The Best One Yet - 👑 “We analyze Waystar Royco” — Succession’s fictional reality. The Debt Ceiling deal. Casinos’ Blackjack tweak.

Episode Date: May 31, 2023

Even in fiction, there are real business takeaways — So we jumped in TBOY-style to Succession’s Waystar Royco (FYI no spoilers). The President and Speaker reached an agreement to raise the debt ceiling — short term crisis avoided, but long term damage done. And Las Vegas casinos just had their most profitable year for gambling ever thanks to one sneaky move: Tweaking Blackjack to create scarcity.$LVS $WYNN $CZR Want merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.com Follow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypod And now watch us on Youtube 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. It's Wednesday, Cevice Wednesday, May 31st, and today's pod is the best one yet. It is a T-boy check. The best part about a three-day weekend? The four-day work week that comes after. So Wednesday is the new Thursday, which is the new Friday. First story, what do we got on the show, Jack?

Have you noticed you're losing more money when you play Blackjack? Because we have. Yeties, casinos just hit record profits because they tweaked the rules of Blackjack. For our second story, we finally have the details on the debt ceiling deal. Yes, we do, but the side effect of any deal can be reputation. And our third and final story. Succession just ended. So we're going to cover the fictional company that that show revolves around.

Waystar Royco is fake, but we've got a takeaway. That is real. Don't worry, no spoilers. No spoilers. I've actually not seen the final episode as of this recording. So, I guess isn't seen it. I'm not going to say anything. Lipsil.

Zip. Kendall, Shiv, Romulus. We don't know, Yetis. We don't know. Well, actually, I know, but I'm not going to tell you anything, Jack. I'm not going to tell you anything. But, Yetis, before we hit that wonderful mix. Just a fantastic mix for a four-day work week, man. Does your ice latte taste a little different? Yiddis, does your frabs, whatever, feel a little funky? Here's the news. Starbucks is officially changing their ice cubes. They're changing the cubes. We have entered a new ice age, literally. But customers are having a meltdown. I need to speak to a manager. Where's the manager? Here's the change going on at Starbucks. They're going from nugget-based ice at all their stores to pellet-based ice. Starbucks is going from bigger ice cubes to smaller ice cubes. And this is a problem for two reasons.

First reason, ice drinks are 75% of Starbucks sales. Second reason, 75% of any ice drink is just ice. If so facto, that drink, it's going to feel a little different. Ice, so hot right. now. Now, Yetis, we should point out, Starbucks says it is changing its ice to help the environment. Right. Smaller ice cubes, less water use, less energy use. But let's face it, ice is a major identity decision, isn't it, Jack? Yeah, surface area affects taste. And mass affects meltability. So whether you're a crushed cube person or a cubed ice person. Do you chew your ice or do you let it rest? Hang out. Just chill in the cube. Either way, your cappuccino is about to taste a little crunchier. Your Frappuccino is about to get a little funkier. Smaller carbon footprint,

but bigger controversy. So Jack, what's the takeaway for our buddies? Ising it up over at Starbucks. There's only one type of ice that Starbucks should be using. Yeah, vanilla ice. Let's hit our three stories. 15 years before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm. It's the best one yet, but the best is the norm. Jack, nifty percent. 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. For our first story, more money was lost by gamblers in Las Vegas last year than ever before. And it's all because casinos tweaked their number one product. Casinos tweaked the Blackjack game.

Oh, everyone was waiting to hear what you're going to say there, Jack. Blackjack. Ladies, check you back pocket. You may want to whip out your wallet on this one. Notice something's missing. Your money's missing. Yeah, Jack, the money is just missing the while. I'm going to call Foxwoods. I don't know what's going on, man. According to the Wall Street Journal,

casinos have tweaked their games to tip the odds even more in their favor. Now, yeties, we've seen tweaking happen before. For example, tech companies tweak their algorithms to engage you more. And a chef might tweak the recipe to entice you a little more. But we've never seen this.

Casinos have sneakily tweaked their games to get you to spend more. Rulette has gotten more risk. Crap's just got a whole lot crappier. I actually cost you. Sorry, I didn't mean to say that. But the biggest change of all was to Blackjack. It was to Blackjack.

Your buddy Timmy's bachelor party took more money out of your wallet because it did. Sir, you have five. I strongly suggest you hit. I too like to live dangerously. Here's how Casinos got more Blackjack players to play more last year and lose more last year. It's actually an absurdly simple but all. Also sneaky three-part plan. Here's how it went down.

First, the Las Vegas casinos cut the number of tables that were playing blackjack. Like literally, there are now 20% fewer blackjack tables in Vegas than there were 10 years ago. Second, fewer tables let the casinos raise the minimum bet amount. You can't just show up to Mahigan Sun and do the $5 fun tables anymore, can you, Jack? No, on a busy Saturday night in Vegas, the minimum bet can be as high as $50 to play a single hand. So those were the first two changes. But the third change was honestly, it was the sneakiest of all, Jack. This is the sneaky one.

Las Vegas reduced the payouts they give out to winning bets. They reduced the payouts. Hit me, Jack. What kind of details we got? Just a few years ago, a Las Vegas casino would pay out in a ratio of three to two. That means if you bet $10 on a blackjack game and you won, you would get $15. But today, they've reduced the payout ratio to just six to five. So if you bet $10 on a game and win, you only get $10.

back 12 bucks. From the players perspective, it's the same risk, but lower potential reward. From the casino's perspective, it's not too shabby, is it, Jack? Add up that Blackjack Magic Las Vegas pulled on us, and Gamblers lost a billion dollars just on Blackjack last year. Now, Jack, we're not accountants, but pretty sure we got to balance the equations on this one, don't we? If gamblers lost a billion dollars, that means casinos won a billion dollars. Eadis, you're not popping champagne, you're pop in Adaville after that. The house always wins. Every gambler should know that. But now the house wins even more. And you see it in the stocks. Las Vegas sands and win resorts, their shares are up 50% in the last year.

So Jack, what's the takeaway for our buddies over in the casino industry? It's the sense of scarcity when shrinking your business can grow your revenues. Yet he's back in April, Jack and I told you the story about Las Vegas's big pivot, away from gambling. Las Vegas used to be Sin City. Now it's been. becoming a family-friendly fiesta. Well, Jack, how did casinos respond to 10% fewer gamblers traveling to Vegas? By reducing the number of blackjack tables by 20%. And that's the key. By removing even more tables than lost customers, casinos created scarcity. So the remaining gamblers who wanted to play blackjack, they felt scarcity. There weren't many tables. Because they felt scarcity, they were willing

to effectively pay more to play blackjack. So casinos shrank the size of their business, but grew the amount of money they made. Because they created a sense of scarcity. For our second store, we got the old DCD, don't we, Jack? The dead ceiling deal. The dead ceiling deal. Yet he's the president and the speaker of the house agreed on a deal to lift the debt ceiling. So we just solved a short-term problem, but discovered a long-term weakness to. Saturday afternoon, Jack's at the pool. He's hanging out with the kiddos. How's my pod son doing, by the way? He's doing the backstroke. He is flourishing in the water. Four-stroke? What's he doing? Can he swim?

No, but he is blowing bubbles in the water. I'm impressed. That's step one to the butterfly. Step one. Okay. Jack's in the pool. And then we get news of a debt ceiling deal. We got a handshake deal to raise the debt ceiling and avoid defaulting on America's debt. Mazel tof. Well, this deal suspends the debt ceiling for two years, not too shabby. So whatever the federal government owes, it has authorization to pay it. And this means that we don't have to do another debt ceiling dramatic showdown until after the next presidential election, which feels okay. That's the main thing that Democrats got.

America won't default on America's debts now. They avoided a default on America's debts. Republicans were the ones demanding changes in return. And here's what Republicans got. The first big win was in fossil fuels. Fossil fuels. Republicans got approval for a 303-mile natural gas pipeline all the way from Virginia to West Virginia. Virginia's a long state.

It's a big state. It's a big state. It is a long state. It's very, very horizontal. The second thing Republicans got was in the welfare category. There are now new work requirements if you want to receive food stamps. Fossil fuels check, welfare check. Now let's move over to tax enforcement. The government is redirecting $20 billion away from the IRS that would have been used to ensure people pay taxes. This bill also impacts student loans. If you have federal student loans, repayments will resume in August.

If you're wondering when you've got to pay student loans again, it's going to be August. And finally, COVID excess. That's what Republicans targeted. We had $30 billion of leftover excess COVID funds that were just like sitting in a Tupperware kank in the freezer jack. And this debt ceiling deal says those will never be spent. They'll be returned instead. But here's the funny thing, Yetis, the biggest drivers of our debt.

Healthcare, Social Security, and taxes. Those three huge things that determine how much debt we have saw almost no meaningful change. In fact, we actually increased. spending on defense with this deal. Yeties, this is a debt deal that doesn't actually reduce the debt. But still, stocks rose Monday on relief. On pure relief. The biggest economy in the world will not default on its debt on purpose.

It's a handshake deal. Now it's got to pass both houses of Congress and get signed by the president. It's not guaranteed it will pass, but it sounds like good news for all of us. Or does it? So, Jack, what's the takeaway for all our buddies in the U.S. economy? There is no winner to this debt ceiling deal. We all lost. Yeties, if Congress passes this debt ceiling deal,

they will have averted a short-term problem. The short-term problem that we'd stiff our lenders and that America wouldn't pay its bills. But honestly, even if we avoid that short-term problem, long-term damage has already been done. Yeah, America just publicly told all of its lenders that we considered not paying them. That's pretty awkward, isn't it, Jack? That hurts our credibility with the financial markets in the future. future and our reputation as a world power with the world's global reserve currency. And frankly, it doesn't solve our whole debt problem either.

We can face the same drama again in two years. If this deal passes, the short-term problem will be solved. But long-term, the damage is already done. For our third and final story, we just got the numbers on Waystar Royco, the company in succession. No spoilers here. No spoilers. And this isn't even a real company. No, it is not, Jack.

We can always find a real business takeaway. Yes, we can. Yeties, let's go back to the 1970s when a company was founded by Logan Roy, a young immigrant man from Scotland. Logan was a father of four, but really only three mattered. Kendall, Shiv, and Roman, and they're all fighting to take over his empire once he passes. Way Star Royco, that's the empire, isn't it, Jack? Waystar Royco, a mash-up corporate M&A name fit for a conglomerate of conglomerates. We checked out the LinkedIn. If you want to work here, you gotta be a killer, Jack. You gotta be a killer.

Fictional company, but based on three real world companies. Waystar Royco is one part Rupert Murdoch's News Corp. It's one part family-run LVMH. And it's got a hint of Disney in there, doesn't it, Jack? Waystar Royco operates in 50 countries. It is publicly traded on the New York Stock Exchange. Now, Jack and I should sprinkle on a little context here. We couldn't get the earnings report from Waystar Royco. Because they don't exist.

it is a fake company. But in the last five years, there were references to its numbers in the show. For example, what was it? Season two, they mentioned $29 billion in annual revenues. Let's go with that one, Jack, the one where they're hanging out in the Hamptons. That was a good kickoff. So Fortune Magazine extrapolated those numbers to estimate a $105 billion market cap of Waste Arroyka. They basically, they took a multiple. You would apply to media companies and multiplied the $29 billion in revenues to get $105 billion valuation. And that valuation would place it 122 on the list of Fortune 500 companies. Yeah, can we sprinkle on a little more context here? More valuable than Target, a little less valuable than Airbnb.

Jack, could you say that to make a tomlitt? We had to break a few grids. I'm saying it now. Yeah, it is the profit puppy of Wasteo-Royko is the cable news network known as ATN. ATN. This is basically Fox News, but again, in the fictional world. ATN demands a huge cut of the cable TV bundle that you're, grandparents pay for. That is why it's a profit puppy. And they also sell valuable commercials during the commercial breaks for like life alert. If you're going to see an ad for thytastrasol,

you're going to see it on ATN. But it's not just ATN. Good point, Jack. Royca owns a few movie studios and they own a dozen print newspapers that are still in circulation. And Jack, we can't forget about Cousin Greg's first job, can we? Remember he was a mascot and he threw up in his suit because he was so bad at his job? Because he was a mascot at the Waystar Royco amusement parks. And how could we forget the original scandal of Waystar Royco? Jack, you must be talking about the cruise lines, another revenue source for Waystar Royco. And I think it was episode one where they acquired Volter, a competitor to BuzzFeed,

a tech-driven viral New Age media company. So this legacy media company now owns a tech savvy media company. But the latest product, the one that got the big product on that. Oh, Jack, are you talking about Living Plus? Living Plus, a hybrid of digital and physical. Yet, he's Living Plus was like an all-inclusive cruise, but in the real physical world, it was basically a retirement community where you lived.

It was a cruise ship on land. It was ludicrously capacious. Now, the goal with the Waystar Royco empire that Logan Roy was building was a flywheel. Exactly. A fly-wheel strategy. Movie characters would drive theme park tickets and then cruise line sales. But in reality, you got something different. Yeah, ATN was a device of news business that broke that flywheel.

You see it in season four. If it is to be said, so it be. So, Jack, what's the takeaway for our buddies over at Waystar Royco? The real company Logan Roy should have followed is Ford. Ford. Yeties, the core story of succession is about a power struggle between family. It is a sibling rivalry that affects the whole economy. Children competed to be the next leader, but the father wouldn't give it up.

Honestly, it's a Shakespearean mess. But frankly, Jack and I noticed there is one publicly traded American company that has pulled this off. Ford. Ford. We think Ford is the biggest publicly traded family-run business in America. Eddie's, let's look at the evidence founded 120 years ago by Henry Ford. Ford has been run by a Ford family member for all but 20 years. In fact, Ford just a few years ago added two.

of the founder's great-great-grandchildren to the board of directors. Because the Ford family was willing to do what the Roy's couldn't. The Ford family put longevity over ego. They gave up some control to keep their power. Well, the Ford's have given up control by letting non-Fords become CEOs. The Fords have swallowed their pride and let non-Fords run the company. Yeti's Waystar Royco is a fake company. But in reality, it should have followed Ford. the takeaways for us for the new Thursday. Las Vegas casinos just had their best year for gambling revenues ever because they tweaked Blackjack. By shrinking their business, they grew their

business because of scarcity. For our second story, the debt ceiling deal doesn't even reduce our debt. Short-term damage avoided. Long-term damage already done. And our third and final story is Logan Roy. This fictitional media tycoon, in reality, should have followed forward. If it is to be said, so it is, so it will be. You can just speak normal, Greg. Now, time for the best fact yet. This one sent in by Kyle Vow, who's currently in Texas, but originally from Vietnam. Vietnamese is one of the most unique languages on earth.

Because get this, Vietnamese is a tonal language with six different tones. So you can have two words in Vietnamese that are the same word, but the meaning changes depending on the tone you deliver it. Yeah, so like same spelling, same look, looks like the same word, but to get the different definition communicated, you just have to shift your tone. For example, in English, we have the word party, which can mean two things. Like, it could be like a political party or it could be like a, like, celebration party, Jack. Or a celebration party, right? The way you say the word immediately tells people what the definition is. So if you're speaking Vietnamese, you can learn one word and no six words. If you know,

oh, you know. Yetis, you look fantastic today. Jack, you're looking great of that slamming sweating over there. You're feeling good? Slamming Sam's actually slamming sweating over here. It's 85 degrees. Jack, you got to get yourself some Starbucks ice. Pellets or nuggets.

We'll speak with the manager. Yeties, Jack and I, we'll see you tomorrow. Before we go, a happy birthday to legendary Yeti, Arienzel, anktivan, all the way over in Ula, Mongolia. And Dylan Dickman from Dallas is celebrating the last year of his 20s, happy birthday. And a happy birthday to Abbaschak Bendre all the way down in lovely San Diego.

Happy birthday to Sanjay and Archie at Guyquod, who have the same birthday, just 36 years apart. And let's get a shout out to Ms. Michelle Jones, the high school business teacher of the year who's got her first day of summer break today. Happy 20th anniversary to Amanda and Jason McKinney celebrating in Punta, Mexico. Erica Machuca just purchased her first home down in Dallas. Big shout out to Matt Golden, who's headed to New Haven to do the Yale School of Management for that MBA. And Claire Yao is graduating and going on to visit her 31st country. And to anyone else, celebrate something today, make it a T-boy.

Celebrate the wins. Except you, Greg. You have to keep working. This is Jack. I own stock of Disney and Nick and I both own stock of Airbnb. Because they created a sense of scarcity. Great. Wonderful, dude. Awesome.

Love it. Awesome. And for that reason, we're doing one story today. Better tune in tomorrow. Oh, my God, I'll turn in. When shrinking your business grows your business.