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The NFL: Ratings King

September 15, 2022
Notes
Transcript

On this week’s episode, Sonny asks Sean McNulty—author of The Ankler’s excellent morning roundup newsletter, The Wakeup—who, exactly, the Emmys are for in an age of audience fracturing. The answer, at least according to the Nielsen ratings, is “very few people.” Many, many more people are watching football, as sports remains the one savior of linear TV (that is: non-streaming, watched-live TV). We also talk about the news out of D23, the weird, aborted push by an activist investor to spin ESPN off of Disney, and much more. If you enjoyed the episode, share it with a friend!

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This transcript was generated automatically and may contain errors and omissions. Ironically, the transcription service has particular problems with the word “bulwark,” so you may see it mangled as “Bullard,” “Boulart,” or even “bull word.” Enjoy!
  • Speaker 1
    0:00:07

    Welcome back to the Bulwark Coast of Hollywood. My name is Sunny Bond. I am the culture editor at The Bulwark, and I’m very pleased to be joined today by Sean McNulty. Now Sean does a daily newsletter at The Anchor group of podcasts and newsletters and everything else that I am constantly telling people to subscribe to. And as as I was just telling Sean before we started, it is quickly become my, like, go to Morning Read.
  • Speaker 1
    0:00:28

    It saves me having to go to variety and Hollywood reporter everywhere else. I love it. It’s all right there for me. So thank you for being on the show today, Sean. I really
  • Speaker 2
    0:00:36

    appreciate it. Appreciate the event. It’s great to meet
  • Speaker 1
    0:00:37

    you. So I let’s I I wanna talk about everything that’s going on in the world of the business of Hollywood right now because there’s a bunch of different stories kinda crashing all up against one another. And I guess we we should start with the the big event from earlier in the week the Emmys. The Emmys happened. You know, let’s let’s break down what actually happened at the Emmys and what it tells us about the state of I guess, TV or streaming or whatever we wanna call the content of stuff that comes, the flood of stuff that comes to our TV through apps and, you know, linear and everything else right now.
  • Speaker 1
    0:01:14

    What’s what’s going on in the world of TV as seen through the the lens of the Yammies?
  • Speaker 2
    0:01:18

    Well, not his most popular show. I’ll tell you that right now. And that’s the biggest takeaways, you know, to my knowledge, to my honestly, to be clear, I I flip between some a Monday Night Football Premier and the Emmys as maybe a few Americans did, but, you know, no mention of Yellowstone, which is the show most Americans watch. Which was also not nominated. And, you know, look, it’s an artistic award.
  • Speaker 2
    0:01:41

    So as the Oscars do not reward box office. But in terms of cultural relevancy, there’s the kind of disconnect in that, you know, succession one again for best you know, drama series, but you’re talking a show that maybe reaches, you know, the numbers are about one six, one point six million in ratings, maybe, you know, on demand or streaming it goes up to two, maybe three for being generous. You know, Yellowstone is pulling in fourteen million a week. So, you know, Again, it’s not it’s an artistic award, but in terms of your question about relevancy to the public or why do people maybe let watch the show less is because the show’s Tenth Lassos probably the biggest ballpark hit out there of all the shows that are nominated. So, you know, that’s really the thing that maybe I mean, certainly in the past when network TV was a big thing with West Wing and things that, you know, twenty million Americans would watch every week, you know, this is as the business has changed to niche niche niche, you know, the tastes have gone one way, but the the vast majority of Americans taste has stayed in a certain, you know, milieu.
  • Speaker 1
    0:02:48

    Yeah. I mean, I guess that’s that’s the broader question here really at this point is, what is the point of the Emmys? In a in a world of niche entertainment. I mean, I I aside from being, you know, look, everybody loves getting awards and nobody nobody loves giving themselves awards more than folks. And Hollywood, I I I can appreciate that as a journalist.
  • Speaker 1
    0:03:08

    We lots of journalism
  • Speaker 2
    0:03:09

    awards out. How do you take the second place? No.
  • Speaker 1
    0:03:12

    But the but, you know, it it is it it like, I I it it is not entirely clear to me what the what the point of a big broadcast show like this is for the average viewer. I I didn’t I I haven’t watched the Emmy. I’ll I’ll put my cards on the table. I didn’t watch the Emmy this week. And I watched The Emmys in years.
  • Speaker 1
    0:03:29

    It just doesn’t it it there’s nothing it does not interest me at all. I I have other things I need to do with my time. And I am I’m a guy who you know, writes about the stuff for a living. I can’t imagine what it’s like for the average person.
  • Speaker 2
    0:03:42

    Yeah. It’s you know, what’s the takeaway? It’s you give another award to show he gave an award to last year, you know. Both show, you know, ten vessels, one, suggestions, ones, and Dias want you know, like, you’re just giving awards to people who already have award. We know they’re great.
  • Speaker 2
    0:03:57

    We heard of them. Fantastic. You know, there is what’s the takeaway for Exactly. I mean, Seth Rogen put it best, everything he used up by the Oscars, but asked about award show or is he like, you know, I don’t care who wins the best insurer of the year award. I’m sure there’s a ceremony.
  • Speaker 2
    0:04:13

    I don’t need to watch it. You know? Like, it’s just it’s it’s an industry focused thing that, you know, And at a certain time, maybe would launch or maybe would get a bigger, you know, raise the profile of a show, like, maybe a show like Appen Elementary you know, may I mean, it’s already got buzz on it, but that may help boost it in season two, you know, in theory. But, you know, network TV is also a dying business. It’s, you know, so whatever that used to be, you know, the people the the great cast got acknowledged from from Sweet Game, which was great, and it’s like, okay, maybe that gets a little bit of awareness raised, but I don’t think that that was the the common, you know, the common conventional wisdom before that I think really to your point, doesn’t apply, and the ratings show that.
  • Speaker 2
    0:04:57

    Every year, the ratings keep going down.
  • Speaker 1
    0:04:59

    Yeah. Yeah. I what wait. Let’s let’s look at this from a from a, you know, top down point of view. How did the network shake out?
  • Speaker 1
    0:05:07

    I mean, who who was the
  • Speaker 2
    0:05:08

    big winner? I mean, which would be the max one you know, big. I think it was either thirty six or forty, whatever, you know, and they were the most nominated certainly. And, you know, Netflix was second. Who they probably believe was third because they’re just looking at, you know and there’s also creative arts, emmys, and the emmys in the show last night.
  • Speaker 2
    0:05:24

    So it’s, you know, creative total. So, you know, but that was those that’s how the nominations shook out. So yeah. And, you know, to television is cyclical. They have certain dates so certain, you know, the crowd wasn’t eligible there, but didn’t air this year and air last year.
  • Speaker 2
    0:05:37

    So year to year comparisons are even useless because it’s not it’s not movies, it’s not sports, where it’s every year’s the same calendar. So even to further the point, this kind of competition back and forth that there’s not level playing fields And the biggest thing about the Amy’s that really in this day and age that just and I’ve spoken about this probably more of the chagreed of my angler teammates, but There are five hundred television shows out there. No one’s watching them all. This is not a competition based on the judges having seen all all contestants. What kind of a competition is this?
  • Speaker 2
    0:06:12

    Back in the day, you probably could theoretically watch most or if not all network TV shows and that was pretty much all that was out there. When you have a universe of five hundred scripted TV shows out there, what’s the point of the award? You’re just saying, hey, here’s a show I watched out of the five hundred, you know, The White Lotus you know, supporting actress in a limited series. Literally had every, you know, it was, like, five out of seven or seven, you know, out of nominees. You’re telling me there were six other people in limited series.
  • Speaker 2
    0:06:39

    In the in the era of limited series that were worthy of the nomination, it’s a it’s a, you know, it’s literally becoming a joke and it’s like, what point has become a punch line. And so not the I’m going across very anti Amy’s. It’s nice to award people. It’s lovely. Should anybody care no, you know, it’s it’s an industry award that happened to have stature that to your point you haven’t watched it in years.
  • Speaker 2
    0:07:00

    I think a lot of people feel the same way and we’ll see what that Monday Night Football versus any, you know, audiences this week as well. I
  • Speaker 1
    0:07:09

    mean, we’re we’re gonna come back to football here in a second. Let’s move to d twenty three. The the big industry news of the week was was, you know, Disney that has their big confab. They got everybody out there. They were gonna show us all the new things that Disney is doing.
  • Speaker 1
    0:07:26

    And as best as I could tell, there’s nothing. There’s there’s like nothing really I mean, I that’s a that’s an exaggeration. I’m joking. There’s a inside it out. Sequel, and there’s a movie based on the star that people wished on — Right.
  • Speaker 1
    0:07:38

    — in the other Disney
  • Speaker 2
    0:07:40

    movies, which she’ll be starring in. Yeah. Hi.
  • Speaker 1
    0:07:43

    Don’t understand that. But but, like, so what’s what’s what’s going on? What what what are the big takeaways from Disney? What should we know from d twenty three? Well,
  • Speaker 2
    0:07:51

    I mean, I joked in my headline for the wake up this week, you know, on Monday was, you know, the hundred and sixty seven alerts you got about d twenty three put into one newsletter because it’s impossible to even keep track of this stuff. And, you know, to the bigger question for me is what’s back to what’s the point? Like, it’s you know, you have people in the room who pay I think it was, like, a, like, you know, like,
  • Speaker 1
    0:08:12

    four
  • Speaker 2
    0:08:12

    hundred to eight hundred out, like, a ridiculous amount of money. They pay to be marketed. They have to go to this thing. You know, the quote unquote don’t call
  • Speaker 1
    0:08:19

    the
  • Speaker 2
    0:08:19

    cult, you know, whatever that Disney’s, you know, it’s like, it’s a fan base that comes together to celebrate this corporation Let’s face it. You know, it’s a corporate, you know, PeP rally. Like, you know, so it’s a very odd unique to your thing and what and then what’s the news? It’s like, oh, there’s Harrison Ford. Yeah.
  • Speaker 2
    0:08:38

    We know he’s making a movie. Is there nothing is there ain’t no? He’s just coming up to say, okay. Great. You know, it’s a comic con for Disney, which is essentially what the idea was.
  • Speaker 2
    0:08:47

    And, you know, they literally dropped eleven trailers in one day if you’re gonna you know, which may be the people in the room cared about. But in terms of general buzz, you spent essentially millions of dollars creating these trailers and what’s the, you know, what’s the up here. Focus Focus two came out, which was when that and it was announced as a film, you know, got a bunch of buzz. I’ve seen nobody mention, oh, the trailers out because it just gets lost in its own morassive information. I don’t understand outside of a cheer a cheer section to make everybody feel great about Disney what the larger it’s a lot of wasted capital.
  • Speaker 2
    0:09:20

    I guess we’re all talking about it, which is sort of what we all we are because we have to, but is the public does the public know about this? And, you know, like, outside of the core Disney, you know, people who are quite frankly going to see this stuff anyway, you have to win over the rest of the people who don’t care about this stuff, you know. So that’s questionable to me. You know, Warner Bros. Famously, they just started DC FanDome.
  • Speaker 2
    0:09:43

    They they canceled it. Like, they’re like, we’re not doing this anymore. And then we’re gonna have next weekend to do them or to do them or whatever the deficit is. How would they pronounce that? Their version of this happens next weekend, and it’s like, this is gonna be all over again.
  • Speaker 2
    0:09:57

    And I just don’t know that there’s you know, you know, I’m I’m a little I’m a baffled, but I’m I’m questioning, I guess. What? You
  • Speaker 1
    0:10:05

    know, it’s interesting. It’s interesting. I I’ve never heard it put exactly this way or at least in in in such such quick proximity to each other. But it really is like almost a microcosm for the unbundled world in which we live right now. It used to be all this stuff was at comic con.
  • Speaker 1
    0:10:22

    You have all this stuff at San Diego comic con studio show they show their trailers and there’d be the big hall h events everybody would be like, this is what we’re doing for the next year. Ray. And now you have like six of these different events and they they’re all both diluted in quality, but also, like, filled with stuff. Filled with stuff. And it’s it’s just too much.
  • Speaker 1
    0:10:44

    Yeah.
  • Speaker 2
    0:10:44

    And look, ComicCom was just literally not even two months ago. It was several weeks ago. Like, you know, so it’s just like back to back to back to back. What is you know, what what are you winning? I don’t know.
  • Speaker 2
    0:10:56

    And this is a a conversation I’ve been having in my newsletter, which, you know, and with the Angela team on the on our podcast is, you know, marketing. And it’s like, you’re getting lost in the noise and you’re not spending the money where you should be spending the money, you know, as as much as it gets to righted, old fashioned marketing works. There’s a reason studios spend fifty million dollars on a movie to market it because that’s what makes a memory, you know, and I was talking a lot about the summer movie business this summer where, you know, the the the the top ten box office films versus the top ten Netflix films, which get relatively no marketing budget behind it, you’re not creating events in people’s minds. What do you remember? I mean, it was I didn’t see Elvis.
  • Speaker 2
    0:11:35

    I watched on HBO Max a week ago. But I remembered as an event of the summer of twenty twenty two. You know, that’s a big difference in people’s minds and hearts.
  • Speaker 1
    0:11:45

    Let’s let’s talk about that for a minute because one of my other podcasts across movie aisle, we actually talked about that this week. We talked about the the in your in your newsletter, the breakdown of what what the top opening weekends in the Netflix box office, you know, quote unquote, hours watched, what what the top eleven movies there were versus the top ten movies at the the actual box office. And, you know, from my POV, I had I had heard of, I think, seven of the top eleven Netflix movies. I mean, I’d only watched, I think, three, maybe four Again, this is my job. Like, I, like, I feel like I’m I I can’t tell if I’m out of the ordinary in terms of seeing more than usual or fewer than usual, frankly.
  • Speaker 1
    0:12:28

    I I don’t know. But with with the movies, with the actual movies, I’d heard of all of them, and I’d seen all of them. And, like, I feel like that’s that’s a big difference, but most importantly, for a movie star, if I’m a movie star, if I’m a person who relies on being a public presence to get cast and roles and to get big paychecks. Why would I be in a Netflix movie. Aside from the fact that I’m gonna get, you know, a twenty five to forty million dollar payday to get, you know, covering both my salary and the back end points.
  • Speaker 1
    0:12:59

    Right? That’s obvious. I mean, like, I should I I could turn my nose up at forty million dollars. Something else makes sense. Sunny.
  • Speaker 1
    0:13:04

    I want you to be in this movie. But but the same time, like, you know, you are kind of cannibalizing yourself. You are you are losing out on other instances in which you could be again boost your your public profile here.
  • Speaker 2
    0:13:17

    Are
  • Speaker 1
    0:13:17

    is there is there any discussion about this in the Hollywood community about, like, what the actual cost is in addition to the benefit?
  • Speaker 2
    0:13:25

    Yeah. It’s a I’m gonna say it’s a new phenomenon, but it’s definitely one that people are becoming more conscious of and you know, I think and that’s why I wrote about it and I got a lot, you know, a lot of response from, you know, the English primarily an industry audience and from the industries that, you know, yeah, this is a problem no one’s talking about, and you’ve got people now I mean, I still have to do I wanted to research this more, but even with someone like Will Farrell, has not been in a theatrical film with the proper marketing campaign. You know, in twenty eighteen with Watson and Holte or Watson and Holmes, whatever that comedy that didn’t do well, which didn’t even get that big of a campaign. Like, you know, he’s been in the Eurovision movie, which came out of Netflix. He was in the Shrek next door, which got a decent amount of love from Apple, but it’s also Apple non Netflix.
  • Speaker 2
    0:14:11

    Right. You know, and his next movie is another Netflix movie. Know, coming out with Ryan Reynolds at Christmas. And again, things I only know because I I followed this stuff. But when was the last time, Will Farrell was on every TV ad on TV.
  • Speaker 2
    0:14:23

    You know? And when that’s five, six years later, when he’s you know, when you’ve been out of that point of view, you know, that I mean, no one knows what the ramifications are, but look, you know, you’re always good at your last hit or you’re light up. As big as these films might be for Netflix, which Yay, Netflix, you know, as I said, Chris Wadsworth had two films that came out this summer. What’s the other one? You know?
  • Speaker 2
    0:14:45

    And he spent — Right. — as much as he spent making a Thor, he spent four months whatever making this other movie and it’s it’s time away and it’s a you got a nice paycheck for it. But does the Chris Hemsworth brand benefit It’s like, no. And that’s where I think that there’s some it’s a new phenomenon. So I go to your answer your question.
  • Speaker 2
    0:15:02

    I don’t think this has been discussed too much, but I think stars are starting to catch on to this that, like, as much as social media uses, like, a better term, people to, you know, to feed their out a rhythm. There are no interest in promoting individual brands. They want, you know, attention and time spent. Streaming services, want subscribers, and people just engaging with the product. They’re not in the business of making stars.
  • Speaker 2
    0:15:24

    They haven’t made any yet. I mean, you know, there has not been a major A List star to come out of streaming. Streaming has been very popular for many years now. Why is that? Because they don’t invest in the star making process, which is marketing, which is the huge campaign, and that cost a lot of money.
  • Speaker 1
    0:15:41

    Well, I, you know, I I made this I made this point very briefly on my other podcast. And I wanna I wanna drill down on a little bit here because it almost feels it almost feels like a predatory pricing scheme that that Netflix is is utilizing here. What I mean is this. Right? If you look at a company like Amazon, sometimes they will deeply discount something to get you to go there and you’re not so you’re not buying it from a from a box store.
  • Speaker 1
    0:16:04

    So you’re not going to the convenience store or whatever. Right? And Netflix is almost doing the opposite of that. They’re overpaying stars to come to Netflix, which deprives the theatrical model of the stars, which in turn destroys the theatrical model. But once that theatrical model is destroyed, those those ours are not gonna be able to get those twenty five to forty million dollar paychecks from Netflix.
  • Speaker 1
    0:16:27

    Because Netflix is gonna say them, but what are you gonna do? You’re gonna go make a movie for for universal — Good luck. — to
  • Speaker 2
    0:16:33

    enjoy half the amount of money, whatever, you know. And it’s like, yeah. It’s back to our original. How is the star made, Sunny, which is what Disney’s gonna be making a movie about. And when that ecosystem you know, is all you know, COVID obviously just decimated it for two years, but it’s, you know, it’s coming back.
  • Speaker 2
    0:16:50

    But the the you know, and this is the larger box office question know, in the pandemic when everybody’s gonna go back to the movies anymore. He hates the movies. I’m like, no. People love the movies. Stop saying that.
  • Speaker 2
    0:17:00

    The problem is there’s a product there’s a there’s a supply supply chain problem. And people have come back this year, you know. But why is box office down twenty percent? Because the number of releases is not the same as it was in twenty nineteen. You know, so unless this is fed, that’s how the Jennifer Lawrence’s of the world get made.
  • Speaker 2
    0:17:17

    You know, it’s not gonna be, you know, I mean, as much as Jacob Ballorti is a great, you know, talent and is in euphoria and originated on Netflix. He’s not opening. He’s not Timothy Shalomite. Great extent. Right.
  • Speaker 2
    0:17:29

    Like, what is Timothy Charlemagne doing? So he’s doing a streaming movie? No. He’s doing dune. He’s doing, you know, bones at all.
  • Speaker 2
    0:17:34

    He’s which which is this indie film with, you know, Luka Guadminio. So he’s staying in the theatrical game. There are these star younger straight up Florence Pew. Same thing. Don’t worry Darling as much as that movie’s prepresses.
  • Speaker 2
    0:17:46

    All over the place, her name is out there, and that’s because it’s a theatrical film. I guarantee you if that was a streaming film. It would not be you know, getting the same kind of buzz. It doesn’t have the anticipation. You get the, you know, people selling on IMAX, the Harry Styles fans.
  • Speaker 2
    0:18:00

    It’s a theater. It’s an event if it was a streaming movie. You would have none of this to go with it, and that’s what these it’s interesting to see what these younger stars who are not the household name, yet where the smart ones I’ll I’ll call smart ones. Are spending? Who what projects they’re taking?
  • Speaker 2
    0:18:15

    I’m sure Tim Timothy Shalamet can get a huge check from a streamer for something. But maybe he’s just no interest, I had no idea. But, you know, but you know, people know movies make stars. It’s always been that way. And as much as TV can make some, the crossover, you know, you know, Brian Transit is not a movie, you know, like John hit the the big names of the early twenty ten’s, how many of them transitioned to being movie stars, you know, it’s always that tough hurdle.
  • Speaker 2
    0:18:41

    You know, that’s not George Clooney, the late thing on the the patron saint crossover. Yeah. That’s a rare thing.
  • Speaker 1
    0:18:48

    Yeah. Let’s let’s look back to Disney for a second because there’s there’s been an interesting kind of under story over the last I like, year or two now, I feel like But it involves an an activist investor named Dan Loeb who has been trying to get Disney to, like, split off ESPN into its own separate thing. And he my understanding is he’s kinda backed off on that now, but fill fill me in on that because it’s actually very interesting for reasons, I’ll get get to it in a second. I’m I’m very curious about why he’s doing this and why he has stopped.
  • Speaker 2
    0:19:22

    Yeah. So Dan Loeb is, yes, a quote unquote activist investor I don’t know if that’s a self appointed moniker or not. I don’t know that many Wall Street folks want to be called activists. But his it’s kind of classic. You know what I mean?
  • Speaker 2
    0:19:35

    Carl Icahn, you know, did this famously where Dan Loeb’s got a lot of money and he invests, you know, he buys five percent of a company and then says, I want this to happen. And it’s a way to, you know, essentially, it’s a win win for him to make money. Because then he can, you know, he wants to stop press to go up on this news that he’s out that they’re doing that, you know, it’s it’s a kind of a scheme in the sense. But so Dan bought a big chunk of Disney stock. It’s not a ownership stock, but it’s, you know, not a few shares.
  • Speaker 2
    0:20:04

    And then he writes this letter quote unquote letter to Bob Jayback, who’s the CEO of Disney saying, you should, you know, you should spin off ESPN. You’re leaving money on the table. ESPN can be much more valuable as its own company, you know, and I want you to do this as this activist investor. Sometimes it works, sometimes, you know, companies ignore people. There’s various ways this goes, but this happened in the middle of August.
  • Speaker 2
    0:20:28

    This week, Dan posted on Twitter. Yeah. I’m now convinced after talking to the guys that they have the right plan for ESPN. It’s like, why don’t you do that a month ago? You know, I it’s just he just is doing it to get this press and get and maybe I mean, I don’t believe Disney’s stock has moved too much since he’s, you know, made his investment.
  • Speaker 2
    0:20:47

    And everybody was like, you know, and and what does he know about running ESPN quite frankly? You know, I mean, he’s looked at some numbers, but now he came back. Like, what if they what if they had listened to him? And now he’s saying it’s a bad idea. Like, it it’s not a good luck.
  • Speaker 2
    0:21:00

    And when when he made that announcement, everybody’s like, Dan, that’s a terrible idea. Do you know how much ESPN would cost by its own about thirty five dollars a month? The the math’s been done on this. You know? God, yeah.
  • Speaker 1
    0:21:12

    And this is Right. And this is what this is what’s interesting to me because it it has always felt like Disney is the secret moneymaker. I’m sorry. ESPN is the secret moneymaker for Disney. ESPN, you know, generates tons and tons of money off of the cable cable subs that, you know, the affiliate fees, right, that that cable companies have to pay to keep it on the the service tiers where everybody can see it.
  • Speaker 1
    0:21:35

    And you know, on top of that, all the advertising revenue, I mean, ESPN is one of the last places where you can get live sports. So, you know, what were what were the Sunday night football ratings? It was twenty five
  • Speaker 2
    0:21:50

    On NBC, it was at well, twenty twenty twenty five total with with peacock. Yeah. So huge numbers.
  • Speaker 1
    0:21:55

    Right. So so I mean, like, football was still a huge drop. ESPN owns Monday night football, but we don’t we don’t actually have the numbers on that yet because we’re we’re taving before. But but they’re they will probably be similarly large, you know, relative to being on cable versus broadcast, whatever. But, like, they will be big.
  • Speaker 1
    0:22:14

    And that’s what what I don’t understand is you you have one of the few places where people still have to go to watch live TV. They still have they are still, like, the the crown jewel and the the lining, but still very large linear TV market. Why would you spin it off? Why would I don’t understand. I don’t and and it makes
  • Speaker 2
    0:22:31

    sense. I got nothing for you. And that was basically what the reaction to his letter was everybody. I mean, yeah, I don’t know why he thought this was and he’s also saying, you know, they can’t be involved in gambling on my Do you watch ESPN? They have shows developed devoted to gambling.
  • Speaker 2
    0:22:46

    I don’t you know, this kind of like, you haven’t have you looked at ESPN in the past five year? It was just this like it was so bizarre Sunny that I was like and everybody was like, I don’t know what world they they’re very involved in gambling. They don’t have an ESPN branded gambling service yet, but they’re gonna And that’s kind of what I think that his insight that he got over the last month was like, oh, you guys are already doing this, you know, or I don’t know, but that seems to be the thing that came around. And, quite frankly, even that, you know, the gambling services as is can’t are not making money. Like, there’s, you know, FanDuel and Drap you know, these kids have been around for a while.
  • Speaker 2
    0:23:19

    I don’t know if ESPN, the brand is gonna all of a sudden convince more people to gamble. Maybe they get a different edge of the crowd, but, like, it’s you know, bar stool, you know, everybody’s Caesars. There’s plenty of competitors if you wanna gamble online. There’s not a problem outside of the legality in certain states. The problem is maybe there weren’t as many gamblers as your thought there were.
  • Speaker 2
    0:23:36

    So I don’t know this is even the panacea that they all think it is anyway, but To your point, you know, ESPN, the secret sauce of ESPN is that they make their money by people not launching it. Everybody subsidizes ESPN. It’s the old CNBC, same prompt, same business model, CNBC gets an average viewership of three hundred thousand people. Roughly seventy million people a month pay for CNBC. They don’t where it’s part of your table bill.
  • Speaker 2
    0:24:00

    But without that subsidization, these services cost a lot of money, which is, you know, you’ve seen this in certain sports markets, NASA, which is the kind of New England cable network for the Boston Red Sox and Boston Brewers. They went OTT at thirty dollars a month. For to watch the socks in the ruins. This is the real cost of sports that’s been buried in the cable model because everybody’s been paying for it even though, yes, ESPN is popular, but maybe it’s, you know, four percent of cable subscribers watch ESPN on a given night, you know. Yeah.
  • Speaker 2
    0:24:33

    So that’s the secret of it. And when you unravel that, I mean, it’s gonna unravel because of cord cutting anyway, and there is a problem looming. But to your point, you know, it is the glue that’s holding the cable bundle together and and know that’s the last piece which I don’t even know ever goes away, but the OTT answer is not ESPN if you just wanna buy ESPN, it’s gonna be very expensive and it’s like, oh, I didn’t know it’d be that much. I’m fine with the bundle, you know, or whatever it might be.
  • Speaker 1
    0:24:58

    Right. I mean, this is I I hammered on this point again and again. But, you know, unbundling, this always sounds like a great deal. Everyone’s like, only wanna pay for what I use, but you just end up paying for the you pay you end up paying the same amount of money for way fewer options.
  • Speaker 2
    0:25:13

    Well, no one knows how much it’s cost. Like, what I use. What do you use actually costs a lot? You don’t know that. Like, that’s what everybody’s actually gonna pay for it to use.
  • Speaker 2
    0:25:20

    Oh, okay. Well, here you go. There’s what it costs and they owe. Maybe I don’t. You know, they think it costs a lot less — Yeah.
  • Speaker 2
    0:25:25

    — in this, you know, social media free news, you know, like this, you know, this online economy has created this like, everything’s so cheap and it’s like, Netflix was priced a certain way for years because they were lost leading. They were losing money. Then they slowly raised the prices and now they make money, but Netflix is now fifteen dollars a month. So the real price of Netflix was fifteen bucks. They were charging you eight for a while as the loss leader.
  • Speaker 2
    0:25:49

    Disney plus the same thing. By the way, all your if you have Hulu, your price is going up in October by two bucks. And if you have Disney plus, if you wanna have ad free experience is going up by three bucks in December. This is the real cost of Disneyflies been around for three years, but — Yeah. Not what it really is not what it costs to be a business, and that’s what everybody’s slowly any any deal that’s good to be true?
  • Speaker 2
    0:26:11

    Probably is.
  • Speaker 1
    0:26:12

    Yeah. Let’s talk was, you know, speaking of companies that are losing money. Let’s talk a little bit about CineWorld’s bankruptcy because I It’s it’s interesting and like kind of depressing to look at the the filing from last weekend. Again, just like looking at the bullet points in your in your newsletter from Thursday or Friday. It was like, oh, they owed this much money to these companies.
  • Speaker 1
    0:26:37

    Oh, they owe this much money in leases. Oh, they don’t own anything. Where are they gonna you know, what are they gonna use this collateral? So, like, I I I try to this is another thing I try to explain to people, but, the theatrical business only really works if you have a steady flow of product. Right?
  • Speaker 1
    0:26:51

    Because they don’t own anything. You can’t, like, regal Regal Cinemas does not own the Regal Theatre that you go to. They lease it. They’re
  • Speaker 2
    0:26:58

    the biggest renters, you know, one of the biggest real estate renters out there, you know, and everybody does a new an apartment or own an apartment. There are different economics involved in those things. It’s cheaper. You don’t have to buy the building, but you gotta keep paying the rent. And when you’re a business model goes down.
  • Speaker 2
    0:27:12

    That’s a problem. I mean, look, the movie business has been, you know, as old as dirt. It’s like, how does it make money? Selling you popcorn and soda not the movie ticket. So they need people coming in to buy the popcorn and soda.
  • Speaker 2
    0:27:24

    If there’s less of that going on, which is what’s been happening because there are fewer releases, I mean, COVID, the side of whatever, you know, that thing. But because even now the problem in twenty twenty two that they’re facing, they need people in the door you know, and that’s a if they’re not coming the door, they’re not making money off of concessions, and they only keep roughly forty percent of whatever you know, box office revenue, you know, maybe up to fifty to pay upon the splits of a movie. So when, you know, the Bolt train opens to thirty million Sony is keeping, you know, about twenty million of that money. And then the Regal and AMC in the in the Cinemark, the the world are keeping the other, you know, thirty to forty percent. That’s that’s it.
  • Speaker 2
    0:28:05

    There is no other revenue stream here to, like, lean on if that isn’t working. So when the supply goes down to people at this month, you know, September’s the big, you know, we’ve I’ve talked about it. I’m sure acknowledge it as well. This lack of even product coming in and even A List product or, you know, high profile product, Your rent is still due at the end of the month just because you’re, you know, the the studios which you don’t own and they have you have no say in how much product you’re getting. They had no ownership.
  • Speaker 2
    0:28:34

    You know, Cinemark has no or Cinemark has no own ownership stake in the studio. Studios can do what they want, you know. So you have you don’t own anything. You just say, you don’t own the movie. You don’t even own the theater you’re in.
  • Speaker 2
    0:28:45

    You’re in a very dependent business on a lot of things that you can’t control in one of those things decide to change their model a little bit, you’re stuck because you have these leases that you signed for tenor, you know, a movie theater. What else is this thing gonna be? You know, it’s a lot of real estate to have. So That’s kind of where they’re at right now. I mean, that’s why they’re bankrupt.
  • Speaker 1
    0:29:03

    Well, I mean, that’s that’s the only advantage that the the thing or companies really have over the malls and shopping centers like that. What what are you gonna put in? Exactly. Are you gonna put a borders in here? No.
  • Speaker 1
    0:29:14

    I don’t know. Amazon’s not expanding
  • Speaker 2
    0:29:16

    anymore, so you can’t make it a warehouse. So, you know Yeah. Who else you gotta just Like, where?
  • Speaker 1
    0:29:20

    The the number the number of spaces that can occupy this footprint is radically shrinking. So, you know, you’re you’re kinda stuck with us. It’s a I there there was one note from your from your we’re taping this on Tuesday. There was one note from your newsletter today that I just wanted to to to light very quickly because I it’s it jumped out at me as absurd. Focus features paying thirty million dollars for the new Alexander Payne movies.
  • Speaker 1
    0:29:46

    I don’t under I don’t understand
  • Speaker 2
    0:29:48

    that. Okay.
  • Speaker 1
    0:29:48

    Just as a just as a business just as a business decision. How do you I I in this environment, how do they make that money back?
  • Speaker 2
    0:30:00

    It’s well, it’s they’re global right. So it’s worldwide. Number one, it’s not just from the silver matter of that, which you can then I mean, universal focus features is owned by universal pictures, which part of the Comcast organization. So they do have a a wide network. So either you can kind of buy it all, and then they could also then sell off territories for certain money, which for sure.
  • Speaker 2
    0:30:21

    They probably will just release it themselves because they have the infrastructure, but that’s one way you can do it is to just buy the rights and then sub sell to France and Japan, and you get two million dollars here from distributor there. You get three million you know, so you kind of make your money back that way. But it’s also, you know, they kinda just did this I mean, peacock wasn’t mentioned in this announcement. It was just focus features. So yeah.
  • Speaker 2
    0:30:44

    Go ahead. Well,
  • Speaker 1
    0:30:46

    this is what this one I wanted to ask. Is this is this a is this a peacock play? Or a Theodore.
  • Speaker 2
    0:30:51

    Right? So I’m going back to yes. So there’s a movie called Honk. Oh, jeez. Wow.
  • Speaker 2
    0:30:56

    Honk honk for you to save yourself. There you go. Great. That was all the time. Just came out well, came out over Labor Day weekend, and that was Peacock and in theaters same day release, they’d pick up, but that was a folk like, fromocus features.
  • Speaker 2
    0:31:12

    And that was a focus. And peacock bought that together at Sundance, but that was peacock was in that announcement and they bought it for eight point five million dollars. The film has gross maybe two million in change so far. So you’re taking a you know, that’s before Prince and Everett, before marketing and all other stuff. So there’s, you know, a lot of money on that.
  • Speaker 2
    0:31:30

    What the benefit to peacock was in that equation was not six billion dollars, I’ll tell you that right now. You know? So, yeah, how do you figure this math out? You know, because you’re also that’s thirty million for the movie. Right?
  • Speaker 2
    0:31:43

    So if you’re gonna put that in market that film properly and, you know, and maybe not, you know, throw money, but at least it’s gonna get a, you know, a beast sized release, if you will. That’s another twenty to thirty million. So you’re talking sixty million in the whole. Is apology, Amati? I was in your pain movie gonna make you back sixty million globet.
  • Speaker 2
    0:32:03

    It might. Look, sideways, they’re they’re you know, his track record is here or there? Is it a lock? No. Yeah.
  • Speaker 2
    0:32:10

    It’s a it’s a lot of money certainly.
  • Speaker 1
    0:32:13

    Yeah. And and I wanna be clear here. I’m I wanna be clear here. I’m not I’m not attacking — Oh, you’re being broke. — because I I’ve no I’ve no idea no idea if the movie’s gonna be any good.
  • Speaker 1
    0:32:25

    I probably will be. They they’re good. Exactly. Exactly. Exactly.
  • Speaker 1
    0:32:30

    And I’m not even really attacking focused features here because I like focus features. I think they make good movies. I just don’t I don’t understand the economics of this. It’s it strikes me as it just strikes me as a crazy amount of money to spend for a genre that is still not it’s still not recovered — Yep. — in the box office.
  • Speaker 1
    0:32:49

    Yeah. For And if they’re gonna if they’re gonna use it as a as a way to get people on peacock, I just don’t see
  • Speaker 2
    0:32:55

    I
  • Speaker 1
    0:32:55

    don’t
  • Speaker 2
    0:32:56

    see it. It’s not gonna be a big sign up how much you know, how many albums and or pain fans are there out there that want to, you know, pay who knows? Good good question, you know, valuable because it’s again. You’re paying five dollars for it on peacock. You’re not paying twenty bucks in the theater or, you know, so that crowd over that, you know, I’m gonna call it, Art House, whatever it might be, is like, sure.
  • Speaker 2
    0:33:16

    I’ll then you’ve just lost fifteen dollars in the equation. So yeah. Thirty is high. Look, maybe there was a bidding I’m sure there was a, you know, a bidding war and these things get a little out of control sometimes. Alexander Payne is, you know, his last movie, but I think downsizing with with Matt Damon.
  • Speaker 2
    0:33:35

    Anyway, the my man was a little furloughed downhill when I’m thinking of. Anyway, both he hasn’t had a hit in a in a couple I’ve been in a little while. So, yeah, it’s probably yeah. I agree with you. I love Focus.
  • Speaker 2
    0:33:46

    I’m a big Alexander paying fan. It does when you do the math of, like, You gonna make back sixty mil on this? Alright. Maybe. I don’t know.
  • Speaker 2
    0:33:54

    But not it’s not most importantly, it’s not my money. So
  • Speaker 1
    0:33:57

    Yeah. Well, that’s I mean, that’s this is all of the monopoly money as first as first. Well, that was everything I I wanted to and talk to you about I always like to close these interviews by asking if there’s anything. I should have mentioned, oh, actually, I take it back. There was one more thing I wanted to talk to you about because I I I am I as I said, I am I I love your your newsletter.
  • Speaker 1
    0:34:16

    It’s a it’s a big value add for the inkler, and I I read it every morning. To try and see, you know, not only to keep up with what’s happening in the industry, but also to, frankly, steal some ideas for my own. Writing. What is your process? Like, do you do you start writing the night before?
  • Speaker 1
    0:34:34

    Is it, like, do you wake up at, like, two in the morning and start, you know, going through? Everything. What is your what is your actual morning and daylight?
  • Speaker 2
    0:34:40

    Yeah. I’m in a bad day. I’m at two AM. It’s mostly evening writing and then morning is touch up for lack of a better term. So that’s that’s usually, you know, I’ll kind of at it depends upon what my days and things like that.
  • Speaker 2
    0:34:53

    But, you know, the I mean, honestly, the nature of it is you have to be flexible because then then some days, the news is a barrage of news in the afternoon, and then I can write it then, some days, the barrage and I’m working most up a point with LA time. I’m based in New York. So the the news may not be till the afternoon, which is starting at five o’clock here my time. So then the evening can be busy and then I don’t know if you’ve how I’ve been reading forward. I do every earnings season.
  • Speaker 2
    0:35:17

    I do very, you know, kind of breaking those down. All the earnings calls down into what I call plain English. For people to kinda understand. And those calls, you know, the the two to three week period where those weeks are entirely different, where I’m up, you know, on an ADM’s earnings call writing to get the thing out by nine nine fifteen when, you know, or end of the day. The or or the calls are, like, five or five thirty at six o’clock at night.
  • Speaker 2
    0:35:40

    Which point I’m running till eight just on earnings calls information. So I wish I had a better end. It’s mostly evening as my only, you know, kind of, real answer I can give you that can go pretty late if it’s been a busy day, but I don’t know until I see what the news gods rained down from above. And when something like d twenty three happens, my Sunday is shocked. So I have to sit there and go through all the trades and read through and then say, alright, here’s the easy way to digest this as possible.
  • Speaker 2
    0:36:06

    So That’s the the basic one of the land.
  • Speaker 1
    0:36:10

    Once again, a great great newsletter a whole line up of newsletters at the Angler Go sign up Sean, I really appreciate you being on the show. Hopefully, we’ll get you back on, you know, soon here. And my name is Sunnyvale. I’ll be back next week with another episode of The Workhorse in Hollywood. To go then.
  • Speaker 2
    0:36:39

    Get an inside look at Hollywood with Michael Rosenbaum. Let’s get inside Deborah Ann Wall. If you had to choose between True Blood daredevil to do again,
  • Speaker 1
    0:36:48

    Partially because the Marvel series feel unfinished to me because we got canceled when we thought we were gonna have more. Whereas True Blood, we did get to wrap it up. I knew that we were wrapping it up. I could say goodbye to everyone. I stole something from the set.
  • Speaker 1
    0:37:01

    I know I didn’t get to steal anything from our daredevil set. Inside
  • Speaker 2
    0:37:04

    of you with Michael Roseenbaum, wherever you listen.