Latest / What the Flux / Catapult Sport's tracking upwards | 1 billion reasons Sony loves Queen | BHP gives up on its $72 billion bid

Transcript

Catapult Sport's tracking upwards | 1 billion reasons Sony loves Queen | BHP gives up on its $72 billion bid · What the Flux

• 0:05
  Speaker 1: This is what the flux.
• 0:06
  Speaker 2: I'm justin and I'm harsh deep and it's Friday, the
• 0:09
  Speaker 2: thirty first of May.
• 0:10
  Speaker 1: A g the latest inflation figures for April have been released. Yeah,
• 0:13
  Speaker 1: and sadly, inflation has jumped from three point five percent
• 0:16
  Speaker 1: in March to three point six percent in April. Oh
• 0:19
  Speaker 1: and well, it doesn't seem like a big jump. It
• 0:21
  Speaker 1: is a bad signal because inflation is going in the
• 0:23
  Speaker 1: wrong direction. And the biggest beer is that inter strikes
• 0:26
  Speaker 1: may actually need to be lifted once again.
• 0:28
  Speaker 2: Oh cray, no Fluxpam. We're giving away fifty dollars today
• 0:32
  Speaker 2: in our weekly game quick Sticks, just for listening to
• 0:34
  Speaker 2: the pod. We're gonna give you a clue. The quiz
• 0:37
  Speaker 2: will drop somewhere between one to two pm today, Oh Wright,
• 0:40
  Speaker 2: So make sure you've got the Flux up and notifications
• 0:43
  Speaker 2: turn on for your chance to win.
• 0:45
  Speaker 1: Three Kluey stories today.
• 0:48
  Speaker 2: Let's get into it.
• 0:48
  Speaker 1: For our first Catapult Sport, the ASX listed sports tech
• 0:52
  Speaker 1: company has just hit one hundred million US dollars in
• 0:55
  Speaker 1: revenue for the very first time. Wow. After doubling down
• 0:58
  Speaker 1: on its subscription services.
• 1:00
  Speaker 2: Scary to think about the amount of data captured on
• 1:02
  Speaker 2: elide players. There is no hiding tell me more so.
• 1:05
  Speaker 1: Catapult Sport actually started back in the early two thousands
• 1:08
  Speaker 1: as a collab between the Australian Institute of Sport and
• 1:11
  Speaker 1: Cooperative Research Australia.
• 1:13
  Speaker 2: But it became commercialized in two thousand and six and
• 1:16
  Speaker 2: has become the leading wearable device product for elite athletes.
• 1:19
  Speaker 1: Players wear tracking devices when they're training or playing a match,
• 1:22
  Speaker 1: and Catapult Sport uses software to record and analyze performance.
• 1:26
  Speaker 2: They've got over two three hundred teams across forty sports
• 1:30
  Speaker 2: using their devices, and.
• 1:31
  Speaker 1: They've just released their annual results and for the very
• 1:33
  Speaker 1: first time, Catapult Sport has crossed one hundred million US
• 1:36
  Speaker 1: dollars in annual revenue.
• 1:38
  Speaker 2: Now, you might have assumed that their revenue is generated
• 1:40
  Speaker 2: by selling these wearable devices, but you'd be wrong because
• 1:43
  Speaker 2: the bulk of catapults revenue actually comes from software as
• 1:46
  Speaker 2: a service, not from the hardware.
• 1:48
  Speaker 1: So tell me, actually, what is the key learning here?
• 1:50
  Speaker 2: The future of hardware may actually come via software subscriptions.
• 1:54
  Speaker 1: We've already seen a number of companies that charge you
• 1:56
  Speaker 1: for the hardware and then charge a monthly subscription for
• 1:59
  Speaker 1: the software as well.
• 2:00
  Speaker 2: Like Tesla or Pelton.
• 2:02
  Speaker 1: But now we're starting to seeing more companies who are
• 2:04
  Speaker 1: just offering their hardware as a delivery mechanism for their
• 2:07
  Speaker 1: subscription service.
• 2:08
  Speaker 2: You see Jazz. The majority of Catapult's tech is sold
• 2:11
  Speaker 2: through a SaaS or software as a service model to
• 2:14
  Speaker 2: elite sporting clubs.
• 2:15
  Speaker 1: In other words, athletes wear these tracking devices and the
• 2:17
  Speaker 1: sporting clubs play a monthly fee to access the athlete
• 2:20
  Speaker 1: startup and jazz.
• 2:21
  Speaker 2: Catapult has managed to grow their annual contract value by
• 2:24
  Speaker 2: twenty percent because of this model.
• 2:27
  Speaker 1: Rather than adding more and more hardware, they expand their
• 2:30
  Speaker 1: software offering. And actually Cata Holt aren't the only wearable
• 2:33
  Speaker 1: company to adopt this model. Have you heard of the
• 2:34
  Speaker 1: wearable fitness device Whoop? I have? Whoop does something similar.
• 2:38
  Speaker 1: It wraps the upfront cost of its wearable device into
• 2:41
  Speaker 1: its monthly subscription.
• 2:42
  Speaker 2: For our second story, Sony Music is in talks to
• 2:46
  Speaker 2: buy Queen's music catalog for over one billion USD and
• 2:49
  Speaker 2: this would be the largest music catalog purchase of all times.
• 2:53
  Speaker 1: Just imagine earning the rights to Baby Redsidy Absolutely timeless.
• 2:57
  Speaker 1: So tell me everything here.
• 2:58
  Speaker 2: So Jazz, Sony Music is a second largest of the
• 3:00
  Speaker 2: big three record companies behind Universal Music, and.
• 3:03
  Speaker 1: They are the record label behind mega artists like Seling, Dion, ACDC, Dojakat,
• 3:08
  Speaker 1: Lil Nasex, and many many more.
• 3:10
  Speaker 2: Earlier this year, Sony acquired a fifty percent interest in
• 3:13
  Speaker 2: Michael Jackson's music catalog for six hundred million USD.
• 3:17
  Speaker 1: But now Sony is in talks with Queen Band members
• 3:19
  Speaker 1: and the estate of Freddie Mercury.
• 3:21
  Speaker 2: It's believed that Sony Music, along with another investor, is
• 3:24
  Speaker 2: willing to pay one billion USD for ownership over everything
• 3:28
  Speaker 2: from Bohemian Rhapsody to Don't Stop Me Now and It's She.
• 3:31
  Speaker 1: In recent years, there has been a frenzy to acquire
• 3:34
  Speaker 1: music catalogs.
• 3:35
  Speaker 2: Yep, Neil Young, Bob Dylan, Justin, Timberlake and Beyonce have
• 3:38
  Speaker 2: all generated hundreds of millions by selling all or a
• 3:42
  Speaker 2: portion of their music, and a.
• 3:43
  Speaker 1: Whole new industry of specialist investment funds are being created too.
• 3:47
  Speaker 2: So tell me jas, what is the key learning here?
• 3:49
  Speaker 1: Move over shares and bonds. There is a new asset
• 3:52
  Speaker 1: class in town. The music catalog.
• 3:54
  Speaker 2: Investors like Hypnosis, KKR and Blackstoner in a race to
• 3:58
  Speaker 2: acquire a whole host of music rights.
• 4:00
  Speaker 1: That's because they're now considered stable assets because they generate
• 4:04
  Speaker 1: consistent revenues.
• 4:05
  Speaker 2: People tend to stream music or by records, whatever the
• 4:08
  Speaker 2: weather or economic climate.
• 4:09
  Speaker 1: Back in the day, songwriting catalogs generally sold between eight
• 4:12
  Speaker 1: to twelve times the revenue generated from those songs annually.
• 4:15
  Speaker 2: But now we're talking fifteen to twenty five times because
• 4:18
  Speaker 2: of the growth of streaming platforms.
• 4:20
  Speaker 1: Meaning more people accessing music legally.
• 4:23
  Speaker 2: Queen Productions reported revenues of fifty two million dollars in
• 4:27
  Speaker 2: the year ended September twenty twenty two.
• 4:29
  Speaker 1: So a billion dollar purchase price is about nineteen times
• 4:32
  Speaker 1: the revenue.
• 4:32
  Speaker 2: And these songs not only create a stable revenue stream,
• 4:35
  Speaker 2: but they actually have the potential to grow.
• 4:37
  Speaker 1: Yep, we're talking royalties from being featured on TV shows,
• 4:40
  Speaker 1: in films, video games, and even possibly TikTok.
• 4:44
  Speaker 2: For our third and final story, BHP has abandoned its
• 4:48
  Speaker 2: seventy four billion dollar takeover bid for British mining company
• 4:51
  Speaker 2: Anglo American after six weeks of hectic negotiating.
• 4:54
  Speaker 1: Must say it's a bit of an anticlinectic end to
• 4:57
  Speaker 1: this journey. So what is the story here?
• 4:59
  Speaker 2: BHP the world's biggest mining company, worth a casual two
• 5:03
  Speaker 2: hundred and twenty four billion dollars, and.
• 5:05
  Speaker 1: It operates mines in all corners of the globe, mining
• 5:07
  Speaker 1: things like iron ore and coal, copper nickel.
• 5:11
  Speaker 2: Now BHB has been in one of the biggest will
• 5:13
  Speaker 2: they won't they asked since Russ and Rachel from friends.
• 5:16
  Speaker 1: Except this is with British mining company Anglo American YEP.
• 5:19
  Speaker 2: For the last six weeks, BHB has been in negotiations
• 5:22
  Speaker 2: with Anglo American for a takeover of the company.
• 5:25
  Speaker 1: And bhb's takeover offers were rejected three times before it
• 5:28
  Speaker 1: finally gave up and called it quits.
• 5:30
  Speaker 2: The reason for Anglo Americans rejection they didn't like the
• 5:33
  Speaker 2: way BHB had structured the deal.
• 5:36
  Speaker 1: BHP's offer required Anglo American to unbundle it's South African
• 5:40
  Speaker 1: platinum and iron ore businesses to reduce their regulatory risks.
• 5:44
  Speaker 2: So since Anglo wasn't vibing with the direction BHP wanted
• 5:48
  Speaker 2: to take the business in, the two companies decided to
• 5:50
  Speaker 2: just stay friends.
• 5:51
  Speaker 1: All frenemies. So tell me what is the key learning here?
• 5:54
  Speaker 2: A takeover bid isn't just about the price, but also
• 5:57
  Speaker 2: about how the company will look in the hands of
• 6:00
  Speaker 2: its new owner.
• 6:00
  Speaker 1: You see, when a target company is assessing the takeover bid,
• 6:04
  Speaker 1: they're looking into if it's a good deal for the
• 6:06
  Speaker 1: company today, but also into the future.
• 6:08
  Speaker 2: Yeah. Anglo American's biggest shareholder is actually the South African
• 6:11
  Speaker 2: government with over thirty percent ownership in the business.
• 6:14
  Speaker 1: And given BHP wanted to unbundle Anglo South African business,
• 6:18
  Speaker 1: which could put jobs at risk, well, the South African
• 6:21
  Speaker 1: government was not happy Jam.
• 6:23
  Speaker 2: And this isn't the first time we've seen a takeover
• 6:25
  Speaker 2: bid fail over disagreements on strategic direction.
• 6:28
  Speaker 1: Yeah. Back in twenty nineteen, it was a proposed merger
• 6:30
  Speaker 1: between Chrystler and Renolds and that collapsed at the very
• 6:33
  Speaker 1: last minute.
• 6:34
  Speaker 2: Reno's biggest shareholder was the French government who wanted guarantees
• 6:38
  Speaker 2: over Renaud's jobs.
• 6:39
  Speaker 1: And the two companies just couldn't reach an agreement, so
• 6:41
  Speaker 1: the deal fell through. Flux Sam, if you want to
• 6:44
  Speaker 1: start your weekend off on a high with fifty dollars
• 6:46
  Speaker 1: from Flux, we are giving it away today between one
• 6:49
  Speaker 1: and two pm. To make sure you've got the Flux
• 6:51
  Speaker 1: app and notifications turned on for your chance to Win,
• 6:53
  Speaker 1: thanks for
• 6:54
  Speaker 2: Listening, and we'll see you on Monday.