Male Mass Hysteria

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S1: This and free podcast is part of your Slate plus membership. Hello, welcome to the Mail. Mass hysteria episode of Slate Money, Your Guide to the Business and finance. News of a pretty big news week. We saw exactly what’s promised in the title, a bunch of male mass hysteria surrounding crypto currencies and bitcoins and block change in the theory and all of that kind of stuff. We’re going to talk about that. Wait, who’s we? It’s me. It’s Felix Salmon. Of course, it’s. Let me just start that one from the beginning.

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S2: That’s good.

S1: All right, it’s me. We’ll examine the facts. It’s Emily Peck. Welcome. Hello, it’s Stacy Marie Ishmail. Welcome. Hello. But most excitingly, this is the Ed Show Elementally. Welcome back to Slate Money.

S2: Always fun to be here.

S1: Thank you. We love you on this show so much. And you are here partly to talk about crypto currencies and partly to talk about burnout in the workplace, but mainly to talk about the biggest news of the week, which was

S2: Discovery Warner Media Disco Warner. AT&T wants to redo on its media strategy

S1: is taking a mulligan. Yes. So we are going to talk a lot about media because Ed’s here and it’s awesome. And we’re even going to have even more in Slate plus a bit less AT&T and a bit more Amazon. It’s all coming up on Slate money. So since you’re here, we really have to start with the mega merger of the not even the week. This is the mega merger of at least the month. Right.

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S2: Or is it a mega merger?

S1: A mega. What’s the opposite of a divestment spinoff?

S3: An unwinding, a

S4: conscious decoupling,

S2: a conscious corporate decoupling?

S1: So the big headline news here is that AT&T under the M&A honcho Jones, think he spent one hundred billion dollars buying Time Warner and now AT&T under their CEO, John Stanecki. No relation, spinning it off and saying that was a terrible idea.

S2: Yeah, yeah. The doppelganger came in and wait, what who want this? Why are we why do we own this weird thing? So first of all, look, five years ago is when they announced a deal, right. I wrote a cheeky column for Recode at the time saying this deal makes no sense. I’m not the only one who said that. A lot of people said that. And five years later, here we are. Right. The deal never made sense from the get go, even after it closed three years ago because there was a Justice Department attempt to block it. Trump did not like CNN, of course, which is part of Time Warner. Even for all that time that they had that they had to look under the books, look under the hood, figure out how this business actually works. They still thought, you know what, we need this. So it’s astounding to me that they never figured out how the business works. And it goes also back to their purchase of DirecTV, again, led by John Stanecki here, their chief merger strategist. They thought when they bought DirecTV, they were buying content. They were like meetings that they had with analysts saying now that we’re buying this content, we’re going to put it on our systems. And people are like, you’re just buying more distribution, right? It’s a satellite service that they don’t actually own content. After they bought DirecTV, they looked under the hood and said, oh, wait, there’s no content here. It’s just expensive licensing deals we have with the content companies. So then they said, oh, we should go buy some content that’s within into the Time Warner deal. Now it’s all being unwound.

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S1: It’s all being unwound. And the weird thing is you thought it would make no sense. I thought it made no sense. Literally. Everyone I know basically thought it made no sense. The only place where it seemed to make any sense or people who seemed to think it made any sense with the Justice Department. Right.

S2: So, yeah, I like I love how you put that. The irony here is Justice Department under Trump thought, oh, they are going to have way too much market power if they own this content. Right. It’s a vertical integration. Right. It’s like the distribution, the pipes that AT&T owns doesn’t have anything to do with the content on the other side. Right. Meanwhile, at the same time as they were challenging this deal, Disney, led by Bob Iger at the time, was talking to Rupert Murdoch about gobbling up Fox. Right. So that’s a content company, buying more content companies. Now, that actually would typically raise more red flags for for antitrust concerns. It’s like now you’re owning more of the marketplace by adding another content player. We should take a closer look at that. What Justice Department do they cleared it in six months, right. Which is incredibly fast. Typically, deals of that size take at least a year to clear the Justice Department or government regulators. Meanwhile, a deal that really made no sense, that argument is the best argument they had for why the Justice Department should not be suing them. It dragged on for two years and arguably that lost two years may have hurt his chances of making Time Warner a better company. I still disagree with that. If they if Justice Department ever stepped in, if they had close to two years earlier, you know what it Bemax would still be VMAX what it is now, just a weird streaming entity that’s sort of tied to a legacy cable channel that a lot of people still don’t know how they get if they have HBO. Right. So it’s a marketing boondoggle. It’s a structural boondoggle just in terms of how linear channels work and how streaming services work. So it never made sense.

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S3: So now in the unwinding, Time Warner’s going to another is joining up with another content player, which I guess makes sense in discovery, which is the content is like the Food Network and Myriad

S2: Trash TV, or I like to call ambient TV. I like to call it background. Right. Like HDTV and Discovery and all the home stuff and sprucing like it’s pleasant to watch. It’s easy to watch. It’s the kind of basic cable that plays sort of in dentists’ offices and doctor’s offices. And you might even have it on at home on a Sunday or Saturday. And it’s your kind of half watching it. And it’s just very pleasant and it’s easy, right. It’s sort of the the lighter form of basic cable. And so it’s very different kind of content business.

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S1: This makes a huge amount of sense to me strategically. Right. Is that what Netflix has always wanted to? Do is just be TV and anyone who wants to compete with Netflix, which absolutely includes HBO mags, has to be able to be TV in the same way. And sure, you are going to want to tune in to HBO to watch the big headline Season three of succession or whatever it is you’re going to want to watch, but you’re also going to just want to be able to turn it on and have something on in the background, because that is just a way that people live. And you don’t want Successional in the background, you want HGV on in the background. And so it provides all of that. And then the other thing it provides, which I think is potentially even bigger, is CNN. If they can bring CNN into this, then that’s actually a reason to turn on the TV on an everyday basis, like news never get stale.

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S2: That is very true. But they’re still, again, a structural challenge here. And what do I mean by that? So, look, there’s this sort of industrial complex around how the television business works, right? So Discovery owns a whole bunch of cable networks. Warner Media owns a whole bunch of cable networks like CNN and TNT and TBS. They enter into contractual agreements with all the distributors like Comcast or Charter or DirecTV, for that matter, and they sell them in a bundle. Right. So as soon as you want to take CNN out of that bundle and start selling it over the top. Right. Meaning through a streaming service charter and Comcast going to say, hey, they’re going to point to their contract saying you can’t do that. I pay good money for this. Now you’re selling it over me, right? You’re going directly to my consumers. You’re going around me, whatever metaphor you would use. And that’s why the streaming business is still weird business for traditional companies to try to enter, because they either have to create new content for the streaming or go back to the to their distributors and rework their deals so that they can bring it onto streaming,

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S1: which is the same reason why why ESPN Disney plays

S2: exactly why there’s this thing called ESPN Plus, which is sort of everything that’s not on ESPN, all the stuff that you didn’t really want to watch anyway. So even Disney has not made that big switch. Right. So I think David Zaslav, who’s the CEO of Discovery, who will now be the head of this new big enterprise to be named, but most likely something like Warner Discovery, he’s got a big decision to make, which is he says that combined Discovery and Time Warner already spend 20 billion a year on content. And it’s a nice round figure and it’s a figure that exceeds what Netflix spends on content, which is maybe 17 or 18 billion a year and rising. The problem is that 20 billion is spent mostly on things like sports rights. Right. There’s TNT and TBS, have NBA and MLB rights and then all the other things that they already fund for their existing cable networks. Right. How much of that 20 billion is going to be spent towards streaming towards HBO, Max Discovery plus or whatever other new streaming that they want to create? And how he allocates that money will tell you what he really thinks the future is. If he keeps it more for the Linnear, for the regular basic cable channels, it’s not a transformative deal in that way.

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S4: I want to go back to something that you said about CNN. And my question is like, what is all of this mean for Jeff Zucker and for the CNN in the world of Jeff Zucker?

S1: I want to jump in here and just say there’s lots of strategic, high minded strategic stuff going on here. But there’s also, as Stacy pointed out on Twitter this week, a bunch of just like old boys going on. And David Zaslav is the ultimate sort of backslapping, cigar chomping old boy. And his BFF is Jeff Zucker. And that personal relationship could well be important here.

S2: So there is definitely a club. There is a club of media titans. And Zaslav is part of that. It includes people like John Malone, probably the biggest Rupert Murdoch, et cetera. Right. Jeff Zucker is sort of a kind of a minor player in that club, but is part of that club and. For CNN and Jeff Zucker, it’s likely a very bright spot because now all of a sudden a more known entity, a guy that Jeff Zucker golfs with on a regular basis, David, that these two guys are golf buddies. They live near each other. They they go to vacations together. They go to each other’s birthday parties. David is going to do everything he can to try to accommodate Zucker without going too far. But look, if Jeff comes in and says, you know, I want to run the whole thing, that might be a problem, but they’ll probably be a place for him. It’s calming effect in the halls of CNN to this deal, right? Because AT&T Red State Company, red state executives buying a blue state, CNN blue state, Time Warner, New York company that never fit. And I think it showed interest in terms of executive turnover. Richard Klepper left David leaving around Turner Networks left. Kevin Tsujihara, who ran Warner Brothers left, though that was more of a scandal situation. And AT&T just they didn’t know what they really wanted out of it. And so that never there was a culture clash between Discovery and Time Warner or Warner Media, between David Zasloff and Jeff Zucker, there’s much more of a close relationship and much more understanding and the same vocabulary. Right, the old boy’s club vocabulary. And I think that it’s good for Jeff, basically it’s good for Zucker. So he’ll have a bigger remet, he’ll have a bigger or he’ll get back more of the business that he lost under AT&T at least.

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S4: Who is this bad for it?

S2: That’s a great question. Well, first of all, there’s the obvious, right? It’s bad for and he’s sort of a lesser known name, but become certainly again reappeared Jason. Kylah. Right. So we’re not going to cry for him necessarily. He’s a millionaire. He’s going to be perfectly fine. But he definitely got there’s whiplash around this, right. Because he was brought in just last year to run Warner Media. And when he came in, he cleaned house. He did his own thing. He brought in his own executives. He cut two thousand employees. So those guys, you know, lost out, certainly. And barely a year in, his boss and parent company says, oh, by the way, we’re just going to spin this off now. We’re getting rid of this

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S4: is Kylah, the person who is responsible for deciding to piss off half of Hollywood by saying we are going to stream movies. Dave.

S2: Yeah, he’s that guy. He’s exactly that guy. The thing to understand about Jason, Kylah is his early days, he worked in media, but really he’s a tech guy. Right. And his sort of biggest claim to fame is that he was the founding CEO of Hulu, which launched in 2007, the same time that Netflix started streaming. So who is actually as early on streaming as Netflix was? The idea at the time, though, was Hulu was a joint venture between these big conglomerates, which basically meant NBC and FOX and ABC were just available to watch on Hulu two or three days after the shows aired on the regular TV. Right. It was free. It was ad supported. And Jason Kylah, who had spent a portion of his career at Amazon, sort of took the Amazon lesson of like customer service with him. Right. And so he felt Hulu was best as a free service with fewer commercials, easy to use with great technology. And in other words, he’s not beholden to the traditions of media. He never was as far back as 2007. So when he came on board at Warner Media, he’s like, you know what? We have all these great movies. We’re trying to goose subs for this, our new IMAX. Why don’t we just make it available right on HBO, IMAX the same day, right? As a consumer. That’s great. That’s exactly what you want. I already pay for this thing and it’s now like, what? Fifteen bucks a month? But family of four can watch a movie that would otherwise I’d have to pay fifty to go to the movie theater. Awesome. Now of course that sucks quote unquote for the Hollywood Creativ, right. Because they lose money. Right. Potentially lose money on that because they get back end on the gross receipts in the theater. So Cuyler had to go back to all the agents, all the big stars and kind of rework a deal and say, you know, we’ll give you a few extra hundred million to make up for that. So Kylah basically screwed that up. He didn’t involve them, right? He didn’t sort of check with him, basically, very simply. And then he kind of reversed course a little bit, said, OK, well, after this year, we’ll probably go back to more of a regular schedule. And I suspect that David Zaslav will probably hold to that as well as love is going to be more beholden to the traditions of Hollywood than Kylah ever was. So in a weird way, ironically, it might be bad for consumers all around. Right. Or at least not as good as it might have that Jason Cayler tried to make it for consumers.

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S1: What about AT&T shareholders? They spent one hundred billion dollars buying this thing. They’re spinning it off the valuation much below that. That sounds bad for them, but maybe it isn’t. If you do a bunch of weird math with debt and dividends and stuff, maybe AT&T is getting out of this relatively unscathed.

S2: I spent like a day on the phone with AT&T and they did the math for me. And I’m like, are you serious? This is the math. Giving me basically, look, this is the map they come up with, they spent one hundred and seven billion dollars to buy Time Warner, including that right in this New Deal. Well, so since they bought it, they’ve sold off a bunch of stuff, their stake in Hulu, a bunch of real estate assets, some foreign businesses, and netted five billion. So that’s five billion back in the bank. This deal, this spinoff merger, that one of the brilliant things about this deal for AT&T is that they get to deliver about forty three billion in debt. So they’re just taking forty three billion of the one 70 billion in debt they have on the books and then transferring it to this new entity right there. Just sort of if not our problem. Right. So that’s another they’re getting close to 50 billion just there. Then the last part of it is they presume, look, we’re going to own seventy one percent of this new entity. Discovery is going to own twenty nine percent. What we’re Discovery shares trading on the Friday close before we announce this deal. By all that math, they figure, oh, so our seventy one percent stake will be worth about fifty nine billion, so that gets them to exactly one hundred and seven billion. So they’re arguing they didn’t even they didn’t lose a penny. Not only that, they’re also saying, guess what, we’ve taken about 15 billion in cash flow out of the business in the last three years. So we actually made some money. I mean, come on. Right. That’s not first of all, Discovery shares could fall and they probably will by the time this deal closes. Also, all the time and money spent fighting the DOJ, hiring bankers to advise you on this, that is not an efficient use of capital regardless, even if I buy your executive time.

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S1: Exactly right. But one of the things we can see just presumptively is that from here on in Discovery, shares are going to be trading as a proxy for the future time. One of the discovery, Kumbo. And we’re going to be able to put a market cap on an implied market cap on that of how much the combined company is worth. We’re going to be able to compare that to Netflix. We’re going to be able to compare that to Disney, and we’re going to be able to see does the market think that this combined company really has a chance of muscling into being a real competitor to Disney, a Netflix or not?

S2: That’s a great point. And just pure numbers just in terms of their revenues coming in. I mean, this combined business would be the second largest media company in the country after Disney.

S1: Like bigger than Netflix.

S2: Bigger than Netflix. Right. It’ll have more operating profit and more revenues than Netflix. Now, that’s fine and good, but it’s more a question of where are they going to put their money? Right. Because, again, they spend 20 billion a content year. David Zaslav claims that there’s going to be more cash flow, free cash flow coming out of this business than they had before as separate businesses. But they also have will have about 50 plus billion in debt on their books. Right. So I don’t think that’s a nice start, frankly, for them. So they’ll be a big business, have a lot of revenue, have a lot more muscle. That is true. But they also have a lot of debt and they’re going to need to service that debt going forward.

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S1: And the fact of the debt is going to make it much more difficult for them to do the Netflix thing of losing a lot of money and really investing in the catalog and maybe transferring money, as you said, from the Linnear to the streaming, because the Lineas. What’s throwing off the cash and servicing the debt?

S2: Exactly right. That the profits are still fat on LENNEAR even though subscribers are falling, stream describers might be rising, but streaming is a money losing business. I mean, it didn’t become a money making business for Netflix until just last December after they crossed two hundred million subscribers, paying an average of eleven dollars a month. Right. So that is the benchmark. It’s like you need two hundred million people paying an average of 11 dollars a month around the world just to be a break, even business. So the economics of streaming are terrible, but people love it. It’s great for consumers. It works very well. That is the future. And these other companies, they’re going to have to bite the bullet and figure out how quickly they can get to that same benchmark.

S3: I wonder what this will mean for NBC and CBS going forward. I heard some people speculating they’re going to merge and maybe because they can’t be out there being small anymore and that

S1: there’s no way an NBC, CBS merger is going to write that well. So it never happened.

S2: So that’s a great dying industry. I like that question because I do think and feel like you’re right, like through a traditional antitrust lens, you can’t have a company owned two broadcast networks, period. You can’t own NBC and CBS. But the Biden administration, as hard as they are on tech, I do think they have a lot of sophisticated people thinking about antitrust. And if they really want to apply true sophistication to looking at these media deals, they would or should would should define the marketplace differently than previous regulators had. And what I mean by that is what is media competing against? They’re competing against Facebook. They’re competing against Amazon to compete against YouTube. They’re competing against Twitter. Right. And you can’t defy the media marketplace. It’s just sort of the media companies and the whatever revenue generating what portion of that revenue they have. This new Warner discovery might be the second biggest media company, but it’s probably like sort of the 20th largest tech media entity.

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S1: If you include Facebook and Google as media companies, which they are, then which they are sure that this is

S2: going to be allowed those deals.

S1: So if if owning Time Warner made no sense to AT&T, which is a pipe company, not a content company, right. Then does owning NBC Universal makes no sense for Comcast, which is a pipe company?

S2: It never made sense that. But here’s the why. Here’s why Comcast is the exception. I do give Brian Roberts the CEO of credit for this. They bought NBC, NBC Universal, but they operate NBC Universal as just another company within the portfolio. There’s no real synergies between these two. They’ve been trying to create ad targeting synergies. But in reality, the way they’ve been operating it is they’ve operated Comcast as a cable company and left it to do that and operate NBC Universal as a media company and left it to do that. So as long as you operate both business as well, then you’re realizing some extra cash flow that flows to the corporate overhead. But even then, they don’t even take a ton from it, from corporate overhead. Right. So there are just two businesses that happen to be owned by the same entity and are operated fairly well. And that’s why it works. But it doesn’t mean one plus one equals two point one. Right. One plus one still equals two in that sort of scenario. So it’s more of an execution thing in that case, why it works versus what AT&T they failed execution utterly around.

S3: That might take away from this and from other experiences that I have maybe had this year is that phone companies are bad at content and they’re bad at innovation. Like these are businesses set up to just take the money, like they run a network, they take the money, they compete for people with phones, and they don’t really innovate or invent. And they don’t understand that content requires both of those things, innovation and invention.

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S2: Your widget makers,

S3: I guess Comcast is an exception and that it’s smart enough to know it doesn’t know what it’s doing. It gets out of the way. But these other companies, they don’t know that. They don’t know what they’re doing. So they are trying to do stuff and they do it badly. And then it all falls apart. And then they make up some funny math and try to convince you that it was totally fine.

S1: Talking about funny math, let’s talk about crypto.

S4: Oh, man,

S1: which is the thing that has never made any sense. I’ve been a crypto skeptic, I guess, since 2011, but we had a fun little episode this week in the crypto markets crypto. I will admit I was wrong. Crypto is not dead as I thought it would be. A Bitcoin is not dead as I thought it would be back in 2011, 10 years later, it is alive, but it is alive in a weird way. It is alive as a speculative financial asset that people can park money in in the hopes that it will go up in value and maybe be some kind of inflation hedge or something like that. All the promise about a payments network and a currency is basically gone out the window. And it’s now very much the world has decided it is a commodity, not a currency. It has answered that question. And so there was a big test of Bitcoin as a store of value this week, not so much in terms of the volatility of the price. We thought, you know, Bitcoin prices, crypto prices go up and down a lot and they went up and down a lot. And that’s normal for crypto. But more in terms of. Can you actually do the thing that you need to do if you have a store of value or a commodity, which is convert that store of value into dollars at whatever price, and that was the big failure this week. The two big exchanges, Coinbase and Bynum’s, both basically went down and failed. And you couldn’t do that thing. You couldn’t convert your Bitcoin into dollars. You couldn’t convert, got Ethan into dollars or for that matter, the other way around. You couldn’t buy them if you wanted to buy them with dollars. And that seems to me to be a really big problem with crypto in general. If that avenue doesn’t work when you need it to, then it just isn’t a store of value.

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S3: But Felix, I will say I was just reading an interesting piece on Bloomberg opinion this morning. I’ll link to it in the show notes because I don’t remember the offer. But he was saying that actually Coinbase and I think finance, you said, are centralized exchanges and they went down. They didn’t function as they should have during this volatile period. But the decentralized exchanges where people trade Bitcoin outside of like Coinbase for the Nahmias or whatever, they didn’t go down.

S1: So but you can trade dollars on those exchanges. All you can do is trade your Bitcoin for Teather or stable coins. And who the hell wants that, as we finally found out this week, or was it last week, three point seven percent of Teather was actually backed by dollars. These days it was 100 percent and now it’s two percent. So, yeah, you can convert coins into other coins, but in order to be a commodity, I really do think you need to be able to convert it into dollars.

S3: But that seems like something that will get fixed. I mean, other exchanges like Robinhood has the same kind of problems. It’s not like a crypto problem per say that those exchanges didn’t work. It’s more like a tech problem.

S1: I think it’s a crypto problem. I genuinely

S3: think that problem when there’s like a lot of trading,

S1: I think it is a crypto problem because it need you need to be able to trade this. The one thing which didn’t go down was like the CME Bitcoin futures. They kept on trading. And so so long as you stay outside cryptocurrency itself, inside the world of regulated exchange traded futures and options, then it can work. But if you actually want to buy the commodity itself, the Bitcoin or the ether, then there’s really no way of getting in and out when you want to. Suddenly no guarantee that you can do that.

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S2: Well, it’s also why I mean, Bitcoin goes up and down when you buy it with dollars. That’s where that’s what we’re tracking. We’re tracking the value of Bitcoin relative to dollars all the time. And so if you can’t spend your dollars to buy Bitcoin, Bitcoin goes down or go, it just go sideways. And so the way I see it and I could be wrong, what happened with these crypto exchanges is ultimately a settlement issue. Right. Which is what the issue was with GameStop when Robin Hood and those guys, like, sort of halted trades like they didn’t halt trades, they halted buying and selling on their platforms. You can still buy GameStop stock, but just not through these entities. So the fact that there are so few entry points for converting dollars into Bitcoin or for enemies to do so, which is the masses, and if it’s a settlement problem, there’s something sort of ironic about that. Right, because the whole point of crypto is that settlement shouldn’t be a problem. The whole idea of a block chain system is that it’s a settlement easy solution. You don’t need, like banks to have agreements with each other and have the Fed sort of back certain kind of A.H. settlement issues. It’s all decentralized.

S1: It’s built into the block chain. And that is actually the single biggest problem with crypto right now. Certainly the big two Bitcoin and ether used to be able to transact on Bitcoin and to very quickly within a couple minutes for like a few cents. Now it can take like hours and it can cost you upwards of fifty dollars to do a single transaction on the theory that work the settlement just isn’t working. The demand for transactions has completely exceeded the capacity of the network to settle those transactions to the point at which most people just don’t transact on these long trains at all because it’s so unbelievably cumbersome and expensive to do so.

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S2: Also, blocking settlement still requires something like five or six ledgers to agree with each other before it’s considered closed. Right. So that takes time. There’s a lot of computing power that needs to have a

S1: lot of computing power and increasing amounts of computing power, increasing amounts of carbon emissions and increasing amounts of money like it’s all moving in the wrong direction. I remember talking to the people at Swift who transfer trillions of dollars every day and they were saying, like, our goal is to reduce the price of a transaction by 90 percent every few years. And they’ve been doing that for decades. Meanwhile, the price of transactions has been going up on blocks underneath it every year for however many years. It’s going completely in the wrong direction. It’s not working at all. Well, so

S2: can I ask just a very fundamental question that is maybe stupid, why does crypto exist exactly like what do people use it for? When Elon Musk said, oh, you can now buy a Tesla with crypto and then now he backed off of that, even that didn’t make sense to me. If you own Bitcoin, you own Bitcoin because you think it will go up in value relative to the dollar. Right. So if you are then forking over your Bitcoin to buy the Tesla, you are losing out on whatever gains you presume are going to happen in the value of Bitcoin. You’d be better like you don’t want to give Elon that extra margin. Ultimately, what you would be better off doing is converting that Bitcoin to dollars, then buying your Tesla

S1: while you’re losing the Bitcoin,

S2: you’re losing the true. But like then you wouldn’t use the Bitcoin is my point. If you’re invested in Bitcoin, it’s because you think it’s going to go up in value relative to the dollar. Why would you ever use it as a form of currency is what it’s not.

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S1: It’s not a currency. We’ve given up on the currency thing.

S2: Well, then, OK, great. It has no value as a currency. If it’s a store of value, if it’s a commodity, what do I look at to decide how I allocate my dollars, my portfolio. Right. Move it out of bonds into bitcoin. Move it out of equities into what? What are the signals that I look at Elon Musk Twitter feed? Seriously, is that what it is that tells me there’s something fundamental?

S1: Can you think of anything? It seems like

S4: it’s mostly Elon Musk, his Twitter feed. When I was doing some research for this segment, I basically Google that exact question to see how different people have answered it over the years. And there was a columnist and let we look at the date December twenty twenty, who essentially said, and I quote, Bitcoin’s value obtains from its underlying technology, like Cool’s, it’s a derivative this. I understand this. And even on Bitcoin dot org, which is a website, you know, one of the things that they say is like, no, there’s no intrinsic value, the values and the utility and kind of the community and the security features and the settlements, which we’ve just discussed, is not necessarily reliable. I am totally fascinated by cryptocurrency as a set of solutions in search of problems, and I continue to not have seen examples of there being like a good fit between. Well, the problem this is claiming to solve and a

S1: very good fit that we talked about last week. Right. We know what the middle class is. There’s a dark web and ransomware like that is the main actual utility for Bitcoin. The problem that only a Bitcoin can solve the other currencies cannot solve. So in a weird way, if you are buying Bitcoin on the basis of its utility as a commodity, like, you know, you’d buy oil, say, because people go in and create you know, you can drive cars with it. If you buying Bitcoin on that kind of basis, what you’re doing is you’re betting on crime. Yeah, good for you.

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S3: I think there’s some use cases for Ethereum also that I don’t, to be honest, fully understand. I was reading some Joe Weisenthal today and a theory. And apparently it’s not just about ether. There’s like a block chain network that’s used for other stuff like trading NFTE, for example. That makes it slightly different from Bitcoin, which really is just a thing that people trade for money like

S1: the ether is. So it is like a distributed computer. You can do things like NFTE, although to be fair, people were creating NFTE long before ether existed.

S4: I do think it’s useful to separate block chain from cryptocurrency.

S3: Yeah, and my other thought is that Bitcoin has filled a Trump void like Trump left a void in our like news brands and we needed to fill it with something. And Bitcoin plus Elon Musk kind of fulfills that need for like some kind of volatile emotional news story, because it’s such an emotional bitcoin is so emotional. The crypto guys get really excited about it and angry about it on Twitter. And I know men are not supposed to be emotional, but I feel like around this area, it’s very it’s like a story. It’s a culture. It’s not just a currency. It’s like a whole. It’s a yeah, it’s a culture. It’s a it’s a new part of society.

S2: It’s mostly men maybe who are actually emotional. And the value of bitcoin then is fueled by male mass hysteria. Yes. One hundred percent that can I just way. Yes, I understand what Anquan really

S1: is and not just men in general, but a man in particular. Can we just say who is the man who got caught up in the mass hysteria around Trump became like a massive Trump, disavowed Trump and has now got caught up in the mass hysteria about Bitcoin.

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S4: Elon Musk. Oh, oh, Anthony Scaramucci. Oh, no.

S2: Oh, oh, man.

S1: Embrace of Bitcoin is so it is one hundred percent tracking. His embrace of Trump, right, the way that he used to hate it and then embraces it and it’s like, oh, no, I was completely wrong, this is wonderful. And then jumping in with both feet.

S4: I mean, to Emily’s point, though, this is the theory of like meme stuck summer. The idea that people were mostly men were looking for something to do when everything else was terrible. And I don’t discount it entirely because trading has always been and emotionally fueled activity. However, you might want to believe in efficient markets hypothesis, like if you think about CNBC at the height of CNBC when it was just Jim Cramer literally screaming at you and telling you you were an idiot if you didn’t take advantage of this particular thing. I’m also really reminded that in terms of your description of folks who get really passionate about crypto goldbugs. Right. Like there was also a time in financial blogging where if you wrote literally anything about gold, you would have to moderate your comments for the next two days because it would just be a lot of people who were also convinced that there was about to be an electron bomb of some kind and everyone had to hunker down in a bunker. So it certainly appeals, at least in the rhetoric that is visible in a lot of these forums to certain of the same types of personalities that have historically piled on to other types of speculative assets.

S2: And remember, like the whole point of block chain was to get out was to oppose a centralized government system, centralized fed. So the early Bitcoin holders who are probably long holders are effectively a lot of them have anti-government sentiments, this sort of. And so I think that’s the baseline right. Of who the big holders are. And for a while it became like the fear trade. If you were afraid of what’s happening in the world that you thought the world was going to collapse, you bought Bitcoin, right?

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S4: Yeah, that was the gold

S2: idea as well. And that was a goal thing to write. So it kind of matched that. And I think to some degree, it still is that the people who convert their dollars to this thing that I still don’t quite understand.

S3: But if you if the world collapses like the Internet’s not going to work,

S4: these are details and my detail

S1: doesn’t work. You can wave your unhappy thumb, drive it through the coins.

S4: This is the same problem with gold. What are you going to do, eat bricks? So, yeah,

S3: in the zombie apocalypse movies, there’s always like some scene where the guy steps on the dollar bills. You know, in the bank there’s always that scene, either dollar bills or gold. It doesn’t matter.

S1: The preppers are not into bitcoin, the preposition to guns.

S3: So, you know, that makes sense because if the world ends, a gun is probably a good thing to have to be on.

S4: It’s one of the reasons ammunition is so expensive right now. That is a true story.

S1: Tell us, what was the music? I can’t even remember anymore. Burn out.

S3: Burn out. I mean, it’s evergreen and I think people are talking about it a lot right now. And it’s as the pandemic, I guess, ends a little bit or is winding down, at least in the US. I feel like it’s a good time. We’ve not talked about it throughout and it’s been a big topic.

S1: We have spent a year, what, 14 months and just this mental state, whatever insanity is done to us,

S4: I think burnout is one of those words right now, much like critical race theory, that’s a lot of people are using and few people have taken the time to define. So I want to take some time to define it. The clinical clinical word, burnout. And this is like an actual the show in there. It’s a manual called the International Classification of Diseases, which is the thing that medical examiners used to be like, what did you die of? Is it in the ICD? They in two thousand nineteen accepted burnout as what they call an occupational phenomenon, which is important. And I think we need to talk about that piece, but not a medical condition. Right. And so is described in this gigantic manual as a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed. And to me, that’s important for two reasons. It’s important because it emphasizes that it’s a function of a dysfunctional workplace and it emphasizes that it isn’t just something like somebody wakes up and decides that they have no right. Like there is a sense of this is chronic, this is ongoing. You arrive at the realization that you are exhausted or you hit your job or you’re not as able to do the things that you were doing before versus what I would describe as like an acute stress moment or a panic attack or something else. And I think a lot of the dismissal of the idea of burnout has come from people who are like, oh, it’s just a bunch of privileged techies quitting their cushy jobs or a bunch of media people who can’t handle how hard life is. And actually, the people who are most affected by burnouts are like health care workers, people who have been on the front lines of trauma. It’s something that’s been widely reported in the media context among war correspondents. So this isn’t a particularly new phenomenon, but it is a more widespread and more visible because we have spent the past however many months at this point in unprecedented conditions collectively while still trying to work or find work through it.

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S3: And I think it’s important maybe to to talk about who is most susceptible to burnout. You already mentioned health care workers and veterans, and Jill points out in her New Yorker piece that the term kind of comes out of the free clinics of the late 1960s and 70s and is sort of like a drug term, like you’re burnt out from like drugs. But then if you dive deeper into that, the people burnt out from drugs were like Vietnam vets, comes full circle. But in addition to those groups, I think in the modern day workplace, and especially in the past year, it’s been women of color and people of color who have experienced burnout at higher rates, sort of the combination of four women like maybe more caretaking responsibilities at home for people of color. It’s been a really hard year with covid has been disproportionately hitting those groups. George Floyd and the every day sort of discrimination those groups are facing in the workplace maybe is even harder to handle, more stressful to handle in the past few years than maybe even usual. And I was looking at a survey of Harvard Business School grads which found that women are twice as likely to be burnt out as men and then women of color even more likely to be burnt out in the workplace because that’s like work is stressful. And then there’s added stress when you’re a member of these groups that face higher hurdles all the time. So I think that’s something to sort of layer on top of the phenomenon, too.

S4: Yes, there is a key element of burnout, which is the idea of being expected to maintain a certain kind of performance, whether it’s the performance of caring in the case of teachers, health care workers, etc., whether it’s the performance of professionalism and whatever that means. And that’s a term that’s often weaponized against people from these historically marginalized groups. And the idea that you have to perform wellness even when because of all the circumstances that you’re describing, you are not having a particularly good time of it.

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S2: I have something to add to this. So so I want to talk about that sense of burnout, especially amongst people of color, even before a pandemic. Right. Because so I did a story not that long ago about Nast. I did several stories about what it’s like to be a person of color working at Condé Nast. And generally it was pretty terrible for all the obvious reasons. But one of the people I spoke with explained it to me. This really in this way, that sort of made sense. That is a nuance that I think a lot of people don’t understand. She was Anna Winter’s personal assistant, black woman, and I’ve treated her with respect, treated her no differently than any of her other assistance, which meant like harshly. But she herself knew it wasn’t discriminatory. It was just like that’s how she does everything, I think a year into it or barely a year to it. She quit and and was surprised. She was dumbfounded. And she said, no, it’s not you. And she couldn’t quite articulate it. But the way she explained it to me was I was exhausted because of the persona, the doppelganger she had to create. Yepp. Coming into work every day in an office, peculiarly, particularly acutely, sort of the white, privileged, rich, blonde world, which it very much was. And so she was treated with respect, largely with few exceptions here and there. But she never felt a community there for herself. And she had to put on a certain face and she did her job well, but she had to do her job and then do this other thing right of of putting on a certain persona. And that was very commonplace response that I got from people of color who worked at a place like Condé Nast. So in general, the workplace is already exhausting for people of color, especially sort of these white collar jobs. And couple that with a pandemic. I mean, it’s just that much more difficult.

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S4: It’s absolutely correct. That performance. I have good group texts. It’s one of the things I’m most grateful for in my life. And I think about the fact that whenever there is a bad thing happening in the world, it’s sort of disproportionately affects people who aren’t white. The group texts sort of blow up with two types of observations. One is the oh, this is when I find out if, like, white people think I’m their friend. Right. Because you start to get the messages of I’m thinking of. You today because unarmed black man died, and that made me think about the one black person that I know and the other is the weird schism of being in places in which you are not feeling like something is really affecting you. But everybody else around you is fine and utterly oblivious in some cases to whatever you might be experiencing, even if that thing is very profound and very visceral. If we think back to, for example, the Atlanta shootings that targeted mostly Asian and Asian-American woman, that was a really hard time for people who have AAPI backgrounds. And they were like, yo, we need to talk about this. And a bunch of people around them were like, la la, la, la. Just another normal week. And that is difficult to keep explaining to people. It is difficult to keep explaining to people that what your interior world, the destabilization of your interior world on a given day isn’t something that you are allowed to project onto, like the zoom or the work meeting. And it isn’t only that sense of you’re not being allowed to project it. It’s also the sense of people on the other end of it aren’t even aware of how much you’re holding it together despite all of that.

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S2: And then if you approach it, that’s a whole another layer of interaction that you have to kind of create. Right. So institutionally, that vocabulary, that language doesn’t really exist. So you have to kind of create it every single time. And that’s exhausting. But that’s a contrast to I mean, there was another article that we read, right?

S4: Kevin Bruces in The New York Times,

S2: the YOLO article, which described basically a lot of fairly well, fairly privileged people, especially in tech, who had enough money to decide that, you know what, I’m going to quit my job and I don’t know, live in a trailer for a year toward the country kind of a thing, or go back to the that passion I had over whatever art thing I was into. Once upon a time,

S3: someone said moved to the beach and mind Krypto.

S4: That is an anecdote that was in there. I think the challenge with that article, and this is often the challenge of the significant cultural clout that The New York Times has, is it really contributed to that conflation of I’m out with people like Olivia Messer, who was one of the people mentioned in that piece, was a former reporter for The Daily Beast who at length on Twitter sort of went through here all of the ways in which I’m dealing with actual diagnosed trauma from being one of the people who was like covering families who had experienced incredible tragedy from dealing with a lot of stuff herself. And that is next to people who are like, I’m going to spend some time with my wife and my dog, which valid but a different set of underlying dynamics. Right. And like, look, we’re generally not great at nuance, but when you’re talking about things that people are experiencing in very different ways, I think that nuance is really important.

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S3: And I think there is a kind of a split, even at the origins of the word between the Vietnam vets with PTSD who are experiencing burnout. And then the words use rising use in in like the 1980s as like something that yuppies were going through that like really high earning. Too much cocaine working. Yeah. Too much cocaine and too much, I don’t know, Gordon Gekko, blah, blah, shiny here. I don’t know how to talk about it. There’s two ways of thinking about burnout. It’s like a fancy thing that happens, but also a very a response to to trauma and stress. And there should be better words, I guess

S2: places like Goldman are examining this stress thing,

S4: law firms, private equity. But look at those three examples, right? The people that we can reflexively reach for are high visibility, high functioning, high bank account access to media coverage. And that leaves out the health care workers of the grocery store workers, the people who still have to take care of other people’s kids over the course of this pandemic. And that, to me, is like the real problem. It is because in the same way that everybody who gets diagnosed with anxiety has often employer funded health care and easy access to therapy in a way that a lot of folks would also benefit from but don’t have the same like burnout has become a conversation about relative privilege in a way that’s super unhelpful.

S1: One of the interesting market signals I’ve seen here is the skyrocketing price of Lyft and Goober’s, which is on one level, it’s just like a first world problem of people having to pay more to be driven somewhere by a chauffeur, but on another level is entirely a function of massively reduced supply and drivers, especially during the pandemic, just realizing what an incredibly stressful and dangerous. This was and just saying there’s no way I can do this in dropping out of that particular labor force without, as you say, any of the safety nets or professional support, they didn’t even have an employer

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S4: or New York Times stories

S1: or New York Times stories. And of course, everyone left were adamant that they weren’t their employers. So they had no responsibility to look after their mental health. And so these people just dropped out of those jobs. You know, the the second order effect that we can see is that it’s the higher prices for those kind of journeys. But the first order effect is just like a bunch of people losing the way that they made their money made that made a living.

S3: I mean, that opens the door to a whole conversation that we should probably have another time about the current labor. Yes, absolutely. And yeah, maybe burnout does play a role in that. There are some jobs just not worth the stress right now.

S2: Labor shortage. But guess what? Corporate profits are up. That conundrum is amazing to me that there is I mean, the danger in that dynamic is that companies are realizing, oh, we can be productive and have fewer workers who are more productive and have fewer workers. Automation is becoming a bigger part of the mechanism of companies now. So, yeah, that’s definitely a whole other episode.

S4: But I mean, we please let’s do it episode on this. But in terms of like food service workers, like we’ve talked a couple of times about wage pressures in hospitality and I want to give a shout out to Etre because they’ve been doing really phenomenal coverage of the perspective of people who work in food service and the fact that a lot of their calculation is we have been at risk. We were essential workers during the pandemic. We have historically not had great labor conditions. And just like folks who are gig economy participants in terms of Uber and Lyft drivers, food service workers are also thinking, is this worth it to me? Is this like subminimum wage or tip only wage worth it to me for the conditions under which I’m providing my labor?

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S2: Always fun.

S1: OK, numbers round. I’m going to kick off this week because it’s a little bit we’re going to stick to media because this is an elderly extravaganza. I had a highly scientific Twitter poll this week with one thousand two hundred and twenty three votes. So you can take this one to the bank. And I basically said the AT&T decision to buy one, the media, did that make any sense? And the answer was, eighty six percent of people, unsurprisingly, said no. That made no sense at all. I also have said, what about Amazon’s decision to try to become a Hollywood power and the streaming giant? Did that make any sense? And 55 percent of people said that didn’t make any sense either. So that is actually going to be what we’re going to be talking about in Slate plus with Ed about whether any of this stuff makes any sense. So, yeah, I guess I should say what my name, which is your number. Fifty five. Fifty five is the number is the percentage of people who think that Amazon’s streaming strategy makes no sense.

S4: Amazing.

S1: That was a dog’s breakfast of a number. I need Emily to come in and rescue this show. Emily, what’s going to my.

S3: No, Felix is thirty nine million as the number of families who will start getting money from the government directly, either via cheque or into their bank accounts starting in July. And then every month, if they have children, you get three hundred dollars per kid under six or two hundred and fifty dollars per kid over six. And this is a temporary program that I think the White House wants to make permanent. And thirty nine million families is like I think it’s in the high percentage of families. If you if you make more than seventy five thousand dollars a year, starts to phase out for the checks. If you are a couple that makes more than one hundred and fifty thousand dollars, it phases out. And I think this is cool that people are going to just start getting money every month. I don’t have a big insight from them and I think people need money. Conservatives are upset because I don’t even understand why I read a quote from Marco Rubio about how this is terrible, but I don’t get why it’s terrible. This is bad for family values. Why? I don’t know. You can use the money to buy stuff. Families need bad for cohesion. Why? The more money a family has, the easier it is to be cohesive. So I think all those arguments are dumb and it’s great news for everybody. All right.

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S1: Who’s going to step up and like a straw man, the argument against this, this is why we need energy. Mansky on this. We need someone who can at least explain why these thirty nine million households, somehow it’s not a good idea to pay the money anyone.

S3: It’s not even enough money to dis incentivize work. Right. It’s not. Oh, I get an extra six hundred dollars a month so I can stop working. That’s not quite right and

S1: it doesn’t go away if you work. The argument with the unemployment checks is that it goes away if you start working, but this one doesn’t go away. If you don’t, maybe it’s, you know what it is. It’s a disincentive to make more than seventy five thousand dollars. Exactly.

S4: So you got a. Reviews, as they always do, they put out a statement on this and they’re essentially arguing that it’s a disincentive to work, it doesn’t require one parent to have a stable job. It removes incentives to marry. Yeah, I’m quoting the previous statement, and it is not pro family to direct cash payments to single parents without ensuring child support orders are established. So. Oh, my God, there are several. I mean, these are bullet points that are in bold. Most of the arguments are kind of a very typical rehashing of the welfare makes people weak and it wrecks the family structure and a disincentive ises productive values from yes.

S3: No one ever says that about like tax breaks for super rich people

S4: because super rich people are obviously highly productive, family oriented members of society, but their

S3: families are breaking up at record rates. Look at the Gates’s look with all that money.

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S4: They’re still richer than though. So it must be working.

S1: Stacey, you have no

S4: I do have a number of my numbers, 50 billion. So next next week or I guess this part of me is the one year anniversary of the murder of George Floyd, which is a wild timeline to think about. And the Financial Times reported that although American corporations pledged to spend 50 billion dollars on racial equity, they’ve actually spent something closer to like two hundred and fifty million, which is a significantly smaller number than 50 billion. And that it’s yet another example of different types of corporate greenwashing. Right. Words like black squares for everyone with no real money. And I am going to be very interested to see as this sort of deadline approaches, whether there is a sudden flurry of activity among corporations who have spent the past several quarters saying hashtag racial justice on earnings calls, but not necessarily doing anything to put their real money where their mouth has been.

S1: It’s a bit like stock buybacks, right? It’s a lot easier to announce a stock buyback than it is to actually spend money on one since you get the rally in the stock price and just making the announcement, what you often find is companies just announcing stock buybacks and then never doing it.

S3: I was also going to mention during the burnout conversation that companies have tried to hire more people of color after George Floyd. And it’d be interesting to see if they’re going to do anything about the burnout problem and the cultural problems that are in their workplaces when they bring new people in.

S4: Companies have tried to launch internship and apprenticeship programs at generally lower rates and fixed contracts for more people of color. You haven’t seen an attendant increase in folks being hired into significantly senior positions, which is what I’m interested in understanding. Because your point, Emily, it’s very hard to fix all the reasons that you didn’t have those people in the first place by keeping your exact same management structure in place at least.

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S1: What’s your number?

S2: This is going to be fun or interesting or weird. I have the same exact number as Stacy Woo 50 billion. Yeah, the amount of shareholder value AT&T destroyed well in their Time Warner escapade.

S1: What is money? OK, so this is this is your kind of back backpedaling a little bit on the math?

S2: Well, I was being a good journalist by asking questions and writing down answers and reporting the answers. Doesn’t mean I necessarily agree or buy the answers. The context by my own math is that they destroyed fifty billion dollars of shareholder value in that deal.

S1: And this is just instead of looking at enterprise value, you’re looking at market cap basically

S2: pretty much plus some enterprise plus debt plus banker fees. They spent one hundred and fifty million on advisory fees, total about 90 plus million to buy Time Warner and then now another 60 million plus to sell. So what was money could have been spent on lowering cell phone bills, more 5G, but still less.

S1: One hundred and fifty million. This is a small part of 50 billion. What’s the bulk of the 50 billion?

S2: It’s mostly market cap. It’s mostly where shareholders were just sort of treading water for this whole period.

S1: So let me let me just get this clear. If you look at the enterprise value of discovery, plus Time Warner pre AT&T acquisition and then you look at the enterprise value of the combined company, when that merged value will have been destroyed, it will be smaller coming out. And it was going,

S2: yes, I’m going to go that.

S4: Just so you know, the FTC did this math from a very different perspective and got to exactly the same numbers, you know?

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S2: Well, there you go. I mean, it’s 50. So that one might argue with the.

S4: I mean, it’s

S1: OK on which no, because congratulations, John, thank you for destroying 50 billion dollars and not many people can make that claim.

S4: Well, maybe we should have a list.

S1: We should have a list. Yeah. Let’s come up with a list of top

S4: value destroyers

S1: destroyed the most value. I feel like timeworn is going to be like three out of four positions on that list. I think that’s it for those for us this week. Unless you are asleep, sleepless. In which case you will be able to listen to even more Atalay disquisitions plus media.

S2: Yes, it’s a good one.

S1: Thanks for listening. Thanks for e-mailing us. Sleep money, sleep dotcom. Thanks to Jessamine Molly for producing from simply Narmada. And we will be back next week with even more sleep money. Sleepless people now more Ed, on more media, because you can never have enough Edalji on media, we’re going to project forward so we can get speculative about what’s next.

S2: The thing we didn’t we kind of overlooked a little bit here was that despite the fact that this Discovery Warner deal looks like some kind of capstone in the Time Warner saga, it’s not because. This new company is a potential target itself because Disney, Apple, Disney could come in.

S3: Oh, my

S2: God. Comcast could come in.

S4: Any Cubans I love her like BFS

S2: know is back. It could finally happen. So here is Lady Q I think would want to do that deal. It would take a matter of convincing his boss, Tim Cook, who he’s not a big M&A guy

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S4: I happy to talk about as the time

S3: is in Peppler at Apple.

S2: Lefler is at Apple. So you want to get into succession conspiracy that you can totally right. That we could just write that episode right now. Right. We don’t even need to we don’t need HBO. We can just write that episode now. And it’s easier to take over because this new company will have a single share class stock. It won’t be that triple structure that discovery has. It won’t be a poison pill thing that like, you know, companies like News Corp have or like the New York Times company for that matter. And all these media tech companies have these sort of weird share structures or poison pills that make takeovers harder. This new Warner discovery will be a very clean, simple, straightforward public business.

S4: We talked about Amazon last week and we interviewed Broadstone and the idea of them having video ambitions. And we were like, does that make sense? Is it going to make sense in a post Bezos world? Do you think that an Amazon tie up with this kind of new holdco is feasible in the next 12, 18, 24 months?

S2: I do think it’s feasible, at least just in terms of pure dollars and money. Right. Amazon would have the firepower to pull it off. There would certainly be antitrust concerns, though. That would be a sort of a mark against something like that happening. But in terms of I think the broader question of does it make even sense for Amazon, like what would be the value of owning it to Amazon? It’s interesting. Prime video right now is a loss leader, but it’s seen as a marketing vehicle. The way that Bezos use it, he sees it as a way to get more prime subscribers, period. And one sort of nuanced element of prime video that I think a lot of people overlooked. Amazon Prime has the rights to yes network in New York, which is the Yankees Regional Sports Network.

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S1: So I can watch Yankees games on Amazon,

S2: on Amazon Prime.

S3: Sure, Felix will do that.

S2: But you’re wondering, like, why did you go for that specific one? They did a study. They found out that there aren’t as many prime subscribers in the New York area relative to the population of the New York area compared to other regions. And so they think by owning something that region really wants and desires would help them bump up prime subscribers within the New York area.

S1: So so this is this is the question I’ve had for ages, which is how can Amazon tell whether all of these billions of dollars that it’s pouring into Amazon Prime or having any kind of ROIC? And the answer is deals like this. Yes. Deal, they pay, however, many hundreds of millions of dollars to the Yankees that they pay, they see over the following however many years, whether that causes an increase in prime subscribers in the New York area. And then they can tell, well, oh, OK, this is something which causes people to subscribe to crime as opposed to this is not something that would cause people to subscribe to crime and they can actually quantify it. That was always the question I have is how on earth did they quantify this?

S2: And sports is a huge element of just still kind of viewer interest. Right. And. Amazon worked a deal with NFL to get exclusive rights that Thursday night football games, which was a huge change in the structure of NFL, does these kinds of things. The difference is that if Amazon wants even more sports, if they want Sunday or Monday, which is really the marquee events. NFL will not sell to a streamer for those events. They’re only going to sell to broadcast networks because they still bring the biggest audiences in single moments. Hence Viacom, CBS. Right. If he wants more sports to drive more viewers to drive more prime subscribers, you want to own a broadcast network. Viacom, CBS.

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S1: To your point, the NFL is not going to let Viacom CBS Football be shown on. Amazon Prime, right, because they want that big

S2: audience, they want that big audience, but they did they did allow Thursday Night Football to go to Amazon streaming. Right. It will be still shown in local markets on their local TV stations. So it doesn’t break that part of the structure. But it’s a big experiment on the part of NFL. If Amazon does a good job of driving enough viewers to the streaming, then it could foresee. Well, now we need to own a big broadcast network to get even more sports right where it can. Yes. Show on CBS or whatever the network might be, and then will have an element of streaming where it will drive more both.

S1: And thing is something which has puzzled me since the beginning of this streaming era with Netflix and Netflix was competing with HBO and everyone else, the rights to certain shows and. They always wanted exclusive rights and the people selling these shows always wanted exclusive rights, and that was always the thing on the table that people were bidding against each other for. And I was always saying, well, why not just have non-exclusive rights? Why not allow HBO to have something and allow Netflix to have the same thing? And then people with HBO can watch on HBO. Netflix can watch it on Netflix and literally never happened. But it seemed to me like it was like maybe what you’re saying is like if Amazon wound up buying Viacom CBS, then maybe that kind of you can watch it on TV or you can watch on Amazon Prime, whichever you prefer, might start happening.

S2: So that’s the thing. That’s the thing to look for. That’s my prediction.