Yet Another Value Podcast - A tour through the media landscape with TSOH's Alex Morris

Episode Date: March 10, 2026

Host Andrew Walker speaks with Alex Morris of The Science of Hitting about the rapidly shifting media landscape. They examine the failed Netflix bid for Warner Bros. Discovery and Paramount’s winning acquisition, along with the strategic implications for streaming competition. The conversation analyzes Netflix’s long-term positioning, the importance of intellectual property in a streaming ecosystem, and how artificial intelligence could influence media consumption. They also assess the financial pressures facing traditional media companies, challenges around integrating large media platforms, and the evolving economics of sports rights. Finally, they explore Disney’s strategic transition and the broader outlook for streaming platforms and legacy television networks.You can check out the upcoming AlphaSense webinar here: [00:00] Introduction and webinar announcement[00:04:06] Alex Morris investing background[00:06:55] Netflix Warner Brothers bid debate[00:11:19] Netflix strategy and screen time[00:13:18] AI impact on media IP[00:18:54] Netflix content release strategy discussion[00:26:18] Regulatory pushback on Netflix deal[00:28:17] Netflix strategy after losing bid[00:31:13] Paramount acquisition outlook analysis[00:33:09] Linear television financial dependence[00:37:34] Risks integrating Paramount and Warner[00:41:12] Distribution complexity across platforms[00:46:21] Comcast Versant spinoff strategy critique[00:53:20] Disney position in streaming landscape[00:57:28] Sports rights competitive dynamicsLinks:Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimerProduction and editing by The Podcast Consultant - https://thepodcastconsultant.com/

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Have it all with Dulu on Disney Plus. You're about to listen to the yet another value podcast with Heroes. me, Andrew Walker. Today's episode, I have my friend Alex Morris from The Science of Pitting on. Look, Alex is a friend. I am a happy subscriber to the Science of Pitting. I'm having them on today because next week I'm doing a, I guess actually when I posted it today, I'm doing a live webinar with Alphacin's covering everything that's going on in the media space in the wake of kind of the Netflix, Paramount Warner Brothers bidding war. And you know, there's always stuff to talk about. There's sports rights. There's Disney's new CEO. I mean, there's just so much to talk about.

love following the space. So I had Alex on for kind of warm-up to go through the space and start talking about everything that's going on the media and start really making sure I've got my views and everything right in front of that webinar, which will be live and we will be taking live Q&A from the audience if you want to come, join, listen, ask questions, that would be awesome. There will also, of course, be a replay. I'm going to include two links in the show notes. One, a link to Alex's substack, which I am a happy subscriber to, and two, a link to my live webinar where you can go sign up and listen to me Ramble live. So I'll include a link to both those in his show notes, but first, a word from our sponsors. This podcast is sponsored by me.

Okay, okay, it's sponsored by Alphacin's, but it's also sponsored by me. I'm going to be doing a live webinar with Alphacensis director of TMT research, Michelle Brophy on March 10th at 1 p.m. Eastern. We're going to be talking about all things media. You know, if you're a long time follower of this podcast, you're a longtime follower of the blog, you know, I love media. I love telecom. I love communication. I love it all. So we're going to be talking about all things media. I am recording this advertisement on February 27th. We just had within the past 24 hours, Paramount outbid Netflix for Warner Brothers. Netflix backs off. I bet you we're going to be talking about how that reshapes the media landscape a little bit. Disney's got a new CEO. Sports rights are always in the news. Video games,

remember them? Those are pretty interesting. That's evolving quickly. What about AI content? We're going to be talking about all of it. And the best part is it's a live webinar. So if you come join, and I'd love for you to come join and listen live. We're going to be taking questions live for listeners. So you can hear me ramble like a madman in real time if you ask the right question. So if you're interested, there'll be a link in the show notes or you know what, go to get another value blog.com. You can find it there.

Go to alpha dash sense.com slash yavp. That's alpha dash sense.com slash yavp. I did that off the cuff of my head. That's how much I know the referral link. So go there. You can sign up, all that sort of stuff. We'd love to have you March 10th, 1 p.m. Eastern. And of course, there'll be a replay if you want to catch it on replay instead.

See you soon. All right, hello, welcome to you yet another values podcast. I'm your host, Andrew Walker. With me today, I'm happy to have on for it's been a lot. Have you gotten to the shirt yet, Alex? No, I don't think so. I don't think I have the shirt. But I think I wore golfing and now it's not in a condition to be worn anymore.

Okay, so you have gotten the shirt. Anyway, I should say his name, Alex Moore's from the science of hitting. Alex, how's it going? Hang it in in there. As you were talking about before coming on, we both have two kids and one kid being particularly young. So hanging in there is as good as you could be doing. As I said before, wise words, man. We're going to hit a bunch of stuff today. Before we get started, quick disclaimer, remind everyone, nothing on the podcast is investing

advice. You can see a full legal disclaimer at the end of the show. We're going to be jamming through all sorts of media stuff. So maybe just like a heightened disclaimer. We're going to talk about a bunch of stocks instead of a single stock focus. Look, I should have mentioned at the front, Alex Morris, the science of hitting. I think I'm a happy day one sub. I read most of everything. thing he writes. Every now and then there's a piece I don't. But I read a lot. I love it. And I'm really happy. I think we're recording this on March 6th. We're going to just jam through the media space. And I should say we're doing this because next week I'm doing a live webinar with Alpha Sense through the media space. So this is kind of my prep. I'll include a link to both Alex's substack and my

webinar in the show notes. But Alex, Netflix lost the deal for Warner Brothers, Paramounts buying them. Disney's got a new CEO. I know you follow both companies. closely. We can talk them. We can talk all the minnows, wherever you want to start. But what are your kind of overall thoughts on the media sector right now? Yeah, I was thinking about this coming in. I think it probably makes sense for me to get a little bit of a background on my history in the industry as an investor. So that way you can see where I've made good decisions and probably more often than not bad decisions. It seems to be a pretty difficult sector to get right. For the past 10 years, there's been one good decision in media, two good decisions.

Sell everything except for Netflix. That's the only, that's the only things that have worked in media for the past 10 years, to be honest with you. My intro started with what at the time seemed like a good decision, which I own Fox. And I own Fox largely because of thoughts about their live rights and how that would navigate a transition the world was going through, which I certainly did not appreciate or fully understand at that point in time. But that was kind of the underlying idea. When the Fox Disney deal happened, I took Equity in Disney, which I've now held for, you know,

it's been more than 10 years, or right around there, which obviously has not worked very well to your point. But owning Disney and following it for a long time gave me a certain amount of appreciation for what was happening, particularly in terms of streaming a D to C. I started to really buy into the idea of what it meant to be global and truly have scale in this business. Long story short, fast forward to 22 when Netflix went through their troubles. My conclusion at the time when it happened was effectively they were the canary in the coal mine and they were going to, the pain they were going through was subsequently going to be hit at everybody else, and the reactions from everybody else would be a huge net positive for Netflix.

So, long story short, I've owned Disney for a long time, not a good investment, bought Netflix in 22, eventually ran to like a mid-teens percentage of the portfolio. I subsequently trimmed a good amount, and also it's gotten, the stock's gotten killed over the past, however many months now in advance this deal and all that jazz. So those are my priors on the space. I guess it makes the most sense to start with this deal. My sense coming in for a long time has been that there are two particularly attractive assets in this space for something like a Netflix, and that would be Warner Brothers and NBC Universal.

And they could fit in in different ways depending on if it was with or without the linear networks and all that jazz. When the price tag for the deal got announced for Netflix, I thought it was excessive. And when I say that, I should probably frame that in terms of, I thought it was excessive in terms of the amount of value that was going to be transferred from Netflix to Warner Brothers. Not necessarily the price tag itself doesn't make sense, but a significant percentage of the price tag making sense was from value that Netflix specifically could add. And for them to give a very large percentage or all of that to Warner Brothers Discovery shareholders was something I viewed as a bridge too far. You want to pause there because I think this is a really interesting debate I've had with a lot of people, right? Most people, I think Netflix would have been the best home for Warner Brothers, right? And that's obvious.

The player with the best scale adding these IP assets is going to make the IP the most valuable. And I hear you on, hey, Netflix, you know, a lot of the value they're creating. But that's part of the auction process, right? Like I'm a standalone worth one. I think to Paramount Warner Brothers was worth two. into Netflix, Warner Brothers worth 2.5. And part of the auction process is like, hey, you've got all that value.

You've got to create. You've got to split it somehow. And the more tense at auction, the more I get to take the value from you, right? You're kind of bidding up to your last dollar of where, hey, I can no longer create value from here. So I certainly hear you, but I mean, it was a pretty damn competitive option. Obviously, Paramount was going crazy for it.

But if you read, and I've heard varying reports of how serious this was, I don't think Warner Brothers actually could have done it. But Comcast, Cents, they're in a bid that they value. at 35 that was basically Warner Brothers take half the company plus cash was their bid, if I'm remembering correctly. So that's a pretty intense bid from Comcast there, too. So there's a lot of competitive dynamics. I'll pause there and turn it back to you.

No, I absolutely agree with what you said. And then you get back to the question of, is this a want to have or a need to have and what else can Netflix do? So that's where for me, that's where that's where that breaking point is. But to your statement, like if you're going to get into these bidding wars, then you're getting to a place where more and more of the value is then being transferred to the sellers, right? And by the way, on this point, I think an interesting part of this whole saga that you and I have been falling for a long time is David Zaslov generally receives a lot of flack for

how he's how he's managed these businesses over time and the amount of compensation he's received. And I think in hindsight, if you look at how this played out in the end, particularly around this sale, he played it masterfully. I mean, the smartest thing to do was to find a way to find a deal with Netflix at a price that was quite high, which he managed to do. And I think they always knew they had Peace Guy there, really, really, really wanting to do this. And they'd ultimately find a way to get very, very close to that value

or ahead of it. And there were a lot of holes in the bid, and they changed a lot of things subsequently that got them. So it's funny to say that someone could get paid hundreds and hundreds of millions of dollars, and then you look at the net result on something, and you can go, hey, actually, maybe some of that pay is, when you're dealing with big numbers, that pay can be justified. I guess is what I'm trying to say.

I don't, so I do hear you. I think, but at the same time, like, the deal was a disaster. I mean, Discovery stock price is flat to down over 10 years and the man is going to be a billionaire off this. And the fact that he ran, I'm not even sure he ran a good process here, to be honest with you. But the fact he ran a process had a bidding more and like, hey, guess what? Every studio in history that's gone for sale, people have gone crazy for, right?

So the fact that he had this great studio that, you know, it's still valued below where they merged Warner Brothers and Discovery together. I actually, I do, I think he's done a nice job at Warner Brothers. Like, I do think the business was a mess when he took it from AT&T, but HBO is kind of firing on all cylinders again. He bought James Gunn in. DC, DC, you might be in a better place than Marvel is right now. You know, like, I do think the fruits of the labor were kind of starting to be realized, but there was a lot of turmoil, a lot of, and Cheryl wasn't really. benefit along the way. So let me ask you a specific question here. You know, one of the things I was very interested in when I was reading this is Ted Sarandos goes out, Netflix's COCO goes out and he says,

look, Reed Hastings is a buy versus bill guy. He wanted to, he prefers build. And while we have his full support, I don't think he's a big fan of this deal. He basically says that, right? Netflix has pretty much never done an acquisition of their history. They've done small little IP things. But I mean, you know, to go from, hey, we've done five deals worth the total of $600 million in our history, too. We're doing $100 billion M&A. I think a big question, and one of the reasons the share price was weak, was not just they were paying for Warner Bros. I think people were looking at Netflix saying, hey, are they seeing something in their internals?

Are they seeing something in their kind of long-term vision here that suggests the core business is weaker than that needed? That suggested they needed to pivot to this massive transformational deal. So I'd love to pose that question to you. My answer in a word is no. I don't believe that's the case. Now, that said, you've seen the transition underway in terms of ad supported and their view on live rights and the things that they're trying to do with gaming, the things are trying to do with podcasts. I think they're certainly trying to figure out, and I think mobile is a glaring example of this, how do we get our share of screen time generally to go from being a number that's,

in a market like the U.S. basically stagnant at best. In terms of share of streaming TV time, it's been going down, how do we bend that? And I think they have been looking for ways to try and do that while also simultaneously trying to further the global strategy and get ready to move forward in that direction. I don't view it as something that is existential

or reflects like a very significant change from what's been happening for a while now, but I do think they want to find a path to get stronger and IP is one obviously very prominent way to go out and try and do that. The question I've always come back to is, okay, well, how much shit to pay for that IP? How is that IP monetized currently? How are you going to change how it's monetized currently? And to the extent that you come to answers on that particular piece of IP about something, how translatable is that to other kinds of IP that you can either own currently, can license, or can potentially go out and buy. So I think

Long story short, I think you see this as a moment where they really start to ask themselves tougher questions on what is the change in our strategy from here forward and obviously from the advantageous position of being really in a solid financial position. Going out and spending $80 billion of cash would not have been insignificant for Netflix to go and do. Their financial position is not I know their market value is obviously quite high, but they don't generate that much cash to easily go to spend 80. This is not Google. Yeah. Right, right. So, You know, I think there's, they now have a lot of opportunities to go play offense, and they have to go find what those opportunities are, though.

You mentioned IP, and I want to take a question I have later and just bring it here because it's been top of my mind since it's been. You know, Netflix is one of, to say it lightly, one of the most forward-looking, technologically savvy companies out there. And then Paramount, which historically, let's put it nicely, has not been, but they, you know, Larry Ellison is backing this whole thing, and Larry Ellison is over at Oracle. And if you think Larry Ellison isn't one of the most tech-sabby people out there, I would, A, point you to the podcast I did with Bern Hobart or encourage you to re-it. I mean, the man has nailed almost every single technological shift in wave, and right now he is all in on AI, right?

And maybe he misses a wave at some point, but he's all in AI. The reason I mentioned this is you have, let's just say both of these are technologically savvy people who have a vision for where AI is going. Both of them looked at Warner Brother and said IP. IP is the benchmark. And I wondered that along two lines. A, do you think IP really kind of juices the value, or sorry, AI kind of juiced the value IP? And B, if you think that's the case, is Netflix's hands go about to where we're saying a little bit weaker than maybe we've been thinking because they've got unbelievable distribution. They've got unbelievable consumer engagement, all this or stuff. The one thing they do not have is IP that they themselves own, right?

They've got stranger things. That's pretty much it in terms of the really good owned IP. So I want to ask you the AI questions on those two lines. I'll turn it over to you and you can go where you want to with it. Yeah, not to skirt the question, but I think the question as I partly think about it is, what is IP? What are we even defining IP as? And what is the top 1% of IP? What's the top 10% of IP?

I think about this in terms of, and I wrote about this probably six months ago, you look at something like sex in the city, which at the time, when he came out on HBO, was a very prominent show for them. And it still has an audience today. I mean, the show ended, the series finale was in 2004. And when the show came on Netflix, you can look at the engagement course to try to guess this. It basically accounted for, by my mask, something like half a percent to one percent of all engagement in the U.S. during the periods where it was released on Netflix.

It's for a show that's 20 years old at this point. I mean, that's pretty darn impressive. But when you then look at it relative to Netflix's overall scale, during, you know, the most recent period that we had that data for, the average viewership of the show, on the Netflix engagement report, shows are broken down into individual seasons. The average season of Sex and the City,

there were 800 other shows that had comparable or higher viewership in the same period, which just speaks to the breadth of, again, like, what is IP actually mean? And by the way, that was inclusive of three shows that in that six-month window had more viewership than Sex and City had the entire time that was on Netflix,

one of which was Squid Game, forgetting the other one, but the third one was a show, I believe it's a Korean show, something with Tangerine title, something that the large majority of people listening in this will have never heard of before. And that's kind of the point, right?

When you're talking about a global platform that has a huge amount of breath and depth in terms of what they provide, yes, it's very important, I think, to have, there's a lot of value to be had in these kind of big cultural moments, whether it's sports or, you know, I think they're doing a live. Is Harry Styles a singer?

Yes, yes. Okay. They're doing like a show with him in Manchester. He's doing a big performance. I don't know if it's live or shortly after. I can imagine them doing stuff like that over time, right? Whether the biggest concert on Taylor Swift's next door, maybe it should be on Netflix, a live show, you know, things like that they can do.

That's where it's the benefit of scale, right? Taylor Swift says, I have a concert. And Netflix says, okay, we'll pay you 30, let's make the math, $50 million. And we have a billion users. So you know, you divide that 50 million over a billion users. Even if Disney really wants it, if Disney's got 200 million users, if they want to top that, well, guess what? The price per user of that is 5x as high.

And that's where like your scale really begets scale and gives you really interesting things, which I want people to keep in mind when we go to sports rights later. So it's really great to have things like Squid Game. You know, by the way, they still license a ton of content. I'm sure as people in the U.S. I've seen in the last couple weeks, something like James Bond. If it comes on platform, it can take over the top 10, basically, because there's a lot of demand to watch those types of shows.

But there's also a huge percentage of other content besides that that people watch on platform. And I think this partly gets to the question about AI and kind of new content is, what is the value of the library as it stands today? I guess if it can be used to some extent, repurpose to some extent, maybe the value changes. But what really is the value of the wire or the Sopranos or these other shows that, you know, are they really game-changing content to add to Netflix's platform? And to the extent that they are, is it game-changing for six months or a year?

Is it game changing for five years? And the answer to that question to me is I've never been particularly confident about that. Now, that said, HBO still punches above its weight in terms of White Lotus and game, a lot of the shows that they have now, I wouldn't even define, would you define White Lotus's IP? Or, you know what I mean? Like, a lot of these shows are just, it's something that they've kind of created more recently on something that wasn't unknown quantity before. So I think that's what Netflix has to continue to get better at, which apparently is quite hard to do and, you know, props to HBO for being so good at that for so long. Yeah, I mean, I think HBO, you know,

I think that is a definition of culture and letting things sit just how good they are, It's been making all these shows and stuff. And, you know, I obviously I'm not an industry with people, but I hear they do everything so different than everyone and they're willing to sit on things and let them just circulate. But, you know, I guess for Netflix, the worry in my mind, and this might be too forward-focused and this might be too Galaxy Brain. But, you know, people get increasingly turned on to short formats, you know, TikToks and stuff.

And I think we can talk radio-tory later. I can't believe there was even a question like, okay, cool, they're buying HBO. They're like, there's still plenty of streaming platforms. out there and they're competing with YouTube. They're completing with TikTok. They're competing with video games. Like it's all, I've always believed Reed Hastings, it's all a competition for time, our biggest enemy asleep.

And just like these short form apps and YouTube and stuff are taking so much time. But I guess my worry would be like, hey, run this forward five years. People go to TikTok to watch their favorite short form videos and then they've got four or five worlds that they love, that they just want to spend all their time in, you know, Sopranos, DC, you pick your work, world. And instead of going to Netflix, they go to the Sopranos AI and they have it spin up three

new episodes for them or something, right? And they can personalize the episodes. Like, I've always, I think stars, I've never watched the show, so I don't know. But one of their big new shows is a Spartacus spinoff, which again, I've never watched. But apparently there was a popular character who gets killed. And the new spinoff is, what if he didn't get killed, right? And you could imagine how Game of Thrones, you have an AI in it's, hey, what if Ned Stark had escaped here? Or what if, you know, the red wedding, if Rob had made out the red, you could imagine just spinning up different shows, spending all your time. And the reason I mentioned that is that's a disaster for Netflix, right? Their distribution no longer matters.

People go to their favorite AP. They go to their AI engine. All the economists are clueling to IP and then the AI engine spin it up. And probably the memory companies are making some money selling memory in the super memory cycle. But that might be Galaxy Brain. But what do you think about like just kind of that risk of, hey, if people are going to be able to spend more and more time with IP? through AI, and then short-in-form video, Netflix is in a tough spot there. Yeah, I think really, really either way, it comes back to the idea that Netflix needs to have,

it needs to have IP that is relevant to people. And it needs to either do that through, you know, doing one-off deals to go acquire IP. It needs to do it through kind of the big global licensing deal they did with Sony. Obviously, if they sign these deals, they need to contemplate the type of things you're talking about. It needs to be all-encompassing. And, you know, when they, when they sit down at the table with, you know, X, Y, Z producer or director or actor, whoever it may be, they sit there in a very advantageous position in terms of what they can do for, for audience and how they can drive the economics of that. And, you know, as was very prominent throughout this deal, you know, it's kind of funny, theater viewership is down in the U.S. The movie theater viewership is attendance is down 40% over the past two decades.

So audiences, to some extent, have kind of voted with their feet. Not to say it's irrelevant, but they voted with their feet to some extent. But the industry still has a big, you know, they're a big stakeholder in this process. They have a view about this. And obviously, going forward, Netflix needs, they have been this way for some time. But they need to be, to the extent they need to be more accommodating. And today makes sense from a business perspective, obviously. They need to tweak things like this.

And, you know, it's kind of the idea that you, they kind of frame this. as, hey, once we got into WBD and saw the books and we saw Warner Brothers and we realized what the theatrical business was like, we realized it's a good fit for us. That's kind of like, okay, I guess I hear what you're saying. But now going forward, they need to really have a thoughtful view on this stuff, right? You know, theater's interesting just because I'm not breaking new ground here, but there are a lot of movies on Netflix. Some of them are of very poor quality, but some of them are of good quality. Like, I remember really liking Red Notice. It had The Rock and Ryan Reynolds. How am I not going to like that? And it, you know, is buzzing fun. But I do think there

is something to, you know, Netflix's movies haven't really popped in the same way that a lot of the movies, like, yes, they get big numbers, but I think people watch them and forget about them versus, you know, a lot of movies and theaters people still talk about. This is a little bit pre-streaming, but Bridesmaid, you know, Anchorman. These are more you're my generation than this generation. But I do think there is something that they might learn or be thinking about when they might have got it from the, hey, when you put a movie theater, it's not just about the economics then. It's about people remember the experience. And there's just something a little bit more memorable about when you go to the movie theater and you sit there and you watch it versus when you kind of sit

on your couch. And if you're trying to build brands and if you're trying to build IP, there might be something to that. And, you know, like, Stranger Things, they probably split up the last season of Stranger Things because it costs so, so effing much money. They wanted to get the real bang for their buck and have retention for four months, you know, but there is something too. When you're dropping it all at once, I think you can kind of binge it and just forget versus when you create that water cooler style moment and you let things just circulate and you let people be able to say, hey, what do you think is going to happen next?

Like, I do just think it's not in the numbers immediately, but I think that is how you build brand. Let me ask you. Well, real quick, by the way, I mean, look, the flip side of that is it's awesome to have a series where you can watch the whole thing, right? But look at Love is Blind right now, which is a hugely popular show for them. And it's, you know, it's a very different type of show from what we call IP, right? But they're dropping, they've dropped, I know this because my wife and I watched a show.

They dropped the wedding episode a week after the previous ones that aired. And then now they're airing the reunion a week. So they have, if nothing else, I think Netflix historically has been really good at being flexible and changing as they see the reason to do so. And Reed Hastings has always said, our two religions basically are customers. customer satisfaction and operating profits. And that's what we're focused on. Everything else is just a tactic to help us get there. And I think there is content that could be treated differently.

And some things can be dropped all at once, and some things can be parsed out a little bit more. And this is one part of the, and this gets back to the Disney discussion, which I'm sure we'll get into, but this is one part of the deal where I do think maybe there was some logic to, if we buy Warner Brothers, HBO, what is called HBO Max, so I guess it's called Max Now, that can return to a more traditional HBO positioning

with a certain amount of really the temple kind of movies and the content that we all know HBO for. And we can take everything else that's more of the filler stuff and that can probably work on Netflix at some capacity. HBO has, domestically, HBO has less than 60 million subscribers and it had 50 million a decade ago. And its Arpoo is $10 today. And I'm going to take a wild guess that it's Arpoo is probably somewhere in the $10

range deck. It has an audience, but that audience is only so large. And the content that they're really, really good at is something that they uniquely do well outside of, I guess Apple does pretty well now as well, right? But they could have returned that to where it was and had a way to kind of differentiate between those two offerings in a way that I think probably could have really been sensible. And then internationally, they probably could have just done away with it for the most part and made of the tile or whatever. But it could have really worked for them in that regard. And I think maybe that part of the deal was actually pretty thoughtful. Get the sweet, sweet bundle economics, too.

Let me, two more question on Netflix, and then we can start hitting some other things. First, Netflix, do you think they were surprised? I mean, the regulatory pushback here, I especially think the Republican senators just like hitting on the company, Europe, hitting on the company. Do you think Netflix went into this thinking, hey, everybody loves us? We are one of the few tech businesses where people like literally vote with their wallet. We make it so easy for them to cancel. Every month they vote. We're going to be with network.

people love us. And I mean, there was a lot of, on all sides, there was a lot of pushback here. Do you think they were surprised by the regulatory pushback? And do you think they learned anything from it? I mean, if they were, I don't think they should have been. I would bucket them in the group of what people perceived to be the big tech companies. And they've obviously had issues with content, too, that's perceived to have a certain political slant or certain, you know, cultural slant. So I think they should have been eyes wide open as they go into this. and anything in Hollywood is, as you can see with the deal now,

it was like, oh, my gosh, we're going to get bought my Netflix, and then Netflix is no longer the winner. And then all of those are you like, we wish Netflix had bought us. Yeah, this is the worst thing in the world. And then the buyer changes, like, oh, my God, this is actually even worse. So that just always seemed like if they overlooked that, I think that's kind of foolish if they did. Last question on Netflix.

So, you know, I follow a lot of these merger. When you are kind of the spurned bitter in a situation, oftentimes the question is, well, let's go by plan B. I don't know, I don't think there was a plan B. Again, Netflix is a source, you know, a big acquisition, but they learned a lot. They got into the Warner Brothers books. They got regulatory pushback. They got all this sort of stuff.

What do you think the next step for Netflix is? Do you think they change this strategy? Do you think they might go after something? I mean, you mentioned Sony earlier. They've got the licensing deal. Sony doesn't have the best IP library, but it is one of the big four studios with 100 years of movie history. Like, that seems like a pretty clean acquisition.

We could get even crazier if you wanted, but what do you think the next steps for Netflix are? I think the next steps are really a continuation of what we've seen, but maybe it accelerates to some extent. I thought from the perspective of a Disney shareholder, I thought the Netflix Warner Brothers deal was interesting in terms of potentially providing a certain umbrella on pricing, particularly if they consolidated the services, which maybe they wouldn't have done. But I thought it provided an interesting cover there, and I thought it provided some nice protection against Netflix really going all in on sports, because they were going to be in a position where they were really serving. that non-live rights role really well. Not to say they wouldn't have done anything, but I think they could have kept it as a bit more of a side show.

I think that probably changes now as a result to this. And obviously they've been going down that path anyways, right? But I think that becomes a much more prominent focus. I think they also really, as they've been doing for a long time, lean into global and international, right? I mean, one of the funny numbers is you look at something like WBD, their D.C business internationally does three and a half billion in revenues. Netflix's international D.C. business does 27 billion in revenues.

So they're in a very strong position to go out and do, I'm forgetting the name now. Is it TPL? The deal they did in France for basically local live rights to find ways to have that work with their platform. There's a ton of things like that that I think they can do internationally to go into markets and go, okay, the top 10, 20, 30 markets outside of the U.S. what do we do to really supercharge our position in a world where we have a lot of competitors like T. Sky or even Disney to some extent that just can't act with level of aggressiveness that we can because of our current position financially and the scale that we have. Nice. Let's wrap Netflix up there, and I'm sure they'll come up in our other discussions. There's three other things I wanted to hit. So we got 30 minutes. We got to run. But I want to talk about, you know, there is a winner, Paramount Warner Brother. You are going to have a scale competitor there. I'd love to discuss our thoughts on that. The other media company, I mean, again, a subscriber, I'm looking at your portfolio right now. You own Disney and Netflix, I think the competition here revealed a lot and is going to have a lot of

impacts for Disney and Netflix. Plus, they've got a new CEO coming in in, what, a couple weeks? So I'd love to discuss Disney. And then you're in my favorite. I'd love to discuss the outlook for sports rights, which, I mean, A, I love them because I am a sports fan, but B, I don't think people realize outside of Netflix how large these sports rights are and how existential. And the NFL bidding rights, people do not realize how crazy it's going to get in the next few years. So you pick where you want to start and we can hop into any of them.

I think why she's just got a peace guy from here. Okay, let's go to peace guy. So peace guy is the winner, you know, buying Warner Brothers for $100 billion plus. This is truly the fish that's swallowed the whale thanks to the Ellison's backstopping a heck of a lot of money here. They're going to be a skilled competitor. I mean, I think they might be larger than Disney kind of when you start putting this up together. Same ballpark, yeah. What's your outlook for Paramount as they kind of combine and become kind of the third-scale player here? Yeah, I think it's relevant to step back a little bit and talk about the Warner Media Discovery Deal. And when that deal was signed and when the deal deck was put out there, I believe mid-21, correct me if I'm wrong, the projections that were given for 23 were 52 billion in revenues.

It makes a SPAC projection deck. It's more aligned as SPAC projection deck, and it was April 21, as you said. So it's kind of running the right time frame, too. So $52 billion on top line, I'll just do one by one to make it easier to follow. $52 billion was the guide for 23, $25 revenues for 37, so $15 billion short. D to C revenues for 23 were $15 billion or more. It came in at just shy of 10 in 25 with an extra two years to work with. EBIDA was, correct me if I'm wrong, 14, and it came in at 8.

This is about right, yeah. And free cash flow was, I think was 60% conversion, so call it 8, and it came in at 3. Obviously, you can have timing on free cash flow stuff. Long story short, they missed every projection by a really wide margin. I have to specifically look at this to remember. My sense is the main reason was the pace of cord cutting accelerated from, I think it was low single digits at that time, and we got to a point where it was high singles, as of fairly recently.

So that's obviously, and that throws a wrench into everything when you have so much leverage, right? And look, even today, they massively under-investing order. Even today, when you look at these companies' financials, the legacy linear TV business is still the majority driver of revenue, cash flow and all this sort of stuff. So even after all this, they're still very dependent on it. And we can talk about that later, but please continue. So Warner Brothers, Global Linear Networks and Peace Guide TV media pro forma are north to 50% of revenues and in the ballpark of 80% of EBITA.

And for a long time it was, okay, well, DDAC is losing money. That's why the legacy stuff is so big as a percentage of EBITA. On a pro forma basis, they're actually at, as you said, they're right around 20 billion in revenue. And then they're at, they were at one-six of EBITA for 25 between the two of them. that's an 8% margin for context for context Netflix was at low teens margins when they are 20 billion in revenue so even if you want to say okay there's a gap there let's give them credit for those couple hundred basis points that's another billion dollars so it's not like you have you kind have a false number here you have massive exposure to linear TV still where that gets really scary

for me is you know you look at WBD's Q4 for 25 results domestic subscribers were down 10% in an environment where, you know, if you look at the other players in the space, I believe most of them were down around six or seven. You know, the portfolio is under pressure. And I think you've seen, you've seen more aggressive actions from the distributors in terms of what they require to sign deals with these companies and what they're willing to pay for. And the two most prominent examples for a long time of the companies that were double-dipping

were Peacock and NBC Universal and Paramount Plus and Paramount. Those are the companies that were saying, okay, you can pay for this D to C product over here for rights that are also on live TV, and the distributors are now saying that's not okay. If we're going to distribute these channels, people need access to the D2C offer for free. So I think that's going to present ongoing pressure,

and again, the question of what the pace of sub-declines is for linear TV is, you know, to be seen. If that comes in worse than what they're anticipating, the pressure there is going to be massive. One additional point here, if you listen to David Ellison talk about what they want to do with this deal, and you see it with the UFC deal as an example, he is very clearly saying that they want to add more shows,

they want to add more content to the DTC platform. I don't know if that's just a remix of spend from elsewhere or if he actually means net dollars going up, but this is Warner Brothers, or this is the Warner Media deal all over again, where Zazlov is saying, hey, 200, 300, 400 million G2C subs, 15 billion in revenues by 23,

if the linear side starts to go against you and you have to find places to cut, the content and marketing spend on the D2C side is where it happens. And also you need to get pricing on these services, which just add this real quick because it is relevant. You look at something like HBO domestically, as I said before, Arpoo is around $10.

The list price for their A-Bod service is 11. The list price for their standard service is $1850. List price for premium is $23. They're giving up a huge percentage of the economics between list prices and what people are actually paying. And Paramount Plus is similar essentials, $9, premiums $14. There are Poo is in the $6.650 range. That's global to be fair.

These companies have to truly figure out what it means to consolidate a platform. What does that mean for pricing and how many subscribers? do you mix out of or lose as a result of that. Disney has been through this process in a lot of ways with Disney Plus and Hulu. It is very, very challenging. And I know P. Sky is talking a lot about, hey, we've taken platforms and put them on common tech stacks before. The platforms they're referencing are Paramount Plus, which is a reasonably large service to be fair. Pluto, which is the last place fast service by a very wide margin relative to the- How dare you, Dick, sir? I'll share you.

And the third service they're referencing is BET Plus, which I don't know how large BET Plus is, but my guess is not very large. It's going to be a very different challenge to take two actual large platforms and merge them together or whatever they want to do with that and also deal with the issue of live rights. And, you know, HBO Max is still tiering whether or not you get sports, depending on if you're on the Avod tier versus the standard or premium. Those are really tough questions to answer. And it's made 10 times more difficult when you're best.

acts against the wall from financial pressures. I will be honest, I think it is just an absolute disaster. The amount of integration here, it is just so crazy to me. And what's really funny is we actually have an example of this happening. Seagram bought Universal in 1995, and they doubled down. They bought Universal Music Group. And it was a disaster. I think it was just a pure disaster.

I think the Bronfen family who owns it called it. I'm looking at a quote here just in my loose notes. I mean, I haven't fully compared, but it was a, I keep saying it was a disaster. The quote from them is, it was a disaster, a family tragedy, you know, like almost implodes the company. We've seen this before. Rich guy buying into media is a disaster, and he comes in, he thinks he's smarter than everyone. I think it's going to be terrible. You know, they say it's not loss of me.

I think Warner Brothers standalone is doing $8 billion in EBITDA, and they're saying, we're going to find six billion of ubidah i have of synergies i have absolutely no doubt that you can find six billion of synergies absolutely no doubt what i do have doubt on is that you can find six billion of synergies without destroying the core business right like anyone can find a cost cut you just go fire everyone and then you come and sit around and you say you know what was the elon must thing hey we accidentally took away abola protection for a little bit like you can find a lot of cost cuts you want to make sure you don't find the Ebola virus uh prevention cost cuts i'm really where they're they're not going to do it. Look, I see the vision.

All right. You take payroll now, go ahead and on that point. The flip side of that is, again, saying we want, I completely agree on what you're saying here, the flip side is we want to invest more and add more content. You know, David Ellison's saying we want to have the best tech platform of anybody in the industry better than Netflix. We're going to, I believe he said, seems like a crazy thing to say, we're going to 10x the number of product engineers. So you have to go out and hire the people and who's going to this job. I guess you can pay somebody a significant amount of money and always influence their decision. But these are the things that they have to go out and win at.

And I think that's going to be very challenging relative to someone who looks at a career at Netflix, which is probably doing quite well. And that introduces a lot of risk into your life to move to that role. Now, if I'm back in, I can see the vision, right? You've got Paramount, which has the legacy studio. They've got the broadcaster. Warner Brothers was always this great asset because they didn't have, you know, they don't have ABC, NBC, CBS, or Fox. They don't have one of the big four. So any of them, regulatory, you can bolt them on.

for the linear business, as you're saying, it's melting away. But I think Versaunt's going to real, Versaant, which is the NBC spinoff of kind of, what is it, USA, Bravo, the mismatch of cable channels. Yeah, Gulf channels can be safe. Versant's going to realize the reverse of this in about two years. You attach the Warner Brothers, you know, the CNN, the TNT, you attach those to CBS and you go for your rights renegotiations. And I think you're going to do much better in those renegotiations when you're protected by the umbrella of a broadcast network.

So I do see the vision, right? You combine them. You get a bigger library. But it's the execution. It's going to be devilishly, devilishly hard. And David Ellison, you know, I hear good things about him. He's not the traditional. It doesn't seem like he's the traditional.

Hey, my dad's a centi billionaire. I'm just living off this. It seems like he works. Skydance seems like it did a good job. but he's never been in an operating role where he needs to cut billions of dollars like this. Like at least David Zaslov had done that before. I just think this is, it's a disaster.

And honestly, I wouldn't be surprised if Netflix is buying the pieces in three, four, five years. Yeah, and I'm sure let's talk about sports a minute. Speaking of Versaunt, you know, you think about a sports like as an example, like the EPL, English Premier League Soccer, and you sign a deal with NBCU,

and you have a presence on linear television, in the U.S. You also have presence on Peacock, you know, that's disconnected to some sense. But there can be continuity in that to the extent that all customers who are pay TV customer have that service. You now split up that relationship where you're dealing with Fersont to have the games on USA Network. You're still dealing with NBCU for the games that are on NBC broadcast and on Peacock.

When a deal comes up for renewal, I just think you ask yourself, is this actually worth it for us to go through this head is, for us to put our customers through this headache? And the example now is Paramount Plus with UFC. I mean, I think they announced a deal and they go, if you pay $8,99 a month for Paramount Plus Essentials, you get access to UFC cards with no pay-per-view buy. Massively beneficial thing for customers relative to the ESPN deal. I don't know how the math pens out on that, but it is massively beneficial for customers. Then you fast forward, and now you're already having talks about, yeah, some will be on Paramount Plus. We can also put them on CVS.

We can also put them on TNT. You start to get this bifurcation again. And I just, from the perspective of a distributor, I go, my head would be at, it's all the same thing. You can show different streams. It's not that there's no ways to add value by doing that. But the idea that you're going to protect TNT by periodically doing that, I'm just not going to put up with it. And we can let customers decide if I'm a distributor at the end of the pay. So I think it's really challenging in practice.

I'm a big NBA fan and one of the most frequent things you hear, and I have this too. I don't know where they have to watch games, you know, for a while that in Tuesday games were on one network, then they're on the next network. And you can solve that. But, you know, I think if paramount, and I think they'll be smarter about it than this. But, you know, I think having, hey, you can watch it on the streaming service or we'll air it on CBS. That's great. But if you're like, we're going to put four a year on TNT and four a year on CBS so that TNT can get carriage, eventually people are going to say F off. And I think you're kind of just like doing your self-disservice. on the verse-hand thing.

And that might work for the big UFC fans, but it gets harder as you go down that range to the less diehard fans. And along these lines, our mutual friend Francisco Alvara sent me something this morning about, basically some of the RSN deals potentially getting rework,

I can't remember which league it even was, but RSN deals getting reworked to where they can then be through digital platforms. I think as a broadcast, a national rights partner, you do run the risk that it becomes really easy for people to watch out of market games. and especially for someone who's not an in-market diehard fan, right?

It just becomes a way for them to say, you know, I don't need to watch the Knicks and the Nuggets. I'll pick one of these other 10 games that's on XYZ service that I'm already paying for, and I'll watch that, especially in a world with sports betting, right? People, I think their affiliation with a given team is just declining as well. So that's a risk for national rights partners to the extent it goes that direction. Arsins are one of I'm really interesting. But just back to your Burstamp part. The other thing is like, this is why I think VersaSand, when it spun off, I was like,

oh, bring it to me, you know, because it's very cheap and it is very hated. And very cheap and very hated spinoffs have historically, I've underbought them. And they're, you know, very cheap. Everything's got a price and very cheap. But Verstant, you look at it, and I was just kind of running the math, and all their distribution deals are ending in 27 and 28. And as I said earlier, you go and you negotiate and you say, hey, we've got USA, and Bravo and CNBC,

and the distributors are going to laugh them out the room without kind of the NBC protection. And then they're going to say, oh, we've got these sports leagues. And they do, right? They signed, like, there's a NASCAR deal that NBC and USA signed, where I think like four NASCAR races are on USA

and eight are on NBC. They happen for now. But when that NASCAR deal is up, Versaunt's going to get the worst of all worlds, right? Because NBC's got better distribution and NBC's got better distribution. If NASCAR is working for them, NBC is no longer beholden to Versaunt. They're just going to say, all right, we're taking it all over here.

If it's not working for them, NBC is going to let NASCAR go. And then Versan is going to say, Tier 4 media asset. It's still our best thing. We've got to sign up. They've just got the worst of all worlds. As we said with the Taylor Swift's example, these sports rights, scale is the best thing you can have because you can pay up and you can distribute over a bigger base. Versant runs into every single, like,

every single small scale issue they run into, it is going to be a disaster for them. And they're going to generate a lot of cash for over the next two years. It's very hard to say that they're going to generate anything or that there's any reason for them to really exist after that. Now, having said that, I will say, CNBC is a good property. I think you could do interesting things on the digital side there.

They do have some digital assets. They've got, I know you're a golf guy. They've got a golf tea time booking app that I think you'd imagine becoming a really valuable business. They've got other stuff. But I think the core business is, it's going to be bad in a couple years. One of the things I find hilarious about the Versaunt-type deal is part of it was fun as, you know, now the NBCU people or the people running CNBC as an example can go out and do things on digital properties.

They can have the level of focus they need there to go out and win beyond just linear. I think it's kind of funny in the context of a small piece inside of NBCU, which is the even smaller piece inside of Comcast, you can't manage to have long-term thinking and the ability to spend $20, $50, $100 million on something that you think can make a lot of sense for CNBC. I just find it hilarious that that doesn't work in the context of that huge thing, but it does it for a standalone small piece.

But not to say that it's incorrect, I'm sure it happens all the time in big companies. Plus you there, because it is interesting. I mean, the reason Warner Brothers got bought, if you listen to people is they announced the spinoff of the linear networks and then that's why people were coming after them. Comcast announced the spinoff, Warner Brothers was going to spin off. Now they're merging into it.

To me, this is classic dis-snergy. And I'm kind of curious, you know, you're putting to, there are synergies to having USA networks and NBC together, to having Discovery Global with HBO. We get all the companies were going to spin it off. And it was, it's clear what they're doing. They're trying to get the lower multiple declining asset out of them. But to me, I kind of didn't understand it, right?

It seemed like, hey, if there are synergies to having, them together, you can cash cow manage one while focusing on the other without creating all this complexity of the span, without creating the time, the expense. What did you think of that? Did you think that was good strategy? I guess hindsight, I guess the proof is in the pudding. Warner Bros. Got a huge premium, but was that value creating? I don't, if we're talking about Versaunt specifically, I don't think the strategy is sound at all. I think it was the wrong decision. I think it was done even for the reasons they gave for doing. and I think they did it for the wrong reasons.

And I've followed Comcast and their strategy for long enough now to take what they say at face value as opposed to attributing any galaxy brain thinking to it. I don't think it's the right strategy. And I think that also brings the question to some extent whether or not Netflix should have made a bid for the whole thing as opposed to trying to just take out. I know they have no interest in wanting the linear assets,

but I think there's potentially an argument that they could have found something to do there that might have made sense, particularly when there's so much cash flow. Obviously, it introduces a bunch of different risks, but I think there is some validity to having both, particularly when you're talking about the live rights. And again, it gets away from a lot of this. I talk about this a lot with Disney in terms of how they report

or how they did report sports and entertainment linear and the accounting mirage of what's actually getting paid for where, as opposed to the company's just being focused on what actually matters, which is there's still 60 million pay TV subs or whatever it is. There are two different distribution channels that have value, and you need to find a way to potentially use both of them to the extent that you can create value out of using both of them, right? And I just think something like Versaunt as an example was really misguided.

Your spot on Netflix, I kind of didn't understand why Netflix didn't just say, we'll take the whole thing, right? there are going to be synergies. We've got the NFL game that we have the rights to, right? If we plot that onto TNT, like, it's not really changing it for us, but there's probably a bunch of 70 and 80-year-olds who want that. It's going to boost TNT's value. It's incremental.

It costs us nothing more. So I just kind of thought that, hey, Netflix has this huge library. Cool. Let's start throwing, you know, TNT airs supernatural reruns all day during the day. let's start running Stranger Things reruns all day during the day. You know, like it just seemed like it would have been fun. One more question on Netflix. You know, Netflix says that the reason that they dropped their bid for Warner Brothers

was financial discipline. And I do believe them. I think there was some financial discipline. However, I've done a lot of bidding wars in history. And I've never seen a company bid, signed agreement. And then the first bid, the first superior bid comes. And the company just says, we're out. We're walking away, right?

And I think because if that's the case, it would raise the question of how skinny the upside of the deal that you signed was, for one. So I wonder, do you believe them when they say that? Or it's not lost to me that Ted Sarandos was at the White House that the day the Paramount bid came. I don't think anyone at the White House met him is the reporting. And then they dropped the bid that afternoon. I wonder if they were told no uncertain terms, hey, the U.S. government will be opposing this deal. And they just kind of looked at and said, we can't say that out loud because that's a political bad, look for us, but let's just drop this deal. It's not worth the regulatory headache. Let's take the

billion. Let's move on. I kind of leaned the ladder, but I'd love to hear your thoughts on that. Yeah, I appreciate the ladder. The things that make me think it's the former is, one, as you said, it's pretty odd in terms of how they approach this. But they also said in advance of the deal being signed, they specifically communicated the WBD. This is our best in final proposal. Now, granted, proposal is different than a signed deal and then the bidding more from there, right? but they specifically told them it's best in final proposal, and we'll walk away if this isn't good enough. I just think that they underwrote it to a level

where they thought they could get the deal done and where they thought it mills still made sense for them, to your point, and kind of my conclusion from the jump, I think their actions subsequently suggest that the margin of air that was then built into that price was too skinny. And I don't think I would have ever signed that deal, at that price to begin with if I wasn't comfortable going, you know, we all know how spreadsheet

math works, right? If going 5% higher was going to break it, then that that might suggest that you were too close to the line anyways. And that's why bidding wars are generally so probable, because you sign something and you think there's the 20% outside, right? So when somebody comes in, you at least have room to go from, let's say Netflix has bid with 20, you have room to go to 30 because, you know, you thought the whole thing was worth 34 and you're just kind of chipping into that. So, all right. There was a comment, real quick. There was a comment from Sir Randos in a podcast.

I think it was with Matt Bellany where they were talking about their structure, the structure of agreements with talent for pay compensation. And he says that along the lines of we structure all deals to pay based on success. That basically it sounds like, you know, largely fixed payout on an average deal. We then have a number, but there is a discount there to account there to account for the value that we bring to the table effectively is what he said. And I think this deal for me, never had that last component of, again, too much of the value was going to WBD for things

that in my mind uniquely reflect the value that Netflix could have a very high degree of confidence of creating. Maybe Peace Guy can do it, but much less certain to me. I don't think we're going to have time to get into full sports rights. I have so many sports rights things. But we've got fun. I'd love to just talk to media and talking to you, Spunman, but I'd love to just quickly, let's hit on Disney real quick. You know, new CEO coming in. I think this deal, if you would ask me six months ago, I think Disney might have, I think they would have done the Fox deal again, but, you know, the math was close. When they look at the steel now, they're probably like, boy, did we get a steal on that Fox deal?

But I'd love to just spend the last few minutes talking about, you know, as we transition to new CEO, as Disney kind of seems to get its feedback under it, where you think Disney is sitting these days. Yeah, I mean, my first thought is, this is something I've written about quite a bit, and it reminds me of Walmart in a lot of ways. you learn these huge companies when they miss a major change in the business just how long it takes and how costly it is to truly get back to even like level footing again, right? Or back to a position where you feel really good about your path going forward. It is very, very challenging.

And I've seen that twice now and it's really kind of seared at my brain at this point. I view the path is somewhat distinct from each other. The entertainment programming stuff I think has successfully kind of made the turn. and success globally is still a bit challenging and less assured than it is for something like a Netflix, obviously. But I think Disney has the path forward to make the entertainment program and D-to-C stuff work. It's going to be a growth business with margins expanding over time. It's going to be a big earnings driver. The U.S. sports rights stuff is still where the challenge is at and where the transition is still ongoing.

And, you know, I think the ESPN-D-2-C, the flagship launch, I think, without knowing specific numbers, has probably come in a little bit weaker than I thought it would. I think given the price point, the nature of what it is and the amount of churn that you'll see around certain sports rights,

it has a very significant challenge in terms of platform technology, password sharing, dealing with a significant number of concurrent streams around live events. Those things are not easy to do. And I think for people who use all these various platforms, you see as a consumer that, you know,

Netflix, in my opinion, is typically best in class amongst these, but it's not easy to do these things very well. And when you click on some tile and something starts loading and it takes a while to work, if it's an NFL game, maybe you'll put up with it and wait. Other stuff, you just won't come back. So these are the kind of challenges that they have to address. And I think in that regard, they're still really figuring out how to do it. That said, they are getting to the places we've kind discussed where everybody on linear and anybody who signs up for standalone will be in the same place in terms of having access to everything, which in my mind speaks to it. The ESPN Plus stuff was really the wrong strategy. And they pursued this incorrectly and it cost them, you know,

years. It was tough, though. I mean, they were, they were in a tough, there's no doubt they were in a tough place there. But I do it. Well, the second password sharing is difficult now, let alone five years, six years ago. They would, it would have really have been difficult. You want to talk about about password sharing. I mean, we share Netflix, which is 10. I mean, ESPN, DTC is 30, and I think a few years ago it might have been more expensive. You wouldn't talk about, hey, I have access to Monday night football,

password sharing nightmare. Oh, my God. Yep, exactly. So that's the part of the story that I still think is really challenging. And then obviously you have, you know, like something like the NFL, every one of the legacy, every one of the legacy rights owners is of the mindset, that they absolutely cannot lose these rights. and they'll pay whatever they have to do to keep their current position.

And the marginal rights that are created are mixed out of the current packages are going to the digital competitors. And so their position there is one where it just feels like they're trying to hang on more than anything else. And to me, it's still an open question of you have to go all in with one strategy to the other. Is it everything basically in this bundled package of our live rights and our entertainment programming or is it we're going to get out of the live rights game?

And I still think that's an open question, to be honest, that they can pursue that strategy. I have so much on live rights, but just very quick, I mean, this is why I think the next NFL round, because you look at Fox, right? And people used to love the Fox, hey, we're all in on live and all this sort of stuff. And the issue, and this is why Netflix has always said, we don't want to do live. The issue is the sports leagues suck all the economics out of your live eventually, right? Now, but you look at Fox, if they lost the NFL, there is no reason for that. They're no longer a broadcaster. Heck, they're no longer a very good, like, basic cable channel if they lose Fox, if they

lose the NFL, right? They're basically the mass singer at that point. Like, that's pretty much their entire thing. So they can literally bid up to the EV of the company to try to keep the NFR. So that's one package. CBS. CBS. CBS is in a slightly better position. But, you know, if they want to be a linear broadcasting network, they do have,

I know they have some college football. I know they've got some other stuff, but they needed the NFL. So they're going to bid like crazy for it. ESPN's probably in the best place where, oh, ESPN without the NFL is dead, but they're probably in the best pace just because they just did the partnership with the NFL and the NFL owns a 10% stake in them. So I'm sure they're going to have to pay through the nose for it. They would die if they didn't have NFL rights,

but they're going to get access to NFL. rights in some form just because they got that partnership. They need it. So, I mean, there's three bidders who are just like basically existential on it. So just up, up, up, up. I mean, I think you're going to just see unbelievable numbers. Netflix is in an advantageous position in a funny way, some of the newer platforms or even something like a peacock to some extent.

I think they're in a somewhat better place for making the transition purely from this one perspective in terms of having less exposure to sport rights and having some exposure and some costs there, but it's not everything. And to the exact point you're making, the other players are stuck in a place where they spent a very significant number of dollars, both on an absolute basis and percentage of their total spend. And that then results in a price point for the products that has to be really high, and their exposure to something like the NFL is, again, it feels, they'll literally pay, it seems like

they'll pay anything to keep their current rights or accept less games, whatever it may be. I'm just laughing. You said Peacock because every time you read Peacock at any conference, I'd be like, we've got the Olympics. We've got the Olympics. So I'm just laughing. You said it on the 11th. Alex, this has been awesome.

Look, a link to the science of hitting is going to be in the show notes. I don't know how to give a better endorsement for it than I've been a subscriber from day one. So thanks so much for hopping on, bud. Good luck. As I told you before, your kid's almost two months. It's three months. Mine just turned three months. and that's where it gets a little bit easier.

But I appreciate you hopping on and we'll talk soon. Thanks for having me. I'm excited for your office since. What's the date again? Remind everybody, Alpherson's webinar. Oh, thanks, buddy. Thanks for the, thanks for the pitch. Yeah, there'll be a link for that in the show notes too.

We'll talk to you. Thanks, thanks for having me. A quick disclaimer, nothing on this podcast should be considered an investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor. Thanks.