DOJ Opens Probe Into NFL’s Sports TV Deals

Summary

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Bloomberg Intelligence Podcast Summary

Episode: DOJ Opens Probe Into NFL’s Sports TV Deals
Date: April 9, 2026
Hosts: Paul Sweeney & Scarlet Fu
Notable Guests: Randall Williams (Bloomberg Sports Reporter), Geetha Ranganathan (US Media Analyst), Anurag Rana (Tech Analyst), Red Brown (Consumer Reporter)

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Episode Overview

This episode centers on the Department of Justice's (DOJ) newly announced probe into the NFL’s sports TV deals, focusing on potential anti-competitive practices and escalating consumer costs. The hosts and guests break down what triggered the investigation, the possible implications for media, investors, and fans, and how broader trends in streaming, media conglomerates, tech, and the consumer industry are shaping these developments.

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DOJ Investigation into NFL’s Broadcasting Deals

[02:31–08:17, 11:09–13:02]

Trigger and Political Context

• Randall Williams outlines the origin of the probe, credited to a letter from Senator Mike Lee (Utah) pushing for a review of the Sports Broadcasting Act due to the high ($1,000+) cost to watch all NFL games via cable/streaming.
  • Randall Williams [02:52]:
    “Senator Mike Lee…sent a letter about a month ago…encouraged the Federal Trade Commission, the FCC, and the Department of Justice to review this Sports Broadcasting Act because… it costs over $1,000 to watch NFL games.”
• Costs of TV rights have reliably risen and been passed to consumers, but the proliferation of streaming partners like Amazon, Peacock, and YouTube adds complexity and expense.

Political Motivation?

• Isabel (Interviewer) questions if political motives are involved given multiple state-level and federal probes of NFL practices (e.g., the Rooney Rule controversy in Florida).
  • Randall Williams [03:42]:
    “It wouldn't surprise me, but it hasn't been reported yet.”

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Structure of NFL Media Rights

• Traditionally, NFL games have required some paid access (cable, local markets). Now, with streaming, added options increase cost and consumer fragmentation.
• Randall Williams [04:38]:
  “There are more partners now…as the game has grown, as the business has grown, the costs have grown as well.”
• Subscriptions now include Sunday Ticket, RedZone, and packages on streaming platforms, resulting in a $1,000+ price tag for superfans to access all games.

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NFL’s Leverage and Timing

• The NFL has four years left on its broadcasting rights deals but may want to renegotiate early for higher revenues.
  • Randall Williams [05:55]:
    “If your Super Bowl is 12 to 0 and it’s the second most watched game ever, you’re four years down the line. Might not be a bad thing.”
• Possible addition of an 18th regular-season game and a 16-game international package is under internal NFL discussion, but labor negotiations have not begun.
  • Randall Williams [06:47]:
    “The Players Association has been in flux for over a year...those negotiations have not started at all.”

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Possible Outcomes of DOJ Probe

• The endgame may be to reduce cost and prevent excessive fragmentation for consumers but given persistently high ratings, the NFL’s defense is strong.
  • Randall Williams [07:45]:
    “If they’re continuing to tune in, that is what I think the NFL’s defense to this would be, is that people are watching regardless and they’re paying.”

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Implications for Media Companies

[11:09–13:02]

• Geetha Ranganathan explains that the probe is actually favorable for big broadcasters (Fox, Paramount/Skydance, Comcast/NBC, Disney/ABC/ESPN).
  • NFL is targeting a 60% increase in rights fees from these companies in upcoming talks.
  • DOJ action provides broadcasters leveraging power, potentially blunting the NFL’s ability to fragment content and hike prices.
  • NFL’s strategy of selling piecemeal streaming rights (e.g., Christmas games to Netflix, TNF to Amazon) seen as pushing monetization at consumers’ expense.
  • Geetha Ranganathan [11:51]:
    “With the DOJ going after the NFL on anti-competitive practices…it gives [broadcasters] better negotiating leverage when they go back to renegotiate deals this year with the NFL.”

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Media Industry Shakeup: Disney and Paramount/Skydance–WBD

[13:02–16:53]

• Disney: 1,000 job cuts, primarily in marketing, as part of ongoing efficiency program. No impact on “creative engines”; mostly streamlining as Hulu and Disney+ consolidation is expected.
  • Geetha Ranganathan [13:23]:
    “This is really more in the marketing department…a process of streamlining and removing redundancies.”
• Paramount, Skydance, Warner Bros Discovery: Merger expected to close by September 30, 2026, after securing $24B in Middle Eastern funding. Main investor concern: high leverage (7x EBITDA, $80B debt) and linear TV exposure (55% of revenue).
  • Geetha Ranganathan [14:59]:
    “Looks like everything will go as per plan. The question really…is whether they’re going to be able to deliver after the deal closes.”

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Amazon, AI, and Hyperscale Cloud Competition

[20:00–24:54]

• Amazon's AI revenue now at $20B run rate (up from $15B in Q1). Analyst Anurag Rana says AWS now benefits from enterprise AI expansion and partnerships with firms like Anthropic.
  • Anurag Rana [20:34]:
    “This is the first time they are actually putting a number around it…Amazon still is in the driver’s seat with the largest market share.”
• Competitive landscape: AWS remains largest, but Microsoft (via Azure/OpenAI) is closing in; Google not far behind. All are ramping capital spending.
• Demand for third-party “neo-cloud” providers (like CoreWeave) surges as hyperscalers seek extra data capacity.
  • CoreWeave’s expanded $21B deal with Meta highlights the insatiable infrastructure demand for AI workloads.
• Software sector under pressure as investors worry about AI cannibalizing legacy products. Long-term, software companies must embed AI to weather competition. Share buybacks (Salesforce cited) indicate confidence in resilience.
  • Anurag Rana [23:57]:
    “What these companies have to do is show that they are not going to get cannibalized by these large language models but actually embed them in their core product and can continue with that profitable growth that they have.”

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Consumer Focus: Constellation Brands Earnings

[28:00–32:43]

• Constellation Brands (Modelo, Corona, Pacifico):
  • Q1 2026 guidance “soft,” but March sales strong; bullish on summer marketing (World Cup exposure).
    • Red Brown [28:17]:
      “They’re planning to support the early momentum with…an aggressive marketing campaign.”
  • Cautious outlook due to poor economic visibility; withdrew 2028 guidance.
    • Red Brown [29:11]:
      “It is the lack of economic visibility. They also withdrew their 2028 guidance as well for the same reason.”
  • Hispanic market performance improved sequentially in high-population areas; premiumization trend continues (customers trade down in quantity, up in quality).
  • Shifts in drinking culture among younger demographics toward lighter, alternative beverages (spiked lemonades, iced teas) and away from hard seltzers.
    • Red Brown [31:05]:
      “People are just changing the way they drink. They’re being more conscientious…they want something that’s lower calorie, lighter, easier to drink.”
  • Constellation happy with its portfolio, industry likely to see more brand swaps/mergers for growth in flat market.

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Notable Quotes & Timestamps

• “Senator Mike Lee… encouraged the Federal Trade Commission, the FCC, and the Department of Justice to review this Sports Broadcasting Act because… it costs over $1,000 to watch NFL games.”
  — Randall Williams [02:52]

• “What I think the NFL’s defense to this would be is that people are watching regardless and they’re paying.”
  — Randall Williams [07:45]

• “With the DOJ going after the NFL on anti-competitive practices…it gives [broadcasters] better negotiating leverage…”
  — Geetha Ranganathan [11:51]

• “AWS’s AI revenue run rate is over $20 billion. In fact, this is the first time they are actually putting a number around it.”
  — Anurag Rana [20:34]

• “They’re being more conscientious with how they drink…they want something that’s lower calorie, lighter, easier to drink.”
  — Red Brown [31:05]

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Key Takeaways

• NFL’s escalating TV costs and fragmented streaming options are drawing DOJ scrutiny, potentially shifting future negotiations with broadcasters and impacting consumer pricing.
• Media companies may benefit from added leverage in NFL rights negotiations.
• Media consolidation continues amid cost cuts (Disney) and big mergers (Paramount–Skydance–WBD), though leverage and linear TV exposure remain risks.
• Tech titans (especially Amazon) are racing to publicize AI growth and invest in capacity, while software firms must adapt to avoid being supplanted by generative AI tools.
• Constellation Brands sees strong brand momentum but faces uncertainty from both the economy and evolving drinking preferences.

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Transcript

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[Paul (Bloomberg Intelligence Host)]

Really interesting headline came across the tape just a couple of minutes ago. According to the Wall Street Journal, Department of Justice opens probe into the NFL on anti competitive concerns. I mean, who wants to mess with the NFL? I guess the federal government can, but let's break it down a little bit if we can. Randall Williams, Bloomberg Business of sports reporter Randall what's the Story here.

[Randall Williams]

So basically, Senator Mike Lee, he's from Utah, he sent a letter about a month ago, maybe a little bit longer than that, and he encouraged the Federal Trade Commission, the fcc, and the Department of Justice to review this Sports Broadcasting act because of the fact that it costs over $1,000 to watch NFL games. Now, rising cost over broadcasting deals is pretty normal. I mean, we've seen every single time a league goes to the negotiating table, normally the costs are passed down to the consumer, but also the games grow. And so I think that it'll be interesting to see how they approach this if anything changes. But the NFL still has four years left on its broadcasting rights agreement. There have been reports that they want to opt out of that and negotiate early. Those talks are very, very early. So we'll see.

[Isabel (Interviewer)]

Could there be possible political motivations behind this?

[Randall Williams]

I think with everything happening in the country right now, you never know who is setting their sights on the NFL. And I mean, you see what's happening with the Rooney Rule. There is a Florida Attorney General who has turned his sights towards the NFL and saying that the Rooney Rule goes against federal law. We'll see how that plays out. And I mean, there are no reports right now that these. Those two things are connected. But we've seen different areas of this administration set their sights on sporting leagues and other organizations out there. So it wouldn't surprise me, but it hasn't been reported yet.

[Paul (Bloomberg Intelligence Host)]

So, Randall, this is focusing primarily on the media rights deals for the NFL. And now most of those even going back 30 years, 40 years, there's been some pay component to it because even if I want to watch my CBS game, I'm probably getting it through my cable package as opposed to having my rabbit ears. So it's always been some consumers directly paying for sports. Is it different now that it's streaming?

[Randall Williams]

There are more partners now. So Amazon has a Thursday Night Football game you can stream on peacock occasionally. YouTube has streamed a game before. The NFL has been selling rights to these streamers and these broadcasting companies for many, many years. And as the. The game has grown, as the business has grown, the costs have grown as well. And I think in reference to what it costs to watch all NFL games, yes, it would be expensive because you would then be paying for NFL Sunday Ticket. You could be paying for Red Zone, you could be paying for the. Each individual subscription of, you know, some of these games. With that in mind, of course, the costs have gone up because they've added partners, they've added games, you know, all those things. But Again, like we're talking about abc, NBC, cbs, espn, all of these things are. You could walk into a bar or just subscribe to your local cable and they would be right there. Now you wouldn't be able to choose a game. And here in New York, you would probably be subject to the jets and Giants. In other places, it would be the local markets there. So it really depends on if the customer wants to pay for all of these games that the NFL broadcast.

[Isabel (Interviewer)]

In the letter here by Senator Mike Lee, he said, to watch every NFL game during the past season, football fans spent almost $1,000 on cable and streaming subscriptions. I guess if you're a fan, yeah, it's worth it.

[Randall Williams]

I mean, I would just say this, that the last Super bowl was 120 and it had 125 million viewers and it was 12 to 0 at one point heading, I believe, heading into the fourth or, you know, fairly well into the game. And it was the second most watched super bowl of all time. And with that in mind, if you're the NFL, of course, you would like to go back to the, the negotiating table to try to get more money. Now if, let's just say that this investigation kicks things down the road. If your Super bowl is 12 to 0 and it's the second most watched game ever, you're four years down the line. Might not be a bad thing. You just want that money right now. So evidently I do think that the NFL will get their money.

[Paul (Bloomberg Intelligence Host)]

It's just about when to get even more money. There is obviously very advanced talks to add an 18th game. And that would be, that would be it.

[Randall Williams]

And that would presumably, I mean, there's that, that is, I have to happen.

[Paul (Bloomberg Intelligence Host)]

You have to open up the whole agreement with the players.

[Randall Williams]

Of course.

[Red Brown]

Yeah.

[Randall Williams]

And, and the players association has been in, in, in flux for over a year. They've had three executive directors in under a year. And when you have three executive directors, the NFL then has to go to the players association, rip up the collective bargaining agreements, and then they have to come to terms on a deal. Those negotiations have not started at all. So an 18th game, a 16 international game package that the NFL could sell. Those negotiations haven't started at all. So I think that Roger, I've heard Jerry Jones, I've heard Robert Kraft, you know, those are the Patriots and the Cowboys owners all talk about adding these things. And I do think that they want to, but it's so, so early. Which is why, you know, going back to this investigation, in a worst case scenario for the NFL, if they had to wait four years. It might work out in their favor because of the fact that they haven't negotiated a cba. So, you know, I think that we'll see how this plays out. But right now I think that if I'm the NFL watching this, it's like, okay, we'll see.

[Isabel (Interviewer)]

Yeah, what could possibly be the end game here?

[Randall Williams]

I'm not exactly sure. I think that it could be to congregate some of these costs to, to make sure that the CBS and the abc, that there are less streamers involved, that it is not passed down to the customer as much. But again, yeah, like you got to think this was one of the most watched NFL seasons of all time. So really, are the streamers hurting and excuse me, are the customers hurting if they're continuing to tune in, that is what I think the NFL's defense to this would be, is that people are watching regardless and they're paying.

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[Paul (Bloomberg Intelligence Host)]

One of the news that we covered earlier today, I want to cover it from a different angle, is the NFL. The DOJ is investigating the NFL on anti competitive tariffs and it relates to the media rights deals that they have. So, and they are the media rights deals are so important to these leaks. It is a primary driver of value for the franchises across pretty much all sports and it's equally valuable to the broadcast networks and to the cable networks and to the streamers that put this stuff out there because boy, advertisers love live programming. Geetha Ranganathan, she's the expert here. She's the US Media analyst here. So Geetha, just talk to us a little bit about this DOJ investigation into the NFL. What are the big media companies who are so vested into this, what are they saying?

[Geetha Ranganathan]

This is actually good news, Paul, for the media companies. So remember, we are right smack in the middle of what is expected to become a very, very contentious media rights renegotiation process with the NFL. So the NFL is seeking something like about a 60% increase in its rights fees basically from companies like Fox, Paramount, skydance, from Comcast, NBC from Walt Disney. Those are the companies that are the most expensive. And with the DOJ going after the NFL on anti competitive practices, it looks like what they're saying is that the NFL is trying to harm consumers by basically making it more and more difficult to access their programming. So we know that the NFL in the past has tried to sell these smaller packages to Streamers, whether it's Christmas Day games to Netflix or the Thursday Night Football package to Amazon. They tried to carve out these smaller deals basically in a move to kind of maximize, you know, monetization. But obviously that's not sitting well with the doj. But this is good news for the broadcasters because I think, you know, we think it gives them definitely better negotiating leverage when they go back to renegotiate deals this year with the NFL.

[Isabel (Interviewer)]

What about, let's now head to Disney. They're ready to cut a thousand jobs, largely in marketing. You've talked a lot about efficiency. So where exactly are these job cuts happening? And how do you make sure that. Or as an analyst, how do you make sure that these don't hit the creative engines of Disney and really affect the future of the company?

[Geetha Ranganathan]

Yeah, so it looks like, Isabel, these job cuts are really happening in the marketing department. So let's just look at, you know, if you kind of take a step back and look at the whole Disney engine, I mean, they have over 230,000 employees. So, you know, cutting about a thousand jobs, it's less than 1%. It's really just a drop in the bucket. But, you know, the layoffs are really part of this whole cost cutting and as you just said, the efficiencies. You know, ever since Bob Iger returned to Disney as the CEO in November of 2022, he embarked on this whole efficiency cost cutting program. He eliminated about 8,000 jobs, which resulted in about seven, seven and a half billion dollars of cost cuts. And really, this latest wave of another thousand layoffs is just part of that. So it is not in any of the creative parts of the company. This is really more in the marketing department. So we already know that, you know, Disney has many multiple operations, so they have like a whole team supporting Disney, plus they have a very similar team supporting Hulu, which is basically, you know, a product that is very soon going to be integrated. So Disney and Hulu are going to become one consolidated integrated product, which means there's really no need to have two separate teams. And so this is just really a process of streamlining and removing redundancy, redundancies and increasing the efficiency in the business.

[Paul (Bloomberg Intelligence Host)]

Keith, what's the latest on Paramount, Skydance and Warner Brothers Discovery? When is that deal going to close and what's some of the feedback you're getting from investors about this deal?

[Geetha Ranganathan]

The deal, Paul, is expected to get regulatory approval and to close by September 30th of this year. So we have a few more months. It Looks like some of the biggest investors are recommending that, you know, Warner Brothers shareholders obviously vote in favor of the deal. That vote is set for April 23rd. So it definitely looks like they're not going to head into any big regular regulatory problem, something that we were kind of anticipating with Netflix. This path seems a lot more cleaner, a lot more smoother. And in good news for Paramount, what they've done is they've kind of secured the Middle Eastern funding, so They've got about 24 billion from some sovereign wealth management funds. This was kind of a little bit of an investor concern, just kind of given all of the geopolitical tensions and the regional conflicts there. But with that kind of locked and loaded, I think investors are definitely kind of heaving a sigh of relief here. And it looks like everything will go as per plan. The question really, Paul, is whether they're going to be able to deliver after the deal closes. That's really what investors are going to be looking for, especially with the $6 billion of synergies that they've outlined and

[Paul (Bloomberg Intelligence Host)]

a lot of debt on the balance sheet. Talk to us just real quickly how the market's thinking about their leverage profile because they're going to be the most or one of the most levered media companies out there.

[Geetha Ranganathan]

Absolutely right. Seven times leverage, about $80 billion in debt when the deal closes. So that is really what the market is worried about, as you pointed pointed out. And you know, again, we have so many different parts here. But I think the biggest worry is really the exposure to the linear TV ecosystem. It's, you know, about 55% of revenue still is going to come from, you know, the linear TV bundle. And really it's about how well they can manage that. So this is going to be a wait and watch story. We've not seen very good results in the past, so fingers crossed.

[Paul (Bloomberg Intelligence Host)]

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[Paul (Bloomberg Intelligence Host)]

You know, it seems like a lot of these big tech companies are almost tripping over themselves to get press releases out saying how big their AI revenue is, how fast it's growing, and Amazon's no different Amazon CEO Andy Jassy in a shareholder letter said AWS's AI revenue run rate is over $20 billion. As Alexis was just reporting, that's up from 15 billion just in the first quarter. So that's pretty good. Stocks trading higher. Anurag Rana joins us here, technology analyst for Bloomberg Intelligence. He's out there in Chicago. Anurag, Amazon, 20 billion. It seems big to me. How about you?

[Anurag Rana]

Yeah, no, it's a very big deal. In fact, this is the first time they are actually putting a number around it because if you remember a couple of years ago, Microsoft was throwing its number out and everybody else was asking Amazon, where is your number? Where are you? But one of the things we talked about at that point, Amazon's riding on the ChatGPT wave where Amazon's more enterprise focused and now those enterprise workloads are coming in and that's where we see the AI revenue for Amazon.

[Isabel (Interviewer)]

How does this change the calculus for the outlook of the company? Like, are you more bullish than you already are?

[Anurag Rana]

That's a very good question. In fact, we published a note yesterday saying that we anticipate AWS growth to pick up this year, in fact, even in the first quarter, because one of the things we saw just announced two days ago was Anthropic's revenue went from I think 9 billion to 30 billion within no time. And AWS is one of their preferred partners. And if you remember, two years ago, it was all OpenAI Microsoft. Now we are seeing Anthropic doing really well and that helps Amazon Web Services. So this year we think Amazon Web Services is going to do better than what most people anticipate an update us

[Paul (Bloomberg Intelligence Host)]

on kind of the competitive landscape. Now, where does Amazon fit in these days?

[Anurag Rana]

Yeah, so when you go back and look at it, prior to the era, Amazon Web Services was the largest. It's still the largest, but it was largest by a massive amount compared to Microsoft and Google. Since then, after ChatGPT, Microsoft really closed the gap with them and became a much bigger cloud vendor, you know, compared to Google, but not as big as Amazon. But all three of them are doing phenomenally well because remember, this is a business where you need to put in a lot of capex and data centers in order to gain this revenue. This is not something you and I can build in house using either cloud or anything because you need physical infrastructure, datacenter chips. Amazon talked about their chip business, for example. So Amazon still is in the in the driver's seat with the largest market share, but both the others I would say Microsoft and Google are catching up fairly fast at this point.

[Isabel (Interviewer)]

So speaking of this slew of deals, we also have core, we've expanding their metadeal for air computing to $21 billion at a headline level. What does this deal tell you the size and duration was? What does that signal and does it tell you met us AI demand is stronger than expected I think spending so

[Anurag Rana]

much because they need to be relevant also in the large language model space. It seems to me that this, this particular deal is tied more so for the training of the model RA inferencing because one of the things what we are seeing is when it comes to even hyperscale cloud providers, whether that's Microsoft or Google, they're doing some of the work in house with their own data centers. But as they can't expand that rapidly, they're going out to these NEO clouds, whether it's Nebby's or Core weave and renting out their capacity so that they can parse out some of that work to them as well. So this is just a continuation of that. The bottom line is AI infrastructure demand is very strong and it actually helps out everybody, not just the hyperscale cloud providers. Also the new clouds, I know you

[Paul (Bloomberg Intelligence Host)]

cover all the software providers. They've had a tough go of it over the last several months, four or five months as investors try to sense which one of these software companies and sectors and verticals could be at risk from AI. Where are we now? Where what's the market saying these days?

[Anurag Rana]

So you can see them in the index is down quite a bit even today every software company is down and yesterday we heard that you know there's going to be some new model by Claude. So every time there is a brand new model from Anthropic or anybody else, there is pressure on these names and I don't think think that's going to change anytime soon. What these companies have to do is show that they are not going to get cannibalized by these large language models but actually embed them in their core product and can continue with that profitable growth that they have. But that's not an argument that gets settled, you know, in the next 12 months. It's going to take a few years to build that out. What we want to see from companies like Salesforce is to go out and buy back a lot of the shares which they did $25 billion buyback that they have announced. If these guys are able to embed some of these models in their own products and protect what they have I think this is going to be a change around in sentiment, but again, that's not going to happen anytime soon. It's going to be a few years before that shows up.

[Paul (Bloomberg Intelligence Host)]

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You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple Car Play and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Paul (Bloomberg Intelligence Host)]

Earnings they're out there. Constellation Brands was last night after the close, stocks trading higher here. I thought some of the guidance was a little soft, but I guess the street says, hey, it's better than we thought it was going to be. But let's break it down with Red Brown, Bloomberg Consumer Reporter Red, what do we hear from Constellation about their business?

[Red Brown]

Yeah, you're, you're right, the guidance was a little soft last night. But I think this morning on the call, the company kind of made the case that March sales were quite strong. They feel like that momentum in this early part of the year is going to kind of carry on through the summer. And with that they're planning to kind of support the early momentum with I think the word they use was an aggressive marketing campaign. So if you think about the big events we have in the summer makes a lot of sense of the World cup. The company expects that to be kind of a growth driver, especially for their bigger brands, Modelo, Corona. You know, we all associate those with the summer as well, so makes a lot of sense. So I think that's kind of explaining a little bit of the share move that we're seeing. The question now, I guess becomes whether or not that this is just a blip or they're still kind of subject to the sort of secular decline we're seeing in the other parts of the alcohol industry.

[Isabel (Interviewer)]

How much of this softer outlook is macro driven? We know that it's not really a good economy. Consumers are feeling pinch as opposed to with the products themselves.

[Red Brown]

Yeah, no, the company is making the case with when they kind of justified their guidance that it is the lack of economic visibility. They also withdrew their 2028 guidance as well for the same reason. They say we just can't see that far out in advance at the moment. But again, it kind of comes back to this question about whether or not it is an Economic situation that they're kind of dealing with right now, or it is just they're subject to the kind of consistent decline we see in the beer market. Analysts are kind of split on what. What the real situation is.

[Paul (Bloomberg Intelligence Host)]

You mentioned some of the brands, Modelo and Corona, brands that identify with Hispanic audience in this country. The companies in the past is called out. The change in immigration policy is impacting, having an impact. What are they. Have they updated their thoughts there.

[Red Brown]

So during the call, they said they actually saw a sequential improvement in those zip codes that have a higher Hispanic population. So, you know, I guess it doesn't tell us a ton if it's just a sequential improvement from sort of a lower start.

[Paul (Bloomberg Intelligence Host)]

Right.

[Red Brown]

They didn't give any sort of specific details on just how much of an improvement it was. So I guess it's something that we still need to kind of keep an eye on.

[Isabel (Interviewer)]

What about. I mean, the company in general has benefited from premiumization. Are we seeing customers trade down and what trends are they pointing to?

[Red Brown]

Yeah, the company said that that trend is continuing, so they're still seeing some strength within their premium brands. I think what may be going on is that people are drinking less, but when they do drink, you know, maybe I'll reach for the. The nicer option. So we've seen that in other parts of the alcohol industry as well. So like, you know, spirits tend has been pushing premiumization as well. So that that trend might, you know, maybe we don't think of beer as necessarily always like a premium option, but there are sort of ways to trade within the category.

[Paul (Bloomberg Intelligence Host)]

All right, you're of that demo. A younger demo.

[Red Brown]

Thank you.

[Paul (Bloomberg Intelligence Host)]

Are you guys drinking beer? You're drinking the red white claws and all that iced tea stuff and all that?

[Red Brown]

Yeah, it's. I guess when you go. I mean, obviously New York's a specific, you know, beer. I mean, alcohol culture, bar culture. But I guess when you do go out there, you do see more people kind of holding cans. A lot of the times it's less a. A white claw. That's. It's more. Less seltzers these days. It's more these ready to drink. So think of like a serve side, which is like a spiked lemonade, a spiked iced tea. Those are really popular right now. And it all kind of comes back to this idea that people are just changing the way they drink. They're being more conscientious with how they. They drink. You know, they still want to be social, be out talking to people. You know, their inhibitions go, but they want to not deal with all the, all of the health consequences when it comes to drinking. They don't want, they want something that's lower calorie. They want something that's lighter, easier to drink. So I guess, you know that that's, it's a debate that's been going on for a long time of like, are younger people actually drinking less? It's, it's really kind of hard to like tease out in the data or they're just like changing like we're saying

[Paul (Bloomberg Intelligence Host)]

they're just picking different constellation. Are they happy with their portfolio of brands or they think, are they always buying and selling stuff? What do they say?

[Red Brown]

I think right now they should be happy. They have some of the most popular brands like Modelo obviously unseated Bud Light a few years ago as the most popular beer brand in the country. Corona I think is fifth. They also have Pacifico is one of the highest growing brands as well. So I think that they should be pretty happy with that stable. But you know, we've seen deals happening in obviously the sort of rumors around Brown Forman potentially merging in a couple of weeks ago. So they're, you know, in, in this sort of shrinking market to gain growth, there's going to be probably more of these sort of swaps, you know, in portfolios.

[Podcast Host/Announcer]

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[Red Brown]

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