the leading platforms
Speaker 11: and publishers and we built a technology back by AI.
Speaker 11: It's multimedia classification technology. We're in the live feeds of
Speaker 11: all the major social platforms. We are classifying video, image,
Speaker 11: audio and text ensuring that the brands are running adjacent
Speaker 11: to brand safe and suitable.
Speaker 6: Content and has the date to have been getting better.
Speaker 11: The data is absolutely getting better. Our technology is highly sophisticated.
Speaker 11: We're classifying frame by frame and what I mean by that,
Speaker 11: if there's let's say a thirty second TikTok video running,
Speaker 11: we are classifying every single second of that thirty second
Speaker 11: TikTok video to ensure brands aren't running adjacent to unsuitable
Speaker 11: content like hate speech, violence, and as we rolled out recently, misinformation.
Speaker 7: Lisa is Pinterest a platform you take seriously in the
Speaker 7: context of ads.
Speaker 11: The brands take all of the platforms seriously, including Pinterest,
Speaker 11: And as you look at the size of the digital
Speaker 11: advertising market space and the fact that advertisers they're pouring
Speaker 11: billions and billions of dollars into digital advertising, they want
Speaker 11: to ensure that an independent verification company like Integral ad Science,
Speaker 11: we are classifying and verifying the quality of the media,
Speaker 11: and that we're holding the platforms accountable and responsible again,
Speaker 11: ensuring that we're identifying the inappropriate stuff and helping advertisers
Speaker 11: run their brands adjacent to more appropriate, brand suitable content.
Speaker 4: And we'll see how those social media companies have benefited
Speaker 4: from some of that growing confidence research.
Speaker 6: Snider, we thank you for being hit Intagled ad Science.
Speaker 7: CEO Changpeng cz Jow, the billionaire founder of the Binance
Speaker 7: Crypto Exchange is starting his sentencing hearing today on anti
Speaker 7: money laundering charges and prosecutors recommending the court give him
Speaker 7: three years in prison, double the maximum that guidelines prescribe.
Speaker 7: Let's go out to Bluebo's Olga Krief, who has all
Speaker 7: the details of what are we expecting.
Speaker 12: So we are expecting the hearing perhaps to last not
Speaker 12: very long, in a couple of hours. CZ will probably
Speaker 12: speak at the hearing, and his lawyers are pushing for
Speaker 12: probation and sort of much you know, less harsh sentence
Speaker 12: than what the prosecution has asked for. And of course
Speaker 12: you'll recall that in November CZ pled guilty to a
Speaker 12: number of charges and he agreed to pay a fifty
Speaker 12: million dollar fine, and Binance agreed to a four point
Speaker 12: three billion dollar fine, and today we'll find out sort
Speaker 12: of what happens to him. He still retains his ownership
Speaker 12: of Finance, which has been doing extremely well, especially in
Speaker 12: this year's sort of cryptoble market, driven by the introduction
Speaker 12: of US Spot bitcoin exchange exchange traded funds.
Speaker 4: Well, Olga Curf, we thank you for really an amazing read.
Speaker 6: It's the big take today, go online, go check it out.
Speaker 6: Because it really is about.
Speaker 4: Ultimately the fortune of cz and how that doesn't seem
Speaker 4: to be being vented anytime soon, whether he says prison
Speaker 4: time or not. Meanwhile, though, there is a whole raft
Speaker 4: of other crypto news to be getting into in a
Speaker 4: batch of ets. So we're just talking about investing directly
Speaker 4: in crypto just debuted over.
Speaker 6: In Hong Kong.
Speaker 4: So is this competition to the US bitcoin products? Is
Speaker 4: this going to bring in new investors, particularly.
Speaker 6: Over in Asia?
Speaker 4: Still Mark founder and managing partner and ease Colleen joins us. Now,
Speaker 4: look still coin. Still Mark is a bitcoin focus venture
Speaker 4: capital firm. We got eighty five million dollars in assets
Speaker 4: on a management You've been doing this for a long time,
Speaker 4: looking at the protocols, the real use cases of bitcoin.
Speaker 4: This is eth and Bitcoin spot ETF. What does this
Speaker 4: mean for the industry.
Speaker 13: Well, it's the first time we're seeing the ETF perform
Speaker 13: against Bitcoin ETF. And what we saw in Hong Kong's
Speaker 13: day one launch was that much of the activity, the
Speaker 13: vast majority of the activity was in the Bitcoin ETF.
Speaker 13: We saw about just under thirteen million dollars of trading activity,
Speaker 13: which is a lot for the Hong Kong market sized
Speaker 13: at fifty billion. Issuer China AMC has reported one hundred
Speaker 13: and forty one million dollars in assets under management after
Speaker 13: day one, and eighty six percent of that is in
Speaker 13: the Bitcoin spot ETF.
Speaker 7: At least, Why is it important that we have multiple
Speaker 7: markets New York, Hong Kong. We talked the other day
Speaker 7: about Australia thinking about its place in this market.
Speaker 1: It's a great question.
Speaker 13: First of all, of course, Bitcoin's price is a product
Speaker 13: of adoption and expansion of its utility set. As esetfs
Speaker 13: are introduced in new markets and new geographies, we are
Speaker 13: advancing adoption. We're bringing a new group of users into
Speaker 13: bitcoin through a regulated product, albeit one that relies, of
Speaker 13: course on a custodian We're also moving closer to having
Speaker 13: a twenty four to seven spot ETF market. Of course,
Speaker 13: with the addition of Hong Kong.
Speaker 4: I'm interested in Hong Kong specifically because of his relationship
Speaker 4: with China and the regulatory oversight. What does this mean
Speaker 4: for China's relationship with crypto, Yes, exactly.
Speaker 13: Many are interested for exactly the same reason now, of course,
Speaker 13: in the launch of the Bitcoin and East Spot ETFs
Speaker 13: in Hong Kong. People in China do not have access,
Speaker 13: so it's a more curtailed audience. Of course, that said,
Speaker 13: we are still introducing an entirely new audience, and one
Speaker 13: that one that thinks differently, has different has exposure to
Speaker 13: different media sources, and we expect that this is a
Speaker 13: positive sign for broader proliferation of bitcoin products in Hong
Speaker 13: Kong and in the reg and exposed to this product still.
Speaker 7: Mark founder and managing partner Elisa Colleen, we really appreciate
Speaker 7: your real time global perspective, and fortunately for our audience,
Speaker 7: there's more coverage of those ETFs and the CZ sentencing
Speaker 7: at the top of the next hour on Bloomberg Crypto.
Speaker 7: The understanding is that in the CZ hearing at least
Speaker 7: carow a lot of that will kick off around midday
Speaker 7: New York time, which is nine am out here on
Speaker 7: the West.
Speaker 4: Pretty perfect if you want to be digesting that in
Speaker 4: real time with a crypto show, but we sort of
Speaker 4: tease ahead to it, but for now, that's our job
Speaker 4: done on this edition of Bloombog Technology.
Speaker 7: Yeah, a really massive after market earning situation that we're
Speaker 7: going to be tuned into and tomorrow is going to
Speaker 7: be a big discussion on that. The pod on Apple, Spotify.
Speaker 7: iHeart the Bloomberg platforms. Thank you to listening to the podcast.
Speaker 7: This is Bloomberg Technology.