Morning Brew Daily - Disney and YouTube Are Beefin’ & What’s Behind the ‘K-Shaped’ Economy?

Episode Date: November 3, 2025

Episode 705: Neal and Toby discuss the ‘k-shaped’ economy where wealthy Americans are spending like nothing’s wrong, while lower-income earnings are pulling back their spending. Then, Disney pulls its content off of YouTube TV as content negotiations go south. Also, CEOs from Nvidia, Samsung, and Hyundai were spotted eating fried chicken in Seoul, which sent fried chicken stocks flying. Also, Egypt unveils its $1 billion Grand Egyptian Museum, aiming to be the best museum in the world. Finally, what you need to know in the week ahead.  Learn more at usbank.com/splitcard  Get your MBD live show tickets here! https://www.tinyurl.com/MBD-HOLIDAY  Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here:⁠ ⁠⁠https://www.swap.fm/l/mbd-note⁠⁠⁠  Watch Morning Brew Daily Here:⁠ ⁠⁠https://www.youtube.com/@MorningBrewDailyShow⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Many employees can't afford a hefty medical bill that pops up out of the blue. But it happens. And employees who are financially stressed are, understandably, more likely to be distracted at work, costing their employers greatly in lost productivity. Luckily, AFLAQ plans help with out-of-pocket expenses not covered by health insurance and can be offered at no direct cost to businesses. Learn more at aflac.com slash morningbrewerdaily. That's aflac.com slash morning brew daily.

Good morning brew daily. show. I'm Neil Fryman. And I'm Toby Howell. Today, the economy is bifurcating into the have and have nots. Then Disney and YouTube TV are beefing, leaving sports fans to suffer. It's Monday, November 3rd. Let's ride. Good morning and hope you soaked in your extra hour of sleep yesterday. You probably needed it after Halloween took a toll on the body. Here's a cool anniversary that happened over the weekend. Sunday marked 25 years of continuous human presence in space. November 2nd, 2000 was the day the crew of Expedition 1 entered the International Space Station, and since then, there's always been at least one human living in space. All told, more than 280 people from 27 countries have rotated through the space station,

conducting scientific experiments in microgravity, and doing the more pedestrian chores required to keep up a facility that's as big as a six-bedroom house. But Toby, this house is kind of falling apart. I'm getting a little emotional here thinking about how the ISS is on its last legs. it is Joe Flacco up there. NASA is going to keep operating it until the end of 2030, at which point they are taking it down, which led me down the rabbit hole of how do you get a station

the size of a football field out of orbit. And the answer is, you do deorbit it. A burly SpaceX Dragon Rocket is going to drag it out over a specific part of the ocean and crash it into it, specifically at Point Nemo, aka the spacecraft cemetery, aka the most remote place on Earth. It is 1,700 miles away.

from the nearest land on any side. So not a lot of chance of debris hitting anyone. But yeah, pouring out for the ISS. Joe Faco is playing well right now, though, so hopefully it finishes strong too. And now we're from our sponsor, US Bank. This one's for all the pet parents out there. Remember the last time your dog or cat

ate something they shouldn't have and the panic trip to the vet? With a little rest, your pet was fine, but you got stuck with an unexpected bill. You don't have to pay that vet bill out of pocket. Introducing the US Bank Split World MasterCard, a new type of card that lets you pay later on every purchase. With a split card, all purchases are automatically divided into three payments

and place into a payment plan to be paid back over three months. And if you're looking for additional flexibility, any purchase over $100 can be extended to six or 12 months with equal monthly payments for a low monthly fee. So whether you're covering an unexpected bill or splurging on concert tickets, pay later on every purchase with the U.S. Bank split card. Learn more at usbank.com slash split card.

That's us, usbank.com slash split card. If you were to give the U.S. economy a grade for the year so far, you wouldn't give it an A or a B or even a D. You'd give it a K. Over the past few weeks, evidence is mounting that the economy is shaped like a K. Wealthy Americans are in their boom times, while those at the lower rung are seeing their prospects deteriorate. This earning season, companies across industries have described what they call a two-tiered economy. Chepotla cut its revenue forecast for the third time this year because people making under $100,000 who account for 40% of its sales are increasingly eating in. CEO Scott Boatwright said, we're not losing them to the competition. We're losing

them to grocery and food at home. And so that consumer is under pressure. They feel the pinch and we feel the pullback from them as well. Over in the footwear aisle, Crocs CEO Andrew Reese has also noticed a bifurcation even among people who love ugly shoes. He said there's a portion of our North American consumers that are highly affluent. They're buying Crocs. They're buying other high brands and they are in great financial shape, but there is a large portion of consumers who are nervous, they are in less good financial shape and are being super cautious about their spending and certainly spending closer to need. Hilton reported a revenue drop for its affordable brands like Hampton and Homewood Suites, even as more luxury hotels are seeing insatiable demand.

Toby, welcome to the split-screen economy. Yeah, you can call it the K-shaped economy. I'm also looking at the barbell economy because we are seeing both sides of the extremes performing relatively well. I look at Coke's recent earnings and they said, yeah, Topo Chico, Fair Life, these premium brands are killing it. But also we're seeing an uptick in dollar store purchases as well. So it is really the middle of the economy that's getting hollowed out here where those consumers are having the most pressure. You're either dropping down into that income bracket where you are shopping maybe at more dollar stores or you have enough income coming in that you can splurge on these premium bands. So yeah, whatever you want to call it, bifurcation is probably the word of the day.

We're going to say it a lot because it does look like the economy is diverging on two pass right now. Yeah, this really came into the consciousness a little earlier this year over the summer when there was this report by Moody's analytics that showed the top 10% of earners in the United States accounted for 49.2% of all spending nationally in the second quarter in 2025. And that figure had been around 40% in the 1990s. So to see that creep up from 40% all the way to 50% of spending by the top 10% of earners, kind of got everyone on notice that this economy is splitting into have and have-nots. And one industry we haven't mentioned yet, but is always considered a canary in the coal mine for these kind of things, is the auto industry.

The repo man has never been busier. An estimated 1.73 million vehicles were repossessed last year, which is the most since 2009. And whenever you hear something say, you know, this is the most X since the year 2009. You know, that's never a good sign for the economy. according to JD Power, nearly one in seven car buyers, now is a credit score below 650.6.4% of subprime auto loans were at least 60 days past due. So repossessions are ticking up, and that is often seen as a canary in the coal mine for lower income people because they prioritize auto payments above all else because that's how you get to work. So that is a critical

need that you're seeing a lot of low income people fall behind on payments. And if you're maybe rolling your eyes and saying Toby Neal, of course, this makes sense. Of course, higher earnings are spending more. Of course, people who have a little more pressure on them are not spending as much. This actually was a economy that got closer together coming out of the pandemic because stimulus checks hit. It boosted lower income households. Wages were outplacing inflation for the first time in a while. There was low interest rates. The wealth gap actually shrank a little bit. But then after that period of COVID, after the stimulus checks faded, benefits rolled back a little bit,

mortgage rates started to surge. It did feel like the economy started to diverge again. So there was a brief moment in time where it seemed like the wealth gap was shrinking a little bit and things were briefly flattening out. But now it looks like we are back on that path of divergence right now, that bifurcation that we're seeing in a lot of industries. If you're a YouTube TV subscriber and tried tuning in to Thursday night football or catching Alex Earle on Dancing with the Stars,

you are in for a confusing night. A scroll through YouTube TV found no SPN, no FX, no Disney channel, just a message saying Disney had pulled its content. Behind the scenes execs at YouTube TV and Disney have been trying for months to hash out a new deal over how much YouTube would pay to carry Disney's networks. But negotiations collapsed after both sides accused each other of brinksmanship. Disney says YouTube is refusing to pay fair rates, while YouTube is countering that Disney is clinging to an antiquated model,

forcing users to pay for dozens of cable channels. They never watch just for access to ESPN or ABC. ESPN is the crown jewel of Disney's portfolio with all the live sports it brings. This is also exactly why Disney thinks the blackout gives it leverage, because good luck getting in between SEC fans and their football. Disney turned up the pressure over the weekend to when they aired college game day for free on Pat McAfee's X account, peaking at 3.2 million viewers in its final hour for the most watched Week 9 broadcast

in the show's 37-year history. But YouTube TV is no slouch and has gone from Upstart to the number three overall pay TV provider in America, giving Google negotiating pattern here as well. The real losers here, Neil, are pretty much everyone

because nearly 10 million people can't watch a major chunk of their sports. ESPN is losing a major distribution channel and YouTube TV will likely see some churn if they can't figure out a deal soon. This is one of the most prevalent things that happens in the media industry is the distributors like YouTube TV or Charter or Comcast

facing off against programmers like Disney who, and they just have constant disputes about what are called carriage fees about how much this content is worth paying for. And YouTube TV, as Wall Street Journal notes, has become the 800-pound gorilla in the media business because as all of those other companies like Comcast and Charter are seeing people cut the cord, YouTube TV is growing like a weed.

It's number three right now. It's going to be number one. the next few years. And Disney is just the latest dispute that YouTube TV has had. It's gone to war with Comcast. It's gone to war with Fox. It's gone to war with Univision over the past few months, over these carriage fees, over these distribution fees. And so these two sides really hate each other. These media companies are pretty ticked off that YouTube has this growing cloud and this growing power power that it's able to throw around with a lot more weight than they're used to. And it is just a power struggle here. Both are trying to say like, hey, we don't need you. We can

survive without you. YouTube TV saying, hey, we'll chop off some of the cost for your monthly subscription if we can't reach a deal with Disney trying to show its customers like, hey, we will pay back your price you're paying, but also telling Disney like, hey, we don't need you. Like customers will keep paying our price. We'll just lower the price a little bit. But then Disney comes around and says, actually, we can get viewers without your distribution platform. Like, we'll literally just put it on Pat McAfee's free X account and people can go watch it there. So they're both trying to angle themselves as it's almost like who's winning in a breakup. Like, I don't need you. I'm doing just fine without you. So you're seeing it happen in real time.

It really used to be traditional TV distributors used to hold all the cards. Now YouTube, Roku, Amazon, they are controlling more distribution so they can kind of shape the terms that pressure those content owners. So I do think that Disney is kind of looking at YouTube saying, like we don't want it to become too powerful an entity in the entertainment industry right now, which is why we're seeing so much pushback. And a lot of the criticism from Disney from Comcast over these disputes has centered on YouTube's owner, Google, and they're framing it in terms of, you know, this same way maybe an antitrust prosecutor or Lena Kahn would frame it.

They're saying it, you know, Google has a $3 trillion market cap. It already controls what Americans see online through search and ads. Now it wants to control what we watch. That was literally what Comcast said about YouTube. So they're going fully in a con on YouTube saying, you know, they are under the ownership of Google who already controls so much of what you see on the internet. And now they want to be your de facto TV provider as well. We, you know, we upstarts. We, you know, small Comcast and Disney need to put an end to this massive monopolization of entertainment.

Meanwhile, Disney has their own, you know, live sports vehicle that they're definitely trying to promote here as well. Hulu has live sports. That is the business that they want to attract more customers towards. So maybe in this scenario with this dispute going on, they're saying, hey, you can't get our stuff on YouTube TV right now. Why don't you come into our ecosystem? Why don't you come into our lovely wild guard? And so, yeah, you're right. No one is necessarily innocent here in any sense of the word.

They both have, you know, some financial incentives on the line. Moving on and welcome to our winners of the weekend, the segment where Neil and I pick two things that had a better weekend than everyone who PR'd the New York City Marathon. I won the pre-show game of who can make the best sign to cheer, runners on, so I'm up first, and my winner of the weekend is anything that comes out of or goes into Jensen Huang's mouth. By now, we all know the king-making ability Huang possesses with any Nvidia earnings call or announcement having the potential to move markets. But this time, it was Huang's dining habits that sent stocks soaring. Photos of the Nvidia CEO,

clinking beers and eating fried chicken with the CEOs of Samsung in Hyundai at a restaurant called Kanbu Chicken in Seoul, South Korea went viral over the past few days, and and rippled through financial markets. Kanbu isn't even a publicly traded company, but Korean investors went full game stop and just started buying any stock even remotely connected to fried chicken. A rival chicken chain jumped 20% at one point. A poultry processor triggered a trading stop up over 30%

with 200 times normal trading volume, a company that makes chicken frying robots also spiked. It was a good time to be in the actual restaurant itself too. That's one of the three quietly paid the eight. $1,800 bill for everyone dining inside. What did Jensen have to say about it all? I love fried chicken and I love beer and I love fried chicken and beer with my friends. Neil, this makes whatever mean stock booms we have had in the U.S. pale in comparison.

Man, he's all, is like a lot of us except a lot richer. I know this happened also in August when shares of a South Korean pen maker, Mon Ami, spiked after President Trump praised the South Korean president's pen during their first in-person meeting at the White House. So, there is a certain meme stock flare to the South Korean stock market. But overall, we should zoom out, the South Korean stock market has, besides fried chicken and pens, has been absolutely booming this year. It's gained more than 66%.

It is by far the best performing stock market of all wealthy countries. It's outperforming the S&P 500 by 49 percentage points, which is the widest margin in two decades. That has a lot to do, not with fried chicken, not with pens, but with South Korea's flexing in the memory chip space. It's got two companies, Samsung and SK-Hinix that are absolutely booming right now. Samsung's up 90% SK-9x as more than doubled because as much as we talk about Nvidia and AMD and other companies that make these GPU processors, Samsung and SK-Hinix are really, really good at making memory chips, which go into all these data centers and it all fleeds into the AI boom. So the South Korean stock market is doing absolutely amazing.

And it is a unique stock market in the sense that retail traders make up the majority of trading volume. So things like memes or things like, you know, dinners with other CEOs can move the markets more so than maybe a giant sprawling mass where there's so many, you know, institutions involved in the U.S. stock market. So they do have a little bit of that meme stock flare to it as well. And also, just in general, it is almost like seeing multiple celebrities eating dinner at a restaurant. you do not see these Korean business leaders in particular out much. So to have them in the, it was definitely like a photo op scenario. They sat right by the window. They wanted reporters and people to see them.

But it was kind of a fanboy moment for some people just seeing these three very powerful business leaders all sitting and doing something that everyone's done before, which is, you know, share some fried chicken and some beers with your friends. All right, we're going to take a quick break and come back with Neil's winner the weekend. My winner is Egypt, which held the grand opening for the $1 billion. dollar Grand Egyptian Museum, the largest museum in the world dedicated to a single civilization. Too soon? Definitely not. This complex was first announced 32 years ago, but suffered a series of delays from wars and COVID. Now that it's finally completed, Egypt is hoping you'll come, spend a lot of

money, and supercharge its tourism industry, which it aims to double by 2030. And once you hear the details, there's a good chance you'll consider visiting, especially if you're proficient in hieroglyphics. The Grand Egyptian Museum is an archaeological paradise displaying more than 50,000 artifacts about life in ancient Egypt. To put that in perspective, the Louvre has 35,000 items on display, and if you spend one minute looking at each piece in the Egypt Museum, it would take you 70 full days. But of course, there are some highlights. Those include a 3,200-year-old, 36-foot-tall statue of Ramsey's II, a 4,500-year-old boat belonging to King Kufu, who was thought to have built the Great Pyramid. and for the first time, all of King Tut's collection has been gathered under the same roof. Toby, it's an interesting juxtaposition because by looking to its past, Egypt's setting a vision for its future. I think Egypt has seen Saudi Arabia and Qatar kind of leaning into some of their cultural heritage as well,

or just using cultural mega projects to try to make tourism a major industry for it. So I think they're seeing these artifacts as assets in a way because, I mean, I'm thinking about IP in general. like you can obviously create your own with Disney or something like that, but Egypt has the best IP in the world that you just look out there, there's pyramids out there, so they're saying, hey, we can lean on this, we can use it to power our modern economy right now and lean more into tourism as well. And this place, frankly, just seems absolutely awesome. Just the sheer scale of it, I mean, I've been to the Louvre and I've seen just how many things are strewn throughout that. What do you mean that this has more artifacts, more things to see than the Louve itself?

So it just goes to show you how big of a project this actually was. Yeah, the subject matter spans 7,000 years from prehistory to the end of the Greek and Roman eras around 400 AD. So there's a lot of content, but you're not going to be reading boards the way you would at a normal museum that's existed for a while. The museum CEO said, we're using the language that Gen Z uses. Gen Z doesn't use the labels that we read as old people and we rather use technology. so they are going to stuff this thing with technology, with mixed reality experiences. So you can learn about ancient Egypt, maybe a little different way than just reading some placards in a museum. More dynamically. And then what is the update with the Louvre?

You were dressed as the Louvre robbers for Halloween, Neil, which... Super original. It's super original. I saw a couple of them out there. But yeah, give us a little update on what's happening with the Louvre. All right, so they've arrested four suspects in connection with the heist of the Louvre Museum. and, you know, the question was, where are these criminals from? Are they part of a global crime ring? Because it seemed like a semi-sophisticated operation to get these crown jewels out of this museum, which is the most guarded in the world, the biggest art museum in the world.

But no, the authorities are saying that they're not professional criminals at all, just like really small-time local criminals who kind of botched a lot of this. They still haven't found the jewels, but they have arrested four people in connection with the robbery. They say there's a couple more people that they're looking for. It's Monday, so here's your preview of the week ahead. There's lots of high-stakes events, beginning with Election Day tomorrow. While it's an off year before the midterms, there's no shortage of key races.

First up, the largest city in the country, New York, will get a new mayor. Zoran Mamdani, a Democratic socialist who's drawn global attention, has a big lead over former governor Andrew Cuomo, despite, or maybe because of, lots of billionaire opposition to his campaign, which seeks to raise taxes on corporations and eliminate bus fares. Elsewhere, Virginia will elect its first female governor as Republican Winston Earl Sears faces off against Democrat Abigail Spanberger. There's also a governor's race in New Jersey and a big redistricting vote on the ballot in California. Yeah, off-year elections tend to swing against the current party in power.

Virginia's governor race, for instance, has gone to the opposition party in 11 of the past 12 cycles. These elections are sometimes less about the individual candidates and more about testing, you know, voter attitudes towards current leadership. So that is generally what you get when you see a off year when there's not midterms on the, on the ballot. The New York City mayor race certainly seems to be about the people involved, though, and we'll be absolutely watching that tomorrow. Then on Wednesday, attention will turn to the Supreme Court, which will hear oral arguments about whether President Trump's reciprocal tariffs are legal. Specifically, the nine justices will decide whether Trump has the authority to impose tariffs under the International Emergency Economic Powers Act,

something no president has done before. It's a landmark case that will have huge ramifications for the world economy. If Trump loses, the U.S. may have to refund $90 billion to companies that have already paid tariffs this year, not to mention shaking up global trade. Trump himself called it one of the most important cases in the history of our country. I mean, I don't think I disagree with that assessment. A couple ways the court could possibly rule here. One, they could say that a trade imbalance doesn't mean. mean an unusual and extraordinary threat, so you can't even invoke this act. One, you could say that tariffs are not listed as tools under the IEPA, so Congress is the ones that are supposed to

deal with explicit tariff statues. Or the third interpretation is just that the court could allow the IEPA actions only if directly tied to a specific foreign threat, so you can't just do blanket global tariffs. So I think you are going to be hearing us utter the letters IEPA a couple times over these backs few days because it is just such a consequential case. On Thursday, the future of Elon Musk at Tesla could be decided. I said these events were high stakes this week. When Tesla shareholders will vote on Musk's proposed $1 trillion pay package, Musk has threatened to leave the company or at least step back significantly if it's not approved, saying he wants more skin in the game to transform Tesla into an AI and robotics powerhouse.

Tesla chair Robin Denholm, who's been pushing for this pay package, said that Tesla is prepared to name a new CEO from within the company should Musk pack his bags and go. But I shudder to think of Tesla's stock price if this thing doesn't pass. Yeah, we were talking about how much would Tesla fall in a single day if it doesn't pass? There are some major people rallying behind it. I mean, Kathy Wood of Ark Invest, who has the largest holding, or it's Tesla is our largest holding is saying, hey, we are confident it's going to pass. We do think that there's super exponential growth on the horizon. Dan Ives, big Tesla bowl says that he'd want to. He wants to keep Musk focus. He wants this plan to pass. But then there's other people who are

against it. The New York State Retirement Fund, which owns $1.7 billion of Tesla's Sox, says that the board has shown an alarming lack of independence. So there are some louder voices, mainly from some of these American Federation of Teachers, CalPers, which is California's public employment's retirement system. These big institutional investors are pushing back against it saying that we don't necessarily want Musk to have as much sway over the company as he currently has. The government shutdown could set a record this week. If it lasts until Wednesday, the current shutdown will hit 36 days becoming the longest in American history. Odds are that will happen with lawmakers still at odds over extending Obamacare subsidies. The impacts are starting to add up with more federal employees missing paychecks, airport delays racking up over absentee air traffic controllers, and snap payments not going out to the tens of millions of people that rely on them for food. On Friday, two judges ruled that the government needs to use contingency funds to make at least partial snap payments. And yesterday, Treasury Secretary Scott Besson said that

some money could start to flow on Wednesday. Yeah, we are seeing a lot of these leaders kind of come out and start to say, what is going to happen with so many of these industries that are affected by the government shut down? I mean, at least Transportation Secretary Sean Duffy said that he would not fire any air traffic controllers who weren't showing up to work. He did say that we will slow down air traffic. You will see delays. So it feels like we're saying a lot of the same story of like, What's going to happen with snap? What's going to happen with air traffic controllers? Until something happens in the government, the answer is not a lot because there's not much

you can do when, you know, the government is not open. And prediction markets have this thing lasting at least 41 days. So going into next week. Finally, in sports, Los Angeles Dodgers will hold their victory parade today after their wild win in Game 7 of the World Series on Saturday night. It was the franchise's ninth World Series title and the first back-to-back winner since the 1999-2000 Yankees. Meanwhile, the road to the final four begins today when the college basketball season tips off.

Purdue enters the season as the top ranked men's team and defending champs Yukon start off as the top dog, or should I say Husky, for the woman. One of the texts I got over the weekend was, is baseball always this fun? Because this was an incredible baseball series. A lot of people who are not baseball fans were saying, wait a second, I might give this another chance just because of how many electric moments there were. And then, yeah, NCAA tournament, very excited. I'm big March Madness, guys. So I'm already starting to take notes. Jot down who I think is going to make a deep run this year.

All right, that is all the time we have. Thanks for starting your morning with us and have a wonderful start to the week. For any feedback on the show or you just want to say hi, send a note to Morning Brew Daily at Morningbrew.com or DM mouse on Instagram at MB Daily Show. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lou is our producer. Our associate producers are Olivia Graham and Olivia Lake.

Hair and makeup is letting the microwave clock ride an hour ahead until March. Devin Emery is our president and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.