The Best One Yet - 🐽 “McRib of Wall Street” — The Stock market’s McRib correlation. ESPN’s secret subscription. Amex’s chirp vs churn.

Episode Date: October 23, 2023

Want to know if stocks are going up or down? Just check if the McRib’s on the menu — We break down the McDonald’s sandwich’s hilarious correlation with Wall Street. For the 1st time ever, Disney just told us ESPN’s financial numbers — We reveal the $7-8/mo secret subscription that every American paid ESPN for years.And Amex just told us 2 things are true: customers are angrier than ever, yet profits are higher than ever — Because customers chirp, but they don’t churn.$SPY $MCD $AMEX $DISSubscribe to our newsletter: tboypod.com/newsletterWant merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.comFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on Youtube Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. Welcome back. It is Monday, October 23rd. And today's pod, it is the best one yet. It's a T-boy. Nick, how do you know I'm not AI, Jack? A really good question.

I actually have no way to verify this. How do you test that I'm not chaty-P-T Jack right now? I mean, I got to see how you whip up the takeaways on us over there. The not-a-bought test for me is asking me to say cookie-cris. Jack, if your cookie crisp doesn't hit the right octave, this is not the best one yet. You're going to ask me to do it? First story for today's show. AI Jack, what do we got?

For our first story, ESPN has a secret subscription that we've all been paying for years. For the first time ever, we just got the financial numbers from ESPN. For our second story, want to know if stocks are going up or going down? Just look at McDonald's McRib. The McDonald's McRib. Yet he's prepare for the most honest takeaway Jack and I have ever whipped up. And our third and final story. Amex customers angrier than ever, but sticking with Amex credit cards anyway.

Because customers chirped, but they don't churn. Now, Yetis, before we hit that wonderful mix of stories. A wonderful mix of stories to kick off the week. We are one week from Halloween Eve. Yeties, we know what you are going through right now. You're under some costume pressure right now. You're under some freaky fomo right now. You have outfit paralysis. Been there, done that. We're all feeling it. This year, are you going to be a sexy spreadsheet again? you're going to go as a possessed podcaster? Well, Yetis, we jumped in T-boy style to brainstorm some business-themed costumes for you. We spent an absurd amount of time on this Yetis. It is a T-Boy annual tradition, isn't it, Jack? Costume ideas based on news themes from this pod. Jack, remember

last year's winner? Yeah, bored apes, no yacht. That was a classic. Because the crypto crash. Well, here's what Jack and I might be wearing this year. You could go this year as a Zillow zombie. A Zillow zombie, because nothing is scarier than 8% mortgage. rates. Or this year you could dress up as chat GPT plus plus. It's AI so human like you dress up like a human. Or why not a retail costume like bed, bath, and beyond the grave? You're just a pile of expired skincare products. That's all you got to do. Or go this year as the ghost of Bud Light past. Too soon, and Beth? Too soon? If you want to diversify, you could wear a combo costume. We love the combo costumes. Like, what's a good example? Wear SPS face, Barbie's body. Bikini on the bottom, fro on the

Top. Are you ready, Yetis, for some couple costumes ideas? Oh, we love the couple's costumes. Be a video gamer and a door dasher. Be Carol from accounting and Frank from finance. Or you could be girl math and guy math. Together, everything's free. But what about a group costume for you and all your bodies? Glad you asked Jack, why doesn't everyone just go as a different apple dungle? I'm USA. She's USB. He's USB. He's USBC. Now, of course, you could just wear what your roommate is wearing. Which would be a classic zucking. Or you don't have to wear any costume at all.

Just go on strike this Halloween. Yeah, everyone else did this year. Yeties, this week is our annual T-boy Halloween costume challenge. So Jack and I want to hear what are your best business-themed costume ideas? Share your ideas with us on Instagram or on X at T-BoyPod. We just posted our Halloween picks today. We want to see yours and get the comments. Comment on our Halloween pick at T-boy Pod on Insta and the artist formerly known as Twitter.

All week long, we're featuring. the best costumes yet. Send us your picks, send us your ideas. Nick and I'll share them on this pile. AI Jack, let's hit on three stories. Fifteen years before this song, two boys from the Northeast met in the dorm. They had an idea

that caused a cultural storm. It's the best one yet, but the best is a known. 50%. That's a fat tip. Tea Boy City on your at list. If you know, you know, because we're ready to go. We can't wait no more, so just start the show. Start the show. For our first story.

time ever. We just learned the financial numbers behind ESPN. So T-Boy is here to present the rise and fall of ESPN. That is so dramatic. I love it. Can we come up with another name for it? Or as we call it, the book of Berman. ESPN, no one knows what it stands for, but we all know what it means sports. There was a time when sports in America was way less relevant than it is today. And it was making way less money, too. Yeties, before ESPN, sports made money through just a few basic ways, through tickets, through concessions, through ads, but not really through TV. And then ESPN game, the first 24-hour sports channel that changed the sports business model. ESPN, all of America could follow all of the teams, right, Jack?

Not just the one local team in your market, like the Red Sox for me grown up. Like some dude based in Dallas could become a Florida fan. That became a thing with ESPN. There was no pro hockey team near you, but you could still hear Barry Melrose talk about the Canucks. You love that mullet. Well, as ESPN's TV money powered the sports business, athletes were no longer the only stars of the industry. ESPN's anchors became stars too. Yeah, Jack, remember those ESPN SportsCenter commercials like when we were going on?

Each and every one of them was standalone, very funny. Each one of those ESPN commercials deserves an Emmy right on the spot. This is SportsCenter. We would play one of them, but they would sue us. We see you, Bob Eager. But, Nick, before we go further, let's go back, back, back. Back, back all the way to 1984. Let's do it.

That's when ABC, the cable TV network, acquired the young ESPN company. Then in 1996, Disney acquired ABC, which owned ESPN. Disney didn't realize it at the time, but the jewel of that ABC acquisition was ESPN. But funny thing is, for 27 years, we haven't known how much money ESPN makes. For 27 years since Disney acquired it, we haven't known ESPN's numbers. Disney kept ESPN's numbers a secret until last week. Disney just shared that in 2022, ESPN made $16 billion in revenue and nearly $3 billion in profits. Jack, we sprinkle on a little context of those numbers.

This is the first time we've heard about ESPN's numbers. And it turns out, they're two-thirds as profitable as Netflix is. ESPN is two-thirds as profitable as Netflix. And that's not all. ESPN made more profit last year than Disney's movie studio, Disney's streaming networks, and Disney's other TV channels combined. In fact, yet he is right now ESPN is the only profitable part of Disney besides the theme parks. But we haven't told you why Disney decided to share ESPN's numbers finally. No, we haven't, Jack.

It's because Disney's trying to sell ESPN. And why are they doing that? Because of our takeaway. Mickey Mouse is tired. of Mickey Mantle. So Jack, what's the takeaway for our buddies over at ESPN? All of America has been paying ESPN a secret subscription for years. Yaddies, we didn't just learn last week how much money ESPN makes. We also interestingly learned where that money comes from. Here's the surprise. Despite all the commercials we see

on ESPN, advertising is less than half the revenue. Turns out a majority of ESPN's business is something called affiliate fees. Affiliate fees. That's two-thirds of ESPN's revenues. So we gotta ask, what are affiliate fees? Well, Jack and I jumped in T-Boy style, and an affiliate fee is a secret subscription. Back when every household in this country was paying $100 a month for cable TV, the cable networks distributed that money to the TV channels. And ESPN got the biggest cut of your $100 cable bill because ESPN was the most important channel. So whether you watched ESPN or didn't watch ESPN, if you paid for cable TV,

you're paying $7 to $8 a month to ESPN. Jack, what an amazing business model because ESPN was also making money on commercials too. And every American who had cable was paying ESPN money. But yet here's the problem for Disney. 30 million U.S. households have cut the cord and that number is only accelerating. That means 30 million households are no longer paying ESPN. That's secret $7 to $8 a month subscription. And that is why Disney is trying to sell ESPN.

ESPN's business model is passed its price. Prime. Because every time an American cuts the cord, they stop paying ESPN a secret subscription. For our second story, the McRib, it just returned to select McDonald's across America. Why are we telling you this? Because

the stock market performs three times better with the McRib on the menu than without. Yeties, prepare for the most honest takeaway we've ever told. 1981, Nick. You and I weren't born yet, but a legend was. The McDonald's McRibreiber.

Rib sandwich. If you've never had a McRib, it's a barbecue in a bun. It's like the best thing that ever happened to your mouth, worst thing that ever happened to pigs. It's a pork-based sandwich with pickles, onions, and barbecue flavor. 480 calories, 22 grams of fat, one questionably shaped patty. Now, they call it the McRib, but there's no bone in there. No, there isn't. In fact, McDonald's used military technology to make it boneless. True story. We jumped in T-Boy style and we discovered that. They licensed tech from like the Navy.

Now, Yetis, in the 41 years since we got the McRib, the McRib has gone on and off the McDonald's menu. At various times, McDonald's like teases us that it's coming back and then braces us that it's going away. It's like, McRib, farewell tour. McRib, dramatic return. It's like on and off. It's intense. So we have a nice data set to look at a shocking correlation between the McRib and Wall Street. Yeties, this is wild.

Data analyst Nick Magooley ran some statistics. numbers on the McRib and the stock market. If the McRib is available, stocks go up. Buy a lot. Get this. The S&P 500, the 500 biggest companies in the stock market, has a higher daily return when the McRib is available. When the McRib is on the menu, the S&P 500 rises 0.9 percentage points per day.

When the McRib is not on the menu, the S&P 500 rises only 0.3% per day. The difference is 0.6 percentage points. Doesn't sound like much. It doesn't seem like much. You're probably like Nick, Jack, why are you talking about the McRith? But Nick, that's just the daily return. If you annualize that return, then stocks will rise 19% more per year with the McRib than without. We repeat, Yetis.

When the McRib is on the menu, stocks do 19% better that year. Hey, Ronald, can you just make the McRib a permanent menu item? I mean, Jack, the federal government should be subsidizing the McRib, right? Like, that's the ultimate adult happy meal. Knowing the shocking insight is incredibly powerful. We can get rich. Like, Jerry Powell, stop doing interest rates just buy more McRibs for the Fed. If us regular investors buy when the McRib is on the menu and sell when the McRib is taken

off the menu, we'll get rich. But here's the thing, Eddie, Jack and I, we wouldn't recommend that. No, don't do that. Don't do anything we just said. And that's because love our takeaway. So, Jack, what's the takeaway for our buddies over at the McRib? There's no one reason that stocks rise or fall. The best we can do is yes. Now, Yeties, this McRib effect, it's actually a classic case of correlation, not causation.

It's a wild, hilarious statistical anomaly. Yes, it is. The McRib doesn't cause Wall Street to become more bullish. But the way Jack and I see it, this McRib coincidence, it reveals something important about our entire economy. Here it is. No one knows why the market goes up or down on a given day. Honestly, there are simply too many variables to assign any way. one of those variables as the cause of the stock market's movements. Because every day, millions of investors are buying and millions of investors are selling, and they're all doing it for a different reason. If stocks rose, it's just because more people bought than sold and vice versa. But every morning, we go to CNBC and it says the Dow is up because of earnings reports. Or the Dow is down

because of oil. But the reality, there's so many elements of why the market is moving. It's never one thing. So, Basties, the McRib and the stock market. It is a hilarious example of a correlative but not a causation. And that reminds us, there's no one reason that stocks rise or fall. And if anyone tells you that there's one reason, just give them a McRib and say, thanks for the information. For our third and final story, MX just enjoyed its biggest profit of all time.

Customers are furious at American Express right now, but they're not dumping it. We'll tell you why. Yeties, remember this past summer when Jack and I told you, You flew to a mall fee, you didn't fly to Epcot. One credit card company loved Americans' international travel this summer, Amex. Amex, they just announced earnings. Jack and I jumped in T-boy style. Spending on Amex cards jumped 9% as you threw down the plastic while you were in Portugal.

So American Express's quarterly revenue passed $15 billion, and profits jumped 30% to an all-time high. But here's the interesting thing that Jack and I noticed. 70% of new cardholders for Amex got membership cards. Yeah, membership cards. Like 70% of new Amex customers are getting the cards with an annual fee. Pretty big annual fees too. Yeah, because Amex just upped their annual fees by 26%.

The platinum card is now $695 a year. Up from $5.56.95 per year per the card. One of the biggest fees in all of fees. But that's not all. Because at the same time Amex is increasing fees, it's reducing the amount of perks. Remember Delta just updated the policy for Amex Platinum cards? Still not happy about it. Still not happy about it.

Starting in 2024, no more lounge access. I don't know. Up yeties. Your typical Amex holder would have good reason to be really upset. Customers are upset, but they're not doing anything about it. Yeties, this is what we found fascinating about this story. According to the MX CFO, customer complaints have popped, but cancellations have not. The CFO said that customers bark is big.

bigger than their bite right now. Yeah, you say that customers basically called up and said, I'd like to speak to a manager and then, and then they just, they didn't do anything after that. They had fun with the manager. It's something we've learned about customers. They often like to vent, but don't end up quitting. Yeah, it's like a lot of carons, but no cancellations.

Like, remember the hashtag delete Facebook and hashtag delete Uber campaigns? Absolutely. They were big campaigns pushing back against Facebook and Uber a few years ago. In both cases, Facebook and Uber barely lost any customers. Because yet he's more often than not, From what Jack and I have seen, customers chirp, but they don't churn. And the reason is our takeaway. So Jack, what's the takeaway for our buddies over at Amex?

Tina, there is no alternative. Yeties, why didn't disgruntled Amex platinum holders dump Amex? It's because of Tina. T-I-N-A, there is no alternative. There's plenty of credit cards from MasterCard to Visa to Apple, but Amex dominates the premium credit card. Because on premium credit cards, there really is no other alternative except for Chase Sapphire. So people could have canceled their American Express card, but they would have suffered as a consumer.

Now, Yeti's, in other industries, there is an alternative. Like, for example, the light beer industry. This summer, people wanted to boycott Bud Light. And guess what? They did. Yeah, it wasn't just bark, it was bite. But in other industries, when there's a highly differentiated product, there is no alternative sometimes. Some products are just immune to consumer. Sumer backlash. And that is because of Tina. Tina's great if you're Amex. It stinks if you're an Amex cardholder. Jack, can you whip up the takeaways for us to kick off the week? Disney just revealed ESPN's financial numbers for the first time. It's very profitable, but those profits are shrinking.

As Americans cut the cord, they stop paying ESPN's secret subscription. For our second story, the McDonald's McRib is back. And if history is our guide, that means stocks will rise. Yeah, barely 19% this year. That's correlation, though, not causation. There's no one reason stocks rise or fall. In case it wasn't clear, this isn't a buy recommendation yet. It's a bite recommendation. And our third and final story is American Express.

They increased fees and cut perks, which led to record profits. But why didn't people cancel? Because of Tina. T-I-N-A, there is no alternative. Sometimes it's Tina. It stinks. Unless you work for American Express. But Yeties, this pod's not over yet.

Here's what else you need to know today. First, President Biden asked Congress for $105 billion in funding, for Ukraine, for Israel, for Taiwan, and for border security. But it can't get passed until the U.S. House of Representatives, Alexa Speaker. And second, Jobi and Delta, their CEOs, had a fireside chat to discuss the future of air taxis, which they claim is coming really soon. New airports are building vertiports for people who want to get to the airport via a futuristic air taxi. And finally, an update from the Sam Bankman-Fried crypto fraud trial.

The prosecutors just said that his defense is the same as the plot of the movie, Dumb and Dumber. Everybody's seen Dumb and Dumber. Apparently that's the case. Sam Bickman-Fried's like, according to this balance sheet, we've only gone four inches. So you're telling me there's a chance? Well, you've had an extra pair of gloves this whole time? It's okay, Jack. I'm a limo driver.

Now, time for the best fact yet. This one sent in by Myra Sylvan and Dahlia Elaine over in Silver Spring, Maryland. The sloth. The sloth. It's a great animal. It's a slow animal. It's known for chilling. Chill and hard.

It's known for relaxing. Turns out sloth poop only once a week. Yeah, that's the best fact yet. A sloth only poops once a week. And it tends to seek out the tree. that's where it is. Its metabolism is just as slow as the rest of it. We told you the other week, Yeti's, about the shortage of laxatives.

The sloth doesn't care. Yeties, you look fantastic. AI, Jack, I mean, that was, you're just like the real thing, man. You can send extra money to my Patreon page. Now, Yeties, remember, we are running our T-Boy Pop-Biz Halloween costume contest starting today. If you have a business-themed costume idea, send it our way at T-Bet At T-Boy Pod. Maybe it's a Zillow zombie.

Maybe it's a bedbath and beyond the grave. We want to hear your ideas at T-BoyPod. Nick and I, we'll see you tomorrow. If you know, you know. And before we go, a congratulations to Yeti Sophia Belfort, who just had her first week at a new job in New York City. She rode the subway the wrong way the first day, but she made it and she made it on time.

Showing up late would have been fine on your first day. Actually, good job, Sophia. And congratulations to Colleen Noynchfander, who with her friend Lisa completed the Camino de Santiago pilgrimage through Portugal, hiking 150 miles. And congratulations to Ilanya Perides, who's starting her first company named after her late father in Maryland, J-L-E Solutions. And congratulations to Luis He Run Juha, who has a new job in Santa Clara, California. And Mike Gingrich just ran his first Iron Man last weekend, not too shabby. Very not too shabby, actually. And Juliana, Paolo Martinez-Ibarra, and Raina Ibarra, are celebrating a 17th anniversary in Plymouth, Minnesota.

Happy 11th birthday to Cole LeGupree in Harrisonburg, Virginia. And Sebastian Segargia, the mushroom farmer from San Juan, Puerto Rico. Happy birthday. Happy 17th birthday to Parker Shell in Collieville, Texas. And Nicole Trask and her mom, Debbie Trask, are celebrating a joint birthday together over in Venice, Italy. Not too shabby. Sounds incredible. And happy birthday to Colin Curran in Arcata, California.

And Eric Cuowa, happy birthday in Saratoga, California. And a huge happy birthday to Michelle Cullen, who gets to celebrate her birthday big time because her grandparents are watching that dog and watching that baby. And Javier Cano in Arizona has put his daughter, Vita del Solcono into a lovely T-boy baby onesie. Fantastic. And to anyone else celebrating something today, make it a T-boy.

Celebrate the wins. This is Jack. Nick and I both own stock of Apple and I own stock of Disney and Netflix. And my Uncle D used to work at ESPN. Mickey Mantle line was incredible. Okay, great. I was honestly, dude, I said Mickey Mouse and I was like, Jesus, I better think of a Mickey. Because I can't think of a Mouse. You picked a Hall of Fame switch hitting New York Yankee legend.

Did you ever go to the Mickey Mantle restaurant? Yes. It was amazing. I love that place. Central Park South. I would like meet my mom there. Sometimes on like a Friday after school, I would go ahead and walk down Central Park South and like meet her there.

Well, remember what Christopher Walken said and catch me if you can't. Remember what he said? Why do the Yankees win all their games? Because everyone's looking at the pinstripes. Oh, yeah. Because everybody's looking at the pinstrives. Because you can't stop looking at those pins stripes.