November 21, 2025 • 22 mins
Watch Scarlet and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Intelligence hosted by Paul Sweeney and Scarlet Fu
-Geetha Ranganathan, Bloomberg Intelligence Analyst on US Media, discusses Netflix Inc., Comcast Corp. and Paramount Skydance Corp. all submitting bids for Warner Bros. Discovery Inc., according to people with knowledge of the matter, setting the stage for one of Hollywood’s biggest companies to be sold. The submissions meet a Nov. 20 deadline for a first round of bids set by the board of Warner Bros. Discovery, the parent of HBO, CNN and the Warner Bros. movie and TV studios. The New York Times reported earlier Thursday that the three companies had put in offers.
- Beth Kowitt, Bloomberg Opinion Columnist, discusses her column: “Inside Walmart’s Masterclass in Reputation Rehab: Beth Kowitt.” Walmart Inc. was once criticized for its treatment of workers and impact on communities, but its reputation has been rehabilitated under CEO Doug McMillon. McMillon invested $2.7 billion in Walmart's workers, including pay increases and training, which improved retention and attracted more ambitious employees.
-Jody Lurie, Bloomberg Intelligence Senior Credit Analyst discusses research from Bloomberg Intelligence on vacation budgets. Even amid rising economic concerns, over two-thirds of respondents to BI's proprietary travel survey said they'll spend more to go places in 2026, about the same as last year, according to BI's US proprietary US travel survey conducted Nov. 10-17. Those planning air travel say they favor a better experience, which may aid full-service airlines like American and United vs. Spirit and Frontier. Some 51% of respondents are eyeing hotel chains vs. 48% in 2025, benefiting Hyatt, Marriott, IHG and Hilton.
-Calvin Butler, CEO of Excelon, discusses the data center boom, its soaring energy demand, and what it means for the green transition. The electrification push is driving unprecedented demand for cables, transformers, gas turbines, and skilled engineers. This is causing multi-year delays and rising costs globally. The technological challenge of managing an energy grid dominated by intermittent renewables, and the most promising innovations emerging to solve it.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Intelligence podcast. Catch us live weekdays at ten am
Eastern on Apple, Cocklay and Android Auto with the Bloomberg
Business app. Listen on demand wherever you get your podcasts,
or watch us live on YouTube.
Speaker 2 (00:24):
M and A Media m and A pending big, big
deal Warner Brothers Discovery. It's in discussions and accepted bids
from Paramount, sky Dance, from Netflix, maybe even Comcast. Now,
I guess we wait and see what happens. But this
is when this deal crosses a tape, it's going to
be a big deal. It's gonna have enterprise value of
north of ninety billion.
Speaker 3 (00:45):
I can't wait for them to make a limited TV
series about this parting process.
Speaker 4 (00:48):
Yes, it's gonna be great.
Speaker 2 (00:49):
Yeah, exactly right, coming to Netflix on soon. Keitha rang
Andathen She covers the media space for Bloomberg Intelligence as
the media analyst there Ethan. What's the latest on Warner
Brothers Discovery. I guess the question now is that BIS
has been accepted. What are next steps? Yeah?
Speaker 5 (01:06):
Next steps, Paul is that these were just first round bids.
They're non binding bids. You know, as far as the
news reports go, it looks like all three companies that
were in the race, Paramount skuy Dance for all of
Warner Brothers, and then Netflix and Comcast for just the
studio and streaming assets, have all placed their bids. This
is going to be a very long drawn process, so
(01:27):
we're going to have multiple rounds.
Speaker 6 (01:30):
You know.
Speaker 5 (01:30):
We've had some conflicting reports actually on what Paramount sky
Dance was offering. There was something earlier this week but
suggested they were offering something north of twenty eight dollars
per share. They came out refuted that report, and the
latest reports seemed to suggest that it might be it's
definitely going to be something much lower than that, probably
(01:51):
something above twenty five, but still below twenty seven. But
let's remember David Zaslav has publicly said that he wants
something north of thirty dollars per share, So this is
going to play out for quite a while.
Speaker 3 (02:04):
I think, yeah, that is a pretty big gap between
what David Zaslov wants and what the reporting indicates Paramounts
Guidance is likely to pay. So if this is going
to be a long drawn out process, does that benefit
Warner Brothers Discovery or these bidders, who comes out ahead
in that kind of scenario.
Speaker 5 (02:21):
Yeah, I mean, the long drawn out processes is really
not good, I think for for Warner Brothers Discovery. But
having said that, let's remember that they do have another
plan B in place, and the Plan B is that
they are going to go ahead and split their company
into two parts, so you have the TV Networks business
and the streaming and studio business. And the good news
(02:42):
for them is that the studio turnaround, which was you know,
kind of in progress, is now really kind of taking shape.
We're seeing some really tangible, you know, growth come out
of both streaming as well as studio. And so worst
comes to worst if nothing you know, materializes from all
of these bids and from all of this same chatter
and buzz, they are still on track to separate their businesses,
(03:04):
and who knows, maybe that would be the better path
for them going forward. So all is not lost even
if you know these bids don't work out.
Speaker 2 (03:12):
KEITHA, I know you've done the work. What do you
think the entire company is worth?
Speaker 5 (03:17):
So, Paul, you know, it all again depends here on
who's making the bid for what parts of the business
they're making. But so as we kind of look at
it right now, I don't think David Zaslav is far
off when he says he wants thirty dollars per share
for all of the company. We think majority of that
value will actually rest with the studio and streaming network.
(03:37):
So we when we kind of crunch the numbers, we
get twenty five to twenty eight dollars just for the
studio and the streaming business. But at the end of
the day, Paul, it all comes down to synergy. So
if you look at you know, combining the entire corporation,
all of Warner Brothers Discovery with all of Paramount for instance,
and they both have you know, substantial linear network exposure,
(03:58):
they both have studios, they both have streaming assets. You know,
we're looking like something like at about four or five
billion dollars in synergies, which you know, then then adds
to the deal value.
Speaker 7 (04:08):
Also, stay with us. More from Bloomberg Intelligence coming up
after this.
Speaker 1 (04:17):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business app. Listen on demand wherever
you get your podcasts or watch us live on YouTube.
Speaker 3 (04:31):
A column that I read this week really resonated because
it hits upon three key themes that we're seeing across
the markets. Retail earnings, tech forward companies, and people worried
about losing their jobs in this AI era. Beth cow
It is a Bloomberg opinion columnist, and she's written a
story about Walmart and it's masterclass and reputation rehab. But
it really rests on this idea that Walmart invested in
(04:53):
its workforce and its treatment of workers at a time
when it was being criticized for not treating its workers well,
and this is paid off in many ways. Beth joins
us now in our bloom Work Interactive Brokers studio. So Beth,
just take us back a couple of years to when
Walmart decided that it was going to spend on its workforce.
It was going to invest money into the workforce, and
investors did not like hearing that.
Speaker 8 (05:13):
Yeah, I mean, it's hard to think about this now,
but a decade ago, Walmart was one of the most
reviled companies in America. Right it was being criticized for
paying its employees low wages. For wiping out mom and
pop retailers for basically creating a culture of disposable consumerism.
So it really was getting hit from a lot of
different angles. And rather than just ignore the bad press
(05:37):
or army, you know, hire an army of pr people,
it decided to do something about it. And Doug McMillan decided,
we're going to invest in our people and two point
seven billion dollars over a couple of years, and we
now know this really paid off.
Speaker 2 (05:50):
So I mean, for Doug McMillan, I mean to me,
after reading your article, this could be one of his
as he's stepping down, could be one of his lasting
legacies at the company.
Speaker 4 (05:59):
I really think so.
Speaker 8 (05:59):
I think I think that you know, he's been at
the company now more than a decade. I think this
will be amongst the most enduring things that he has done.
I think this. I'm not sure that the company would
be in the place it's at today if he had
not really addressed this.
Speaker 3 (06:13):
And let's be clear about what exactly he did with
that two point seven sharing dollars. Pay increases, there is
training and really just attracting a better quality worker.
Speaker 8 (06:24):
Yeah, and the way he did this was right. It
was pay increases, but more than anything else, it was
creating not low paying jobs, but a career.
Speaker 6 (06:32):
Right.
Speaker 4 (06:33):
There was now a path.
Speaker 8 (06:34):
For people who started at Walmart to move up the ranks,
and that was really important, right to attracting more ambitious employees,
to getting them to stay, and I think that that
shifted the whole culture of the company.
Speaker 2 (06:48):
So what's the company saying about AI? Because there's a
lot of answer just in the overall economy about what
the impact AI will have upon jobs. One could look
at big box stores as industry that might be at
risk because.
Speaker 7 (07:01):
They do employ so many people.
Speaker 2 (07:03):
What does Walmart say.
Speaker 8 (07:04):
Walmart's taken a very different approach, I think than some
other big employers, and it has embraced a EYE. Let's
be clear, Like there's a AI is throughout embedded throughout
the company, but it has not used a EE to
have some of these mass layoffs that were justify some
of these mass layoffs that we've seen at other companies.
And I think part of that is this history, like
(07:24):
it knows how important these entry level workers are and
that they need a path, they need this workforce to
sort of grow the company. So it said AI will
change every job. It knows that, but it is trying
to get every worker through to the other side, so
whether that's retraining, finding new rules, rules for them. So
(07:47):
it's just a very different outlook, I think than what
we're hearing from others.
Speaker 3 (07:51):
And you've noted as well that the last ten years
at Walmart has led to tremendous return for shareholders, but
also it's become a case study at heart Heard Business
school on how to on how an experiment on paying
your workers war or investing your workers can pay off.
Speaker 4 (08:07):
Absolutely.
Speaker 8 (08:08):
I mean we you mentioned this at the beginning, but
Wall Street hated this plan. I mean the company lost
tremendous value, about that much tremendous value when they announced it,
and now you know, we have the receipts a decade later,
and the I think the market gap has tripled. The
stock has returned more than four hundred percent. So they
(08:28):
really took a gamble on this and stuck with it,
and it really has it has paid off for them.
Speaker 2 (08:33):
I mean, every time I look at the dees screen
on the Bloomberg terminal for Walmart, had just blown away
by the fact that they have two point one million employees.
What's the retention of those employees. I'm wondering if there's
like I would think in the warehouses it might be
really really high.
Speaker 7 (08:48):
I'm not sure about the stores. How is retention sure?
Speaker 8 (08:50):
So they've actually increased retention by ten percent since twenty
fifteen they when they started this plan. And another thing
is that they've some of the more management len roles.
Seventy five percent of those are hired from with it.
So this pipeline is really critical for them. And so
that's why I think that they are so focused on
creating a place where people stay.
Speaker 4 (09:13):
That's key.
Speaker 3 (09:14):
And you only have to look at the outgoing CEO
and the NTO, right, Both Doug McMillan and John Ferner,
the successor, are Walmart lifers. They started off as hourly
workers there.
Speaker 8 (09:24):
Right, They know the importance of that and having worked
their way up, that needs to be something that continues.
Speaker 2 (09:28):
There is this something that you think the new CEO
is as committed to as the prior CEO.
Speaker 8 (09:34):
I would think so because he has the same background.
I mean, I think he knows the importance of emerging technologies.
He's really focused on that. But I think because of
his history and he's worked very closely with McMillan for
a long time, so they must be aligned on this.
Speaker 7 (09:51):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (09:58):
You're listening to the Bloomberg and Intelligence podcast. Catch us
live weekdays at ten am. He's done on Apple, Cocklay
and Android Auto with the Bloomberg Business App. Listen on
demand wherever you get your podcasts, or watch us live
on YouTube.
Speaker 2 (10:13):
Jody Lori joints us here in our Bloomberg Interactive Broker
studio in the Big Town.
Speaker 7 (10:17):
How about that, Jody.
Speaker 4 (10:19):
We love your coverage.
Speaker 2 (10:20):
You covered from the credit perspective, all the fun industries
like hotels, like cruise ships and all that kind of stuff.
I know, you guys put out a survey talking about
how people are spending their vacation money.
Speaker 7 (10:33):
What'd you learn?
Speaker 9 (10:34):
So we do the survey every half a year, and
so we just got the results out for the most
recent one that we ran last week. And what's interesting
is that we're seeing more people planning on keeping their
budgets the same.
Speaker 4 (10:47):
But what's more interesting is.
Speaker 9 (10:49):
That if costs succeed, budgets fewer people than last year.
Speaker 4 (10:53):
So they'd increase their budget.
Speaker 9 (10:55):
And that's on the back of them knowing that inflation
is a much higher risk for them for their portfolio.
Speaker 3 (11:01):
So in other words, people are making room for time off,
but they're going to have to scrimp more in order
to make it happen because their money is not going
to take them as far as it used to correct.
Speaker 4 (11:13):
And Scarlett, I mean, I think to piggyback on that.
Speaker 9 (11:16):
If you look the eating out, anticipation of spending is
higher this year than last year, and I think that's
lesser reflection of people wanting to eat out, but more
that they're expecting eating out is going to be more expensive.
And so even though we're seeing people want to spend
on paid activities and experiences, which could bode well for
the cruise lines and the theme parks, at the end
(11:39):
of the day, when cost succeed budgets, more people this
year over last year are planning on cutting and looking
at free options. So going to the free museums, going
to low cost.
Speaker 3 (11:49):
Options, well, now that the government is open DC is
an option once again. How about in terms of destination,
maybe staying closer to home, maybe not going quite as
far internationally, Yes.
Speaker 9 (12:00):
And staying closer to home is very very much key
if we see the data, the international trend is to Canada.
Canada bumped up to the second spot. So we saw
that in the midyear, and it was pretty curious for US,
particularly because when you look at it the opposite way,
and we did this announced a few months ago. Canada
(12:21):
is not coming to the US. They don't want to
come to the US. It's too expensive for them, they
don't really like the current government situation, and on top
of it, I think they're scared about crossing the border
and what it means for immigration. So we're seeing Canadians
not come to the US, and we're seeing a lot
of companies comment on that.
Speaker 4 (12:38):
But we are seeing a lot of Americans go to Canada.
Speaker 9 (12:40):
And I am curious how much and this is going
to come in further reports. How much of the Canada
move is a reflection of the World Cup next year.
There's a lot of people going to Vancouver, for instance,
for the World Cup. I'll actually be there during the
World Cup, but not going to the World Cup.
Speaker 7 (12:55):
Why we.
Speaker 9 (12:58):
Might be doing a very family friendly cruise to Alaska.
Speaker 2 (13:01):
Nice.
Speaker 4 (13:02):
It just works out that that's the same time as
it was bad timing.
Speaker 2 (13:06):
It's bad time, all right, talk to me. This is
when I go to Aruba, we go to an all inclusive.
How come I didn't know about this all inclusive thing
when I had four little kids.
Speaker 3 (13:17):
I mean, were they were they a thing back then?
Speaker 2 (13:19):
I don't know, but I mean I would get the
bill which would be five inches thick with like smoothies
and chicken fingers and all that kind of crap that
they'd eat throughout.
Speaker 7 (13:27):
The day four kids.
Speaker 2 (13:28):
Man if if I knew about the all inclusive, that
would have been a savior for me. What are people
doing when they are they willing to still pay it
for travel? Because I still here people going to Europe
and stuff like that. I mean, they're not going to Poughkeepsie,
They're going to Parish and things.
Speaker 9 (13:43):
Yeah, I mean Japan is certainly a popular destination. Strong
dollar there, yeah, very much increased.
Speaker 4 (13:49):
Italy has increased.
Speaker 9 (13:50):
We're seeing among the upper income level, you know, Portugal
and Spain as popular destinations. And I think probably what's
even more interesting is onboard spending for cruises is still
continuing to have momentum.
Speaker 4 (14:02):
At the moment, I.
Speaker 9 (14:03):
Think where we're watching is when that onboard spending shifts
and then the cruise lines, for example, don't get that.
Speaker 4 (14:09):
Gravy for cash flow.
Speaker 9 (14:11):
And to your point, Paul, I mean, even though you
have something called all inclusives, even though you have the
cruise lines, that they all are considered these package deal
what every company is doing, and we're talking the rental
car companies. You know, Avius is doing this too, obviously,
the airlines is they're all.
Speaker 4 (14:26):
Doing these premium products.
Speaker 9 (14:28):
These you know, you do different tiers of products, so
the add on so you can get the base level,
which is really the skeleton package. But anyone from cruise
lines to you know, theme parks, to some extent, to
the all inclusives, to the airlines, to the rental car
companies are all segmenting to give you know, the lower
income consumer the ability to say that they traveled and
the higher income consumer the ability to travel luxury. And
(14:51):
in terms of the add ons, what are these add
ons are they? You know, things that they used to
offer for free and now charge.
Speaker 4 (14:58):
You for for some of it.
Speaker 9 (14:59):
It is so you know, a good example I have
is anecdotally, I know that some of the cruise lines
that used to not charge to get people into the
center of a city, say in Europe, you're on a
European cruise.
Speaker 4 (15:10):
They used to give that for free.
Speaker 9 (15:12):
Now they say no, you have to be a part
of one of our you know, expeditions, one of one
of our excursions in order to get that for free.
Otherwise we charge you twenty dollars to get into the
Senate's colwn in you know, Czechoslovakia and not Checklisvokia, check Republic.
Speaker 7 (15:26):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (15:33):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple Coarclay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (15:47):
Obviously, the theme this week, one of the things has
been Nvidian It's strong earnings. AI fight has been really
a driving theme for this overall market for going on
three years now, and Investor has been looking for your
privative ways to play that theme, and one of that
has been how do you get tompower all these data
centers out there? And that leads you to utilities, and
that leads you to our next guest, Calvin Butler, CEO
(16:10):
of exelon it is a publicly traded company. EXC is
the ticker of the stocks up about one percent today,
up about twenty two percent year to date, so certainly
performing well with the other utility stocks. Calvin, thank you
so much for joining us here. Again, when I look
at your industry, you guys are critical to the rollout
of AI because we've got to power this stuff, these
(16:32):
data centers.
Speaker 7 (16:33):
How do you guys view it?
Speaker 6 (16:35):
Yeah, Paul, thank you for having me and exactly how
you said it. We're critical to the development of AI
data centers and large load quantum and we take that
responsibility very serious. And from a standpoint of building that infrastructure,
protecting that grid, it's going to be the backbone of
(16:57):
all this. We always say that the energy in sector
there is five percent of the GDP, but we power
the next ninety five and we take that very seriously.
Speaker 4 (17:06):
You take it seriously.
Speaker 3 (17:07):
So walk us through some of the plans you're making,
how you're preparing for this transition, for this increase in demand.
Speaker 6 (17:15):
Yeah, thank you, Scarlett. What we have done, We've done
a few things. Is one understanding for your listeners, excellent.
We are truly a transmission and distribution company, you know,
proud to have six utilities operating the electric gas side
through the pipes and wires. So having said that, being
the backbone of that, we're encouraging those data centers and
(17:38):
large developers to come into the states in which we operate,
and we put together a comprehensive plan to get them online,
up and running sooner rather than later. Speed is everything
for them, and so what it takes is a coordinated effort,
and we've worked very hard to move upstream to get
(17:58):
them online so they can do what they do, which
is on the technology side. Now, as we do that,
we have to keep in mind first and foremost the
affordability factor for all of our communities, and that's where
we're working with them to identify sites that are more
ready to put their equipment and their technology in place.
Speaker 2 (18:19):
We had a couple of governor races recently in New
Jersey and in Virginia, and affordability was one of the
big issues. And in New Jersey the governor elect who
actually won, one of her number one issues was bringing
down electric utility bills. So this is an issue we
got to fund, We got to I guess create and
develop these data centers, but we got to do it
(18:41):
in a way that it doesn't cause.
Speaker 7 (18:43):
Everybody's power bills to go up.
Speaker 2 (18:45):
How do you think about that transition.
Speaker 6 (18:48):
Paul, You're absolutely right. It was a race in both
New Jersey and Virginia, an issue, and we believe it's
going to be an issue in the twenty twenty six
elections because of affordability. Pocketbook issues are going to be key.
So let me tell you what we're doing from excellent perspective.
We are protecting our residential customers. You know, we serve
(19:09):
almost eleven million customers. So as as important as it
is for data center development, it's more important for me
to protect the other customers in this process. So we've
come up with what we consider a rather innovative solution
in creating a tear up a transmission security agreement. So
what that does is we require a letter of credit
(19:30):
or a cash deposit from these large developers speculating are
identifying what thir ten year revenue projections or cost projections
coming back to our utility is, and anytime that they
do not meet eighty percent of that load projections or
cash projections, we draw down from that deposit. And what
(19:51):
it does it protects the other customers on the systems
for the investments that we're making. So we're being very
intentional about protecting the other users on the system because
when it's done right, it should reduce the cost for everyone.
But when it's done haphazardly or piecemeal, it can have
(20:11):
ramifications that everyone else has impacted. But what you're seeing
not just from the capital investment. You're seeing the supply
costs go up. Supply costs are going up because of
the increased demand, and we have inadequate generation on the
system to do that. You use New Jersey as an example.
Let me give you a real example of what happened
(20:32):
to New Jersey customers last year. New Jersey customers average
residential customers bill rose thirty eight dollars thirty four dollars.
I'm sorry, thirty four dollars. Thirty eight dollars was due
to supply because they were reconciling our bill, our bill,
our cost the demand, the transmission and distribution part went
(20:54):
down four dollars, but the bill still went up thirty four.
That's how important it is to get this supply stack
right to help lower all customers' bills.
Speaker 3 (21:04):
Kevin, let me ask you about nuclear because this week
the government announced it plans to buy and own up
to ten large new nuclear reactors that could be paid
for using Japan's pledge to fund five hundred and fifty
billion dollars of investments in the US. Of course, this
is part of a push to meet surging demand for electricity,
and nuclear is increasingly seen as a solution to this need.
Speaker 4 (21:25):
What's your take.
Speaker 6 (21:27):
I think it's critical. I truly believe in a all
of the above approach and that nuclear base load generation
is going to be critical to us meeting this effort.
As you know, again, we've always taken an approach that
every electron matters to help unaffordability, and that's why it's
so critical. I use an example the Crane Center that's
(21:50):
coming back online in Pennsylvania. That's critical because it's new
generation coming back online. A large Microsoft is paying for it,
and that billion dollar loan is exactly what we need
to encourage reopening of these former facilities to get more
electrons back on. And that was one of the best
(22:12):
operating nuclear plants prior to its shuttering.
Speaker 1 (22:15):
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Speaker 2 (00:24):
M and A Media m and A pending big, big
deal Warner Brothers Discovery. It's in discussions and accepted bids
from Paramount, sky Dance, from Netflix, maybe even Comcast. Now,
I guess we wait and see what happens. But this
is when this deal crosses a tape, it's going to
be a big deal. It's gonna have enterprise value of
north of ninety billion.
Speaker 3 (00:45):
I can't wait for them to make a limited TV
series about this parting process.
Speaker 4 (00:48):
Yes, it's gonna be great.
Speaker 2 (00:49):
Yeah, exactly right, coming to Netflix on soon. Keitha rang
Andathen She covers the media space for Bloomberg Intelligence as
the media analyst there Ethan. What's the latest on Warner
Brothers Discovery. I guess the question now is that BIS
has been accepted. What are next steps? Yeah?
Speaker 5 (01:06):
Next steps, Paul is that these were just first round bids.
They're non binding bids. You know, as far as the
news reports go, it looks like all three companies that
were in the race, Paramount skuy Dance for all of
Warner Brothers, and then Netflix and Comcast for just the
studio and streaming assets, have all placed their bids. This
is going to be a very long drawn process, so
(01:27):
we're going to have multiple rounds.
Speaker 6 (01:30):
You know.
Speaker 5 (01:30):
We've had some conflicting reports actually on what Paramount sky
Dance was offering. There was something earlier this week but
suggested they were offering something north of twenty eight dollars
per share. They came out refuted that report, and the
latest reports seemed to suggest that it might be it's
definitely going to be something much lower than that, probably
(01:51):
something above twenty five, but still below twenty seven. But
let's remember David Zaslav has publicly said that he wants
something north of thirty dollars per share, So this is
going to play out for quite a while.
Speaker 3 (02:04):
I think, yeah, that is a pretty big gap between
what David Zaslov wants and what the reporting indicates Paramounts
Guidance is likely to pay. So if this is going
to be a long drawn out process, does that benefit
Warner Brothers Discovery or these bidders, who comes out ahead
in that kind of scenario.
Speaker 5 (02:21):
Yeah, I mean, the long drawn out processes is really
not good, I think for for Warner Brothers Discovery. But
having said that, let's remember that they do have another
plan B in place, and the Plan B is that
they are going to go ahead and split their company
into two parts, so you have the TV Networks business
and the streaming and studio business. And the good news
(02:42):
for them is that the studio turnaround, which was you know,
kind of in progress, is now really kind of taking shape.
We're seeing some really tangible, you know, growth come out
of both streaming as well as studio. And so worst
comes to worst if nothing you know, materializes from all
of these bids and from all of this same chatter
and buzz, they are still on track to separate their businesses,
(03:04):
and who knows, maybe that would be the better path
for them going forward. So all is not lost even
if you know these bids don't work out.
Speaker 2 (03:12):
KEITHA, I know you've done the work. What do you
think the entire company is worth?
Speaker 5 (03:17):
So, Paul, you know, it all again depends here on
who's making the bid for what parts of the business
they're making. But so as we kind of look at
it right now, I don't think David Zaslav is far
off when he says he wants thirty dollars per share
for all of the company. We think majority of that
value will actually rest with the studio and streaming network.
(03:37):
So we when we kind of crunch the numbers, we
get twenty five to twenty eight dollars just for the
studio and the streaming business. But at the end of
the day, Paul, it all comes down to synergy. So
if you look at you know, combining the entire corporation,
all of Warner Brothers Discovery with all of Paramount for instance,
and they both have you know, substantial linear network exposure,
(03:58):
they both have studios, they both have streaming assets. You know,
we're looking like something like at about four or five
billion dollars in synergies, which you know, then then adds
to the deal value.
Speaker 7 (04:08):
Also, stay with us. More from Bloomberg Intelligence coming up
after this.
Speaker 1 (04:17):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business app. Listen on demand wherever
you get your podcasts or watch us live on YouTube.
Speaker 3 (04:31):
A column that I read this week really resonated because
it hits upon three key themes that we're seeing across
the markets. Retail earnings, tech forward companies, and people worried
about losing their jobs in this AI era. Beth cow
It is a Bloomberg opinion columnist, and she's written a
story about Walmart and it's masterclass and reputation rehab. But
it really rests on this idea that Walmart invested in
(04:53):
its workforce and its treatment of workers at a time
when it was being criticized for not treating its workers well,
and this is paid off in many ways. Beth joins
us now in our bloom Work Interactive Brokers studio. So Beth,
just take us back a couple of years to when
Walmart decided that it was going to spend on its workforce.
It was going to invest money into the workforce, and
investors did not like hearing that.
Speaker 8 (05:13):
Yeah, I mean, it's hard to think about this now,
but a decade ago, Walmart was one of the most
reviled companies in America. Right it was being criticized for
paying its employees low wages. For wiping out mom and
pop retailers for basically creating a culture of disposable consumerism.
So it really was getting hit from a lot of
different angles. And rather than just ignore the bad press
(05:37):
or army, you know, hire an army of pr people,
it decided to do something about it. And Doug McMillan decided,
we're going to invest in our people and two point
seven billion dollars over a couple of years, and we
now know this really paid off.
Speaker 2 (05:50):
So I mean, for Doug McMillan, I mean to me,
after reading your article, this could be one of his
as he's stepping down, could be one of his lasting
legacies at the company.
Speaker 4 (05:59):
I really think so.
Speaker 8 (05:59):
I think I think that you know, he's been at
the company now more than a decade. I think this
will be amongst the most enduring things that he has done.
I think this. I'm not sure that the company would
be in the place it's at today if he had
not really addressed this.
Speaker 3 (06:13):
And let's be clear about what exactly he did with
that two point seven sharing dollars. Pay increases, there is
training and really just attracting a better quality worker.
Speaker 8 (06:24):
Yeah, and the way he did this was right. It
was pay increases, but more than anything else, it was
creating not low paying jobs, but a career.
Speaker 6 (06:32):
Right.
Speaker 4 (06:33):
There was now a path.
Speaker 8 (06:34):
For people who started at Walmart to move up the ranks,
and that was really important, right to attracting more ambitious employees,
to getting them to stay, and I think that that
shifted the whole culture of the company.
Speaker 2 (06:48):
So what's the company saying about AI? Because there's a
lot of answer just in the overall economy about what
the impact AI will have upon jobs. One could look
at big box stores as industry that might be at
risk because.
Speaker 7 (07:01):
They do employ so many people.
Speaker 2 (07:03):
What does Walmart say.
Speaker 8 (07:04):
Walmart's taken a very different approach, I think than some
other big employers, and it has embraced a EYE. Let's
be clear, Like there's a AI is throughout embedded throughout
the company, but it has not used a EE to
have some of these mass layoffs that were justify some
of these mass layoffs that we've seen at other companies.
And I think part of that is this history, like
(07:24):
it knows how important these entry level workers are and
that they need a path, they need this workforce to
sort of grow the company. So it said AI will
change every job. It knows that, but it is trying
to get every worker through to the other side, so
whether that's retraining, finding new rules, rules for them. So
(07:47):
it's just a very different outlook, I think than what
we're hearing from others.
Speaker 3 (07:51):
And you've noted as well that the last ten years
at Walmart has led to tremendous return for shareholders, but
also it's become a case study at heart Heard Business
school on how to on how an experiment on paying
your workers war or investing your workers can pay off.
Speaker 4 (08:07):
Absolutely.
Speaker 8 (08:08):
I mean we you mentioned this at the beginning, but
Wall Street hated this plan. I mean the company lost
tremendous value, about that much tremendous value when they announced it,
and now you know, we have the receipts a decade later,
and the I think the market gap has tripled. The
stock has returned more than four hundred percent. So they
(08:28):
really took a gamble on this and stuck with it,
and it really has it has paid off for them.
Speaker 2 (08:33):
I mean, every time I look at the dees screen
on the Bloomberg terminal for Walmart, had just blown away
by the fact that they have two point one million employees.
What's the retention of those employees. I'm wondering if there's
like I would think in the warehouses it might be
really really high.
Speaker 7 (08:48):
I'm not sure about the stores. How is retention sure?
Speaker 8 (08:50):
So they've actually increased retention by ten percent since twenty
fifteen they when they started this plan. And another thing
is that they've some of the more management len roles.
Seventy five percent of those are hired from with it.
So this pipeline is really critical for them. And so
that's why I think that they are so focused on
creating a place where people stay.
Speaker 4 (09:13):
That's key.
Speaker 3 (09:14):
And you only have to look at the outgoing CEO
and the NTO, right, Both Doug McMillan and John Ferner,
the successor, are Walmart lifers. They started off as hourly
workers there.
Speaker 8 (09:24):
Right, They know the importance of that and having worked
their way up, that needs to be something that continues.
Speaker 2 (09:28):
There is this something that you think the new CEO
is as committed to as the prior CEO.
Speaker 8 (09:34):
I would think so because he has the same background.
I mean, I think he knows the importance of emerging technologies.
He's really focused on that. But I think because of
his history and he's worked very closely with McMillan for
a long time, so they must be aligned on this.
Speaker 7 (09:51):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (09:58):
You're listening to the Bloomberg and Intelligence podcast. Catch us
live weekdays at ten am. He's done on Apple, Cocklay
and Android Auto with the Bloomberg Business App. Listen on
demand wherever you get your podcasts, or watch us live
on YouTube.
Speaker 2 (10:13):
Jody Lori joints us here in our Bloomberg Interactive Broker
studio in the Big Town.
Speaker 7 (10:17):
How about that, Jody.
Speaker 4 (10:19):
We love your coverage.
Speaker 2 (10:20):
You covered from the credit perspective, all the fun industries
like hotels, like cruise ships and all that kind of stuff.
I know, you guys put out a survey talking about
how people are spending their vacation money.
Speaker 7 (10:33):
What'd you learn?
Speaker 9 (10:34):
So we do the survey every half a year, and
so we just got the results out for the most
recent one that we ran last week. And what's interesting
is that we're seeing more people planning on keeping their
budgets the same.
Speaker 4 (10:47):
But what's more interesting is.
Speaker 9 (10:49):
That if costs succeed, budgets fewer people than last year.
Speaker 4 (10:53):
So they'd increase their budget.
Speaker 9 (10:55):
And that's on the back of them knowing that inflation
is a much higher risk for them for their portfolio.
Speaker 3 (11:01):
So in other words, people are making room for time off,
but they're going to have to scrimp more in order
to make it happen because their money is not going
to take them as far as it used to correct.
Speaker 4 (11:13):
And Scarlett, I mean, I think to piggyback on that.
Speaker 9 (11:16):
If you look the eating out, anticipation of spending is
higher this year than last year, and I think that's
lesser reflection of people wanting to eat out, but more
that they're expecting eating out is going to be more expensive.
And so even though we're seeing people want to spend
on paid activities and experiences, which could bode well for
the cruise lines and the theme parks, at the end
(11:39):
of the day, when cost succeed budgets, more people this
year over last year are planning on cutting and looking
at free options. So going to the free museums, going
to low cost.
Speaker 3 (11:49):
Options, well, now that the government is open DC is
an option once again. How about in terms of destination,
maybe staying closer to home, maybe not going quite as
far internationally, Yes.
Speaker 9 (12:00):
And staying closer to home is very very much key
if we see the data, the international trend is to Canada.
Canada bumped up to the second spot. So we saw
that in the midyear, and it was pretty curious for US,
particularly because when you look at it the opposite way,
and we did this announced a few months ago. Canada
(12:21):
is not coming to the US. They don't want to
come to the US. It's too expensive for them, they
don't really like the current government situation, and on top
of it, I think they're scared about crossing the border
and what it means for immigration. So we're seeing Canadians
not come to the US, and we're seeing a lot
of companies comment on that.
Speaker 4 (12:38):
But we are seeing a lot of Americans go to Canada.
Speaker 9 (12:40):
And I am curious how much and this is going
to come in further reports. How much of the Canada
move is a reflection of the World Cup next year.
There's a lot of people going to Vancouver, for instance,
for the World Cup. I'll actually be there during the
World Cup, but not going to the World Cup.
Speaker 7 (12:55):
Why we.
Speaker 9 (12:58):
Might be doing a very family friendly cruise to Alaska.
Speaker 2 (13:01):
Nice.
Speaker 4 (13:02):
It just works out that that's the same time as
it was bad timing.
Speaker 2 (13:06):
It's bad time, all right, talk to me. This is
when I go to Aruba, we go to an all inclusive.
How come I didn't know about this all inclusive thing
when I had four little kids.
Speaker 3 (13:17):
I mean, were they were they a thing back then?
Speaker 2 (13:19):
I don't know, but I mean I would get the
bill which would be five inches thick with like smoothies
and chicken fingers and all that kind of crap that
they'd eat throughout.
Speaker 7 (13:27):
The day four kids.
Speaker 2 (13:28):
Man if if I knew about the all inclusive, that
would have been a savior for me. What are people
doing when they are they willing to still pay it
for travel? Because I still here people going to Europe
and stuff like that. I mean, they're not going to Poughkeepsie,
They're going to Parish and things.
Speaker 9 (13:43):
Yeah, I mean Japan is certainly a popular destination. Strong
dollar there, yeah, very much increased.
Speaker 4 (13:49):
Italy has increased.
Speaker 9 (13:50):
We're seeing among the upper income level, you know, Portugal
and Spain as popular destinations. And I think probably what's
even more interesting is onboard spending for cruises is still
continuing to have momentum.
Speaker 4 (14:02):
At the moment, I.
Speaker 9 (14:03):
Think where we're watching is when that onboard spending shifts
and then the cruise lines, for example, don't get that.
Speaker 4 (14:09):
Gravy for cash flow.
Speaker 9 (14:11):
And to your point, Paul, I mean, even though you
have something called all inclusives, even though you have the
cruise lines, that they all are considered these package deal
what every company is doing, and we're talking the rental
car companies. You know, Avius is doing this too, obviously,
the airlines is they're all.
Speaker 4 (14:26):
Doing these premium products.
Speaker 9 (14:28):
These you know, you do different tiers of products, so
the add on so you can get the base level,
which is really the skeleton package. But anyone from cruise
lines to you know, theme parks, to some extent, to
the all inclusives, to the airlines, to the rental car
companies are all segmenting to give you know, the lower
income consumer the ability to say that they traveled and
the higher income consumer the ability to travel luxury. And
(14:51):
in terms of the add ons, what are these add
ons are they? You know, things that they used to
offer for free and now charge.
Speaker 4 (14:58):
You for for some of it.
Speaker 9 (14:59):
It is so you know, a good example I have
is anecdotally, I know that some of the cruise lines
that used to not charge to get people into the
center of a city, say in Europe, you're on a
European cruise.
Speaker 4 (15:10):
They used to give that for free.
Speaker 9 (15:12):
Now they say no, you have to be a part
of one of our you know, expeditions, one of one
of our excursions in order to get that for free.
Otherwise we charge you twenty dollars to get into the
Senate's colwn in you know, Czechoslovakia and not Checklisvokia, check Republic.
Speaker 7 (15:26):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (15:33):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple Coarclay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (15:47):
Obviously, the theme this week, one of the things has
been Nvidian It's strong earnings. AI fight has been really
a driving theme for this overall market for going on
three years now, and Investor has been looking for your
privative ways to play that theme, and one of that
has been how do you get tompower all these data
centers out there? And that leads you to utilities, and
that leads you to our next guest, Calvin Butler, CEO
(16:10):
of exelon it is a publicly traded company. EXC is
the ticker of the stocks up about one percent today,
up about twenty two percent year to date, so certainly
performing well with the other utility stocks. Calvin, thank you
so much for joining us here. Again, when I look
at your industry, you guys are critical to the rollout
of AI because we've got to power this stuff, these
(16:32):
data centers.
Speaker 7 (16:33):
How do you guys view it?
Speaker 6 (16:35):
Yeah, Paul, thank you for having me and exactly how
you said it. We're critical to the development of AI
data centers and large load quantum and we take that
responsibility very serious. And from a standpoint of building that infrastructure,
protecting that grid, it's going to be the backbone of
(16:57):
all this. We always say that the energy in sector
there is five percent of the GDP, but we power
the next ninety five and we take that very seriously.
Speaker 4 (17:06):
You take it seriously.
Speaker 3 (17:07):
So walk us through some of the plans you're making,
how you're preparing for this transition, for this increase in demand.
Speaker 6 (17:15):
Yeah, thank you, Scarlett. What we have done, We've done
a few things. Is one understanding for your listeners, excellent.
We are truly a transmission and distribution company, you know,
proud to have six utilities operating the electric gas side
through the pipes and wires. So having said that, being
the backbone of that, we're encouraging those data centers and
(17:38):
large developers to come into the states in which we operate,
and we put together a comprehensive plan to get them online,
up and running sooner rather than later. Speed is everything
for them, and so what it takes is a coordinated effort,
and we've worked very hard to move upstream to get
(17:58):
them online so they can do what they do, which
is on the technology side. Now, as we do that,
we have to keep in mind first and foremost the
affordability factor for all of our communities, and that's where
we're working with them to identify sites that are more
ready to put their equipment and their technology in place.
Speaker 2 (18:19):
We had a couple of governor races recently in New
Jersey and in Virginia, and affordability was one of the
big issues. And in New Jersey the governor elect who
actually won, one of her number one issues was bringing
down electric utility bills. So this is an issue we
got to fund, We got to I guess create and
develop these data centers, but we got to do it
(18:41):
in a way that it doesn't cause.
Speaker 7 (18:43):
Everybody's power bills to go up.
Speaker 2 (18:45):
How do you think about that transition.
Speaker 6 (18:48):
Paul, You're absolutely right. It was a race in both
New Jersey and Virginia, an issue, and we believe it's
going to be an issue in the twenty twenty six
elections because of affordability. Pocketbook issues are going to be key.
So let me tell you what we're doing from excellent perspective.
We are protecting our residential customers. You know, we serve
(19:09):
almost eleven million customers. So as as important as it
is for data center development, it's more important for me
to protect the other customers in this process. So we've
come up with what we consider a rather innovative solution
in creating a tear up a transmission security agreement. So
what that does is we require a letter of credit
(19:30):
or a cash deposit from these large developers speculating are
identifying what thir ten year revenue projections or cost projections
coming back to our utility is, and anytime that they
do not meet eighty percent of that load projections or
cash projections, we draw down from that deposit. And what
(19:51):
it does it protects the other customers on the systems
for the investments that we're making. So we're being very
intentional about protecting the other users on the system because
when it's done right, it should reduce the cost for everyone.
But when it's done haphazardly or piecemeal, it can have
(20:11):
ramifications that everyone else has impacted. But what you're seeing
not just from the capital investment. You're seeing the supply
costs go up. Supply costs are going up because of
the increased demand, and we have inadequate generation on the
system to do that. You use New Jersey as an example.
Let me give you a real example of what happened
(20:32):
to New Jersey customers last year. New Jersey customers average
residential customers bill rose thirty eight dollars thirty four dollars.
I'm sorry, thirty four dollars. Thirty eight dollars was due
to supply because they were reconciling our bill, our bill,
our cost the demand, the transmission and distribution part went
(20:54):
down four dollars, but the bill still went up thirty four.
That's how important it is to get this supply stack
right to help lower all customers' bills.
Speaker 3 (21:04):
Kevin, let me ask you about nuclear because this week
the government announced it plans to buy and own up
to ten large new nuclear reactors that could be paid
for using Japan's pledge to fund five hundred and fifty
billion dollars of investments in the US. Of course, this
is part of a push to meet surging demand for electricity,
and nuclear is increasingly seen as a solution to this need.
Speaker 4 (21:25):
What's your take.
Speaker 6 (21:27):
I think it's critical. I truly believe in a all
of the above approach and that nuclear base load generation
is going to be critical to us meeting this effort.
As you know, again, we've always taken an approach that
every electron matters to help unaffordability, and that's why it's
so critical. I use an example the Crane Center that's
(21:50):
coming back online in Pennsylvania. That's critical because it's new
generation coming back online. A large Microsoft is paying for it,
and that billion dollar loan is exactly what we need
to encourage reopening of these former facilities to get more
electrons back on. And that was one of the best
(22:12):
operating nuclear plants prior to its shuttering.
Speaker 1 (22:15):
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