Latest / Bloomberg Intelligence / Netflix, WWE Deal, GE Earnings, and Market Outlook

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Netflix, WWE Deal, GE Earnings, and Market Outlook · Bloomberg Intelligence

• 0:01
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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• 0:16
  Speaker 2: Company news stories of the Day topical is Netflix. It
• 0:19
  Speaker 2: has acquired the exclusive rights to raw as well as
• 0:23
  Speaker 2: other programming from World Wrestling Entertainment Marketing. The streaming services
• 0:27
  Speaker 2: first big move into live events, the streaming giant big
• 0:30
  Speaker 2: Bucks Shares, agreed to pay five billion dollars over the
• 0:32
  Speaker 2: course of the ten year deal. Let's break this down
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  Speaker 2: with Keitha Ranganath, and she covers all the media stuff
• 0:38
  Speaker 2: for Bloomberg Intelligence. She joins us via zoom from the
• 0:41
  Speaker 2: Bloomberg Intelligence headquarters in Lovely Princeton, New Jersey. Githa, this
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  Speaker 2: is a big move for Netflix here because they've kind
• 0:49
  Speaker 2: of resisted getting into live events and sports and that
• 0:54
  Speaker 2: kind of stuff. So what gives here?
• 0:58
  Speaker 3: Yeah, what gives I think Paul is advertising. So they
• 1:01
  Speaker 3: resisted advertising to for the longest time till they were
• 1:03
  Speaker 3: kind of finally forced to bite the bullet and use
• 1:07
  Speaker 3: advertising to kind of reinvigorate subscriber growth. And so far,
• 1:11
  Speaker 3: I mean, it's worked, maybe not as much as they
• 1:14
  Speaker 3: had hoped it would, which is why they kind of
• 1:16
  Speaker 3: need to do. They need to invest in their business
• 1:19
  Speaker 3: in order to kind of really build that critical mass
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  Speaker 3: of you know, ad supported users that you know, then
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  Speaker 3: they can sell kind of advertising to. And so I
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  Speaker 3: think this is really the real play here for Netflix
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  Speaker 3: is to chase those advertising dollars.
• 1:35
  Speaker 4: How much could it actually help?
• 1:37
  Speaker 5: Like what kind numbers are we looking at, like X
• 1:39
  Speaker 5: amount of its revenue now that could be x amount
• 1:41
  Speaker 5: in five years.
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  Speaker 3: Right now? The revenue is deminimus right. You know, they
• 1:46
  Speaker 3: launched the advertising tier in November of twenty twenty two,
• 1:50
  Speaker 3: kind of had a really really slow start, but the
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  Speaker 3: most recent number that they reported was twenty three million
• 1:56
  Speaker 3: monthly active users. So we think that translates roughly to
• 2:00
  Speaker 3: about twelve million or thirteen million subscribers on the ad platform. Ultimately,
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  Speaker 3: what we want to be able to see for scale.
• 2:09
  Speaker 3: You know, we know that Amazon Prime is actually launching
• 2:12
  Speaker 3: I think just in a few days they're kind of
• 2:14
  Speaker 3: launching video ads on on Prime Video, and the audience
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  Speaker 3: right off the bat that they've kind of cited to
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  Speaker 3: advertisers is one hundred and fifteen million. So what you
• 2:23
  Speaker 3: really kind of want to see is fifty million, one
• 2:25
  Speaker 3: hundred million. That is really kind of the captive audience,
• 2:28
  Speaker 3: the critical mass that we're looking for in terms of
• 2:30
  Speaker 3: how much can advertising potentially be. So right now, Netflix
• 2:34
  Speaker 3: is about a thirty five to forty billion dollar business.
• 2:36
  Speaker 3: I think if it takes off in a big way,
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  Speaker 3: probably in the next two years, I wouldn't be surprised
• 2:42
  Speaker 3: if advertising made up about ten to fifteen percent of
• 2:45
  Speaker 3: Netflix's revenue.
• 2:47
  Speaker 2: Yeah, that's a lot, So Keitha, you know, is this
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  Speaker 2: maybe the first step dipping the toe on the pool
• 2:53
  Speaker 2: of maybe becoming a bigger player in sports over all
• 2:57
  Speaker 2: that again, they've kind of resisted that, have been very
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  Speaker 2: adamant about they don't have an interest in sports, maybe
• 3:03
  Speaker 2: because of the price tag, But is this maybe the
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  Speaker 2: first opportunity here?
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  Speaker 3: I definitely think so, you know, so, yes, they have
• 3:11
  Speaker 3: spoken about the price tag. Again, this is you know,
• 3:13
  Speaker 3: definitely a hefty price tag. It's five billion dollars over
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  Speaker 3: a span of ten years, so they're spending five hundred
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  Speaker 3: million a year. But again, they're not necessarily betting the farm, right,
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  Speaker 3: because if we wanted to see Netflix do something transformative.
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  Speaker 3: You know, it would have to be like maybe buying
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  Speaker 3: a gaming studio, which would be upwards of you know,
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  Speaker 3: fifteen twenty thirty billion dollars, or maybe just buying a
• 3:31
  Speaker 3: film studio again, which would be a huge price tag.
• 3:35
  Speaker 3: Of course, sports rights are also expensive. This kind of
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  Speaker 3: I think allows them to dip their toes a little bit.
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  Speaker 3: You know, it's still five hundred million. It's not some
• 3:43
  Speaker 3: crazy number like you know what what you know, some
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  Speaker 3: of the other big media giants are paying for sports rights.
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  Speaker 3: You know, you look at Disney, They're paying upwards of
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  Speaker 3: ten billion dollars just for all of the sports rights
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  Speaker 3: that they have. So I think relatively it's it's a
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  Speaker 3: way for them to kind of experiment, test the water,
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  Speaker 3: see how it plays out. And then remember we're on
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  Speaker 3: that ten year deal with TKO. They do have an
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  Speaker 3: option after five years to kind of walk away from
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  Speaker 3: the deal if they're not happy with how it's playing
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  Speaker 3: out for them.
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  Speaker 5: But still, I mean for TKO, like it's kind of
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  Speaker 5: double what they were getting with regular cable. So how
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  Speaker 5: much is the content spend concern worth to the share
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  Speaker 5: price of Netflix?
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  Speaker 3: Oh, definitely, content spen I think is definitely going to
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  Speaker 3: be one of those, you know, worrisome factors for Netflix.
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  Speaker 3: But having said that, okay, so they are or they
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  Speaker 3: have said that they're going to spend seventeen billion dollars
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  Speaker 3: this year on content. Obviously it's probably going to go
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  Speaker 3: up to about twenty billion dollars over the next couple
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  Speaker 3: of years.
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  Speaker 6: But then look at.
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  Speaker 3: Their free cash flow profile. They're throwing out six and
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  Speaker 3: a half billion dollars in free cash flow in twenty
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  Speaker 3: twenty three. That probably goes through about ten billion dollars
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  Speaker 3: in the next few years. So they do have a
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  Speaker 3: lot of cash at their disposal. They did say that
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  Speaker 3: they're going to buy back shares, but we also want
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  Speaker 3: to see them invest in their business, and so this
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  Speaker 3: is a great way that they're investing in their business. Ultimately,
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  Speaker 3: I think to build up their advertising business, it's not
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  Speaker 3: just content, They're going to have to invest in their
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  Speaker 3: tech stack, in their ad tech stack a little bit more,
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  Speaker 3: you know, to kind of really get more traction and
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  Speaker 3: more scale.
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  Speaker 2: All Right, Githa, let's step back a little bit on
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  Speaker 2: the streaming business here. You just you know, threw out
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  Speaker 2: some big, big free cashual numbers which I remember the
• 5:19
  Speaker 2: days had negative free cash flow and they were just
• 5:22
  Speaker 2: trying to get some get the positive free cash flow.
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  Speaker 2: How about the other competitors out there? What's the feeling
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  Speaker 2: we're you know, two three, four years into this whole
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  Speaker 2: streaming business?
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  Speaker 7: Here?
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  Speaker 2: Is there room for other players here? How do you
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  Speaker 2: think this might shake out?
• 5:36
  Speaker 3: Yeah, Paul it, I think, you know, the streaming wars
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  Speaker 3: are definitely over at this point, and we know the
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  Speaker 3: winner is Netflix. You know, they've just completely decimated the competition,
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  Speaker 3: if you will, whether it's in terms of subscriber growth,
• 5:47
  Speaker 3: but more importantly, you know, subscriber growth doesn't really it's
• 5:50
  Speaker 3: it's important, but it's not. It's not the be all
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  Speaker 3: and the end all. What you know, the street is
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  Speaker 3: really focused now on is the financial side of things,
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  Speaker 3: is the profitability metrics, and Netflix is kind of ssolutely
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  Speaker 3: blown it out of the park, and so as we
• 6:02
  Speaker 3: kind of look at you know, we're really what we're
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  Speaker 3: kind of trying to see is the margin profile. So
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  Speaker 3: right now, if you look at Netflix's streaming business, it's
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  Speaker 3: a twenty percent operating margin, but they have committed to
• 6:12
  Speaker 3: about three hundred basis points of average annual increase so
• 6:16
  Speaker 3: just push that out another three four years. Very soon
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  Speaker 3: we could be seeing upwards of thirty percent operating margins.
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  Speaker 3: Can any of the other players, like a Disney, like
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  Speaker 3: a Warner Brothers, Discovery replicate that they did they did
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  Speaker 3: have those margins in their cable TV business. Unfortunately, in
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  Speaker 3: the streaming business, it's going to be a really, really
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  Speaker 3: long haul. We do think that they could potentially maybe
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  Speaker 3: get to you know, ten percent, fifteen percent, but it's
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  Speaker 3: going to take them a very very long time, and
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  Speaker 3: who knows how the whole landscape is going to shift
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  Speaker 3: by that time.
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  Speaker 4: Paul, how do you watch stuff?
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  Speaker 2: Kind of? You know, the only stuff I watch really
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  Speaker 2: is sports, okay, and then I will stream some stuff, you.
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  Speaker 5: Know, But but will you do you still have traditional
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  Speaker 5: cablemen to watch the sport?
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  Speaker 2: Yes, for the broadband and for the sport words.
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  Speaker 5: Okay, But but if you can get sports on streaming,
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  Speaker 5: would you cut the cord?
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  Speaker 2: Well, I need broadband access, oh sure, yeah, but you
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  Speaker 2: can get that just that. Yeah, that's right, And that's
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  Speaker 2: basically what would be And Geitha, the cord cutting is
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  Speaker 2: going to Alex's question, where are we there in terms
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  Speaker 2: of cord cutting it's bad.
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  Speaker 7: It's really bad.
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  Speaker 4: All it palls and talking the words that feels bad.
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  Speaker 3: It's it's close to an eight to nine percent erosion.
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  Speaker 3: And just to kind of give you some context here,
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  Speaker 3: you know, back in the day, Paul and when you
• 7:29
  Speaker 3: were kind of covering the space very actively, it was
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  Speaker 3: one hundred and four million PATV households. Right now we're
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  Speaker 3: down to about seventy million. And the the you know,
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  Speaker 3: and kind of the outlook is we're probably going to
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  Speaker 3: go to fifty million in the next couple of years
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  Speaker 3: and then who knows, who knows where that's where we're
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  Speaker 3: headed after that.
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  Speaker 2: That's a tough business, all right, Keitha, thank you so
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  Speaker 2: much for joining us. Always feel a little bit smarter
• 7:49
  Speaker 2: after checking in with you. Githa rang Andath and she
• 7:51
  Speaker 2: covers all the TMT space for Bloomberg Intelligencies based in
• 7:54
  Speaker 2: our headquarters in Prince, New Jersey, joining us via zoom
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  Speaker 2: and that is a tough, tough erosion to what was
• 8:00
  Speaker 2: a phenomenal business model when every household was paying it's
• 8:04
  Speaker 2: eighty or ninety dollars a month. Everybody in Hollywood was
• 8:07
  Speaker 2: making money.
• 8:09
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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• 8:23
  Speaker 1: Just Say Alexa playing Bloomberg eleven thirty.
• 8:28
  Speaker 2: Last year, thanks to the rally at the end of
• 8:30
  Speaker 2: the year, fixed income folks actually had some positive total returns.
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  Speaker 5: There.
• 8:33
  Speaker 2: Good year because twenty twenty two is just ugly here.
• 8:36
  Speaker 2: So it's been tough space in fix income. Let's got
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  Speaker 2: the latest outlook here. We can do that with Natalie Trevithick,
• 8:41
  Speaker 2: head of investment grade credit strategy at Payden and Regal. So, Natalie,
• 8:46
  Speaker 2: you guys rallied. I'm going to say you guys being
• 8:48
  Speaker 2: a fix income folks kind of rallied there in November December,
• 8:51
  Speaker 2: got some positive returns. How are you approaching twenty twenty four?
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  Speaker 8: Yeah, that was a sharp rally and maybe it went
• 8:58
  Speaker 8: a little bit too far, bringing some of twenty twenty
• 9:01
  Speaker 8: four returns. But despite the modestly negative returns year to date,
• 9:05
  Speaker 8: investor appetite for corporate bonds is insatiable. We've already had
• 9:09
  Speaker 8: over one one hundred and fifty billion of supply this year,
• 9:13
  Speaker 8: and most deals are over five times subscribed. So there's
• 9:15
  Speaker 8: just so much investor money trying to get invested in
• 9:18
  Speaker 8: corporate bonds at these higher yields, despite the small.
• 9:21
  Speaker 7: Rise in interest rates since the beginning of the year.
• 9:24
  Speaker 4: So what happens with like cuts?
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  Speaker 8: Yeah, if that that cuts, that's just even better news
• 9:30
  Speaker 8: for corporate bonds since we think, you know, there may
• 9:32
  Speaker 8: be some potential widening and spreads, but that'd be offset
• 9:35
  Speaker 8: by the move lower and interest rates. And even though
• 9:37
  Speaker 8: the market's still pricing in a number of cuts this
• 9:39
  Speaker 8: year five to six, we think they may come a
• 9:41
  Speaker 8: little bit later than anticipated, maybe in the second half,
• 9:44
  Speaker 8: because the economy is still looking strong.
• 9:47
  Speaker 2: So, I mean, what's the market like? Are you just
• 9:51
  Speaker 2: like when the phone Mortgane stale their gold and sexs
• 9:53
  Speaker 2: or whatever calls you guys to buy a new issue.
• 9:55
  Speaker 2: Do you just buy it? Are people just buying these
• 9:57
  Speaker 2: things or do they saying, oh, no, this is the
• 9:59
  Speaker 2: maturity one, this is the sector I want, or are
• 10:02
  Speaker 2: they just kind of clamoring to get anything.
• 10:04
  Speaker 8: They're clamoring to get most things. There's been a ton
• 10:07
  Speaker 8: of bank issue when saying, you know, people were afraid
• 10:10
  Speaker 8: to touch banks for a while. Last year they rally
• 10:12
  Speaker 8: sharply and people can't get enough of them.
• 10:14
  Speaker 7: We've had some of the big banks for.
• 10:15
  Speaker 8: Price five billion dollar deals and there's twenty billion of
• 10:18
  Speaker 8: demand for them, so people are going after that.
• 10:21
  Speaker 7: But they also want duration, so we.
• 10:23
  Speaker 8: Haven't seen a lot of thirty year issue and whenever
• 10:25
  Speaker 8: there's a thirty year deal, people just want to lock
• 10:28
  Speaker 8: in these higher yields for longer, whereas issuers, you know,
• 10:30
  Speaker 8: they rather borrow on the front end and not have
• 10:33
  Speaker 8: these long term high interest costs.
• 10:35
  Speaker 2: So if I'm a banker, I'm telling my issuers we
• 10:37
  Speaker 2: can go super covenant light covey light, as we used
• 10:40
  Speaker 2: to say back in the day. What is that are you? Guys?
• 10:43
  Speaker 2: So are the buyers just so aggressive that they will
• 10:47
  Speaker 2: maybe give on some covenants and things like that.
• 10:50
  Speaker 7: Yeah, it's getting to be that way in the high
• 10:52
  Speaker 7: yield market.
• 10:52
  Speaker 8: We're seeing less covenants generally in investment grade corporate bonds.
• 10:55
  Speaker 8: We don't have many to begin less, so we're used
• 10:58
  Speaker 8: to playing that game. They are pushing spreads, you know,
• 11:02
  Speaker 8: to the brink.
• 11:03
  Speaker 5: Well, I have to be honest, guys, I'm normally risk
• 11:05
  Speaker 5: averse anyway, but this makes me nervous. You have covenants
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  Speaker 5: sort of going by the wayside, massive issuance, still massive
• 11:13
  Speaker 5: demand from what you're saying, seems a little bit indiscriminate.
• 11:17
  Speaker 4: What's the risk potential here then?
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  Speaker 8: Yeah, the risk would really be if we had a
• 11:22
  Speaker 8: downturn in the economy, then banks would underperform. They're very
• 11:26
  Speaker 8: much a beta for the market. But we you know,
• 11:28
  Speaker 8: we do expects some volatility. We think spreads have come
• 11:31
  Speaker 8: a long way. They ended last year thirty basis points tighter,
• 11:33
  Speaker 8: and they're tighter even this year despite those negative yields.
• 11:37
  Speaker 8: So we think there could be some near term volatility
• 11:39
  Speaker 8: and you see those negative returns over the short term,
• 11:43
  Speaker 8: but with the five and a quarter percent, you know,
• 11:45
  Speaker 8: average coupon on a new investment grade credit, we think
• 11:48
  Speaker 8: over the longer term you're going to clip that nice
• 11:50
  Speaker 8: coupon and maybe get a little bonus of the FED cut.
• 11:53
  Speaker 8: So we're looking at mid to high single digit returns
• 11:55
  Speaker 8: in investment grade corporate this year.
• 11:57
  Speaker 3: Wow.
• 11:58
  Speaker 2: So are there secters that you guys prefer these days
• 12:02
  Speaker 2: in the credit space.
• 12:03
  Speaker 8: Yeah, we've actually started to like the sector now that
• 12:07
  Speaker 8: interest rates are off the high. We think that has
• 12:09
  Speaker 8: room to perform, and there's still a strong labor market.
• 12:12
  Speaker 8: You know, we like some of the residential ruts, maybe
• 12:14
  Speaker 8: staying away from some of the office rates. We continue
• 12:17
  Speaker 8: to be selective in the energy sector. There's been some
• 12:20
  Speaker 8: attractive deals coming in that market, particularly within high yield,
• 12:23
  Speaker 8: which we find compelling.
• 12:25
  Speaker 7: And in banks, were being pretty selective.
• 12:28
  Speaker 8: We're looking for some of the banks which are coming
• 12:30
  Speaker 8: a little bit of a concession, but those have been
• 12:32
  Speaker 8: printing pretty aggressively now, so it's really deal specific there.
• 12:38
  Speaker 4: Natalie.
• 12:39
  Speaker 5: I'm also wondering when you mentioned that, like if we
• 12:41
  Speaker 5: see a downturn that that would provide some rough volatility
• 12:45
  Speaker 5: for the sector. What kind of downturn like softness versus
• 12:49
  Speaker 5: like a deeper session, Like what happens if we just
• 12:51
  Speaker 5: kind of have middling growth for example.
• 12:54
  Speaker 8: Yeah, we're expecting that soft landing and maybe some middling growth.
• 12:57
  Speaker 8: And that's almost a Goldilock scenario for corporate bonds since
• 13:00
  Speaker 8: there's no real reason for them to widen, and you
• 13:03
  Speaker 8: still have investors looking for that extra hundred basis points
• 13:06
  Speaker 8: by going into corporate bonds over just treasuries. So you
• 13:09
  Speaker 8: kind of hang out there and you get that coupon
• 13:11
  Speaker 8: clipping year. You know, obviously, if it's a harder recession
• 13:15
  Speaker 8: and it's unexpected, you could see spreads, you know, blowout
• 13:18
  Speaker 8: materially wider.
• 13:19
  Speaker 7: But what we've seen is investors tend to step in.
• 13:21
  Speaker 8: When we got that volatility last year after the banking crisis,
• 13:25
  Speaker 8: when spreads got to one sixty five, there's a strong
• 13:27
  Speaker 8: buyer base came back in and pulled spreads back in
• 13:30
  Speaker 8: as we recovered.
• 13:31
  Speaker 2: So when you talk to issuers here, are they raising
• 13:34
  Speaker 2: money because they can, because they have to, because boy,
• 13:39
  Speaker 2: they could have raised money a lot cheaper a couple
• 13:41
  Speaker 2: of years ago. And why are companies coming to the
• 13:44
  Speaker 2: market here given that rates relative to the last several
• 13:47
  Speaker 2: years are in fact higher.
• 13:49
  Speaker 8: Yeah, So corporate bonds tend to these companies tend to issue,
• 13:53
  Speaker 8: you know, once a year, some of them multiple times
• 13:55
  Speaker 8: a year, like the banks almost come every quarter. So
• 13:58
  Speaker 8: it just refinancing their existing debt. Is a lot of
• 14:00
  Speaker 8: it general corporate purposes. Some of it's for share buybacks.
• 14:04
  Speaker 8: But you kind of hit the nail on the head
• 14:05
  Speaker 8: is that they refinanced a law of their debt a
• 14:07
  Speaker 8: few years ago, particularly in thirty year bonds, So they
• 14:10
  Speaker 8: have a lot of duration out there already that they
• 14:12
  Speaker 8: have at very low coupon payments, so now they're looking
• 14:15
  Speaker 8: more at the front end and just continuing their normal
• 14:18
  Speaker 8: boring schedule. It's actually interesting that the average coupon has
• 14:21
  Speaker 8: only gone up about fifty basis points from the lows
• 14:24
  Speaker 8: that hit last year, so it's only about four and
• 14:27
  Speaker 8: a quarter percent now, so it's not like they're refunding
• 14:30
  Speaker 8: their entire debt stock each year.
• 14:32
  Speaker 5: So any kind of like massive wall of maturity that
• 14:35
  Speaker 5: we've been worried about over the last two years, that
• 14:38
  Speaker 5: will come do, and rates aren't going to be from
• 14:40
  Speaker 5: the Fed at zero.
• 14:42
  Speaker 4: That's not a thing.
• 14:43
  Speaker 8: That's really not a thing in investment grade bonds because
• 14:46
  Speaker 8: as I mentioned, companies have termed out their debt issuing
• 14:48
  Speaker 8: twenty thirty forty year bond, so there's no looming wall there,
• 14:52
  Speaker 8: and high yield companies have had great access to the market.
• 14:55
  Speaker 8: Supply has been a little bit light there, and there's
• 14:57
  Speaker 8: a lot of private debt financing market, so we really
• 15:01
  Speaker 8: don't see a big maturity wall looming in the next
• 15:03
  Speaker 8: few years.
• 15:04
  Speaker 2: Natalie, do you guys have paid in regal do you
• 15:06
  Speaker 2: stay domestic us or you look at international issuers.
• 15:09
  Speaker 8: We'll look at international issuers as well. We have a
• 15:12
  Speaker 8: great emerging markets team here.
• 15:14
  Speaker 2: And so what's what's kind of the view from for
• 15:18
  Speaker 2: you guys for emerging markets and just you know, paper
• 15:20
  Speaker 2: outside the US.
• 15:22
  Speaker 8: Yeah, we think there's definitely opportunities in emerging markets. I'm
• 15:25
  Speaker 8: going to defer to their team to give you the countries,
• 15:28
  Speaker 8: but we think it could be a solid growth year
• 15:31
  Speaker 8: for em all.
• 15:33
  Speaker 2: Right, Natalie, thanks so much for joining us. Really appreciate it.
• 15:35
  Speaker 2: Natalie Trevithick, head of investment grade Credit Strategies, Paiden en Regal.
• 15:40
  Speaker 1: Here, you're listening to the Bloomberg Intelligence Podcast. Catch us
• 15:45
  Speaker 1: live weekdays at ten am Eastern on Affo card playing
• 15:48
  Speaker 1: Android Auto with the Bloomberg Business app. Listen on demand
• 15:51
  Speaker 1: wherever you get your podcasts, or watch us live on YouTube.
• 15:57
  Speaker 2: When we have Bobby Goshen here, we talk geopolitics least
• 16:00
  Speaker 2: what's going on there. Now he's got a column out
• 16:03
  Speaker 2: on Awards shows, so I got to read it and
• 16:06
  Speaker 2: then I go see, oh, it's Bobby Ghosh's Bloomberg opinion
• 16:08
  Speaker 2: column is covering culture. Previously he covered foreign affairs. That's
• 16:13
  Speaker 2: a pivot who makes that pivot from foreign affairs to
• 16:16
  Speaker 2: like culture to Barbie.
• 16:18
  Speaker 9: How do you feel about that, Bobby about Barbie? Not
• 16:21
  Speaker 9: very much.
• 16:22
  Speaker 10: You know, everyone's going to be talking about Barbie being
• 16:24
  Speaker 10: for a couple of categories. I'm going to be the
• 16:27
  Speaker 10: odd ball who says I'm glad to hear it. I
• 16:29
  Speaker 10: hated the movie, absolutely hated the movie, and I'm glad Sarah.
• 16:33
  Speaker 2: I'm just gonna step back and let these.
• 16:34
  Speaker 9: Two go at it.
• 16:35
  Speaker 4: Okay, Well, first of all, I guess it's not made
• 16:37
  Speaker 4: for you. But do you know women of my age
• 16:41
  Speaker 4: group that didn't like it or did like it?
• 16:43
  Speaker 10: My wife loves it. I know plenty of people, women
• 16:46
  Speaker 10: and men who loved it.
• 16:47
  Speaker 9: I just didn't like it.
• 16:47
  Speaker 10: I thought it was too loud and too tacky and
• 16:50
  Speaker 10: too exploited, and basically, you know, it was a marketing
• 16:52
  Speaker 10: campaign for a doll.
• 16:54
  Speaker 9: Oh yeah, I'm too cynical.
• 16:57
  Speaker 10: When you cover foreign affairs, you become deeply, deeply cynical.
• 17:02
  Speaker 5: And I don't disagree that. In essence, it's still an
• 17:04
  Speaker 5: ad for Mattel Barbie one hundred percent. But to me,
• 17:07
  Speaker 5: that didn't take away from the brilliance of the script
• 17:09
  Speaker 5: and the message that comes across for it.
• 17:12
  Speaker 4: I weep every.
• 17:13
  Speaker 10: Single time in the same Niad nominations for a net Benning.
• 17:18
  Speaker 10: That was a terrific movie. You want, you want a
• 17:20
  Speaker 10: message about women empowerment. If that's what you're looking for,
• 17:23
  Speaker 10: that that's a fantastic movie.
• 17:25
  Speaker 5: But what I can also do is just watch Barbie
• 17:27
  Speaker 5: that I bought it, so I'm just gonna buy it.
• 17:28
  Speaker 4: I mean, I bought it and I'll just watch that.
• 17:29
  Speaker 4: But anyway, this is not what your calm is about.
• 17:32
  Speaker 5: Your Colm says award shows like the Oscars are doomed.
• 17:35
  Speaker 4: I feel like I've heard this one before.
• 17:37
  Speaker 10: Yeah, so you know, all the award shows, Oscars, Emmy's
• 17:41
  Speaker 10: Golden Globes. The audiences have been dropping precipitously over the
• 17:46
  Speaker 10: past decade. It used to be that an Oscar night
• 17:49
  Speaker 10: would be forty billion viewers, and then it became about thirties.
• 17:53
  Speaker 10: Now it's down to you know, if they get ten twelve,
• 17:55
  Speaker 10: then they're lucky. Last year there was a little bit
• 17:57
  Speaker 10: of an uptick. I think a lot of people sort
• 18:00
  Speaker 10: of basically dialed in to see if there'd be a
• 18:02
  Speaker 10: repeater Will Smith's slap on Chris Rock. There wasn't a
• 18:05
  Speaker 10: slap this year. Ironically, the nominations are going to get
• 18:10
  Speaker 10: a lot of buzz for the reasons we've just been
• 18:11
  Speaker 10: talking about. Because Margot Robbie gets snubbed, because Greta Govi
• 18:16
  Speaker 10: gets snobbed.
• 18:16
  Speaker 9: There will be a lot of.
• 18:17
  Speaker 10: Buzz around the nominations, but for those exact same reasons.
• 18:21
  Speaker 10: I suspect few people will watch the actual oscars. It's
• 18:24
  Speaker 10: too long, it's you know, they're just too much sort
• 18:29
  Speaker 10: of pop and circumstances, very little actual content, and most
• 18:33
  Speaker 10: people will will consume the highlights on YouTube and on
• 18:37
  Speaker 10: TikTok on on.
• 18:38
  Speaker 2: That's not what the ABC Television network wants. They hear that,
• 18:41
  Speaker 2: I mean, because they I mean, that's historically these events,
• 18:45
  Speaker 2: which the CEO of former CEO of CBS would call
• 18:48
  Speaker 2: oh wow events, that's what brings in huge advertising dollars.
• 18:53
  Speaker 2: So well, that's just another emblematic of the overall issue
• 18:57
  Speaker 2: of TV cord cutting.
• 18:58
  Speaker 10: And so yeah, they'll sell out the ads. They sold
• 19:01
  Speaker 10: out the ads the last time as well last year
• 19:02
  Speaker 10: as well, but at a lower rate. So that's something
• 19:05
  Speaker 10: that they need to worry about. If they'll you know,
• 19:08
  Speaker 10: sufficient numbers of people will tune in that advertisers will
• 19:11
  Speaker 10: still remain interested in the event, but for progressively or
• 19:16
  Speaker 10: you know, smaller and smaller amounts of But.
• 19:18
  Speaker 2: Here goes this. This is the sales pitch that broadcast
• 19:20
  Speaker 2: and cable television have been making the Madison Avenue for
• 19:23
  Speaker 2: thirty years. Yeah, okay, here's the pitch. I'm gonna give
• 19:25
  Speaker 2: you no inferior product to what I gave you last year.
• 19:28
  Speaker 2: I'm gonna charge you more.
• 19:29
  Speaker 4: That's not going this way.
• 19:31
  Speaker 2: And it works every single year.
• 19:33
  Speaker 4: So they're charging more for the space right now.
• 19:35
  Speaker 2: Every year up until the last couple of years when
• 19:37
  Speaker 2: court cutting became so bad. But broadcasting cable television, which
• 19:40
  Speaker 2: is yeah, I know, my ratings are down because there's
• 19:41
  Speaker 2: five hundred more more channels, but still I have the
• 19:44
  Speaker 2: biggest audience at CBS. Yes, it's half of what it
• 19:47
  Speaker 2: was ten years ago, but it's still bigger than anything
• 19:48
  Speaker 2: else out there. Oh, by the way, for that, I'm
• 19:50
  Speaker 2: gonna charge another five six seventy percent. And that worked forever.
• 19:54
  Speaker 2: Now the issue is.
• 19:55
  Speaker 9: I don't think that can be sustainedful very well.
• 19:57
  Speaker 2: I don't know. Yeah, I think again, you know, unless
• 19:59
  Speaker 2: you're the ser if, you're the super Bowl you.
• 20:01
  Speaker 9: Can go is a different category.
• 20:04
  Speaker 10: But you know, sports, if you're a fan, you don't
• 20:08
  Speaker 10: want to just watch the highlights. You want to watch
• 20:10
  Speaker 10: the live performance. But with Oscars, with any award show,
• 20:14
  Speaker 10: more and more people are quite happy just to see
• 20:16
  Speaker 10: the highlights immediately after the award is announced.
• 20:18
  Speaker 9: They don't want to watch the whole awkward moments, the
• 20:21
  Speaker 9: awkward moments, the songs, the skits. You know, it seems
• 20:25
  Speaker 9: like too much.
• 20:25
  Speaker 2: Of them used to be that used to be must
• 20:27
  Speaker 2: watch it really, I know, John Tucker's The Whole World's
• 20:30
  Speaker 2: Coming to an End.
• 20:31
  Speaker 5: I would have oscar parties. Literally, we'd like do both
• 20:33
  Speaker 5: to put in money. We'd like people walk home with
• 20:35
  Speaker 5: a couple hundred bucks.
• 20:36
  Speaker 4: Like it was. It was like, I guess you can
• 20:39
  Speaker 4: like people in my home.
• 20:41
  Speaker 5: Sure, I mean, oh, like in the reality of the
• 20:43
  Speaker 5: maybe maybe. But but what I also wonder too is
• 20:47
  Speaker 5: do you think that these kind of live events will
• 20:49
  Speaker 5: go the way of sports in different ways of viewing
• 20:53
  Speaker 5: it like we saw ww and Netflix for example, Like
• 20:57
  Speaker 5: would Paramount be like, hey, let's just er it streaming
• 21:00
  Speaker 5: and save something like that thing?
• 21:02
  Speaker 10: Well, I think you probably if the audience continues to shrink.
• 21:05
  Speaker 10: They'll have to find new ways of making it relevant.
• 21:07
  Speaker 10: You know, in time, I think you'll see the duration
• 21:12
  Speaker 10: of its shrink. I don't think a three and a
• 21:13
  Speaker 10: half hour program, which invariably goes closer to four hours,
• 21:17
  Speaker 10: I don't think that's sustainable anymore.
• 21:19
  Speaker 9: This year, they're bringing it forward.
• 21:20
  Speaker 10: They're starting broadcast an hour early because they're conscious that
• 21:24
  Speaker 10: in that last hour past bedtime in the East Coast,
• 21:27
  Speaker 10: a lot of people the next day is a school day,
• 21:29
  Speaker 10: lots of people just switch off, and that's a real
• 21:31
  Speaker 10: problem for them. So they're bringing it forward to try
• 21:33
  Speaker 10: and see if they can sort of juice the audience
• 21:35
  Speaker 10: that way. I think you'll probably see certain amount of
• 21:38
  Speaker 10: stunt casting in the in the people who are hosts
• 21:42
  Speaker 10: to presenters. We've seen that happen in the in the Olympics,
• 21:45
  Speaker 10: for instance. You know, Olympic audiences have been down. NBC
• 21:48
  Speaker 10: has been bringing in people like Snoop Dogg Right to
• 21:52
  Speaker 10: try and get audiences interested. I say, okay, let's have
• 21:56
  Speaker 10: a let's have a switch and get some Olympic perfore
• 22:00
  Speaker 10: almost to present the oscars.
• 22:01
  Speaker 9: I'll watch them on BIOst.
• 22:03
  Speaker 2: ABC doesn't have the rights of the Olympics.
• 22:05
  Speaker 9: That's true. But you can bring an athlete in exactly well,
• 22:08
  Speaker 9: that's the good thing.
• 22:08
  Speaker 2: I mean bringing in athletes to just some stunt hosting.
• 22:12
  Speaker 10: Yeah, I think you see progressively more and more desperate
• 22:15
  Speaker 10: attempts to try and hold on to that audience.
• 22:17
  Speaker 9: But I think that ship is se.
• 22:20
  Speaker 4: What else you're working on right now? What else catches
• 22:22
  Speaker 4: your eye?
• 22:23
  Speaker 10: Well, culture is a very very sort of large beat,
• 22:27
  Speaker 10: and there's a big tent, and there are lots of
• 22:28
  Speaker 10: different aspects of it. I'm sort of taking a nibble
• 22:31
  Speaker 10: of the food some food stuff, no pun intended, you know,
• 22:36
  Speaker 10: I'm trying to wrap my head around the the evolution
• 22:41
  Speaker 10: of the entertainment business. Just this fact that it's it's
• 22:45
  Speaker 10: becoming more and more sort of desegregated, and you can't
• 22:51
  Speaker 10: rely on the old tent pole events and the old
• 22:55
  Speaker 10: ways of watching and consuming entertainment. People are watching entire
• 22:59
  Speaker 10: movies in segments on TikTok. That just, you know, my
• 23:03
  Speaker 10: head exploded the thought of that. Can you watch an
• 23:06
  Speaker 10: entire movie two minutes at a time? But people are
• 23:09
  Speaker 10: doing that. I've written by that in the past, and
• 23:10
  Speaker 10: that's very interesting to me, you know, just to sort
• 23:14
  Speaker 10: of come back to the oscars, that slap that we
• 23:17
  Speaker 10: were talking about. Yeah, within twenty four hours of that slap,
• 23:21
  Speaker 10: fifty million people had watched it on YouTube. It broke
• 23:25
  Speaker 10: the existing YouTube record fifteen million people. How many people
• 23:29
  Speaker 10: watch it on ABC twelve yep, million people.
• 23:32
  Speaker 11: So we've become a less cultured.
• 23:35
  Speaker 9: I don't think we're less culture, but certainly I want to.
• 23:37
  Speaker 11: I want you to come up with an index like
• 23:39
  Speaker 11: the DOW or the S and P five and the
• 23:40
  Speaker 11: Culture Index. Okay, I don't know what components will go
• 23:43
  Speaker 11: into it telling us, you know, are we less or
• 23:46
  Speaker 11: more culture?
• 23:47
  Speaker 10: I think our attention span has certainly been greatly reduced
• 23:51
  Speaker 10: because in part because there's just so much competing for
• 23:54
  Speaker 10: our attention, and Hollywood and the the theaters have been
• 24:01
  Speaker 10: taking for granted for years that we will go in
• 24:04
  Speaker 10: and watch a movie, you know, two and a half
• 24:08
  Speaker 10: hours at a stretch in the case of someone this
• 24:10
  Speaker 10: year's Big Three, three and a half hours at a stretch.
• 24:13
  Speaker 9: But I think fewer and fewer people going to do that.
• 24:15
  Speaker 9: That's just too.
• 24:16
  Speaker 2: Long, it is, I mean, it's it's That's what I
• 24:19
  Speaker 2: think the big issue is. And you talk to the
• 24:20
  Speaker 2: filmmakers in Hollywood, and they're frustrated like crazy because you know,
• 24:24
  Speaker 2: they feel like the art form of cinema is dying
• 24:29
  Speaker 2: and so, but then you get Martin Scorsese, I think
• 24:31
  Speaker 2: goes to the other extreme with his film.
• 24:34
  Speaker 9: That's because he's Martin school, that's right.
• 24:36
  Speaker 2: And I walked down to the theater saying, yeah, Martin
• 24:39
  Speaker 2: Scorsese took me for granted. He made a three and
• 24:41
  Speaker 2: a half hour movie when A Farewell could have been
• 24:44
  Speaker 2: a two hour movie. I loved the movie, I love
• 24:46
  Speaker 2: the actors, but I did not have a good experience.
• 24:48
  Speaker 2: If I saw him on a street right then.
• 24:49
  Speaker 5: I said, so did Christopher Nolan. Open Hummer was like
• 24:51
  Speaker 5: seventeen hours, I know, didn't have to.
• 24:53
  Speaker 9: Be really the thing.
• 24:54
  Speaker 10: Interesting thing though, here's here's the weird thing. We're We're
• 24:57
  Speaker 10: perfectly happy to spend an entire day binge watching the
• 25:00
  Speaker 10: TV series Y so you know, eight hours, nine hours
• 25:03
  Speaker 10: at a stretch, just breaking for lunch and bathroom breaks.
• 25:07
  Speaker 10: But we don't want to watch three and a half
• 25:08
  Speaker 10: hours in the cinema. So you know, Hollywood has to
• 25:11
  Speaker 10: wrap its.
• 25:12
  Speaker 9: Head around that.
• 25:12
  Speaker 4: So so, so why is that? Is that? What John
• 25:14
  Speaker 4: Tucker saying that we're all just getting dumber.
• 25:16
  Speaker 9: I think no, I don't think we're getting dumber.
• 25:18
  Speaker 10: I think some stories are better told in the long format.
• 25:21
  Speaker 10: This long this idea of binge watching is relatively new.
• 25:24
  Speaker 10: Is the opportunity didn't exist before, and I think a
• 25:28
  Speaker 10: lot of really intelligent directors are taking to that, recognizing
• 25:31
  Speaker 10: that that's how that's where we live now, that's why
• 25:34
  Speaker 10: there is appetite now. And if that means that we
• 25:36
  Speaker 10: make fewer movies and more interesting long running television shows,
• 25:41
  Speaker 10: then so be it.
• 25:42
  Speaker 2: I just think people can get on Instagram reels. You
• 25:46
  Speaker 2: look down, you look up, it's three hours later.
• 25:49
  Speaker 9: Yeah.
• 25:49
  Speaker 2: Well, I mean for somebody who I'm sensitive that stuff,
• 25:54
  Speaker 2: I don't want to get anywhere near that it happens.
• 25:56
  Speaker 2: And so imagine if you're sitting in Hollywood and you're like,
• 25:59
  Speaker 2: wait a minute, this is not had just got entertained
• 26:01
  Speaker 2: rapidly for three hours on user generated content and just garbage.
• 26:05
  Speaker 2: What happened to the two hundred million dollar movie I
• 26:07
  Speaker 2: just made?
• 26:08
  Speaker 1: You know?
• 26:09
  Speaker 2: That's kind of the big issue. Bobby Gosh, We're talking
• 26:11
  Speaker 2: more about about this with Bobby.
• 26:13
  Speaker 4: Gosh's Majeh on Tucker Cry I.
• 26:14
  Speaker 2: Know it's just but he's got he feels, he feels
• 26:17
  Speaker 2: passionately about this whole dumbing down of America, and there's
• 26:20
  Speaker 2: a lot of data to support it, quite frankly. So,
• 26:23
  Speaker 2: Bobby Ghest, thanks so much for joining us here.
• 26:26
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 26:30
  Speaker 1: weekdays at ten am Eastern on applecar Play and Android
• 26:34
  Speaker 1: Otto with the Bloomberg Business App. You can also listen
• 26:37
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• 26:40
  Speaker 1: Just Say Alexa playing Bloomberg eleven thirty.
• 26:45
  Speaker 2: Let's chicken with brook suttle Wine. Oh she's very nice.
• 26:48
  Speaker 2: We like talking to loved and she's super duper smart
• 26:50
  Speaker 2: and she really covers all of these industrial companies well.
• 26:53
  Speaker 2: And there's a lot of stuff to talk about here.
• 26:54
  Speaker 2: So brook Sutherland, she writes for Bloomberg Opinion. She's based
• 26:57
  Speaker 2: up in Boston. April. I don't know where you want
• 27:00
  Speaker 2: to go here. We've got the you know, the three
• 27:04
  Speaker 2: M issue, we got the geed earnings. Let's start with
• 27:06
  Speaker 2: those companies, which are you know, right in your Ballywick
• 27:09
  Speaker 2: in terms of industrial America. What do we take away here?
• 27:13
  Speaker 6: Sure? I mean, I think there are two different stories here,
• 27:16
  Speaker 6: So I mean GE sits primarily the crown jewel is
• 27:20
  Speaker 6: the aerospace business, which will stand alone come April once
• 27:23
  Speaker 6: it feeds complete, sort of that final piece of its
• 27:25
  Speaker 6: slow moving break up. This is a very strong corner
• 27:29
  Speaker 6: of the industrial market, particularly for companies like GE that
• 27:32
  Speaker 6: provide maintenance services repairs. That business has been booming because
• 27:37
  Speaker 6: we've had so many issues with Boeing and Airbus in
• 27:40
  Speaker 6: terms of being able to deliver jets. That's kept airlines
• 27:43
  Speaker 6: flying older planes for longer. Older planes need more shop visits,
• 27:48
  Speaker 6: they need more repairs, and so companies like GE have
• 27:51
  Speaker 6: just been really growing like crazy there and that looks
• 27:53
  Speaker 6: set to continue given Boeing's continued challenges, and then also
• 27:57
  Speaker 6: the recall of the geared turbofan Jet Engines, which is
• 28:00
  Speaker 6: impacting a big portion of the Airbus A three twenty fleet.
• 28:04
  Speaker 6: And so that business is really doing quite well, and
• 28:06
  Speaker 6: I think GE is just kind of chuggling along here.
• 28:08
  Speaker 6: I think the stock reaction that you're seeing reflects the
• 28:11
  Speaker 6: fact that this company, the shrifes, have really just taken
• 28:14
  Speaker 6: off like a rocket ship over the past twelve months
• 28:17
  Speaker 6: on enthusiasm about this breakup. And maybe you know, investors
• 28:20
  Speaker 6: got a little bit ahead of themselves in terms of
• 28:22
  Speaker 6: the forecast. But this is also a company that has
• 28:24
  Speaker 6: a history of setting the bar at a beatable level
• 28:28
  Speaker 6: under Larry Colp at three M it's a completely different story.
• 28:31
  Speaker 6: They play more in sort of the shorter cycle industrial markets,
• 28:34
  Speaker 6: places with quick serales turnarounds, and so they've really been
• 28:38
  Speaker 6: hit hard by slowdowns in electronics and in China as well.
• 28:44
  Speaker 6: And you know that sort of general inventory de stocking
• 28:47
  Speaker 6: phenomenon that's haunted much of the industrial sector over the
• 28:50
  Speaker 6: course of the back half of twenty twenty three. And
• 28:52
  Speaker 6: I think you know, as you look at the forecast
• 28:54
  Speaker 6: that they gave for this year, there's nothing heroic here.
• 28:58
  Speaker 6: We're talking about a pretty pedestrian sales growth going forward.
• 29:02
  Speaker 6: And I think you know, there was some hope that
• 29:04
  Speaker 6: maybe we might start to see some green shoots, that
• 29:07
  Speaker 6: you know, this corner of the industrial world might start
• 29:09
  Speaker 6: to turn around. If for no other reason, then you know,
• 29:12
  Speaker 6: the ism has been a contraction terrorky for fourteen months now,
• 29:15
  Speaker 6: which is the longest streak since the dot com bubble burst,
• 29:19
  Speaker 6: and at some point that has to end. But it
• 29:21
  Speaker 6: doesn't appear that we've reached that point just yet.
• 29:24
  Speaker 5: Talking about three AM before and it's talking about, hey,
• 29:27
  Speaker 5: was this a whole point of a conglomerate that like,
• 29:29
  Speaker 5: you have all these different parts, you have industrial demand,
• 29:32
  Speaker 5: you have retail demand, you have China demand, you have
• 29:34
  Speaker 5: electronics demand, and then that's going to spare you all
• 29:36
  Speaker 5: the pain. But it seems like everything is not doing well.
• 29:40
  Speaker 6: It I mean it. Threem always makes the argument that
• 29:43
  Speaker 6: their businesses stick together because of material science. When you
• 29:46
  Speaker 6: think about they sell automotive adhesives and then also post its.
• 29:49
  Speaker 6: But at the end of the day, it's still still
• 29:51
  Speaker 6: inadhesive and there's a lot of overlaps there. But where
• 29:54
  Speaker 6: that is really make breaking down is that they were
• 29:57
  Speaker 6: supposed to have this you know, superhuman R and D
• 30:00
  Speaker 6: engine that would just keep churning out better and better
• 30:03
  Speaker 6: products and help push the growth of the company along,
• 30:05
  Speaker 6: and we're just not seeing that and the results. And
• 30:08
  Speaker 6: the company has been in restructuring mode for years now,
• 30:12
  Speaker 6: quite frankly, and then also dealing with you know, the
• 30:14
  Speaker 6: very serious legal liabilities related to pfast and military earplugs,
• 30:19
  Speaker 6: and so it's a company that is trying really hard
• 30:22
  Speaker 6: to reinvent itself and get back to focusing on actually
• 30:25
  Speaker 6: making industrial products. But that's just not the story right now.
• 30:29
  Speaker 2: So I mean, are we is he taking a victory
• 30:33
  Speaker 2: lap here because he's really done a good job. It
• 30:36
  Speaker 2: seems like just looking at this dog.
• 30:38
  Speaker 6: Yeah, I mean he should be. This was a certainly
• 30:41
  Speaker 6: not an easy task that he inherited. It was some
• 30:44
  Speaker 6: pretty dark days when he took over a CEO of GE,
• 30:48
  Speaker 6: and I think there are a lot of lessons here
• 30:51
  Speaker 6: from what he's been able to do as we think
• 30:54
  Speaker 6: about what Boeing needs to do to write the ship
• 30:56
  Speaker 6: over there. There was a lot of shared exails executives
• 31:00
  Speaker 6: between those two companies, and I think some similarities between
• 31:03
  Speaker 6: their two cultures. And GE has done sort of a
• 31:06
  Speaker 6: really top to bottom overhaul of the way that it
• 31:10
  Speaker 6: operates and that extends, you know, not just to the boardroom,
• 31:13
  Speaker 6: but to the factory floor. And Larry Colpe's been very
• 31:15
  Speaker 6: hands on and he's a big believer in lean manufacturing
• 31:19
  Speaker 6: and that is a philosophy that is rooted first and
• 31:22
  Speaker 6: foremost in safety and quality and on time deliveries, which
• 31:26
  Speaker 6: are things that you know, Boeing really could use some
• 31:30
  Speaker 6: lessons on.
• 31:31
  Speaker 5: Yeah, said so nicely, because it's so I'm looking through
• 31:34
  Speaker 5: the different areas.
• 31:34
  Speaker 4: We talk a lot about aerospace, for ge.
• 31:36
  Speaker 5: You know, I'm going to be interested in the energy part,
• 31:38
  Speaker 5: and that's what really the spin off is going to be.
• 31:40
  Speaker 5: I have to say, though, like not terrible. Like the
• 31:43
  Speaker 5: renewable energy revenue up twenty three percent, power revenue of
• 31:47
  Speaker 5: fifteen percent. There was still an operating loss though in
• 31:50
  Speaker 5: renewable energy. What where's the weakest link there?
• 31:54
  Speaker 6: Yeah, No, it's definitely not terrible. And this business has
• 31:57
  Speaker 6: come a really long way, and you know, I think
• 32:00
  Speaker 6: it's gotten to the point where it is at least
• 32:02
  Speaker 6: stable and that it's realistic to have a conversation about
• 32:06
  Speaker 6: what this looks like on its own, which was certainly
• 32:08
  Speaker 6: not the case for a very long time. There's still
• 32:13
  Speaker 6: is struggling a bit in offshore, but they you know,
• 32:15
  Speaker 6: have been able to eke out some profits in onshore
• 32:19
  Speaker 6: and in grit which is really you know, helping to
• 32:22
  Speaker 6: put this business in a much stronger place. So they're
• 32:24
  Speaker 6: not out of the woods completely just yet, but they've
• 32:27
  Speaker 6: really come a long way. And to be talking about
• 32:29
  Speaker 6: positive free cash flow, I mean that blows my mind
• 32:32
  Speaker 6: a little bit as I remember the dark old days
• 32:35
  Speaker 6: when we were coming out of the you know, disastrous
• 32:37
  Speaker 6: Alstom acquisition, and this business was just on the gas
• 32:40
  Speaker 6: turbine side, was just bleeding money. And so you know this,
• 32:44
  Speaker 6: this has really been a stark turnaround and the business
• 32:46
  Speaker 6: is in a much better position, especially when you think
• 32:48
  Speaker 6: about Siemen's Energy, which is probably the closest pier and
• 32:51
  Speaker 6: just all of the issues that they have had, which
• 32:54
  Speaker 6: also stems from quality control, and I just I do
• 32:57
  Speaker 6: not think it is a coincidence that ge Underry Cope,
• 33:00
  Speaker 6: with all of his focus on lean manufacturing, has avoided
• 33:03
  Speaker 6: the major quality control lapses that we've seen at Seamen's Energy,
• 33:06
  Speaker 6: at RTX, at Boeing. I think the company is just
• 33:10
  Speaker 6: a lot more on top of it, and that's a
• 33:11
  Speaker 6: reflection of his approach.
• 33:12
  Speaker 5: So it's wind, so it's all the energy. It's the
• 33:14
  Speaker 5: big wind turbineses. Yeah, often so somewhere off.
• 33:17
  Speaker 4: Of New Jersey. I think they were supposed to be
• 33:19
  Speaker 4: then and then Orista didn't like that.
• 33:21
  Speaker 11: John, that's the proposal. I believe it's gone through. They're
• 33:24
  Speaker 11: still doing I think environmental impacts, no.
• 33:27
  Speaker 4: But the companies.
• 33:29
  Speaker 5: They want more money because prices have gone up so
• 33:31
  Speaker 5: much and the contract isn't giving them the money, and
• 33:34
  Speaker 5: so they're kind of pulling out and writing down their stuff.
• 33:36
  Speaker 11: Seeing those big turbines of my deck.
• 33:39
  Speaker 2: We got bigger issues in New Jersey. Hey, Brooke, let's
• 33:42
  Speaker 2: switch carees a little bit about Boeing. I'm seeing that
• 33:44
  Speaker 2: the recently, the United Airlines chief executive Scott Kirby criticized
• 33:48
  Speaker 2: Boeing on Tuesday, saying he was disappointed with what he
• 33:51
  Speaker 2: called the planemaker sluggish response to the grounding of Max
• 33:53
  Speaker 2: and nine aircraft. What's the latest from our good friends
• 33:57
  Speaker 2: at Boeing.
• 33:59
  Speaker 6: I mean, the latest is that that Max nine variant
• 34:02
  Speaker 6: that was involved in the Alaska Airlines incident remains on
• 34:05
  Speaker 6: the ground, and the FA is being very thorough. They
• 34:09
  Speaker 6: did complete sort of the first round of inspections on
• 34:11
  Speaker 6: those forty initial jets, and we're downloading that data to
• 34:14
  Speaker 6: see if that process was what it needed to be
• 34:17
  Speaker 6: to get those jets back up into the air. But
• 34:19
  Speaker 6: I mean, I think the frustration among Boeing customers is palpable,
• 34:25
  Speaker 6: not just from United, but we've also heard comments from
• 34:27
  Speaker 6: Ryan Air and a couple other customers, because this is
• 34:30
  Speaker 6: just not the first time that we've had manufacturing issues
• 34:34
  Speaker 6: out of Boeing, nor is it the first time that
• 34:36
  Speaker 6: deliveries have been delayed or you know, a plane that
• 34:39
  Speaker 6: Boeing had promised on a certain timeline gets significantly delayed.
• 34:42
  Speaker 6: And I think if you're an airline customer, you just
• 34:46
  Speaker 6: have to be you have to be frustrated. And I
• 34:49
  Speaker 6: think that's just what we're seeing right now.
• 34:51
  Speaker 2: Yeah, it really is amazing. Then the question is where
• 34:53
  Speaker 2: do you go and to dlopoli here, So I'm not
• 34:55
  Speaker 2: sure where you go exactly. So all right, brook thanks
• 34:57
  Speaker 2: so much for joining us. Brook Sutherland and she's a
• 34:59
  Speaker 2: Bloomberget Indian commis. She covers all the industrial parts of
• 35:03
  Speaker 2: this economy. So it's great to check out with the
• 35:05
  Speaker 2: Brookly on the day when you've got three M reporting,
• 35:07
  Speaker 2: you've got ge reporting. United actually had some good numbers,
• 35:10
  Speaker 2: that stock is higher. There's still some issues ongoing with Boeing,
• 35:13
  Speaker 2: and I read a piece recently, opinion piece where it
• 35:16
  Speaker 2: just kind of said Boeing, you know, they made a
• 35:19
  Speaker 2: decision maybe a good decade plus to focus a little
• 35:22
  Speaker 2: bit more on profitability, total returns. Maybe at the expense,
• 35:26
  Speaker 2: maybe at the expense of some of their engineering investments.