The Best One Yet - 🐉 “Games of Thrones vs Lord of the Rings” — Biggest Budgets Ever. Estée Lauder’s Lipstick Index. Manchester United’s Mis-Valuation.

Episode Date: August 19, 2022

Game of Thrones and Lord of the Rings are about to drop new series with the biggest price tags in entertainment history: $40M per episode… and that budget explains everything. Estée Lauder’s lipstick sales reveal a problem with the whole economy. And Manchester United may be the most undervalued sports team on Earth.$MANU $EL $AMZN $WBDFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

I think the tallest point in the state of Florida is like 28 feet. Below C-level. That is classic you. You got something just like quick and absurd to make me... I try to think of what's the opposite and what's extreme. That's our formula, people. Pretty simple, actually. Jack and I look at what's the opposite what you'd expect?

And then we blow it up. All right, there we go. Three. Two. This is Jack. No, it's a negative thing. Here we go, three, two. This is Nick. This is Jack.

It's Friday, the real Friday, August 19th, and today's pot is the best. One, yes. It's a T-boy, baby. Oh, yes, it is. More than any other pot. More than any pot we've ever done, it's a total T-boy. By far. First story, what do we get?

While we're on vacation the next two weeks, Game of Thrones and Lord of the Rings are relaunching new series. But one number tells us everything that we want to know, and that number. budgets. For our second story, Estee Lauder's makeup sales reveal something strange about this economy. Jack, it's time for us to talk about the lipstick index. Our third and final start, Elon Musk wants to buy Manchester United. He does. Actually, he was just kidding. Well, you know what? Isn't a joke? A Manchester United's valuation.

But before we hit that wonderful mix, Yeties. No one is doing this mix in the entire news industry, Jack. We're the only people doing this mix today. We guarantee it. Ish. Kind of. We're sure. Yetis, run over to Nike's headquarters and knock on the door. Everyone is MIA. Open the door at any Nike office worldwide today. Nobody's home. You send an email to anyone at Nike worldwide today.

You're going to get an out of office. Nike is supposed to just do it. But the whole company is just doing a vacation. That's right, Yetis. Nike is trying out a new thing. Yeah. Summer break. It's a week long and everyone has to take it.

Nike, they shut down their whole office this entire week. Not too shabby. If LeBron shows up demanding a new headband, he's going to have to band it himself. Tiger Woods, you got to tie your own shoes today, buddy. It's unprecedented. Oh, there is no precedent, Jack. And Nike's not the only company demanding that all hands be off deck. Bumble shuts the whole office for a whole summer week.

LinkedIn locks out the whole office for a whole summer week. And this podcast, we're muted our microphones for the next two weeks. I am loving this mandatory rest of relaxation. Yeties, we're going to miss you. This is our last pot until Tuesday, September 6. I'm faring off to block out. Yeah, Jack's going to the smallest place on the smallest state. And Nick is flying over to Italy.

Besties, if you got a good gelato spot in Milan, per favor, let us know. We are going to miss you until we see you again on Labor Day. But Jack and I, every summer, we gotta rest our vocal cords. Every summer, we take a moment to relax our larynxes. Every summer, we got to detoxify the takeaways. Yeties, we hope you get to enjoy some vacation too. Whether it's company-wide or just you. In the meantime, slap on that sunscreen.

Maybe it's Trader Joe's. Jack, let's hit our three stories. be at front with you. August, great month for birthdays, pretty slow month for everything else. Yeah, it's not a fast news month. Like most CEOs, they're sitting in the Hamptons right now, honestly. So it's a slow time for stocks. It's a slow time for news. This is actually why we take this time of year off. But this year, it's different for one particular industry. For the TV industry. Because August is turning out to be an incredibly fast time for new TV shows. Oh, Jack, circle the calendar this Sunday, August 21st. Do you hear that? What is the?

What's that coming around? It's a roar. Game of Thrones returns with House of Dragons. Jack, you're going to have to brush up on your high Valerian. If you've been asking, where are my dragons? The answer is HBO Max tomorrow. But here's the wild thing, Yetis. It's not just the Targaryen Sacken Kings Landing.

The hobbits have some FOMO too. Two weeks later, September 2nd, Lord of the Rings returns with a whole new schmovie. After an eight-year hiatus, Gandalf is back. He's throwing that gown back on. You can all pass. If you've been asking, where's precious? The answer is Amazon Prime video. 12 weeks of rehearsal, and that's what we get, baby.

And yet he's, this is big. Because Game of Thrones and Lord of the Rings are two of the most valuable franchises on the planet. Jack, you're right. We're talking A-list IP up there with Star Wars, Harry Potter, Dancing with the Stars. So HBO and Amazon spared no expenses with these series. Oh, get this. HBO spent a reported $200 million on this new Game of Thrones spin-off movie. That's $20 million per episode to recreate all those blonde-haired kings and queens and fire-breathing dragons. Okay, sit down, stand up, sit back down again. We're talking $200 million.

That is three times more than the entire first season of Game of Thrones. Yeah, and it's also on par with blockbuster movies that go into theaters. Okay, Titanic and Avatar, both of those cost about $200 million. to produce. But here's the even more wild thing. This is shocking. Amazon's production power puts Game of Thrones to shame. Bezos is dropping nearly half a billion dollars on Amazon's Lord of the Rings magic. Nearly half a billion dollars. This Lord of the Rings season caused more to produce than any TV series or any movie ever. Okay, this Lord of the Rings TV series was $400 million to make. That ties it with Avengers endgame, the blockbuster movie,

bigger than any movie. So much money is going into this that Ned Stark should come back from the dead and demand payment. Jack, if a real White Walker doesn't like walk in our living room when we're watching this, I'm going to be disappointed. I'm going to be pissed. I'm not going to be happy. Where is my white walker? John Snow, you still know nothing. So Jack, what's the takeaway for our buddies over at Amazon and HBO? Budgets reveal everything. Yeties, both budgets are huge. But Amazon's budget, it's double HBO's. And that's That difference reveals everything. First, it reveals that tech companies don't need streaming to be profitable.

Apple and Amazon, their goal with Apple TV Plus and Amazon Prime Video, it is brand love. Yeah, the goal for Amazon is for you to love Lord of the Rings and then associate Lord of the Rings with Amazon the brand. But for media companies, it's different. They don't need love. They need money. They just need money. HBO is owned by Warner Brothers Discovery, a publicly traded media giant with a huge amount of debt. House of Dragons needs to make cash for HBO now.

And keeping costs reasonable is important for them. So the big tech budget, it doesn't matter. But media companies' budgets, that does matter. That's why Lord of the Rings' budget is double Game of Thrones' budget. Budgets reveal everything. For our second story, Jack, night serum or day serum? Both. Exactly.

Answer is Dewey. My answer's true. You're like this or that questions tend to be both. You seem to have caught on. Robin Bros. Second story, Jack, Estee Lauder, the icon of beauty. They just fell after their earnings report. But Estée Lauder's lipstick sales may predict what happens next in this economy. Okay, we're just going to put this out there. Estee Lauder has been smelling good for 76 years. They're the fourth biggest beauty company in the world.

Now, Estée Lauder, the name, it sounds as French as a croissant, but actually they were founded and they're based currently in Midtown Manhattan. And for Estee Lauder, it's not Hot Girl Summer. No, the last three months, revenue over at Estee Lauder slipped 10%, $3.6 billion, and profits, they fell to him. But this is a publicly traded $100 billion beauty behemoth, and they're not worried. No. In fact, Jack and I jumped in T-Boy's style to the earnings call, and we notice they have, like, a quiet confidence. Yes, and the reason for Estée Laudor's Sultry Swaggerneck? Yes, Jack? It's the lipstick effect.

Maybe it's her. Maybe it's Maybeline. Oh, it's the lipstick. Yeties, not just some crimson cosmetic concoctious. Lipsick is an economic indicator that professors should pay attention to. They should. Yeah, they should. Here's the lipstick effect. During an economic downturn or a recession, you typically buy less stuff. Exactly.

Right, Jack, you're going to protect your finances. So, like, now's not the time to splurge on that hot tub for the patio. Here's the lipstick effect, though. Makeup is an exception to that rule. Yeah, this is what Jack and I find fascinating about this. You buy fewer big ticket items, but you buy more beauty items. So you're like, you're saving a thousand bucks, not buying that Sony TV.

So you're sad. But you saved a thousand bucks. So you feel like you can indulge in some new eyeliner. Maybe a day serum and a night serum. Yeties, when there is economic uncertainty, there is a desire to buy cheaper things, but ones that make you feel good. You're looking for good vibes, but affordable good vibes only. Exactly.

S. S.A. Lauder, they call them tiny pleasures. Tiny pleasures. You didn't get a raise because it's a recession, but, you know, you deserve to go to Rev. Jack, we skip the Macy's. I don't know. Maybe I'll hit the Mac counter instead. Well, Estee Lauder reported that lipstick and fragrances, two tiny pleasures, were flying off the shelves last quarter.

In fact, Estée Lauder predicted three to five percent sales growth in the coming year because people are going to buy those tiny pleasures. You're going to load up on lipstick. And the tiny pleasures make up for people's lack of super splurges. And that is the lipstick effect. So, Jack, what's the takeaway for our buddies over in the makeup industry? The lipstick effect has a dark side too. Okay. So, Besties, on a micro level, that lipstick effect is fantastic for Esté Laude.

Even if we enter a recession, Estée Lauder can depend reliably on those lipstick sales. But here's the problem on a more macro level for the whole economy. That lipstick effect could be an early indicator of a recession. We just got word that total retail spending in the U.S. in July was flat compared to June. It's not good, but it's not a recession either. But you know what, Nick? Estée Lauder first noticed this lipstick situation in the United. the 2001 recession. Yeah, they coined that phrase, the lipstick effect leading up to that recession.

The economy was down in 2001. Lipstick sales were up in 2001. So great for Este Lodder, that lipstick sales are selling out. But it may be a bad early sign for the economy overall. Now, a word about our sponsor, Robin Hood. You know, honestly, your salad, it says so much about you. Nick, you like to blaze your own trail at the salad bar. I'm ordering a salad. I go off menu, like a combo of kale and croutons that has never been made before. Me? I'm not reinventing the wheel. I like to go classic. If Sweakerian thinks it's a good combo, Jack's not going to change that. Kind of like investing strategies.

Someone to build a custom portfolio of stocks, crypto, and options. Others don't want to reinvent. Just give me the most standard ETF. Whether you're tweaking your one-of-a-kind portfolio every day or prefer a more hands-off approach, Robin Hood has the tools. If you're not investing on Robin Hood yet, to get started, go to robinhood.com slash T-boy to choose your free stock. That's robinode.com slash TBOI. Limitations apply. Stocks offered by Robin Hood Financial LLC, member SIPC. Crypto offered through Robin Hood, all investments involve risk.

By the way, this podcast is not owned or part of Robin Hood, and we are not employees of Robin Hood. For our third and final story for the new Friday, Manchester United soccer stock was popping all week long. Because Manchester United may be the most undervalued team in all of global sports. Okay, are we going to make this a rule? Should this be our rule? It should be our rule. It should be our rule. When Elon Musk tweets, we have to wait 24 hours.

There has to be a waiting period before we pay attention to his tweet. Because two days ago, Elon Musk said he was going to buy Manchester United. He tweeted Seth. He said, I'm buying Manu. Yeah, Jack and I could have covered it on this here pod. But then he said he was joking. So we're happy we didn't cover it on the pot. Yeah, we're glad we didn't waste your time.

But Manu stock jumped 17% on that nonsense. And since then, it's been flopping around like an Italian midfielder. And get this, the stock has stayed. up several days later. Why is that, Jack? Because of another incredibly wealthy person. Okay, Bestie's unique situation here. Manchester United is a publicly traded stock, but the American family, the Glazers, they own most of Manchester United since 2005. And according to Bloomberg, the Glazer family is considering selling some of their ownership stake to a private equity firm called Apollo.

Okay, so Jack and I got curious. We jumped in T-boy style. This got us thinking about Manchester United's value. It's market cap. Since it's a publicly traded stock, we can add up the price of all the shares. Manu is worth $2.2 billion. Okay, not too shabby. That's a nice billion dollar number. But to sprinkle on a little context here, it's actually kind of small. It's like Wayne Rooney. It says 510. We all know it's 5'8. Yeah, because soccer is the most beloved sport on the planet. And Manu is one of the most beloved soccer clubs on the planet. And yet, Manchester United's valuation. According to this $2.2 billion market cap is not less than one NFL team, not two, not three, five, or eight. It is less than every single national football league team.

It is. The number one most valuable sports franchises thing is unfortunately the Dallas Cowboys. Holy Tony Romo. The Dallas Cowboys are worth seven billion dollars, most of any team. The Dallas Cowboys are worth three times as much as Manchester United. Okay, Jack, what's going on over for our buddies in Cincinnati with the Bengals? The least most valuable NFL team, the Cincinnati Bengals, are still worth more than Manchester United. Yeties, Manchester United stock has consistently fallen over the last decade. It's been rough to watch. Meanwhile, every other sports team's valuation has been going up year after year after year.

Oh, get this. The average NFL team, its valuation, is up 18% in just the past year. It's a nice investment, too, because at the same period, the S&P 500, is down 3%. And it's not just on the field. NHL teams, yeah, they're at all time highs. The NBA, the Major League Baseball, they're at all time highs too. Your stock portfolio and Manchester United?

Not at all time highs. And the reason we're seeing this with all these sports franchises is because a sports franchise is just, it's a rare asset these days. Yeah, it is. Owning a team is the modern equivalent of like owning a castle in the medieval era. And billionaires increasingly won in on that castle. So what is wrong with Manchester United? Man U, they're not bending it like Beckham, what's happening over there?

Why is Manu's value, according to their current stock price and their market cap, worth less than the bills? The Jets can't even buy a Super Bowl, but the Jets could buy Man U. They can. So, Jack, what's the takeaway for our buddies over at Manchester United? Manu may be the most undervalued team in all of sports. Yet he's according to a whole bunch of studies, Jack and I spent a lot of time looking at. Manchester United is the most recognizable sports logo. on earth. And it's not just the brand that is so valuable. Look at Manu's business.

Manchester United's quarterly earnings. They're bringing in about 900 bucks a year. Jack, what are the Dallas Cowboys doing? Less than that. So Manu is more recognizable, more international, higher grossing, and yet Manu is worth a third as much as the Cowboys. That's why this private equity firm wants in. They think that Manu is an undervalued asset. The way they see it, someday Elon Musk or another billionaire, will buy Man U for way more than the $2.2 billion they're investing at right now. Yeties, maybe investors just think that the Glazer family that's running it is just bad at running Manchester United. Maybe that's why the stock price is so long. But either way, Man U looks like one of the most undervalued assets in all of sports. Jack, can you whip up the takeaways for us

for the last pod before vacation? Amazon is paying double for Lord of the Rings what HBO is paying for Game of Thrones. Budgets reveal everything. For our second story, Estee Lauder is experiencing spikes and lipstick sales that are common during recession. Yeah, there's a dark economic side to the lipstick effect. Our third and final story, Elon tweet joked that he was buying Manchester United, but it got us thinking.

Yeah, man, you may be the most undervalued asset in all of sports. Like David Beckham's left foot or David Beckham's right foot. Or Harry Potter. You Grant, love actually? Of course. Now, time for the best fact yet. This one sent in by Brad Cohane from lovely Port St. Lucie, Florida. Starbucks wasn't the first to pumpkin spice your life.

No, the first pumpkin spice trade actually was documented a mere 3,500 years ago. Get this, the key ingredient to pumpkin spice flavor isn't pumpkin. No, apparently it's nutmeg. Nutmeg is what makes your pumpkin spice PS. And archaeologists found in clay pots on the Banda Islands in Indonesia, 3,500 years ago, they found nutmeg. They did. They found nutmeg that had been traded for that, you know, that pumpkin spice paste before the pumpkin spice.

And apparently the clay pots were not from Indonesia, which implies that there were trade involved. We're talking venty-sized pots. Yeah, that beat Starbucks. And apparently, even those pots were like 75% ice. Yeties, you looked fantastic all week long. Jack and I are going to miss you for the next two weeks. Yeties, besties, we freaking love you guys. Okay, Jack, should we, maybe we whip up a little gift while we're going?

Oh, the bonus episode? Bonus episode? What do you think of that idea? Monday, the 29th, I think. We're going to drop a little something for it. You want to do a bonus episode? Let's do a bonus episode. Yeties, Jack and I got to go.

We got to figure out a bonus episode. It's going to be something different we think you'll like it. Let's whip it up. We love you guys. We'll see you in two weeks. Can't wait. And before we go, congrats to Yeties, Chris and Katie Hoffman, who are alloping right now in Chicago doing legit.

And congratulations to Sasha Schwartzen, who's getting a bar mitzvah down in California. And Sean Le Sanchez, first game as the volleyball coach at Shamanad University over in Hawaii. And congrats to David and Megan, who are getting married this weekend in Portland. And Maryland and Roberto from Brooklyn, they're getting married today, like right now, over in Brooklyn. And congrats to Matt and Helen Paggs, who are celebrating a 12-year anniversary on the Jersey Shore. And Dr. Jackie and Diego, enjoy that six-year wedding anniversary over. in Texas. And congrats to Bethany Peters, who's running the Hood to Coast race in Oregon for the South Sudan Clean Water Initiative. And a happy birthday to Leah Foley over in Connecticut.

An happy birthday to Molly Giles, who's celebrating her birthday in Telleride, Colorado. And Kelly Crichter, enjoy that birthday in Vienna, Virginia. Happy birthday to Alice Burray in Dallas, Texas. And Michael Gingrich enjoy the birthday in Lancaster, Pennsylvania. And happy birthday to Stacey Holguyen, celebrating back in Hawaii. And an early seventh birthday to the year. Young Reed Burrilsky. And happy birthday to Jason Lewis in Lakeland, Florida.

And a happy birthday to Zach Begland over in Los Angeles. Happy birthday to Tiffany Helgeson in St. Louis, Missouri. And Min Mama Guo Shen, happy birthday in Saratoga, California. Happy 23rd to Matt Groot Heist in Denver. And Joey the Cake Baker Vargas, happy birthday in San Diego. Happy birthday to Angel Halverson in Houston, Texas. And Cam Grayley over in Anaheim Hills, California. Happy birthday to Kevin Wambra in Cincinnati.

And another Kevin. birthday to Kevin Goodwin over in D.C. And happy birthday to Michael Silva, happy 41st down in San Diego. And to anyone else who's celebrating something during these two weeks that were off, honestly, congratulations and happy birthday to you. Make it a T-boy, celebrate the wins. We'll be thinking of you. We're talking to you, by the way.

You. You. This is Jack. I own stock of Amazon and Nick and I both own stock of both Apple and Robin Hood. Now a word about our sponsor, Robin Hood. Okay, so Jack and I both worked in finance for a while. And we know the six-monitor Bloomberg jockey with charts, numbers, balances, and more charts. They got coffees in both hands while they're executing some complex trade on a soybean future.

Well, we're not trying to impress with our mission control trading center. Just give us an app, Robin Hood with its mobile first and intuitive design, it lets you trade with just a few quick taps on their app. And even if things still don't seem easy, Robin Hood has your back 24-7 with its live and robust customer support. If you're not investing on Robin Hood yet, to get started, go to Robinhood.com slash T-Boy and choose your free stock. That's Robinhood.com slash T-B-L-Y. Limitations apply. Robin Hood Financial LLC, member S-I-P-C, all investments involved for us.

By the way, this podcast is not owned by or part of Robin Hood, and we are not employees of Robin Hood. Great. Dude, great job. Dude, we still got it. We still got it.