The Best One Yet - Hasbro’s $4B cartoon deal, Fried Chicken’s market-moving moment, and Dish’s 5G future

Episode Date: August 27, 2019

First Popeye’s and Chick-fil-a went at it over a new fried chicken sandwich, then KFC added a Beyond Meat faux-meat burger. Hasbro is dropping $4B for British cartoon Peppa Pig (and it’s also getting some rap artists). And Dish is about to be the 4th biggest telecom company after the Sprint-T-Mobile merger, so we jumped into it Snacks style.Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks. Daily, it is Tuesday, August 27th. How are we feeling about this one? Tea Boy Tuesday. It's the best one yet. Let's go.

This is a wonderful mix. Jack, how are markets looking? There were no earnings today. But stocks rose because President Trump kind of walk back some of his tough talk against China and said he wants to make a trade deal. Jack, this is a mix of all mixes. What is our first story today? Fried chicken is having a moment. Take out the bucket.

Popeyes and KFC are making headlines in market. ways. We've got to talk about a key to virality. Jack, second story. Second story, Hasbro just dropped $4 billion for the media company behind Peppa Pig. That is not Pepe Lepeu, and it highlights the future of entertainment. Three words, cross-media franchises. Put them on a tattoo. Third and final story, Dish Networks gets no respect. It gets no respect, but it's about to become the fourth biggest wireless provider, and it's trying to reinvent itself. This may be the biggest winner of the mega merger between Sprint and T-Mole. Now, Snackers, before we get into all that,

there is a wafting scent in the air, and it might be a little PSL. It's crisp, it's sweater season, it's PSL season. Jack, when are we going to hit the orchards and get some apples? Because Pumpkin Spice Latte starts back up today at Starbucks. Not only that, it's also the first new pumpkin spice latte drink coming out since the original PSL in 2003. Nick, you know what this new drink is called from Starbucks?

I want you to serve this up for me, and I'll take it in a venti. Pumpkin cream cold brew. Jack, it sounds like the team at Starbucks got a bunch of marketers together, threw some millennial trends up at a board, and just pick whatever happened to stick on three months ago. It comes default with the side of avatoseast, unless you ask for that to not. Do you have to borrow your parents' Netflix password in order to order this thing, Starbucks?

The only thing off-trend here is the cream. I think that's a typo, meant to say plant-based oat milk. If your oat milk wasn't raised on a farm, then why are you drinking it? Snackers, enjoy that today. Let's hear us restores. You're tuned in to snacks daily. We spoke to the lawyers and we got to get some. The snacks about to hear ain't food.

It's air candy. They don't reflect the views of the Robahood family. It's all informational just so. You know, we're not recommending any securities. Nope. It's not a research report or investment advice. Not an offer or sale of a security. Right.

Snacks is digestible. Business news for you. Robahood Financial, LLC, member FINRA slash SIPC. For our first story, adorable toy legend Hasbro just dropped a cool, you know, $4 billion to buy a kids TV program in Britain. Hasbro's roster is thick. It's got Mr. Potato Head. It's got Power Rangers. I love Billy, not as the Green Power Ranger, as the White Power Ranger, but I also like My Little Pony. Jack, you can add Peppa the Pig to this wonderful lineup you've cooked up.

Surprisingly, it's not just Peppa the pig, the star of the story. Tupac Shakur is indirectly involved in this acquisition. Now, before we get into the acquisition, we got to give a little context here. The company is Entertainment 1, but the star is Peppa the Pig. What parents see when they hear Peppa the Pig is a two-dimensional cartoon character with family-oriented storytelling, very colorful, kind of like one of those shows on Nickelodeon. This is like a blues-clus meets Mary Poppins kind of situation when it comes to the access. And Peppa the Pig has a whole gang full of alliteration.

There's Pedro the Pony, Freddie the Fox, Gerald the Draft, Shirley the Shark. Good, clean, family fun. So you've got two key companies here. We got Hasbro, based in Rhode Island, wonderful town, love college hill. They're the toy company. And they get the rights to everything Peppa Pig and all of the other characters that this company, Entertainment One, owned. But if you're an investor, you're not looking at Peppa the Pig for some good old clean fun. You're looking at it for a ridiculously direct access to China in a way that Jack and I had never seen with any other company. Peppa the Pig was created by United Kingdom-based storytellers, and it's got like a lot of British flags in there.

but it is actually translated into 40 languages and has 34 billion views in China. Peppa the Pig's like that one friend in college years who is studying abroad like every semester, like 10 out of the eight semesters. Peppa the Pig has been in China since the early 2000s. Life is all about timing by way. That is perfect pre-trade war. Get this. Peppa the Pig has been embraced by one of the most intense organizations in the world, the People's Liberation Army of the People's Republic of China. China's army is literally walking around getting into formation. Bay style doing military stuff in Peppa the Pig's face.

Okay, Facebook is banned in China. Twitter is banned in China. A lot of other tech companies and movies are banned in China. But Peppa the Pig is on China's like government-sponsored central television organization. You got Peppa the Pig on at 2.30 p.m. And then at three, you've got Mao Zay Dong's happy hour. Now, the executive at Hasbro said this best. Peppa the Pig is a beachhead to get into China for many years to come.

Not an easy thing. Now, that's Peppa, but if you're Hasbro, we got to mention this. There is a hilarious side note here. Hasbro got a lot more than just Pepper for $4 billion. Entertainment One, which owns Peppa the Pig, is also the proud owner of Death Row Records. Jack, can I enlighten you with these names? Dr. Dre, Snoop Dog, Tupac, what are you seeing here as the theme? I'm seeing a lot of West Coast rappers.

I was more of a bad boy family kind of guy. Jack's doing the thing with the middle finger and the ring finger with the side thing. I'm actually not doing any hands symbols. That's obvious. East Coast, West Coast. What is the takeaway for our buddies over at Hasbro? Disneyfication is the future of entertainment and toys. Back in the day, when things were all good, clean, fun, movie characters needed a toy

presence to be relevant, but now it's the reverse. Toys need a movie presence to be relevant at all. The key here is you need to have both toys and movies. Look at Hasbro's rival Mattel. They've taken the Barbie doll franchise, which has been great for like 60 years, and they're turning it into a movie featuring Margot, Ruffalo. Now, Peppa the Pig is just a show right now, but Hasbro can Disneyfacate this whole thing by having a whole profit ecosystem of toys, lunchboxes, backpacks, theme parks, but it all

begins with feature-length films. Now, Hasbro stock fell Friday, even though Hasbro is going to get access to China with this deal, because $4 billion for Peppa the Pig is a lot of money. For context, Disney spent the same amount of money $4 billion for Lucasfilm in 2012, which was all of Star Wars. Shares dropped because $4 billion is a lot of money for Pepper the Pig. For our second story, fried chicken and fake chicken are having a moment right now, and it is a market-moving moment. Jack, we have got to talk about this.

Yesterday, Beyond Meat announced it's testing plant-based chicken nuggets and chicken wings at KFC, which is owned by Yum Brands. And then all weekend long, you probably heard this from a buddy of a friend, that Popeyes and Chick-fil-A were going at an all-out hashtag fried chicken war that was enveloping on Twitter. Yes. Now, Popeyes and Chick-Fleigh are the key of this story. Yum's got its thing with Beyond Me, but we're focusing on that vicious Twitter rivalry that went down. We had to jump into this because this is the most food virality we've seen with market-moving potential since the Kronut Ramen Burger of 2012. Now, Popeye's is way smaller than Chick-fil-A. They're both based in the South. I think Popeyes is based in Louisiana, and they soft-launched their first ever chicken sandwich a couple months ago. We're thinking, like, this has got the buns, the pickles. I don't know how you feel about the pickles. Everyone always says, salty sweet, but I don't even know what that means.

Well, it got salty sweet enough that Popeye's was ready to announce this thing. So they finally tweeted that they have a fried chicken sandwich for sale on August 19th. This is when the first shots were fired. Because on August 19th later, Chick-fil-A counter-tweeted that they were the original and what are you doing? We are all about the fried chicken. Yeah, Chick-fil-A, the giant chicken sandwich in the room, like, is basically picking on the little guy, Popeyes, calling it unoriginal, saying we had the first chicken

sandwich. You know what Popeyes does? Instead of shying away, it retweets Chick-fil-A's tweet and adds its own funny little caption like, y'all good? Then that retweet got 87,000 retweets and 32,000 likes for a very nice quantifiable combination. So Chick-fil-A tried to put down and bully Popeyes. And what ended up happening is Popeye sells out nationwide, thanks to that hate from Chick-fil-A on Twitter. By Sunday, August 25th, you could not get a new Popeye's fried chicken sandwich across the United States of America. This is like if Wall Street Journal is threatened by snacks and they tweet like, yo, you guys trying to make digestible news financial?

And we're like, yeah, we do. Yeah, we are. That would actually be a great moment for snacks. Wall Street Journal. Go ahead and tweet that, please. So if you look at what the real value is here for Popeyes, they added more social media followers in just the last two weeks than they did in the last two years combined. Getting that kind of exposure on Twitter could cost a lot of money if you paid for it

with advertising. but it came organically through this virality, and guess what? It paid off. That was worth $23 million in advertising revenue that it didn't have to spend. As our buddy Matt Kobach pointed out from the New York Stock Exchange, that was $0 in ad spend, $23 million in ad value. So, Jack, what is the takeaway for this whole fried chicken war and our friends in the fast food industry? Social media virality doesn't happen in a vacuum.

It happens among context. Jack, I love how you frame that because the context is key here. And for this situation, chicken is king right now is the context. Chicken is the original white meat. It's cheaper than beef. It's healthier than beef, for sure. Except when it's fried and covered in like 12 different types of preservatives. Fried chicken is also sold in a bucket, which along with, like, feed for a petting zoo and popcorn, that is a good group.

I like where you went with that. Now, Snackers, Bloomberg, our buddies there pointed this out. The average American eats 10 pounds more chicken right now than they did 10 years ago. Fried chicken is literally in the name of KFC. It's made Chick-fil-A the third largest restaurant chain in the United States. We're talking you got McDonald's and you've got Starbucks, and then Chick-fil-A has just crept or like, I don't know, what do the chickens do? They like, they like, they take small steps.

It took small steps up to third, waddling its way. Chick-fil-A, third biggest restaurant chain, that should be a snack fact of the day. So Papi's tapped into this context, and you've got to know the context if you're going to understand virality. By the way, this is Nick, and as we always tell you, Jack and I own shit. is it beyond meat. For our third and final story, this one is a classic. We're talking about Dish Networks, which just jumped after years of pain, which may be ending or may not be, but they could be, so we looked into it. Dish Networks, publicly traded company, ticker symbol, kind of lame, D-I-S-H, Dish. Super Show. Should have been rain, because anybody who ever

had a satellite dish knows, if it's rainy, you might not be able to watch that movie. Classic 90s problem. Your buddy comes over and it's like, we actually can't do anything. We have to play cards or something. nature affected whatever it was. Now, a stock analyst said yesterday that DISH Network was an opportunity buy, but another analyst said last month, it's an opportunity sell. Now, the headquarters for DISH are in lovely Englewood, Colorado, one of the great suburbs of the great city of Denver. And since analysts aren't sure what the deal is with this company, we're going to break it down for you and tell you about their two divisions. Their big division is pay TV, their future

division is wireless. So let's go to the original, the old school, the core here, which is its pay TV. And Net pay TV is driven by satellite dishes, the big scary things. You pay $100 or $200 a month. You strap this thing onto your roof and you get to watch TV. This company is actually extraterrestrial. It owns two satellite dishes that are spinning around planet Earth, sending that movie signal down to your home. Beaming it down unless the rain interrupts.

Now, it's also got a very cool young toy, which you may know as the Slingbox. Yes, Slingbox is the original, like, watch TV through the internet device. I remember well. This thing was huge sophomore year at Middlebury College in like 2008. What did you need sophomore year, Jack, if you had to sum it up? You needed a buddy who had a fake ID, and you needed a buddy with a sling box. Jack and I were roommates. We had neither, but we had a massage chair, and that compensated for the other two.

The pay TV division for DISH has been shrinking for three years straight, probably more, but that's all we saw in the earning statement because of cord cutting. So that's the core of DISH networks is the satellite dish and pay TV. But its future is in wireless. And since 2008, the company has been, quote, unquote, buying up spectrum. We don't know what that means, buying up spectrum. No clue. We looked into this.

We couldn't figure it out. Sounds exciting, though. And it's about to get a lot more spectrum if the T-Mobile Sprint merger goes through because then it'll have Boost Mobile as the fourth wireless company. And that'll make it the fourth wireless company. Now, it's planned ahead because it's been focusing on a little something called 5G, a.k.a. the Internet of Things. Yes.

In March of 2020, just like six or seven months away, it's going to live. it's going to launch 5G narrow brand internet of things, which is, it's not going to connect your phone. It's not going to connect your connected car. It's going to be for like small stuff, like home appliances. Right. We're talking like your trash can alerts you when it's full, not the trash can that alerts you when it's full, and then the self-driving car takes out the trash for you in order some more tied stick detergent. If you have like a delicate in the tumble dry cycle, uh, this thing could get connected to DISH networks 5G and it'll buzz your phone when it's done. Now, technically, DISH hasn't made any revenue yet from this like 5G future, but this could be a sleeping giant for the company, and that's why it wants to draw attention to.

There's more on this stuff in the company's 10K, which is like the S1 document, but they actually publish it every year. Read up if you want more. It's your annual report card for a company. So, Jack, what's the takeaway for our buddies streaming and beaming across the world over at Dish? Pay TV companies are adapting shockingly well to cord cutting. Jack, Chuck Darwin would be impressed. Can we look back at some of the telecom companies of our youth? How about AT&T?

These things used to have legs. Now they have wings. It's revolutionary. AT&T used to have landlines. Now it has HBO in streaming video. You got Comcast, you got Verizon, you got DISH. They're all doing a lot less TV landline stuff and a lot more aggressive future cutting edge internet stuff. Dish Network hopes to make a similarly successful and awesome transition like AT&T Verizon,

from pay TV to like 5G growth internet. of things. Jack, can you whip up the takeaways for us over there? Hasbro just bought up some Peppa Pig because good clean family programming is kosher in China. It's going to take Peppa Pig and turn her into a profit ecosystem a la Mickey Mouse which is totally fine. Peppa, you're going to be great.

Also, I mentioned Billy was the Green slash White Ranger. That was Tommy. Tommy is the Green slash White Power Ranger. I didn't want to say anything, but I'm glad he came clean. Second story. Fried chicken sandwiches are having a moment right now on Twitter and Popeyes has won that moment. The Underdog just got $23 million of free Twitter advertising.

Third and final story, Dish Networks is trying to transform from satellite dish company to Internet of Things. And remember, you need the Internet for everything. So, Jack, time for the snack fact of the day. This one's a nice round number. We got the census coming out. That is when a bunch of people get paid by the government to walk around neighborhoods and talk to people and knock on doors.

Three, four, five, six. What Nick's doing there is he's simulating counting. the number of people that reside in this country. Multiply that by a lot. So the cost, in case you're wondering, per an American, to do the census every year, Jack, can you lay it on us? Forty-eight dollars per person. Multiply that by 300 million Americans, that cost a total $14 billion. We do it every 10 years. Now, the last time we did it 10 years ago, the cost was down to $42 per person. And America is by far the highest in the world. The average, in case you're wondering, is about $5 per person per census worldwide. I got to hope that we pay better and give them better umbrellas for the rain.

Now, Jack, we got one other story we're covering in the Snacks newsletter today. Johnson & Johnson was just ordered by a judge to pay like $500 million for its role in the opioid crisis. And that was surprisingly good for the stock. We'll explain why. Snackers loved having it with this date. You look fantastic. Go in, have a great work day. Talk to you tomorrow. Can't wait. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc. or any of its subsidiaries or affiliates.

The podcast is for informational purposes only, is not intended to serve as a recommendation to buy or sell any security, and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.