Central Air - The Best of the Worst

Episode Date: August 18, 2026

This is a free preview of a paid episode. To hear more, visit www.centralairpodcast.comThis week: David Ellison is displeased about the California-led lawsuit to stop the Paramount-Warner merger, and he’s threatening to move both studios out of the state. Is this threat credible?Also this week: the Democratic establishment held off Thanksgiving-canceler Francesca Hong in the primary for Wisconsin governor, and we discuss the unhinged responses to the very grim news with the Jason Arday situation. And during cocktail hour, we look for silver linings — who in the Trump cabinet is actually doing a good job?To hear the full episode, upgrade your subscription at www.centralairpodcast.com.

Welcome to Central Air, the show where the temperature is always just right. This is Josh Barrow. I'm here with Megan McArdle, columnist for the Washington Post, and Ben Dreyfus, who writes the Substack newsletter, Calm Down. I learned this past week that I have a partial tear of the planter fascia along the bottom of my foot. So I've been sentenced to six weeks in one of these rigid boots. Casts for legs seem to be out. It's these like these plastic devices in that you can hopple around on like it's a ski boot. And I'm apparently going to do that for the next six weeks.

weeks. Why have they decided to give you people? I use people with quotes, since you're essentially a cripple now. Why have they decided to give you the opportunity to move your foot out? Like, the thing about the cast was that, you know, they didn't trust you. They were saying it stuck. Somehow did you have to prove your bona fides that you weren't going to do that too much? It's not a broken bone. So I don't know that they would have casted it before, but like once upon a time, I feel like they would have put me on crutches. Or one of this cute little wheelie. carts that you see people now rolling around on. Yeah, I was talking with my friends about whether I could get one of those.

But so I was at a party over the weekend. And one of the annoying things about being in the boot is that for the next six weeks, I'm going to have thousands of conversations about why I'm wearing the boot and what went wrong with my foot. And so this guy comes up to me and says, hey, I'm a podiatrist. What's wrong with your foot? And I describe it to him. And then he looks at me and goes, you're standing on it too much.

Yeah, Josh. I mean, how often do you think that that guy has been waiting to say that? you know, real doctors get to constantly, like, mention it, but he only, he has to wait until someone hurts their flesh or fanciitis or whatever, it happens to be walking around at a party. I hadn't thought about it that way. I just thought about myself as receiving medical advice that I hadn't even sought. How did you tear your planter fascia? I think I did it on a treadmill. I went to Barry's boot camp and then I was sore after class and then the next day I went and I was really sore afterward. And then they thought I just had platy fasciitis, like it was inflamed.

And so what they said is, you know, activity is tolerated. So I went on a 15-mile hike in the Grand Teton's. And, you know, I did all sorts of circumstances where I was standing on it a lot and not even in one of the rigid boots. And I was also doing my physical therapy, but I was like, you know, it keeps feeling worse when I do these exercises. And so finally they sent me for an MRI, which, by the way, a foot MRI only takes 10 minutes now. They seem to have gotten better with the machines. And also, a foot MRI is good because your head's not in the machine. Once I had an MRI on my shoulder and the technician asked me, are you claustrophobic? And I said, no. And then they put in the tube and I realized that I just don't have prior experience with being placed in a coffin-like space,

which I do, in fact, find extremely stressful. But at least with the foot, you're not in the coffin. Last year, I had to go get an MRI of my head. And I was fine, but I'd like hit my head. And they were doing the thing that I, they always do, which is saying, all right, are you going to be okay. So they didn't figure out what's wrong then? Right. No. They didn't fix me. But they were there and they were holding my hand and constantly saying it's fine and I guess

I was just unafraid enough that I got a little annoyed with them and I was like just shut up. It'll be fine. I'm just here. I'm just like I'm lost in my own thoughts. Okay. It's fine. Yeah, I have to get them because I have a family history of breast cancer

and it's great because you're not only lying in a tube. wondering if you have cancer. And between those two things, it's, uh, I discovered a claustrophobia like you that I had not realized previously. It feels like on some level of an MRI should be relaxing, right? You're just like you're in the space. You don't have to do anything. All you have to do is lay there. Um, I feel like there's a part of me that I should be able to access to be like, this is a pleasant break in the middle of the day. It's nap time. Well, if I could bring my favorite podcasts, it would be fine. But the loud thumping sort of interferes with that. I like the loud thumping.

I find it rhythmic. You just go get an MRI for fun. Yeah. Let's talk about some of the news this week. I want to start with the Warner Brothers Paramount merger, the proposed merger that California, along with several other states, is suing to block on antitrust grounds.

David Ellison, son of Oracle founder Larry Ellison, who controls Paramount, Skydance, and would control the combined entity if the merger goes through, has threatened that he's going to move both studios out of California if the state of California does not agree to settle the lawsuit by October 1st, six weeks from now. And this obviously, this news has dropped like a bomb in Los Angeles where there's already, you know, tremendous retrenchment in the movie industry. There's been

the problems with movie consumption, and then also there's been productions increasingly moving out of the state of California in large part because of tax incentives that exist in other states and around the world. And so one of the questions people are obviously asking themselves is, is this threat for real? Can they really move the movie studios out of L.A.? I mean, all of the... Ben, am I thinking about this correctly? For, like, the entire history of the American film industry,

every major studio has been located in the Los Angeles area. Yeah, mostly. The reason why they're in L.A. is because they were trying to escape from Edison and its patents, and they quickly ended up in all in L.A. They did used to originally be in New Jersey. Yeah, and then they did have some in Texas and San Francisco. but then they all quickly, like, ended up in L.A.

I thought it was because the weather was so favorable in L.A. Well, it is that. I mean, there's more days that are better. And, like, the reason, but the reason why they had to leave the East was because Edison's patent enforcers were, it was harder for them to get west. But, like, the reason they chose Los Angeles over San Diego or San Francisco at the time had to do with, like, San Diego has a lot of beautiful things, but it doesn't have much a desert. And there weren't that many things there. And then San Francisco has fewer days that look like Los Angeles. Right.

But so, like, you know, how seriously do you take this threat that he could actually pick up and move them to Texas or Tennessee or Georgia or whatever? Incredibly not serious. One of the reasons is, I mean, you can definitely move some of it, right? Because also, I mean, there have been runaway productions for years. Canada has been stealing is probably the wrong word. but has been like incentivizing people to come and shoot there for a long time. Georgia does, Britain does, Utah does.

All of these places do. But the thing that like really makes it sort of impossible to imagine them doing is that you can move individual productions that can shoot in different places, but Warner Brothers and Paramount have huge numbers of like television shows that are just shooting constantly on these back lots. And those have huge amounts of the low, the line crew that are there that are all like mostly in Los Angeles and wait so sorry what does below the line mean people whose names you don't know you know it's not the important cast and it's not

the director and it's not the director of photography basically everyone else it's it's the best boy grip the makeup people the teamsters the every other thing hold on they're they're not claiming that they'll move every single production out of LA the claim is that they will move they said they would retain some presence in Los Angeles for production, but that they would move basically everyone who is like in the corporate office of the studios to wherever the new headquarters. I mean, then it's maybe more doable. You know, there's lots of in and out move their corporation to Tennessee too, right? But like even this, I feel like as a little not likely. One reason being just because people will be so mad. You know, you still have to get the above the line talent

to want to do it. Like, people have to want to work with these places. And if they literally leave, like, the Hollywood directors and producers and these, all of these people feel very strongly about Los Angeles. And we'll be just so mad about, like, the moving the corporate office there, because it's such a, the way he's doing it is so, it's so clearly, like an extortion thread, that I find it very difficult to imagine that he would actually do this for it to be worth it. But I mean, at that level, at the corporate level, I feel like you guys would maybe know more about this than me. But like, what are the corporate efficiencies that they would be able to gain there? I don't really know. It's a couple of things they're pointing to that they would, the corporate income tax

would be lower in other locations. I mean, they think the government in California is generally hostile to them and they'll find a more friendly government. And then, you know, a major reason that other companies move their headquarters, you know, out of New York and into red states is that the housing is cheaper and the cost of doing business is cheaper in a number of ways. And that actually makes it easier for them to hire people in certain industries. I'm a little skeptical that would apply to entertainment, but usually part of it is that there's actually, you know, rather than it being a staffing negative, that it can actually be positive that you're there. But Megan, what do you make of the idea that they would up and move? Very difficult. Very, very difficult. You're making

deals. You kind of want to be near the people you're making deals with. You don't want to have to fly in and out. I mean, it's, it's why Silicon Valley is where it is. It's why New York. continues to retain finance, even though by most metrics, it would make economic sense to move at this point. But they don't because you want to be able to like run over and have coffee with someone or a drink or whatever. That said, it's not as hard as it was 10 years ago. And California really is like a very hostile work environment for corporations. The electricity is expensive. Everything is super expensive. So is it impossible? No. I mean, I think like when SpaceX moved to Austin, people treated this as like, oh, he'll come crawling back and he didn't. Because in fact,

there was enough you could do in Austin that you couldn't do in California that even aside from whatever fit of peak he was having over fights with the California Coastal Commission, it was worth it to be somewhere that let him build stuff. Does that logic apply to movies? I don't know. But every company that moves makes it easier for the next one, right? Like, the hardest part is that you don't have access to talent. But, I mean, I guess that was sort of what I was wondering, you know, I mean, the California government might not be great towards corporations in general. But even when you saw during the Democratic primary for governor this year,

all of them, even the cranky, coocious ones on the left, we're still like, well, we need to be offering more tax rebates to keep Hollywood here. Like there's a, like, such a historical connection between these two that I, I, I, they, they're willing to go more and above and beyond to try to like keep Hollywood around, although Ellis may be pissing people off and maybe that doesn't work. But like, the thing that you're talking about with network effects, which makes total sense, I also think like, you know, one thing that you get when you have an industry centralized in one location like that is a history of connections to like the colleges, right? UCLA and USC. And there's all these like feeder networks that are built to then send people to, you know, agencies and they work in management companies. And there's all these things that are not just on the production sheets and in working at these exact companies that like, I don't know if you get that when you move somewhere else.

Obviously, you can fly and you can do Zoom calls and you can get, but it's different. You also get all these specialized supply chains. If you're in Los Angeles and you need some weird. costume for your filming, the house that has that costume is there. You can send an intern over to pick it up. You can't do that in Austin. But again, Georgia is really developing, Atlanta's developing a real economy around this stuff. It's probably not as, it's definitely not as deep as L.A. But the more it happens, the less control you have. And I suspect the same is true. of, look, there's now all of the, you know, they have specialized finance, the banks are set up for

Hollywood. But now that, like, you have this whole creator economy, which does related stuff, not the same stuff, and that's scattered, I don't know. I think it might be harder to hold on in the future than it has been in the past. The challenge here for California that goes beyond Warner and Paramount is jurisdictions around the world have absolutely lost their mind. in terms of their willingness to pay to subsidize film production to come there. I mean, the typical way these programs work is that you get a tax credit for a percentage of the gross cost to do a production. And that credit ends up being so large that the effective tax rate on making film and TV productions

is hugely negative. Like in Georgia, you get 20% of eligible production costs back to you as a tax credit, so you end up with this big negative tax bill. And this isn't a good way to do economic development. The states and the countries like doing this because you get to point to very specific things that happen. You point to people who, you know, this person has a job and craft service because we brought this film production to the state. And you get actors to show up to legislative hearings to talk about how great the program is and people feel very special because they met some famous actor. I mean, this is even in California just in the last few days, Noah Wiley has been in hearings testifying about the importance of California enhancing its tax credits to compete with Georgia, etc.

So you have this incumbent industry in Los Angeles that the state has reason to seek to protect. But basically, the only way that you can protect the productions themselves is by overpaying to have them in the state. My view is that other states that haven't really built this industry, the correct thing to do is not play. Don't hand out credits. Don't bother yourself that you don't have a film industry. It's a much tougher question for California because it's so central in the economy. I think that's true for most places. But my understanding is that a lot of places like Ireland, I mean, the Irish are crazy on a number of levels, but they view it as less as economic development in the film industry,

although you do have a problem of, if you're a small country and you want to have a native film theater industry, you need something for the actors to do, right? Like, Ireland has an unusual number of actors compared to, for some reason, like writers and actors where the Irish shine. but it's also that they view it as tourism, right? You are paying them to basically do a massive advertising campaign for your city. And I doubt it's economic positive anywhere,

but for some places I can see that it's probably closer to penciling out. But so like I get that like they shot all the Lord of the Rings movies in New Zealand and that created a lot of understanding of how beautiful New Zealand is and probably really did do a lot to boost New Zealand tourism. But like, did you know that they shoot the Rob Lowe game show the floor in Ireland? That show with, on Fox with like the hundred contestants, they're all standing on the squares. They have to move around and challenge each other on their specialty, you know, topics.

I did not know that this game show existed, but I'm pleased that Rob Lowe has developed a third, fourth, fifth act in his career. Is it a BBC show? Is it like that? No, it's a Fox show. It's an American show with Americans, with an American host shot in, indoors on a soundstage in Ireland that they don't like nobody knows it's being shot in Ireland. It's just shot there for tax reasons. They have to take all of the contestants,

bring them there for two weeks, put them up and like they they shoot the whole season in the two week period. But it's like that's, you know, the Irish government paid a tax subsidy and that helps the Fox Corporation choose to make this show. But it's not doing anything to encourage tourism to Ireland. In general, I'm agreeing. I just think like, you know, there's a reason that like Qatar and Dubai and Abu Dhabi have paid film to film there, because they have this very weird thing of, they currently have more money than God, but they know that eventually that oil is a declining resource, not just because you pull it out of the ground, but because the planet is trying to get away from using so much of it. And so they're trying to develop themselves as a kind of

Entropos Hub, where you get financial services, you get tourism, you get other stuff. My personal experience, albeit 10 years ago, flying through Abu Dhabi, I did really enjoy the Etihad first class experience that we were able to take because Gary Leff, who's been on the show, helped us mile run. But we were in the hotel, and I went to the concierge. And I was like, because we're just stopping on our way from Thailand. And we're like, sure, we'll take a two-day layover in Dubai in Abu Dhabi. And I was like, so what is there to do? And she said, well, there's the desert safari or you could go see the Great Mosque.

And I was like, okay, what else? And she was like, that's pretty much it. Like, there were no restaurants that were not in hotels that we could find. I'm not saying they didn't exist. But, you know, there's no local eater. Everything's very hotel-centric. So a ways to go in my personal experience, which, may be outdated now. But that, like, is this totally, a totally irrational way to spend their money?

It's why their airlines are so nice, probably, but that's not most of these cases, right? That's not why Georgia is doing this. I'd assume you're generally anti-industrial policy. This is just industrial policy for movies. This is what I'm saying. There are corner cases where I can imagine this working, where you've made Abu Dhabi and Dubai look super sexy and everyone wants to go there because they've got the big building that Tom Cruise jumped out of. But in general, this does not make sense, obviously. I mean, it's complicated. So Ireland is an interesting case because Ireland does now have this massive,

they built up like production facilities in Belfast, right? Well, Belfast is in the UK. Right, northern Ireland. But like it's where they shoot all of the House of Dragons things and all the Game of Thrones things. And because of that, all these people go because they love Game of Thrones. It's one of the few situations like Lord of the Rings, right, where it actually will attract tourism things. But you can then look at, you guys are talking about industrial policy, right?

And we have all these race to the bottoms of people doing tax incentives in various places for all this stuff. In Britain, they don't have much ability to do that at a, the country can do it. But they can't do it internally. Like a place in Wales can't really, like, compete against a place in England to do it. They don't have the ability to do those things that we do in the United States. And so when a second-tier city like Belfast wants to have an economy that is going to grow, that it's suddenly going to have some reason to exist, all of it has to be essentially decided by the government.

They have to decide to do it. And the government did decide to do that with the BBC. So they sent a built a massive production facility in Belfast and then sent a bunch of BBC television productions there and said, this is where you're going to shoot them. And it took a while, but eventually, like, those things lead to more crew members being there. It leads to all of the network effects that we were just talking about, which then attracts other, like, independent productions that can come and handle those things. But basically, like, you have in Belfast, essentially, like, a Soviet-decided economy

where, like, they, you know, it's like when they have Magnet City and they're all just going to do magnets there. And I do think, I don't know exactly the story about where Rob Lowe is, you know, and it sounds like he's in real Southern Ireland instead of... Yeah, it's the Republic of Ireland. Yeah. They are all real and they eventually will be unified gloriously. It is funny. I mean, I don't know, like, when I've gone to Toronto for in the summer, if you go to Toronto in the summer and you're on like a film set, you can literally like just walk around, like walk outside of the line of the set, and you'll just go a block. and then walk in to Alana Alda, he'll be there on his film.

And he'll go, oh, hey, nice. And then you'll walk in a couple more blocks and find, you know, Roblo on a set. Because they're all, they've all been shooting there for so long. But those are productions that are sort of like TV for, you know, like showtime shows or showtime TV movies and stuff like that. But they do it. They've always had this sort of like magnet attraction to these certain places like Toronto, which has been doing these runaway productions for so long.

For tax reasons. With Canada, it's not just. It's also that Canadian television has to have 35% Canadian content. And so if you're making something for the North American market, there's like an added kind of bonus. If you shoot it in Toronto, it counts as Canadian content, even if all the actors are American. But then what you, I feel like what you really get now with the things in Georgia and stuff are where they're actually like building essentially mini studios there.

You know, like half the Marvel movies are shut there because they built these massive studios. And Tyler Perry's operation. Yeah, exactly. And so it does lead to more. And there's one in Florida, too, that I'm which I'm forgetting. But like, none of these have ever been able to pull anything truly out of L.A. Like, they've never been able to move an entire thing out, including like, you know. You mean an entire studio? Yeah, like a huge mass. It's enough to piss people off in L.A. And it's enough to be in a serious amount of money. But it's not enough to like actually, none of these studios have ever actually moved. I mean, one of the reasons I think for that is that

the natural place that other people that above the line talented, people who matter actually would want to be as New York, and New York doesn't offer, New York is more expensive. You know, New York is, um, but it's, I also would just say, before we find from this, so I can just tell you a quick, funny story, but how, uh, serious these and, like, personalized these things get. My dad had a television show called Education of Max Bickford with he, he and Marshall Gay Hardin and Peter O'Toole. And it was on CBS, and they were going to shoot it in L.A. And they were going to shoot it in L.A. And Les Moon Viss says, we're going to do it all in L. Then my sister says, I want to move and live with my dad, but I only want to do it in New York. And my dad, in his one act of being a good father, says, all right, I am insisting on moving this television show to New York. And Peter O'Toole and Marsh Gay Harden said, great, we would love to do that. So they moved it. And so that my dad could spend 11th grade with my sister, and they shot in Silvercoat. And then it's on the bubble at the end of it. And it was doing well, but not that well.

And so CBS cancels it. And my dad's agents go to CBS and say, why? Why? And Les Moondis says, I'll tell you exactly why. Because fuck him, that's why. He made me move this to New York. We shoot these shows in L.A. And he was just so mad that that had happened. And, you know, that was 25 years ago.

It's all different. But, like, people take these things incredibly strongly. And, like, I think that, you know, my dad always thought it was so weird that it had happened. It was so, why would he get mad at us for this? but like people live in these places, you know, they all feel very strongly about it. And just picking up and moving them is a huge fight. And that's why I think like the, it's a little different than just moving the internet corporate headquarters to Tennessee.

The other thing I wonder about this is like there's an abstract question of like, does it make sense for a film studio to move out of L.A. and locate somewhere else? There's another question of, does it make sense for David Ellison to buy two film studios and move them both out of L.A. or merge them and move them out? because the weird thing about the way that this corporate drama has been floating over our politics for several years. And obviously a key political element of it is that Ellison has political sympathies with the president and the Republicans like when the news organizations become less left wing. But like he's just a guy who has a lot of money because his father made a ton of money in a completely unrelated industry. And he seems to have decided it would be fun to be a film mogul.

And Larry Ellison has also decided that would be fun and he's been willing to put up an enormous amount of capital behind that. And he's shown that if you have a lot of money, you can buy stuff. It's not clear to me that he's shown that he's any good at actually running a media organization. And, you know, he, you know, first when he got control of Paramount, they had to do a couple of big deals right up front. And one of them, they didn't get done. They'd like, Taylor Sheridan, who makes Yellowstone and like is like at the,

like the core of what IP is even valuable at Paramount, his future productions are going to NBC. And so it's, you know, the, it's not clear to me that David Ellison has particular talents about, you know, let's reorient this business in a way that makes it more efficient, more effective, whatever. I think all that we've seen is that if you, you know, if you have a lot of money, you can buy some stuff. But also like, what is a studio? Obviously, the IP is maybe, is probably the biggest part of that, but it's, you know, it's the lot. It's the executive. team, it's the relationships that they have with people in the industry. And so if you sell off the lots and make all your key people move 1,500 miles away, it seems like you'll lose some of those

key people, you'll lose some of the relationships that those key people have. And so I guess what he's bought then is a bundle of IP, but then he's probably overpaid for all that IP. It's interesting because, you know, it would make sense kind of if he if you, if he just bought Paramount and then was like, all right, Paramount, a relatively small of the major studios. And he wanted to move that one away. What is the point, though, of buying Warner

Brothers as well? Like, you can already do that. If he wants to just build something in Austin, he can build the biggest paramount lot in history there, and he can put $40 billion into it and attract all of these things. But why do you need two, and why does that, what does that get you?

If not the lot, and if not the relationships, and if not, the ongoing television productions and things that are already there. I guess it gets you Harry Potter. Right. So if I want to make the argument, and I am just playing devil's advocate here, I don't believe in industrial policy. I think people lose their heads, especially. Like, movies are the stadiums of state industrial policy, right?

Like, people just, they're like, oh, my God, I love sports, or I love movies, and we should just spend an enormous amount of money subsidizing it. I'm against that. And I don't know private and public. actors lose their heads around this stuff. Governments put stupid money toward it, and so do private investors. Yeah. But if I want to make the argument for it, what's my best argument?

It's that if you think that Hollywood is on the cusp of being disrupted by YouTube and streaming and AI or whatever, having everyone in one place also means that they're transmitting their resistance to change. Like all successful firms fail the same way, right? They get really good at doing something. They build up an enormous amount of cultural, internal cultural capital, external cultural capital with other players in the market. And then they can't adjust when the market shifts because there are too many internal constituencies who come up with a zillion reasons it's a stupid idea. who drag their feet, who refuse. And so a common turnaround strategy is that you basically try to get those people to leave your company because they're not going to be on board for the next iteration.

Right. And you can see Barry Weiss's hire at CBS in that way. It's like, you know what those people are going to hate this? Now, I don't actually, I'm not saying it was actually that Machiavellian. I think he actually doesn't care that much about CBS news. it's not what he bought Paramount for. It's not what he wants. It's not what he wants Warner for.

It's just like, I think he just thought, like, if this thing is a declining asset, it's not going to make me money. I want it to make me happy. And if it does make me money, if Barry succeeds, great. But it's just not high on his priority list. But if I'm telling the story, then the story is, look, Hollywood is, as we've seen, we have seen the union. screw up negotiations, have these strikes that hurt Hollywood without really netting people much, and that you're going to see that over and over again over the next 10 to 15 years, as everyone from the executive suite down to the best boy is desperately trying to keep

things going the way they were. And that maybe you move it because that way you're breaking that culture. A lot of people aren't going to come with you. They're going to be the people who are the most attached to the existing status economy of L.A., to the way things have always been done. And you take the people who are willing to move. Yeah, like the downside of that is that maybe those are just the people who aren't very good and they can't get other jobs, right?

This is a complicated calculation. It doesn't always work. But if I wanted to tell the story where this works, that would be the story I would tell. But I think there's a couple of really key problems with that story. this specific context. One is that if that's your grim view on the industry, that it's like deeply troubled and there's all this like existing stuff that's way less valuable than people think it is, the idea that you would get into successive bidding wars to buy two studios for more than Netflix was willing to pay for this studio. And Netflix has a very rosy view on the,

on the future of this industry. It would just seem to suggest you're starting that off by vastly overpaying for what you're getting. If that's, if your view is like everything's going to get disrupted, it would make more sense to have a smaller foothold in the industry, do something that transforms to position you well and then plan to grow rather than just like overpaid it by all the existing stuff. Okay, so number one, I think he ever paid for Warner because everyone overpays for Warner. In the history of this company, it is just its job, it exists as like the McGuffin object that everyone spends all of their time chasing. No Warner merger in the last 40 years has worked out for the people involved in it. Oh, I strongly disagree.

The AOL Time Warner merger worked out quite well for the AOL side. Yeah, sure. Warner overpaid for AOL. Yeah, fair. And David Zazlov, congratulations, dude. This is the outgoing CEO of Warner who's going to make a fortune off this. You took this disaster, and you were the guy who floated off in the last lifeboat on the Titanic. So I think he overpaid.

But I can also tell a story where, look, you know, there's the classic kind of MBA case. about cat scans. Josh, are you familiar with this one? No. Catscans. They are developed by EMI. Sorry, the record label? Yes, the record label,

which had decided like everyone else in the middle of the 20th century that what they really needed to be was a conglomerate. So they have this scientific research arm that invents the CAT scan. And then they're out of the business like pretty quickly. Why? Because GE comes in. They're not the people who invented it, but they are the people who have all of these complementary assets that allows them to monetize it.

Like they have a medical sales force that's really good. They're pretty good at producing electronic equipment, which is somewhat more complicated than pressing vinyl into records. And ultimately, they own the market for this machine. And so if I want to tell the story, Again, I am not really warrantying this story. I'm not saying, like, if you asked me what I, I am just trying to make the best case I can, is that there is a lot of value in the company, right? There is all of this IP. There's knowledge about how to light things.

We were talking when we did the pre-call, we're talking about how, like, a lot of these productions that are shot outside of Los Angeles, like the lighting's not very good, right? It takes actually, these things are these very fine-grained skills that can't be written down it's a ton of like tacit knowledge. And so you have, you get all of that stuff. You're going to lose some of it, but you're not going to lose all of it. You're still going to have a lot of it.

You're still going to have distribution channels that you can use to as you're transitioning, right? We just had a movie that was made by a YouTube guy that did bonzo business. So maybe you do more of that. Maybe you're just in a better position to do more of that. If you don't have all of the people who are like, that's not a movie. and who have stayed behind in LA. And yet you still have the IP libraries. You still have a bunch of stuff.

I think letting Taylor Sheridan go was an enormous mistake. We actually watched the first non-Taylor Sheridan successor show to Yellowstone. And by watched, I mean, we watched half an episode and we're like, this is bad. We're not watching any more of this. Same actors in a lot of cases. And the writer was like in the writer. like in the in the writer's room I believe on the original show

Taylor Sheridan just is kind of magic and like that was a mistake but there are a lot of these that may not be such big mistakes I know that we have other topics I do but before we do I do I have just a couple little bites one you have you can't you can't let Taylor off the hook for that entirely

because he hasn't left for NBC yet right he set up that room he set up that show he he did it he just doesn't like to constantly run this show still. Two, I think that this generally underestimates how difficult it is to make a movie, right? Like, people constantly say, like, how does this director who's only ever had flops keep working? Just because it's incredibly difficult to end up with a movie at all. You know, like, there's all these very huge and complicated things that have to happen for you to have anything to release. And so the idea of, like, you sort of want to push people out just because of, you know,

they had the old ways of thinking or something like that seems, I think, just to lose the fact that there's so much knowledge. It's not something that you can really just like take some Arizona film students out and be like, all right, here's some money and go figure it out. And the other thing that I would just say is that I think that, Josh, your point about why do you want to have a bigger footprint? Everything that you're describing about, like, you know, you could do all of these things. If your theory of the case is that this industry is changing so much,

you should do with just Paramount. You know, they bought that for $7 billion. You don't need to go into extraordinary debt to then buy this much bigger thing. For $100 billion. For $100 billion. For $100 billion. That you're now servicing the debt. You're dealing with all of this stuff in huge ways that in that case, then really doesn't get you

anything except for Harry Potter. And if all you want is Harry Potter, license Harry Potter. You know, like you don't need to do, you don't need to eat the whole elephant. Well, I mean, they own the licensing, right? Right? Like, you can't just be like, go to J.K. Rowling and be like, I know you licensed it to them, but now I want you to know what I mean? I mean, you could you. I think the idea is you go to Warner and offer to buy the rights from Warner.

Yeah. And I would also do you say that like Warner Brothers also, you know, it is, uh, it has all these bad assets that they were spinning off from from discovery. But like, it has been making money for, you know, it's still, it's still like a, it's not like a totally toxic business. It's like these are children like the making mittens or something. in an orphanage and we're not going to have orphanages anymore. They are still making billions of dollars a year. But yeah, I do think that like if that was the thing, then just take Paramount and do whatever you want with Paramount.

Paramount's smaller. Paramount's great, whatever. Yeah. The other reason that I'm skeptical about the specific plan to move it is that it just came out now in the context of this fight over the antitrust issue, where it's like, you know, it doesn't look like this was a long considered view of David Ellison's about like part of the strategy is move it out of California, he's trying to use it as a bargaining chip. It's almost like he's improvising right now. He didn't realize

it was going to be so hard to get this merger closed. This is a tool that is available to him to issue as a threat. But like, it should be the case that there's a correct answer about whether or not to move the business out of California, and that applies whether or not you are adverse to California on this one specific issue in the same way that like Ken Griffin got really mad about Zoran Mamdani doing that kind of tacky video talking about his Pietatera that they're going to do the Pieter Taks on. But ultimately did not back out of building the new office building that they're building for Citadel in Manhattan because the economic question of do we need this building isn't really changed by, you know, whether you're mad at the mayor or not.

Didn't Mom Dani also back off a bit, though? He backed off a bit rhetorically, but the Pieter Tacks policy didn't change. We keep seeing other very left-wing politicians with less political sense than Zaraan Mamdani has. And I've been interested in the last week about the narrow loss that we saw from Francesca Hong in Wisconsin. We talked a little bit about this on last week's show because Francesca Hong, a state representative representing like the Corps of Madison, one of the most left-wing state legislative districts in the whole country, she was running for governor and was going to have this, you know, see, can we elect a Democratic socialist statewide in a swing state? And then the last two weeks of the campaign where she was the frontrunner sort of became a festival of like all of the most outlandish things she had said over the years.

And did she really believe them, including in 2020 tweeting about how we should cancel Thanksgiving because Thanksgiving was, you know, the first super spreader event leading to, you know, the destruction of indigenous communities and folks with an X, even though folks is already gender nonspecific, even if you don't. spell it with an X. And she went on TV and was asked, do you still want to cancel Thanksgiving? And she didn't figure out that the response she was supposed to give was supposed to start with no. And I thought we were going to be stuck with her as a Democratic nominee. And in fact, the establishment in Wisconsin that had kept like tripping over its own feet through the last eight months of this campaign

finally gathered together. And the Milwaukee County executive who actually dropped out of the race was brought back in by Governor Tony Evers. They barnstormed the state together. The government or kept saying, if you nominate Fran Hong, we're probably going to lose. And that worked. She lost by like half a point. And Democrats decided that it was going to be an electoral mistake to be the cancel Thanksgiving party. Are you surprised? This is a perfect, like, central-air topic. One, because obviously, I'm quite happy that this crank lost. And that Thanksgiving has been saved for another year. Well, I mean, yes. I do think that, like, what's interesting is that the Thanksgiving part of it is the least interesting part of that tweet. Because like she says canceled Thanksgiving because it was right around in

2020 when like they meant canceled Thanksgiving dinner because it was going to spread the virus or whatever. And then she had to get little cutesy and be like also colonialism is terrible. Should have canceled it in 1621. Yeah, exactly. Which also by that, by that time, the super spreader event of smallpox started happened actually. But as you're talking about, you know, a lot of these lefty candidates, TSA candidates have history of saying all this inane nonsense that people constantly are taking. up and saying, why did you say that? And she couldn't handle it. You know, you'd watch, you'd watch her even in those sympathetic interviews with like the Pod Save guys where she just wasn't ready for prime time. But then you watch people who like this guy in Michigan, I feel like,

he's much better at talking about this stuff. Abdel Al-Saiad, the Senate nominee. Yeah. And he's had lots of crazy things hung out with Amazon 9-11 Piker and all of these things. But like he handles it in a way that it makes me much more likely to kind of roll my eyes when I see the attack ads about it in a way that I didn't with her. And to be honest with you, like, that is one that I think she just wasn't a good politician. But also, like, it's brought up this whole question of, is it an optics objection that made this woman lose? Or is it that people genuinely were like, this catalyzes a lot of problems.

problems I have with your ideology and think that, like, you have bad judgment or you have bad beliefs. And if it's that latter one, which I think it is, I think it's both maybe, but, but it's, at least in part, some of it is that second one. So you think it's not that Democratic primary voters in Wisconsin said, this can't be sold to a swing voter later? It's that they said, I personally like Thanksgiving and don't want a candidate who wants to cancel it. I think that a lot of them do like Thanksgiving and don't want to cancel it. I think that like, I think that... Most of them, I would say.

I think that like a lot of... Of course, the electability always matters, but the left always points to electability and says, that doesn't count. It's illegitimate. People don't actually believe that. But the inherent to the belief about electability is that you're going after the median voter.

And by definition, the median voter has common popular beliefs. And so I think that there are both of those things going on in Wisconsin, but I think that like the simple fact of that, being so stupid was that it is unavoidably stupid. You look at it and it's just like, this person has beliefs that I really am having a hard time wrapping my mind around. And that's, that's fundamentally different. Well, it's also like she's a total wet blanket. Like, this is one of

the things that people hated about, you know, quote unquote woke one was like someone who like every fun thing that you're interested in, they have a story about why it's actually problematic and it should make you feel bad. Right. Because Thanksgiving, cancel Thanksgiving is not a policy, statement. I mean, I guess Thanksgiving is a federal, is a government holiday. So in theory, you could have policy around it, but it's like, it's a signal of like, do we like American traditions or do we think American traditions are, you know, shitty and oppressive? And so I think- It's a policy statement for the turkeys, Josh. Why don't you check your human privilege for a

moment? Well, she's also been a like a prison abolitionist, though, in the past. So like, I assume that she thinks all the turkeys should be pardoned. That's right. They need social services. Definitely not, definitely not put in pens. Yeah, yeah. Systems of care. That's the phrase she kept using when people would ask her about, you know, do you still ultimately want to abolish the police?

She would talk about, well, you need to develop systems of care. I mean, this is like the, Momdani talks like a real person. Abdul Sayed, I think talks like a real person, although I think he comes off as a prick. He talks like a real person who has a little bit of an anger problem, which is a different way of being off-putting than the way that Fran Hong is off-putting. Look, he's more epped than Hong is, but that is like saying, I am the tallest pigmy.

Well, it's like the... Fran Hong is off-putting in the way that some people who were unpopular in high school were, and El-Sayed is off-putting in a way that some people who were popular in high school. Right. Yeah. That's a good way. But, like, I don't know how he's going to do in the general, right? Now, admittedly, his opponent is not exactly a shining star of charisma.

Mike Rogers, the Republican nominee in Michigan. But he's like generic Republican. That's better than Republicans often do choosing the Senate of candidates. Yeah, fair enough. But I also think that, like, part of it was that she had the wrong set of litmus test issues. It's not that the Democratic primary voter is just wholly concerned about electability. Or really, I would imagine wholly concerned about preserving Thanksgiving from the grasping clause of Francesca Hong. It's that now the litmus test is not being correct on the police and racial justice.

Now it's Palestine. And he's on the right side of that one and not backing off. Well, actually, I think it was data centers was the big thing in the Wisconsin race. Like that Francesca Hong was supposed to be drafting off this rising political tide against the data centers. And I think that did help her along, although not quite far enough. But Michigan's like a very weird place where you have, A, of course, all of the DSA people who are absolutely all in on Israel, Palestine, but then you also have Dearborn, which is all in on Israel, Palestine. And maybe that's enough to get him across the top in the general. I don't know. But I think he's, I don't think we know yet whether he's going to be able to turn that one around. There have been a couple of polls out in the last few days that have El-Sayed trailing,

including from Fox News, had a batch of very favorable polls for Democrats and Senate races around the country, except in Michigan where they found El-Sahed behind, even though Michigan is more democratic than, like, Iowa and Texas, et cetera. Now, he's just out of a divisive primary, so maybe he has, you know, some room to recover there. But I think that, you know, Michigan also has a substantial number of Jewish voters, a lot of whom I think were very put off by his primary campaign and especially comments that he made about that synagogue shooting that had happened in Michigan some months ago. It's not just Israel, Palestine and stuff halfway around the world. There is very much a local angle there. That's obviously usually a

democratic-leaning constituency, and that I think is going to be something of a drag on him in that general election. You know, he's promoting Medicare for all, but his wife's therapy practice doesn't take insurance. You're going to have to explain that one and how you believe with all of your heart and all of your soul in universal health care. Do people care? Yeah, they do. They don't like, I don't know how you put that an attack at in a way that's compelling. He's a populist who makes, like, a very healthy six-figure income. Look, it's not that you can't overcome that, but it hurts if you're, if it looks like it's fake, right? And that's a kind of signal that, like, oh, you really, you believe in this so much that your wife, friends a private practice that doesn't

take insurance and doesn't take Medicare. But I mean, you know, you can say we're all operating within a broken health care system. I mean, and you can also say, you know, my wife runs her business and I don't tell her how to run her business. My therapist don't even take insurance at all. I don't deal with them myself. But like, I do think that unless he's already on the record saying all doctors and all providers must take Medicare as currently written, then I don't think there is a hypocrisy here. He wants to entirely change the system. That is what Medicare for all is. But he wants to entirely change the system for it to be that. He's not saying that personally he wants everyone to have to take it today.

Well, but part of, that's what Medicare for all is, is that everyone has to take the below market rates that Medicare pays, which is why his wife doesn't take it. Well, Medicare for all is whatever one feels. Yeah. I mean, he's already been, you know, like the talking about how this is, you know, an aspirational thing. They're sort of talking about it like the way that they talk about police abolition. And this is, I mean, this is driving Madaglacia is nuts because. is in the in 2019, when you had the whole Medicare for all wars, people would attack you as some sort of sellout if you didn't want a system that was far more comprehensive than Medicare or any actually existing socialist system around the world.

But I think that I think we've seen in this campaign, people are not as interested in litigating the details of health insurance policy as they were eight years ago. The politics have moved on from this to a significant extent. And you really can fudge it. And that, you know, it's creating a floor rather than a ceiling. you know, there would still be private. So maybe, you know, maybe if, now that his vision entails private plans, maybe that does mean that you have psychiatrists who are not taking the main plan, even in his view. But I just, I, like, I really don't see this as in the top 10 of his campaign problems. I don't think that, like, so what are the top 10?

Well, I mean, I think that he has, I think that there are a lot of voters. That's it for this week's free episode of Central Air. If you want to hear my answer to Megan's question about the top political risks to Abdul El-Sayed and Democrats trying to hold that Michigan Senate seats. If you want to hear about what characteristics in politicians most derange the other side of the aisle, an update, unfortunately, on the Jason R. Day story. And during our cocktail hour, we discuss, are there actually good officials in the Trump cabinet? We each give our nomination for who's doing the best in that field. And I think we came up with maybe like one and a third cabinet secretaries who are doing a good job. So if you want to hear all of that, go to

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