Comcast’s Spinoff & A Kansas City Chiefs Hallmark Movie 11/20/24
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Hi, i'm cnbc producer katy cramer today on school pod. Big news for the news, comcast to spend off its cable networks, which include us.

C, B, C, yours truly, r stra.

What we are expecting and what shareholder can expect.

what the name be, I just ask K I.

they all suck. With the man who started at all, one of cnbc s founders and our first president to Rogers.

my first thought was the kids are gonna be alright. And another .

historic brand, delta, about to turn one hundred CEO advisors speaking to investors about consumer spending and taking a pause from boeing while new leadership, their irons out the .

kinks and spending time with his his big customers in, in that regard, letting them know, keeping them posted, which which I appreciate right now we're in your bus customer .

plus you don't want to miss our interview with kansas city chief s president mark donovan. His team is in its hallmark era thanks in part to t swift. Two founders collide on a holiday movie channel beloved by all tell .

us wife is an authentic number of the cancer chief kingdom. She's authentic fan.

It's wednesday, november twenty. Squad pod begins right now. First up today on the podcast we're in the news. Comcast, the parent company of C N B C, and nbc universal, is moving forward with a plan to spin off its cable networks, channels like U, S, A, E, M, S, N, B, C, and yep, C N B C, the N B C network bravo and streamer p cock will all stay under the conchas umbrella after this spin off, which is set to take a Better year to figure out.

Now conchas executives had floated this idea few weeks back in the earnings 的 conference call， building a new, quote, well capitalized company that would be publicly traded and made up of, again, I quote, our strong portfolio of cable networks. The combined properties of this new entity, us cable networks and some other digital assets, generated approximately seven billion dollars in revenue in the twelve months ending september thirty. The television portfolio of nbc was years in the making, but chord cutting continues to have significant financial impact on the TV business.

Comcast lost three hundred and sixty five thousand TV customers during the third quarter, so we'll see what the future holds for brands like ours. C, N, B, C, is three, five years old and was the pioneer for the p. Cox diversified into cable.

And now we're about to embark on a new adventure. As always, walk box is angered by jae knin, Becky quick and Andrew ross sorkin. Joe carnon takes things from here.

I'll let's bring in tom Rogers. He's executive chairman of orb gaming, former nbc cable president and A C, N, B, C contributed. Tom, thanks for genus.

I would imagine as a someone who had the four sight to found the network and is watch, and we always have, you ought to talk about the state in the industry. You probably understand this move. And I would imagine you're in favor of IT or think it's a good idea.

H, I actually do think it's a good idea. I think of couple of these channels is my babies, and my first thought was the kids are gonna all right. Um I think this is A A A very good move in terms of being able to create an entity where uh C M B C and M S N B C, for example, can get the kind of resources they need to expand their franchise, really put them in a position to explore the opportunity of the of the streaming world. I think within comcast, it's been pretty clear that uh, these channels have been treated just as cable travels and really haven't had an opportunity to get the resources to spread their wings as broad media franchise.

They can go away behind that constrains of today's cable bundle and getting those resources a create opportunity, create opportunity for employees, create opportunity to be much more creative, I think in terms of um how you could imagine specialized business streaming services that are supported not by the household pocket book as any channels within the cable on to our today, but uh, support from corporations and investors who really could rely on more reversal or specialized services and a whole move level of revenue streams. So I don't look at this as as a way for come cast to simply dump problem assets because the cable bundle is continuing to face court cutting. I look at a much more an opportunity for some really strong media franchises to be able to broaden themselves.

Yeah, thanks. Some problem child is not a, not something I was, I was hoping you would call a, call us.

The kids are going to be.

the kids are going to be okay, even the problem child, no. Um so come cast the first mover on this and then they're not alone. I mean, this is this is facing the entire industry. What give gives calm case the ability to do, they aren't a bad position. I think to be able to do this probably.

uh, well, I think they can do IT in a way that creates a healthy spin off. Uh other companies are a heavily burden by that. Uh well, I do think this create A A vehicle that will allow uh others to potentially uh take assets and put IT in there.

I I think comcast will be very resistant to a burdening this with a lot of debt. So the fact that he could be capitalized in a healthy way to really give these franchise is not only on the new side, but the entertainment side is well. And an opportunity to uh, drive things that they happen when you're competing for resources against the olympics, against pecked, against the N B A H. It's really hard for these channels in this kind of environment to get the kind of priority attention that they could get uh to uh h expand and grow m and I think the others may find this an attract vehicle, but I think calm caf given is much more healthy baLance. He will be in a position to set this off in a way that that is financially strong.

Yeah tom, I think if you look at this um the the world street journal today reporting that brian Roberts would maintain a one third voting control in the company and that's a vote of confidence. This is not something being spent off to private equity to say good luck, fix IT up. I mean, that sounds like exactly what you are just talking about. The idea that these will be companies that will be invested in .

um and that's one way to read IT h absolutely obviously brian will be heavily intended to see this saying financially sixty but putting mark lazar in in china to this a guy who as cable in his bones um and was actually one of the early employees of nbc cable um back uh in the day when the the whole division was being formed um and uh I think that the it's a show of confidence that the somebody of his a merit is being put to drive this.

I think mark will need to put in place here a couple really strong business development executives. So this thing can proud new opportunities and, uh, grow. And with that, I think I can really succeed. time.

Here's my question. I'm going to put you on that, that development team for a second, and i'm going to give you a couple of billion box, maybe a billion box a year for you to invest. You can acquire assets.

You can invest in the business, the core business um you can actually hire other people. You can buy cable. You could buy linear, you could buy internet companies, you could buy gaming companies, you could buy sports licenses, if you think there's any even available that, of course, that won't be in the .

sort of NBA or take no.

But if that IT might .

be no billion dollars.

no IT might be. But here's the question, assuming that your business is losing, name your name your number hundred million dollars year, whatever the number is going to be um you need to obviously buy a business, buy businesses or create businesses or developed businesses that are going to grow to make up for that number every year to turn this into a growth business. So my question is what kind of businesses would you buy?

Well, first you can start with the fact that uh, these businesses are profitable today. Uh, very substantial revenue. Uh, they uh have distribution agreements in place and um I I don't think that they have any major distribution agreements coming up.

But near term, obviously come cats s been put in place through its cable division, a very long term arrangement. Um and uh, I think there's a lot of organic growth opportunity without the acquisition or emerge that comes from some of these franchise. I think you know, as I mentioned, I think cnbc has A A long road of opportunity to drive itself into the streaming world in a way that IT is not today.

Um I think that the M S N B C for much of the last couple years was uh the second most the popular cable network of uh of all on and all day rating spaces. And h so you know these channels have leverage in their own right even though they lose the leverage of long term of I did the olympics NBA no. But to answer your question.

by the way, I just you know my understanding of IT is that the olympics are actually still going to be tied to channels like USA and some of the other things through thirty two that that's actually part of the license. So even though there's a split you will have, you will have olympics in some other sports that you might not be thinking about.

I am sure there are all kinds of contractor and licensing to arrangements were to put in place that will maintain some of the energies and that the inner of itself gives a normous leverage to the spin off for distribution purposes. H but um you know chat and also like sipi I which is a broad entertainment, a niche that has massive following in terms of uh, where that might go golf, obviously huge following.

Uh these are all areas that can be exploded in terms of investment. And when do you acquiring uh assets that are uh anywhere from a print to uh uh streaming assets to things that uh a develop from existing programs that that now the opportunities for the broader relationships with the entertainment world， a beyond p cock beyond the N B C U family opens up a soul of opportunities. Um you know this is what uh uh a business development exercises about. Get a well capitalized the company with broad franchise that have a leadership positions today and figure out how to get them out of their current constraint of being cable only plays and the I think the sky is the limit that I I couldn't prioritize for you today where I put that money. But once people are unleashed to be able to do that, there's plenty of opportunity in any of these areas.

What is the name be? I just ask K I, they all suck. Um I don't know, what do you think a new code to start with? I guess what is always called wave writer networks connector wave writer quantum connections. Next j cable, let's taken isn't IT you got fiber flow network? You anything for me?

IT will be IT will be a lot. You're the name. And the issue we had when we started C N B C, which was the first of the cable channels in the N B C family, uh, the notion that we were using n bc when the broadcast to phillips figured that that was a sc religious to actually allow the name nb C2Be use d in a c ab le con tact. We couldn't use the p cock on that network because of that. Thanks for a long time.

I remember, I remember that. And then bolster brought a back. Bolster brought her back and said, White, you he said, why do we not have the peacock on our look? We hit some screwy little like nike. You remember, I was like, we had IT was .

possible issues, and today through licensing and through the opportunities to grow this thing, it'll be a hell melodies here. IT was then. So just think of the history of what I took to get a broadcast network.

You like cable master solutions I want to be a master of, and I think we should get, I think we needed to drop cable completely. I don't know. Like toxic, alright, tom Rogers, we have a lot of history together.

Obviously the decades. Yes, yes. yeah. I know. Alright, thanks.

Time thirty five. Years.

thirty five, thirty five. accounting.

Cheese will be next .

coming up next on spot. Major retailers might be seeing inflation conscious consumers, but mid, the high income spenders still have the travel bug. Delta CEO ed basin IT says passengers are respiring on trips there.

Number one priority for spending is not going to target, is not going to one mark is going sometimes. It's the experience economy. The experience economy continues.

Ed bast joins us ahead of deltas one hundred anniversary and the company's annual invest day that's right after this.

Small box tomorrow breaking down invidia earnings market reaction analysis and to demand for its next ai stay ahead of the market walk box tomorrow six I M easter C M B C.

This is spot stand under .

by and three.

two.

one up and under two.

watching square x on cnbc, m Andra a sorting along with joe knin and Becky quick. Ahead of investing day, delta airlines of firming its fourth quarter guidance fill of bow joins us now at the table with a very special gas ad basic CEO of delta.

And you guys are going to be laying the south are investors later today. But we got a preview yesterday and you just made the announcement a few minutes ago. The release one out you're looking at over the next three years, some sustained durable higher profits on a regular basis. How do you get there?

Well, the themes for the investor day today are two, the differentiation deltas, continued investment in the quality, the service, the reliability, the service, the experience and durability. So the investors know what they can count on and will will get back to those later. But when you think about that, one of the big risk that this industry has always faced is that there has never been an airline that can truly say it's financially db.

And you know that that's the night we talk with people on wall street. They say, now these airlines go through a period where they are really good trading stocks, stay away from them as long term investment know. Warm buffet is said that for years, why should people believe it's different now?

Well, when you look at what progress we've made over the last fifteen years, the investment in quality, investment in service levels, the investment in not just the the experience for our customers but actually experience for our owners, the free cash that we're throwing off, that's what's different. We're projecting over the next three to five years that we're going to generate fifty billion dollars of Operating cash over that period of time.

Fifty percent of that's gone to go back into the product, twenty five billion hours over that period. The other twenty five billion hours is going to get a baLance. Ch, that's pertained that is gone to be a force baLance sheet with potential on the back end of that excess of cash that we could potentially use for our shareholders if we needed to.

This has been a chAllenging year, whether it's the excess capacity in the industry, which has been weighing everybody's result to your results. In the first step of the year, there was the crowd strike situation outage and the lawsuit. What have you learned the most from all of this this year?

Well, it's about resiliency and durability. One of the things that are most impressed with as we close the year and we closing the year strong is that despite all those things, our proper over year are continually the industry in the relatively flat on the ear over year basis, anticipating some pretty significant growth going into the new year. And the overall experience our customers are feeling are saying the delta is the premium brand in the industry and they are continuing the fly delta.

Hey, can you just shed a little light on the consumer because we heard from target just a little bit ago and um their numbers were a far bullet with the street was expecting part of that was higher cost. Part of IT was also them saying that they are seeing a consumer that is still on a budget that is still very choose about what they're going to spend on a directionally was a big issue for that. And walmart, even though they had really strong numbers yesterday, did say that when IT comes to some of the direction ary spending, they are seeing a consumer that is still pretty choice y pretty concerned about cost. What what do you .

see from our consumer is defined as households with a hundred thousand dollars or more of annual earnings. That's forty percent of the households in our country that cohorn trust in the last twelve months has accumulated an incremental ten trillion dollars of wealth over this period of time and that their overall wealth has grown forty percent is the pandemic. So that's the consumer that we're targeting.

That's the consumer that's flying today is over ninety percent on the revenue base that is generated at delta. And there number one priority for spending is not going to target, is not going to one mark going someplace. This the experience economy. The experience economy continues to be really strong. And whether that's internally, whether that's business, whether that's for you trying to continue to to find a new places and new experiences to to bring their friends on, that's what we're leaning into, and we see no end in sight to that.

But on the lower and spiritual and bankrupcy front frontiers trying to pik IT to a bit know to go a little more upscale, but the low cost business model for airlines is IT dead for good in your repented. Well, it's chAllenge right now.

And one of the reasons is chAllenged. This is the airlines like delta products, also catering affairs that are for Price sensitive levels, not a significant part of our inventory. And consumers are choosing delta for the value that we create.

But doesn't that create an opportunity in that market right there? I mean, that's not you're concerned because your market is the over hundred thousand. I want the previous experience, I want to deal the brand i'm going to pay up. There is a lot of people under one hundred thousand in the us.

and there is no question that there was more capacity chasing that segment of the market than was necessary we saw at the summer. And so you see every airline that's in that segment is cutting back and whether it's through a bankrupcy or court order to our southwest making their changes that whole half of the second. That's not our target. That segment is under a lot of arrest and they will you'll get restructured and sort IT out. But it's going to take some .

time party feel about what you're .

seeing a polling right now. Well, where we're waiting for the news on the maxtla. A, I think it's going to be some time .

before we hear about that. Kelly warper, at some point, need to say here's my plan. Aside from what he has said so far, which has been we will get back to the lacking and tackling and building the the airplanes the correct way. Does he need to put out some concrete measures in terms of what we expect to do in the next few years?

I think I think he's doing that. I think he's spending time with this, this big customers in in that regard, letting them know, keeping them imposter, which which I appreciate right now. We're an airbus customer though.

Wow, airbus customer that that hurts. But what going to do? Well.

it's if we have been tied to bowling, I know I, me, we I but maybe a broader .

physical her question, do you think that we should have had more competition for major airline manufacturers in the U. S. Would have that created a different dynamic that they talked about? I mean, we sort of got into this sort of us versus situation. I don't know that advantage just in the and or if actually IT created some of these problems because there really IT was only one competition.

I don't know. Well, there is no question we'd prefer more options and more competition. And I think that lack of competition was one of the reasons why when when the final story boeing is told that that caused a lot of the of the being on the back, back kills somewhat. At the same time, the cost to building these these enterprises, these planes, the investment that required the cost for the airlines to take a third product in is master the amt of new pilot.

Have to like canada, don't you? In a membra and stuff like that.

we have emperor yers, but that's .

in our reasonable.

If they moved into the main space, a training locations .

anywhere, just wells up, I guess .

that's IT whelps up. But but this is this is a long cycle, highly capital intensive business, and we need boys to get fixed. There's there's not an option there and there on on the case and glad to see him there. What is gonna? A long time, a long time before they get anywhere back to where they were.

Can you talk a little bit about crowd strike and where the the the legal action that you are seeking from them? I think it's five hundred million dollars are seeking because you felt like you were left hang hanging out to drive when they have big issues too. Where where does that stand? You've been in talks .

with crowd strike or where we file litigation several weeks ago and it's in the lawyer stands right now and we they apologize. They said they were sorry but kindly dly IT doesn't IT doesn't do a lot to the the hundreds of thousands of people that were impacted in our business are people as well as our customers have.

Have they reached out for a potential settlement .

talks had we had conversations. But when you get into the scale of how we were impacted and for something the lawyers, you have .

jumped prety quickly. Yes, good to have you here. Yes, big, big invest day. Hey, guess, guess. We turns one hundred .

next year himself. No great dot.

We turn one hundred, and we're going to be launching one hundred three year as the keynote for the consumer electronics showing vegas for so we can january and IT from the sphere.

That is crazy to think about the airlines one hundred years yeah.

airline to turn one hundred .

that we've been flying for that long.

Two and they have a fight attended who was hired by Howard d use I was I was told that yes.

is I I just last way gave her her her sixty fifth anniversary report.

Wo person .

we ve had that was sixty five years of service. IT was really times when .

you have it's a wonderful industry.

We're going have a great holiday period. The advances bookings really, really, really strong, and we're going a good day today with our investors.

Good luck.

Thank you. thanks. thanks. So next .

on spot n, fl. Fandom takes the homework. The driver is called Taylor swift love story, but make IT holiday kenza city chiefs president mark donovan says a new romance movie is for the brand, the channel and the fans.

If you talk to the hallmark talks today, I put them in a different place. You know what terms of advertisers looking at this product on their station? This is the typical homaro ity.

Our goal is to empower you to be a Better investing u.

James teachings I was able to learn and become financially independent in my retirement.

Join the club with jim's best deal of the year at C N B C. That com slash club like for friday terms of restrictions supply.

You're listening to school pod from cnbc with joe turnin backed quick and Andrew ross sorkin and a very special guest from the world of sports talking about a love story.

One can city .

chiefs partners with hallmark for a holiday movie this year, capitalizing on their new tell us with fan based on this. Now I completely move this mark tony on is the president of the kansas city cheese. So you're you tell us swith fan base for the can city cheese. Did you know this? Two three years ago you predicted this.

You write big card. I D love to say .

that IT was a marketing strategy, but IT is an authentic relationship and we're happy to have IT, and it's been nothing but good for us. I think the best thing I can say about the whole relationship of what is had the impact is had on us is tailor swift is an authentic member of the cancer chief s kingdom. She's authentic fan. And that matters to our fans and our fan base and that matters us. And we tried to respect that.

Well, having the home probably was pretty good and as well and and you know, Kelly, not chop liver either at this point and where the coach is like A T, V star and it's pretty it's pretty good. See where he goes.

Those give me nuggets notes.

The noggy give me those nuggets. Yeah so I don't know I was I don't know there's only one way for you to go from here. And that's .

down from .

what I can tell is that what one years our goal .

is to consistently compete for .

championships. Well.

how do you want to win .

in a rope as as many .

as you possibly on the verge? We have the opportunity to make history, and we made a lot of history in our french as a last decade. We have the opportunity to do something that's never been done a national of football like and I would say this with about our team and it's LED by andy read is LED by our gentle major red beach and obviously the direction clarcor C E O. But first day of training can he was about the opportunity he was about we we're on a stage that we earned because we won the first two arrow and now we got to go to take advantage of this. So it's it's very positive of the way we look at this opportunity.

You want talk about the movie.

I I do i'm kind of excited about this movie. I I think you guys going to real shade homaro too with what this had this about yeah a really .

interesting story. So um we actually kinda city is a special town, special place and the whole family who started hallmark or a bashing of our community. Um so we actually went in the last a playoff s and said our c mo or crew came up with the idea of her team of could we somehow own the playoff?

So you guys you guys they want to .

you did this promo. IT was a fake movie promo, and we did IT sort of honoring half. They did know anything about IT.

We didn't talk to 我。 一定 是 we got to call a couple weeks later saying we should talk。 And and I joked with Laura after the promo that know there's there is a chance that we could actually make a real movie here.

And now november thirteen, how they touched down a teeth love story will prome here on homard channel. And IT gives us the opportunity, as you said, expand our fan ways. They can expand there as well.

Is IT seriously rip from the headlines a goal of the decal things used to be? Or is this just using IT as a, as a vehicle for telling a different story?

Yeah, you looked at the promoter from last year, which was falling for football. That was a different story is about fans. This one is a different version of that story and it's really about fans.

It's about fandom, is about the unification of our files um and IT doesn't in a very hallmark likeways. So bring the holidays and it's a it's a perfect combination of entertainment, pop culture, the power of the nfl, the power of our superstars. I mean, you got an hallmark movie that has dona Kelsey, andy read, four of our active players.

I was about the budget for this film because hallmark, one of the reasons it's done so well as it's actually typically limited the budget of its films add to that work in this context.

Yet an interesting model for us. IT was different for them. He was different for us. Um we worked with guide and sports who has a partnership with the and failed to make sure that we can distribute IT correctly.

And I think we also have had to expand our envelope a little bit right how we do this um but he gives us this amazing opportunity. And if you talk to the hallmark folks today, it's put them in a different place. You know what terms of advertisers looking at this product on their station? This is the typical hallmark city.

Is there any blow back to Taylor swift endorsing como haris for president? Did that change the relationships .

I an you think about the franchise family, any team you're going na have opinions on every end of the spector and we have that .

in a lot yeah as we've ve seen .

yeah so one of things we talk about and and read leads this and it's a cultural thing, is we're going to respect each other. We can have different opinions, we come from different backgrounds, we have different believes. We're expect each other, and that's how we're going to go forward. And you know, these thin guys are fighting side by side on sunday afternoon for this, the ultimate winning a game. So you have to have that culture and that that respect in that support.

I just can't even imagine the increase in value of your franchise in the last couple of years. Can you see I love the town, jazz and barbecue and everything else, but it's not a new york market in terms evaluation. But are you up near the top now after three straight?

And we're pretty proud of the run we've been on. We talked about IT back in two thousand and nine and ten, and we were four and twelve and two and fourteen, not real successful to football team. And and Frankly, okay, as a business Operation, and we talked about preparing for success.

So on the business side, IT was how do we prepare and get ready for when this team actually excels on the field. And it's great to see and talk about IT now because the strategy works when when andy came in, when we turned to sing around with alex Smith and then with Patrick and with Kelsey increase Jones. And the success we've had has been exponential growth on the business side because we are ready for IT.

We prepared for that. And now we're the point of trying to maximize this special time we're in we think about this. We're on scot box talking about a hallmark movie member years. We've been in four, the last five super bowls. We're got to take adventure in this opportunity.

and that's we're going. What this as though, do you look at these things of cycles? You talk about the sort special moment, yeah, and how you actually keep the special moment going, right? Joe was singing you like one way. There's one way from here, which is down now, yeah, you get to the top of that and get a ski down at some point.

And so how do you even think about that? How do you think about that about terms of valuations? Because we were just showing a whole number of teams, by the way, with great valuations, some of whom had their special moments, by the way, years ago yeah and then they have to actually rebuild themselves yeah.

I think the cyclical point are really good. One is the structure of the nfl. I think it's the best structure in sports um but it's also the most chAllenging because parody is important and it's set up so that next season is going to be harder than more successfully.

You are, from the schedule standpoint, also tough to keep these teams together where the where the contracts work. Um so we look at that every day, we have a goal of consistently competing for championships and sometimes that's making hard decisions. Bread reach and and the reading Clark on have to decide what to do with players at the end of contracts.

Who do we renew, who do we not renew is IT difficult decisions for them and for a fan based to accept. But our goals to consistently compete, we ve been able to do that. Love the .

riders of chief s now the bills chiefs. Yes, you think is that I I hope the raters are because that's something about chief s in the raters. Is there .

traditional uniforms?

And the you .

look at this last game, I think you out today with the readings and this is the highest rated game, it's it's a statement to the value.

The unfair will say they you know at one point there one job and that was to keep an eye on on josh and they did not to stand around him to remember did you did you call any reads say .

what you know yeah ah one of things I learned early on is these guys are players you can the .

legs on that man is a great player .

and he's playing great um because .

for yeah you do yeah that a process.

that a promise is a hope I want to be get the place I think you will.

I think I think it's great. right?

Thank you. Nice to see you.

That is squad pod for today. Thank you as always, for listening. Squad box is hosted by joe carnon bci q, Andrew ross sorkin u continent weekday mornings on C N B C at six y turn and get the best of our TV show right into your ears when you follow square pot wherever you get your podcasts. That's IT have a great day and we'll meet you right .

back here tomorrow.

We are clear. Thanks, guys.

Small box tomorrow breaking down invidia earnings market reaction analysis and to a mend for its next j ai stay ahead of the market walk box tomorrow six A M E R C N B C.