← Pablo Torre Finds Out
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- [00:00]
A
Welcome to Pablo Torre finds Out. I am Pablo Torre. Today's episode is brought to you by DraftKings. DraftKings. The Crown is yours. And today we're gonna find out what this sound is.
- [00:11]
B
Why can't you just say it one time on our show? Just say it.
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C
We didn't have any.
- [00:15]
B
We took advantage of the little guy.
- [00:18]
A
Right after this ad. You're listening to Giraffe Kings. I don't. I don't want to.
- [00:37]
B
You have to ring the bell.
- [00:38]
A
It's like, hey, yeah, I am trying to buy lubes.
- [00:40]
C
Yeah. Take how long it takes to get somebody to come over and unlock.
- [00:46]
B
I've gamed the system. I go to Walgreens and Dwayne Reed, and I go right to the person with the key.
- [00:52]
A
You go to the person with, oh, wow, hold on, Are we rolling?
- [00:54]
B
And I go. And I go with them aisle to aisle.
- [00:57]
A
So.
- [00:57]
B
And so I hand him a 20 personal shot offer. And so I have 20 because I.
- [01:02]
A
Want their attention into your surfs, into your indent.
- [01:06]
B
Explain what I don't want to do. I don't want to press a button and say, hey, we need help at aisle four in cosmetics. I want to get what I'm there to get. I have a list, and I have the person give a 20, and then they do not take any of the other calls. They have a key, and I'm in and out of there in a jiffy.
- [01:22]
A
You are. Wait, did you are turning this into the scene in Goodfellas where you palm a 20 into the hand. Into the hand shake of the employee who's like, yes, Mr. Samson.
- [01:33]
B
I don't introduce lube today. I merely say I need some Vaseline. Yeah, I just. I don't want to have to ring the button every aisle. So I don't. I can't believe you're making fun of me. This is far more efficient.
- [01:47]
C
I'm on your side here.
- [01:48]
A
I don't do rich guys, only fans. Like, how can we. What if we just paid the guy directly to work for us instead of.
- [01:57]
C
Having give them a 20, hand them a list, say, I'll be here eating ice cream when you get back.
- [02:02]
B
I like looking at expiration dates. So people don't do that. It's why I don't do, like, instacarting or shopping like that. Because when you're buying milk or eggs or yogurt, whatever, you have to buy the latest expiration date.
- [02:14]
C
I never look at the expiration date.
- [02:16]
A
If I could summarize you and I. If I could summarize this show in one sentence. It's that David cannot stop checking expiration dates. John doesn't.
- [02:27]
B
I am not the only one who looks.
- [02:30]
C
Nobody would suggest it.
- [02:32]
A
It's just typically, you get home and you're like, I bought moldy bread.
- [02:35]
B
That's how you roll.
- [02:36]
A
That's how I. That's how I find out.
- [02:39]
C
No, no, you look at the bread and see if it's moldy, but sometimes.
- [02:42]
A
It'S like hiding around the corner of the bag. And you're like, ah, got me again.
- [02:47]
B
We could. We could do a whole show on this. But the way that I do, my refrigerator may stagger you.
- [02:52]
A
It is what is. Okay, what does it look like?
- [02:54]
B
It's in order of expiration dates. So when you buy, let's say, dressings, you have to. So people tend to do last out, first in. So you take what's in front of the fridge and you use it that.
- [03:08]
A
You just familiar with how people normally operate a fridge, which is whatever you operate is in the front.
- [03:14]
B
Right. You don't want to operate it that way.
- [03:16]
C
Same thing's true of clean T shirts, right? They put them on top. You just pull it off the top. I bet you don't. I bet you have.
- [03:22]
B
Well, you know that clean shirt, the.
- [03:24]
A
Show, he has a rotation of blazers.
- [03:26]
B
No, I. I put obviously everything clean on the bottom. But the purpose of the fridge story, and I don't want to take up too much time.
- [03:32]
C
It should all be clean. You're putting in.
- [03:33]
B
You don't waste food this way.
- [03:34]
C
You're putting in the clean stack.
- [03:36]
B
I'm just saying you don't waste food in the.
- [03:37]
C
Freshly clean on the bottom so you don't end up.
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B
You know what stinks is when you have a guest at your house and they're in your fridge and they're looking for buffalo sauce, and they look at and say, oh, that's from 2021. That's a position I don't want to be in.
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C
I have solved that problem.
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B
You don't have buffalo sauce?
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C
I don't have anything. I have almost nothing in my fridge.
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A
I thought David was gonna say it's a problem when you have guests, period.
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B
Well, there's certain.
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A
I visited David's home in an undisclosed location, perhaps on a certain island that might be lengthier than other islands and Strong Island. I was told immediately what not to touch. Don't put your bag on this. Don't touch it.
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B
Well, I had a sign, actually. There's a sign saying there was ice items on this.
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A
How Could I forget that there was an actual sign?
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B
An actual sign. I do have signs around my house. People are not courteous. They drop their crap everywhere. I find it rude. Can we start the show soon?
- [04:39]
A
I think we have.
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B
Foreign.
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A
We gathered today looking westward in a couple of ways, because the story we're going to lead with is this massive story headquartered in part out of the Burbank area. But we turn to Southern California also, obviously, because it is on fire. And this is something that you guys have to think about because you do business out west quite a bit. So I just want to acknowledge that weird time to talk about entertainment without acknowledging the metaphor becoming literal.
- [05:26]
B
It's not just the entertainment business that's been impacted. And. And for some reason, people are focused on celebrities who have lost their homes, but they're not focused on all of the people who don't have the means to rebuild, don't have the proper insurance. It's a nightmare out there. So I'm heading out there because I want to see what's going on and I want to visit with my daughter. And I feel terribly now because I am struggling with when to make calls to people I do business with in California because I feel like I have to start every call with, are you okay? But if they're not okay, I would have heard or they won't answer their text. So if they answer, it means they are. So I don't know the actual right social rules.
- [06:05]
C
I think the right social rules are to ask them how they're doing today, as opposed to how you're doing. How are you doing today? I think that's the polite way to start. And I'm sure you do that. And I would just put that while David and I do business there, we also have friends there.
- [06:20]
A
Yes.
- [06:21]
C
And we both know. And every day I hear about someone else who has lost their home or who has had to relocate somewhere. And it's quite significant. And as always happens, the attention is on Brentwood and Pacific Palisades because they are. They are prosperous and famous people live there. But Altadena is a very old city, has a very high ownership of black. Black ownership. And probably, you know, historically, it's going to be disrupted. That's where a lot of black professionals have lived and prospered. So I will be interested, as usual, to see how our resources are mobilize in what we do. Hopefully it will be better than the Ninth Ward in New Orleans.
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A
Right.
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C
Where they did close to nothing. And Barbara Bush applauded that those people would be better off Living somewhere else. I doubt anyone will suggest they'd be better off not living in the Palisades or Brentwood, though. Somebody told me a very interesting thing the other day, which is why you want to get back. You don't want to get back in the midst of ash strewn ground with lots and lots of homes burned. So it's a very difficult matter to figure out what to do.
- [07:37]
A
No, it, it is, it is both strangely assuring that going through other, in this case the pandemic, a global catastrophe, is sort of helping us prepare for what to do when yet another catastrophe happens. But even just the basic thing of like, oh, by the way, I talked to my friends in la, so many of my friends moved out to la, left New York to go work in entertainment and it's like, oh yeah, also our, our schools are all closed. Like, oh well, at least we've gone through that before. But now it's yet another chain of dominoes in which you hope that, and I say this knowing it already has been, you hope that it's not so deeply politicized such that the people who need help actually might even get it. But I want to make the very awkward pivot back to what we're really here to talk about by following just the map here towards an entity, a venue known as Venue. And I don't expect anybody, even the most diehard listeners of this program, to remember what venue V E N U is. I call it venue in my head all of the time. Who wants to remind people what venue was?
- [08:50]
B
I'll try to do it quickly, John.
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C
Sure.
- [08:52]
B
Venue was a collaboration by three huge companies, Fox and Disney and Warner Brothers Discovery, which people may know as tnt. And they all got got together companies who had not really worked together all that much and said, we have a great idea. We're all going to put our sports assets and channels, regular channels, tnt, pick your channel, we're going to put it into a bundle and we're going to create its own company called Venue, where if you buy a Venue subscription, you're going to get Fox Channels, Disney channels and Warner Brothers Discovery channels and it's going to be awesome for you, the consumer. That was the original announcement when John Skipper, during a sporting class episode said I have no idea what all the hubbub is about. This is a ridiculous announcement. This company does not offer anything new under the sun. He was so bearish on the company. Meanwhile they were investing hundreds of millions of dollars into the infrastructure, naming CEOs.
- [09:49]
A
Creating and actually a new company.
- [09:52]
B
And guess what? Then there was a lawsuit and lawsuits can really get in the way of anything. And a company named Fubo sued, saying it's no fair. You're getting all these channels. We want these channels for our customers at Fubo, which is a digital platform. And the, the judge said, you know what, you may be onto something. We're not going to let venue start. All the employees were in their offices getting ready to launch Venue. And the judge says, nah, hold on. And then Disney and Fox and Warner Brothers looked at each other and said, we have a problem here. We're spending money with no revenue, all expenses.
- [10:27]
C
Yep.
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B
And so then they decided they being. They being Disney, as one of the partners said, here's what we can do. Let's get rid of the lawsuit. Let's do a deal with Fubo. Let's buy Fubo. That'll make Fubo happy. That'll make him drop the lawsuit. And so they did. And so the lawsuit ends up getting dropped. And everyone assumes everything's going to be great. Except Skipper who said venue is still nothing. Like, what are we doing?
- [10:54]
A
Let's bring in John. Because the idea of why venue is gone seems clear to you then. Is it even clearer now?
- [11:02]
C
They don't need it now, right? It was always a temporary stop gap before they launched Flagship, which is the.
- [11:11]
A
Single tile app that ESPN will become. Will become soon.
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C
This was always a Disney led effort, in my opinion. I thought that Disney always got the preponderance of benefit. I believe this decision has been overwhelmingly made by the Walt Disney Company and they have decided that, gee, we'll agree. Because we not only have to make Fubo's lawsuit go away, DirecTV is still objecting. So is EchoStar. So we're going to give DirecTV the channels to put in a bundle that will compete with YouTube TV will. I guess I didn't read it yet. I guess Echo Star will end up getting the same. Should I know what Echo Stars Dish.
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A
Dish. Okay, sorry. I'm trying to.
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B
It's the merger that wasn't allowed to happen that would have created some sort of larger satellite company.
- [12:00]
A
I like to position myself as a proxy for the audience. I also have just no idea what anything is called anymore. So proceed, please.
- [12:07]
C
That. That's it. So now they don't need venue. They've got My Sports on DirecTV. They have something on EchoStar. Flagship will be coming along before too long and you'll have ways to get espn. What they're just trying to do is aggregate as much of the audience that is left Back.
- [12:24]
B
But you didn't think they ever needed venue.
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C
No, I never saw me is the.
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B
Corporate discussion that happens in the boardroom is they come up with this idea, they launch it, they have press release.
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A
The Avengers of Media are going to combine for the first time.
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B
It was amazing.
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A
Remember, magical product.
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B
And what John is saying is from the beginning that you questioned it. So it's, it's not the lawsuit.
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A
What did they want out? What did they want to get by the announcement and the hubbub? Just to be very clear, they wanted.
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B
My view is they wanted to give the consumer another mirage of a choice of efficiency. And that is what these companies are trying to give consumers time and time again after they started cutting the cord. They want to be the savior, except really all they're doing is making you pay the same or more, but two different platforms.
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C
I agree with that.
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A
We should talk about just the consumer here because as everything is now feeling like Echo Star and Flagship and it all feels like we're naming Transformers now.
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B
Like Cody has gone crazy for Flagship and Jimmy Pitar. They talk about it as though the world is about to change.
- [13:43]
A
Well, we should just explain again, John Skipper, former president of espn this was a thought, of course, when you were running the company. Now it is an imminent priority in a way because of again, gaze across the map of media. So I get why this is like the number one. Like a number one priority. But what is confusing to me is that while Flagship is being prepared for launch, there are these other things happening. The fubos and the venues of the. And I'm like, so what, what is this?
- [14:17]
C
Well, and you've got leakage that Flagship is not going to fix. So the longer they wait, there are more and more places where there's been leakage of fort rights. Right. Netflix has now entered the game more aggressively. Amazon is buying things. So there was a moment where virtually everything you wanted appeared on an ESPN channel.
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A
Don Skipper, the number one enemy of leakage of sports rights. Truly.
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B
Because he doesn't like competition.
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A
Well, that's what we're saying.
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B
Yeah. He had no interest.
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C
I think that I love competition.
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B
It's fun as long as you win.
- [14:52]
C
Yeah, that's the, that's the fun part of competition. I'm really in it for the, for the, for the sport. We were in it to be the worldwide leader by large margin still. They still are. By the way, this is an interesting. This is interesting in that while there have been lots of digital disruptions, in some cases you had completely new players or you've Ended up with just three players, like the music business. And here you're going to end up with many, many more players. ESPN is still going to have more rights than anybody else for a long, long time. So they have managed to be smart and prevail. But I think Flagship in some way is less and less attractive because there's less and less. It's not on there, right? There's stuff on Paramount and there's stuff on Max and there's stuff on TNT and. And you're still going to have to, I guess, if you buy Flagship. Question is, what you get from flagship that you don't get from. From. Well, my sports.
- [15:55]
A
Or it would be arguably in the name, right? Like the biggest flagship items. Like you get the NFL again, but.
- [16:02]
B
You get that, well, you remember what John said from the beginning is. And it got so much attention because people misunderstood it. The super bowl behind, first of all, on a streamer for sure, it's coming. Second of all, behind a paywall is a pay per view event. We are not far from that. And the question is, is Flagship going to be closer to CNN plus or closer to Netflix? And what Disney is betting is that Flagship is going to be closer to Netflix. And my biggest concern is as a consumer, I don't miss Flagship. I. It doesn't add value to my portfolio of subscriptions or my ability to get things that I can't get. Until ESPN says we'll get you to like Flagship, we're going to take everything off espn, espn. And I don't think they're going to do that for years still, at the.
- [16:48]
C
Minimum, I don't think they will. Now, there is one thing which they have alluded to without very much detail, but I wouldn't provide detail either. And that is the original promise of streaming, right? That you would get more personalization, you would have more choices. There'll be some things you can do. And that is a way they could distinguish Flagship, right? Which is to say, well, you can get all those channels on a linear basis or on an archival basis, but you're not going to get the great feature number one, great feature number two, great feature number three, that nobody else has. Now, I'm quite frankly skeptical of that and always have been. Remember how many times people have talked about, oh, you're going to get to pick your own camera angles. Nobody wants to. Even the Manning cast, which, by the way, I watch Monday night instead of the regular feed.
- [17:40]
A
I sample it all the time.
- [17:41]
C
Quite fun. Quite fun. Most people don't watch it and it.
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A
Doesn'T really compare it to the game. It is dwarfed by that audience.
- [17:48]
C
And if you add the two together, they're probably not getting a marginal, they're probably getting new people. You just have some same audience.
- [17:57]
B
Given what they're paying the Mannings, it is staggering to me where they see any incremental benefit. And you've got all these networks with the Nickelodeon cast, you've got everyone doing the alt casts. And now it's the hottest thing because it's like the watch parties and watch parties are of value and that's all the Manning cast is.
- [18:14]
A
But the Mannings, I mean, that deal is a bigger deal across production in various ways. But I digress. I want to get to what the consumer allegedly was promised and what now can be expected. So, like, if you're a customer and you're like, I don't know where anything is to sort. I'm the host of this show and I have trouble keeping track. I, I have trouble calling Fubo FUBO instead of fubu.
- [18:39]
B
Do you have a problem finding a sporting event? Yes. You do?
- [18:43]
C
Absolutely. I believe FUBU is for us, by us.
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A
Well, now it's for us by others because they've sold 70 to the aforementioned Walt Disney Corporation.
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B
Good for them, by the way. They found an exit strategy. But I want to get back to this. You really can't find a sporting event. You have that amount of confusion.
- [18:57]
A
Harder.
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B
It's absolutely harder. But if you go to ESPN, the link espn.com and you look for scores they will have on it. What channel every game is on?
- [19:06]
A
Oh, no.
- [19:07]
B
So you know, to go to Amazon.
- [19:09]
A
Information available, it's just not easier because it's just a very basic math of. Whereas it used to be under one roof or two roofs or three roofs even. Let's just call the espn, Fox, NBC, cbs. Now it's like, oh, wait, this is streaming over here. Oh, and that is.
- [19:28]
B
I mean, this is how we all felt when Fox started, when we all had three channels. Maybe no one remembers this, but John and myself, but we had Channel 2, Channel 4 and Channel 7 in New York, which was CBS, NBC and ABC. When Fox started, it was a major thing. Like, oh my God, there's a fourth channel where there's football games on Fox. Before Simpsons, we were shocked when the NFC package went to Fox.
- [19:49]
C
I, I dealt with that. I dealt with that pretty well.
- [19:51]
A
Yeah. What was that like, John?
- [19:53]
C
All it meant was you, by the way. I remember you had to get up and turn the channel, of course.
- [19:58]
B
So I, I just don't see the big deal that people.
- [20:01]
A
Well, you got it. Well, hold on. It's not. I think this returns us to the very basic notion of what we're talking about is live television specifically. And now when I reference. Oh, it's on Prime. Oh, it's on Peacock. I'm paying for all. I am the guy, unlike perhaps many people in our audience, who is paying for all of it. Because it's my job now it's like, oh, I don't have this unless I buy it. And so I think we return to the very basic bottom line of the bottom line.
- [20:28]
B
The bottom line is a. I hope you write off all of these subscriptions that you have for your job notice. You just set it to the new ERS. External Revenue Service.
- [20:36]
A
That's right.
- [20:37]
B
2. I think that there. You didn't hear about this External Revenue Service.
- [20:42]
C
No. So you didn't either.
- [20:44]
B
No one's heard this.
- [20:44]
C
You're sure it's not the Elon?
- [20:47]
B
No.
- [20:47]
A
I thought you. I thought referring to our internal Meadowlark.
- [20:53]
B
No.
- [20:53]
A
Okay.
- [20:54]
B
Donald Trump has announced that he is starting January 25th the external revenue Service, which is different than the Internal Revenue Service. The External Revenue Service is charged with collecting money from foreign governments, countries, entities, etc, who have not paid their bills to us.
- [21:09]
C
And is there. Is there still an Internal Revenue Service? This. There are supplements or.
- [21:15]
B
It's a separate. It's a separate thing. I'm sorry, I thought that would have been funnier if you hadn't heard of the External Revenue.
- [21:20]
A
I just like that you're excited about taxes.
- [21:22]
B
I'm just excited that. That we're actually going to charge people what they owe. I think it's very important. I love your bills.
- [21:29]
C
Wait, you're talking about individuals or foreign countries? Because we're certainly not making individuals pay.
- [21:34]
B
What they owe, which I firmly believe. Individuals and foreign countries.
- [21:38]
A
I will also believe that all foreign countries will pay what they owe when I believe that we do not favor certain foreign countries to a degree that makes me laugh at the premise that there's an agency tasked with doing this.
- [21:48]
B
The ers.
- [21:49]
A
The ers.
- [21:50]
C
The Elon Revenue Service. Anyway, we could probably collect more money just by charging that guy.
- [21:56]
B
Yeah.
- [21:56]
C
Than we could. The fighting should just with Denmark for Greenland.
- [22:01]
B
Did you get an invitation to the any part of the inauguration?
- [22:05]
A
No. No.
- [22:06]
B
Heartbroken now that Biden's out. Your. Your invitations to the White House have dried up.
- [22:10]
A
I went to the holiday party.
- [22:11]
B
And you're done now.
- [22:12]
A
The vibes were bad. A delight.
- [22:15]
C
What you expected? Celebrate good Times a delightful spread of food.
- [22:22]
A
They take the holidays very seriously. At least they did. But no, it's been. It's been remarkable radio silence, David, if that's what you're asking.
- [22:28]
B
I'm just saying, are you concerned about your loss of power? There's a transfer of power. I'm now concerned of the media. Like a Joe Rogan.
- [22:34]
A
Oh, that's that. That horse has left so many barns already. I. I am more concerned about being individually audited, though, just for reasons that I may say on various.
- [22:43]
B
You can deduct the cost of Peacock.
- [22:45]
A
Very good. You do.
- [22:46]
B
And your sweater.
- [22:47]
C
We mentioned I was at the first Donald Trump inauguration.
- [22:52]
B
I didn't.
- [22:52]
C
In 1616. What was there?
- [22:55]
A
Under what pretenses?
- [22:56]
C
I was in the Disney lobbying office and we were making calls on Congress people and I can't remember Richard's last name, but the main lobbyist for. For the Walt Disney Company said, hey, John, would you like to go see the inauguration today? And I said, yeah, of course. I've never been to one and wasn't my candidate, but it was okay. I was prepared to give the man a chance. But I can tell you as an eyewitness, it was very sparsely attended.
- [23:30]
A
Now we're all getting audited.
- [23:32]
C
It was very sparsely attended. And there's a picture of me because the Time magazine did a thing.
- [23:37]
A
Oh, we gotta find this.
- [23:39]
B
Find it immediately.
- [23:40]
C
Where they put this on where that you could find yourself. Right. They did a 360 and I'm on the right behind the president on the back row. There's nobody up there in the last four or five or six rows.
- [23:52]
B
You literally sat next to nobody.
- [23:54]
C
I sat next to nobody.
- [23:55]
A
That's great.
- [24:09]
B
Where is the consumer now? If you're looking at keeping track of what you have to subscribe to in order to get the same things you used to get on cable, I think John has been clear, and I agree with him, that you are probably behind. You're probably paying more per month now than you did to get basic cable. And the question is, what has been the benefit to the consumer? And what we thought it was was the a la carte was the bundling, where you only have to pay for what you want. And what it's turned into is that in order to get what you want, it's been split by the owners of that content in so many different ways to maximize their revenue that it's ended up bleeding down to the consumer.
- [24:46]
A
Right. A la carte seems fictional as a concept.
- [24:50]
B
Just expensive.
- [24:51]
C
Well, and we may. We may differ on the nomenclature here, there is no a la carte. You still cannot look at, oh, here's what the cable company, the satellite company offers, and I just want to pick the ones I want. You can do a little better, right? There are light, there are more choices, but you can't do much better. You're still buying.
- [25:14]
A
It's a prefix menu economy. In media, it's not, oh, I'd like this, that and that. I'm going to combine my own favorites.
- [25:23]
C
And of course, the ones who are going to suffer the most are not attached to a great big company. Right. I mean, so the. In, you know, American, I think AMC remains independent still.
- [25:35]
B
9.99.
- [25:35]
C
I pay per month. But they're going to suffer over time and they'll either get consolidated into one of the big companies because they're going to continue to bundle, the companies are. And force the distributors to take a large selection of their bundles. They're going to be some sacrifices. Disney's closed some channels. The, the regional sports networks, as we've talked about often are going to be a victim of this and they'll be. So there'll be less available niche channels will, will disappear and there'll be a few big cable bundles.
- [26:11]
A
Do you enjoy, John, seeing someone disrupt what you have called the greatest business in the history of media and the economy around it in favor of clearly the same, but worse, with worse profit margins?
- [26:25]
C
No, no, I'm not amused at it. It's actually, it's difficult to navigate. It's not much fun. You're not saving money. You're not yet getting any benefit from streaming. Right?
- [26:35]
A
Well, they're, they're just remaking cable is my point.
- [26:37]
C
They're remaking worse profit margins. You know, you hope someday that there will be some benefit from the, the streaming distribution of content that did not exist when it was satellite or telephony or coaxial cable. But we haven't seen that. In fact, they still struggle to get it done. Right. Didn't Netflix on their first Christmas Day game struggle to deliver it to people?
- [27:01]
A
Well, it was the Jake Paul Tyson thing.
- [27:03]
B
Yeah. On Christmas Day, they actually did much better with their buffering. But if you're saying the profit margins have gone down, then where is that money going? Because I don't think it's going to the consumer. Where it's actually going is to just competitors.
- [27:16]
C
Yeah.
- [27:17]
B
So it may not be the percentage profit margin that has changed, but it certainly is the amount of profits. And you've seen that with the quashing impact, it's had on so many media stock prices which is causing all this unrest. So it's actually they're all related. And so what we haven't seen yet is where the consolidation ends. You've seen a bunch of mergers that have been attempted. Some of them have, are still in the process of happening like cbs. We don't know what will happen at the end of the day there.
- [27:44]
A
Right.
- [27:44]
B
But I think you are a decade away and, and we've said this from the start of the show. A decade away from understanding who's going to make it and who's not.
- [27:53]
A
But go ahead, John.
- [27:54]
C
I just want to say it's interesting because sports has proved to be the glue that has prevented new entrants from running old entrance out. You still got NBC. In fact, broadcast networks are somewhat ascendant here. But it is all sports. It's NFL on those broadcast networks. It's, you know, every, it's Amazon getting some sports, it's Netflix getting some sports, it's Apple getting some sports.
- [28:24]
B
But it's always been though. So this is something I keep arguing with Pablo about. The reason Fox got into the NFL game at a loss is they wanted to prop up their programming.
- [28:33]
C
Right.
- [28:33]
B
And, and it's worked and it's made them what they are today. Some could argue the NFL deal, the loss they took. So live sports has always been recession.
- [28:42]
C
Proof but now it's proving to so far to keep digital companies from completely disrupting and driving old, old media companies out of business. Right. Nobody's really been driven out of business.
- [28:57]
A
I think it's a matter of when it comes to David and this argument about hasn't this always existed before? Yes. Has it existed with this level of difference between sports and entertainment that that gap is just, it's bigger than it's ever been. And it's just fascinating to see. Again, we returned to Hollywood briefly here, but like they're all freaking out and sports like you could argue maybe they should be, but it is ascendant at a time when everything else is descending. And that's what's fascinating about being the sporting class is that this is the business that everybody is saying at least.
- [29:37]
C
This is working, this sports matters more to more people than anything else. Right. I mean look at the, that's always.
- [29:47]
A
Been the best argument for it.
- [29:49]
C
But look at the dispersal of music. Right. There is no centrality to music right now. Right. You don't have a top 40 that everybody listens to. It just dispersed everywhere. It doesn't mean it's bad or Good. There's a lot of interesting music. There's. People can find what they want. But in fact. In fact, that's actually not true because everybody who uses all these music services actually listens to a less and less wide variety of music.
- [30:17]
A
Okay, but that's a metaphor again, for, like, what we're getting here. We got the illusion of choice, to paraphrase David, and instead we are bundling, we're retrenching, in fact, in fewer as opposed to more.
- [30:31]
B
When you lose a barrier to entry in any industry, you run the risk of actually constricting and constraining that which the consumer is taking advantage of. And there's. So podcasting is a great example. There's no barrier to entry. Anybody can start a podcast. But 99.4% of podcasts get, you know, under a thousand downloads per month. How many new leagues have tried to start? You're doing one right now, which is starting, I believe, tonight.
- [30:57]
A
Unrivaled.
- [30:57]
B
Unrivaled.
- [30:58]
C
No, no. Starting Friday.
- [31:00]
B
Okay. Sorry, John. This is.
- [31:03]
C
Okay.
- [31:03]
A
Okay, again, expiration dates. Dates in general.
- [31:06]
C
Just such a transparent guy. I cannot bring myself honestly to pretend it's Friday.
- [31:15]
B
All right, we'll try that.
- [31:16]
C
But I wasn't actually trying to do that. I just.
- [31:18]
B
No, I believe that.
- [31:19]
A
We know.
- [31:23]
C
But the sports that are there have held up very well for the most part. You don't see a lot of things going away. Music, you see a lot of things going away. We are being algorithmed to death.
- [31:35]
B
I think more people are in music, more people are releasing songs. More people feel empowered to try to have their voice heard.
- [31:42]
C
That's because there's less barrier to entry, and lots of people can do that, but many, many fewer people can make a good living at it.
- [31:49]
B
Well, that's. That's 100 the case. And it's also the same with athletes. There is a story that we would tell athletes that the number of rich athletes is really very few. There's way more. Sunday night athletes or weekend athletes.
- [32:03]
A
Athletes as a. As a class of.
- [32:06]
B
As a thing that you do in order to get paid to do that, you have to be unbelievably good. In order to be rich and do that, you have to be out of this world. It's the same with acting. Not every actor is Julia Roberts making 20 million a picture or Tom Cruise. The 99.9% are doing the TV on your. When you fly, and they're saying, please fasten your seatbelt. Those are actors who are at the sort of bottom end of the pace.
- [32:33]
A
Those aren't flight attendants.
- [32:34]
B
No, they are actually actors paid.
- [32:36]
C
I think he's talking about the video. I am talking about the video.
- [32:39]
A
You're saying they don't actually use the flight attendants. They hire actors to. To play flight attendants. Even though flight attendants are actually doing that.
- [32:45]
B
You're hearing this for the first time.
- [32:47]
A
I just thought it would be cheaper to just know the actual flight attendant.
- [32:50]
B
But they're not actors. Haven't you ever seen your flight attendant on Flight 880? They're not going to be able to be on video.
- [32:56]
A
He or she is great.
- [32:58]
C
They're great. The. By the way, the best buckle your seat belt ad is always on British Airways. Have you seen the new one?
- [33:07]
B
Oh, I don't watch.
- [33:09]
A
I. I know how to buckle my seatbelts. I have breaking news from. Feels out of the glass. Matthew Coca has now weighed in. David is totally wrong. And his sources, the flight attendant he has lived with previously.
- [33:24]
B
Are you gonna tell me that your flight attendant does the videos?
- [33:29]
A
They work for the company.
- [33:31]
C
I would. I would bet there's some combination. I would bet there's some combination.
- [33:36]
B
There's a line on it. There's a. There's a proviso.
- [33:40]
C
I, I think this is probably that deep dive into something just about nobody else cares about right now. I feel confident. I want to get us back to our. Our wonderful listeners who probably don't care.
- [33:58]
B
I'm just saying I've never felt worse than when you're flying and they tell you how to close your seatbelt. I can't.
- [34:02]
C
I keep wondering why it is necessary still. The other one I like too is we're beginning our initial descent. I'm like, I only want one descent. I just want one. I just want one descent. What do you mean, the initial descent? Why are we going to try this? We're going to try this till we get it right.
- [34:19]
A
I would like.
- [34:19]
C
The initial descent did not go well. We're going to be trying to do.
- [34:22]
B
The secondary descent is going to be fantastic.
- [34:26]
A
I would like to just keep track. Coca, if you could, of just all the times that David says there is no worse feeling than. And then we could just have the list of feelings that are at the very bottom of David's list of feelings he would like to have.
- [34:39]
C
There's a lot of things raise one other thing. Why do you have to disarm? The doors are very important.
- [34:45]
B
Yeah. It's actually when it goes from red to green, it's so they can't be opened in the life. And the. What's the thing where you float on when you're in the water. The raft. There's a raft as a part of every emergency exit on the plane.
- [34:59]
C
It's a raft of vocabulary going on here.
- [35:01]
B
I remember sitting in front is the worst place to sit on a plane, right?
- [35:05]
C
Well, no, no, it's the best place to sit on the plane.
- [35:08]
B
Unless it crashes.
- [35:09]
C
The worst place to be in a crash. But since I'm not planning to be in any crashes.
- [35:14]
A
Another great distinction between John and David is that David is planning.
- [35:18]
C
Are you sitting in the back for safety?
- [35:20]
B
Oh, no, no.
- [35:20]
A
But I want to bring us back to the question of population and how many people are actually into the things we are talking about or watching Hulu live TV. Okay. If you're wondering around 4.5 million subs, Fubo TV, the Protagonist, you could argue in this story around 1.6 million subscribers in North America. YouTube TV over 8 million subs. And so I guess I'm bringing that all to the table just to give a sense, in case you were wondering about the fragmentation of all of this. It's just.
- [35:51]
B
But give the number for cable, John. The cable. The number of people who had cable at its height. I want to say 125 million.
- [36:00]
C
No, it was never 125 million, but it did peak at 68.5. Well, that's what it is now. It's peak. It was about 100 million.
- [36:10]
B
So just 100.
- [36:11]
C
Okay, 100 million out of about 115 million households. So think about that. You had, you know, 87, 88% of every household in this country. Shows you how much we value television.
- [36:23]
B
You want to know where the numbers have gone and why there's a problem with rights deals and regional sports networks. Think about just what we said. You just gave the numbers for streamers for these platforms.
- [36:32]
A
Can I briefly. Can I briefly just blame. I hate. I say this all the time. Google has replaced search with an AI overview which has said the following sentence, which I know to be to not be true. According to available data, the peak of cable households in the United States occurred around the year 2000, with approximately 68.5 million cable subscriptions at that time.
- [36:52]
C
That's. It's wrong on every count. It peaked.
- [36:56]
A
Correct the record, please.
- [36:57]
C
It peaked in the end of 2000. Beginning or end of 2012 is when it peaked. And again, this was reported data which was industry measurement likely somewhat exaggerated, but it was about 100 million homes. ESPN was in about 95 million of those. It also depends on how you calculate Hotel rooms, bar televisions. I mean, there's a. So there.
- [37:22]
A
Yes. It's a whole thing we've talked about before.
- [37:25]
C
But, but the point was it was ubiquitous.
- [37:27]
A
Yes.
- [37:27]
C
Right. Close to nine out of every ten households in this country had a pay television subscription. No other country in the world came close to that. England, I don't think ever crossed 50%. You were in other places in Europe. We want to be 35% and watch.
- [37:46]
B
TV as much as we do.
- [37:47]
C
No, no, we're, we're a TV craze.
- [37:50]
A
The worldwide leaders in watching television.
- [37:52]
B
We certainly are. So I, I just would, would say that because of that you give numbers for the streamers and the platforms, there is so much market share left that it's hard for anyone to give up on the business. So when you ask why Fubo is trying to get money, because they ran out of cash. They get an infusion of cash from Disney when Disney buys them and it gives them the ability. And what Fubo has said is we're going to go out now and do more deals, we're going to get more channels, we're going to try to expand to get more subs, but we need money to do that.
- [38:26]
C
Well, Fubo, let's see, says Disney, Fox and Warner Bros. Will make a $220 million payment. Disney is committed to 145 million term loan. So you're getting, you're getting close to $400 million for 1.6 million subscribers. It's a, it's an expensive acquisition.
- [38:48]
B
Well, the market seems to think it's an outstanding deal for Fubo because if you look at Fubo stock, you will see that they have skyrocketed. Which means what the market is saying is this is the type of growth Fubo needed to, to attain. And to do it, they needed to get money to do that. They needed to file the lawsuit in order to get the injunction in order to get the deal with Disney, in order to get venue to go away, in order to then be able to get more market share, which in turn will keep pushing up its stock price.
- [39:30]
A
So the question, as I clarify also 1.613 in North America is FuboTV's subscriber base. The question of who won here.
- [39:39]
C
The CEO of Fubo is the biggest single.
- [39:44]
B
Why not all stockholders?
- [39:46]
C
Well, he probably has more stock than anybody else and I was just being more specific. And by the way, he's a quite good CEO who has hung in there, worked very hard to make this company work, pivoted when he couldn't do the original Sports Light bundle. So, you know, he did everything.
- [40:05]
B
You wouldn't give it to him, and you don't agree to give it to him. Now, you did not like giving just ESPN to anybody.
- [40:12]
C
Well, first of all, we very seldom gave it to anybody. We were for sale for everybody. And had they wanted to pay us what other people were paying us, would.
- [40:23]
B
You have sold them one channel? No.
- [40:25]
A
Can we recap what this was about? So Fubo wanted from John, meaning ESPN at the time, to carry espn, and they wanted to do it at a reduced price is what you're saying. That was the dispute they wanted.
- [40:40]
C
They wanted a bargain, and we don't do bargains. We had a single price. We did not negotiate price. We started every discussion with, this is going to be the price. And now let's talk about what the arrangements are when we're going to do it. And no, you're such a bully because.
- [40:57]
B
You were able to do that, because you also. That's the way you propped up all your other channels, ESPN 2, 3, 4, 5, 8, 10. By saying you have to take it so you could show they have all these subs, which, in fact, no one wanted the channels.
- [41:09]
C
We had the most desirable content for consumers.
- [41:14]
B
Curling.
- [41:15]
C
We had the most desirable content for consumers. The college football championship, all the conference basketball games, the US Open.
- [41:23]
A
LeBron James, maybe you've heard of him.
- [41:25]
C
Yeah, NBA on Christmas.
- [41:27]
B
And it was not on the deuce.
- [41:29]
C
What. What we charged was a reasonable price. And we did construct a bundle that says, you're gonna have to take all this to get this price. You want to take it out. We are required by law to sell everything individually, but of course we'd say, oh, you don't to pay the 10 bucks, will you take out and pay $9 and 80 cents for ESPN?
- [41:52]
A
And what was your guy. And I say your guy jokingly, but also, David, you did. You have interviewed him on Dan's show Yourself, the CEO of Fubo, the winner of this story. And just to recap, he wanted to pay less. Why? What was the argument he was making?
- [42:09]
B
Because he didn't have the cash or the number of subscribers to actually give him money every single month that he could then turn around to give to the content providers. He was going to go bankrupt, so he couldn't afford to pay espn.
- [42:21]
C
His. His original proposition, I believe I remember this correctly, his original proposition was that the greatest point of friction in the cable universe is the cost of sports and the inability to just get sports. So his theory, which is abstractly an outstanding theory was, I'm going to put all the sports stuff together. But of course we wouldn't do that. We wouldn't say, oh, we'll just take all the sports stuff out.
- [42:49]
A
John was like, wait a minute, we're all the sports stuff together.
- [42:52]
B
Why do you stand up our non sports channels as part of this bundle, which nobody wanted.
- [42:57]
C
So I wouldn't suggest that nobody.
- [42:59]
B
Sorry. The four people who wanted the channels that you were pushing were being paid for by the 4 million people.
- [43:05]
C
We exercised this. We exercised our leverage because of the quality of what we had.
- [43:12]
B
Why can't you just say it one time on our show? Just say it.
- [43:15]
C
We didn't have any.
- [43:15]
B
We took advantage of the little guy. And now I'm a absolute.
- [43:19]
C
I didn't take advantage of any little guys. I may have taken advantage of some big old distributor mofos because we didn't sell directly to consumers, but they passed.
- [43:28]
B
The costs on right to the little guys.
- [43:30]
C
That was their decision.
- [43:31]
B
Oh, that is, that's how he.
- [43:35]
C
That I'm just having fun with. We knew what was going on, but we believed that, that nobody knew what they were paying for espn. They knew what they were paying for the cable bundle. So yeah, we were in an advantageous position that we absolutely took advantage of. And I know you to be a man who believes that your only job as an executive at a public company is to make the most money for your shareholders. Exactly what we were doing.
- [44:02]
B
I've already told you that you are the greatest businessman I've had the honor of doing business with and being a. Of part being in your life. But your lack of, of willingness to acknowledge it publicly makes me smile. That's okay.
- [44:14]
C
I'm a company guy.
- [44:15]
B
No, you were. You were a dozer.
- [44:19]
C
Rude.
- [44:19]
B
Mean.
- [44:21]
A
I was gonna say. There are so many other syllables after mill that could have applied and instead it was Willie.
- [44:27]
C
Well, that's. That's what you should call Willie. I grew up, you know, near Comms, North Carolina, near some hills. And you called a company guy Mill Willie.
- [44:37]
A
That's right. The question. Okay, so, so, but this is useful to me because I want to get actually to the beginning in some way working reverse chronologically of like on some level. Sure, you could argue that John flew too close to the sun by extracting value from the cable providers who then got their subscriptions canceled by the customers who are like, this is way too much money leading to the rise of the a la carte desire. But like, why are we here? Like, why, why are. How did we get here. How will historians look back and think about, wow, this got real different because.
- [45:19]
B
We'Re in the middle of a disruption. And the disruption is caused when you've got people who work for, in for companies and for huge institutions who want to keep doing things the same way. Because there is imputed profit margin and there is fantastic stock price results and there's great bonuses and great salaries and. But then all of a sudden the customer base has a different version of what they want. And then you have to adjust and some companies go Kodak and they just can't adjust. Some companies, Blockbuster couldn't adjust, some people, Netflix. Instead of selling DVDs, they start a streaming network and all of a sudden they're producing content. So what? That's to me where we are right now. We're in that middle space which sort of it's, it hurts because you don't know where it's going though.
- [46:04]
C
In a lot of those examples you gave, there was a very superior product which overtook a product that didn't keep up. Right. I mean Kodak went out of business because how, why it's cool to take a, a one shot photo when you can do it all digitally. It's a dramatically superior and less expensive product when you could buy 3 million, 4 million 5 million songs for 4.99. Really better financial proposition than spending 20 plus dollars on the CD. And so those were inevitable. They wouldn't get killed. The most interesting thing to me is that sports didn't get killed. Nobody has really come up with a better way to consume sports. I was always A skeptic of 3D sports and reality TV sports, the two dimensional on a great big screen with HD is still the best way to watch sports.
- [47:06]
B
I think it's live versus not live. I think if you want to break it down, the reason why sports is recession proof and why it will survive, it's because it's the notion of something being live. And it's why networks are trying to do all sorts of live content and things exclusive.
- [47:19]
C
Right? It works because you're not competing with somebody else's movie or somebody else's situation comedy or somebody else's reality show. You're the only one that has the Detroit Lions and the Green Bay packers, the only one and that has power.
- [47:34]
A
At the risk of sounding like the worst feeling that David Sampson claims I've ever felt, we are beginning our initial descent. We have reached the end of the show, maybe not yet the end of the business. I thank you both for extending our expiration date for one more day.
- [47:54]
B
That's great. Were you fed that by Coca?
- [47:56]
A
No.
- [47:57]
B
Nice.
- [48:10]
A
Pablo Torre finds out is produced by Walter Averoma, Ryan Cortez, Sam Dawig, Juan Galindo, Patrick Kim, neely Loman, Rob McRae, Rachel Miller, Howard Carl Scott, Matt Sullivan, Claire Taylor, Chris Tominiello and Juliet Warren. Our studio engineering by RG Systems. Our sound design by NGW Post. Our theme song, as always, is by John Bravo. And we will talk to you.
- [48:39]
C
Sam.