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This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and Amrie Hordern. Join us each day for insight from the best in markets, economics, and geopolitics from our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from six to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always on the Bloomberg Terminal and the Bloomberg Business app. So here's the latest. Investors are waiting a slew of jobs data this week that could determine the fence path forward. Neil Data of Renmeg has been saying the fedest late on cunning rates, and he's worried about the labor market. He joins us. Now, Neil, welcome to it. Back to the program, buddy. I want to start with Friday and ask a question I've already asked this morning, So I'll ask you twice. How bad does that number need to be on Friday to open the door for you to make it your base case. They're going fifty.

This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and Amrie Hordern. Join us each day for insight from the best in markets, economics, and geopolitics from our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from six to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always on the Bloomberg Terminal and the Bloomberg Business app. So here's the latest. Investors are waiting a slew of jobs data this week that could determine the fence path forward. Neil Data of Renmeg has been saying the fedest late on cunning rates, and he's worried about the labor market. He joins us. Now, Neil, welcome to it. Back to the program, buddy. I want to start with Friday and ask a question I've already asked this morning, So I'll ask you twice. How bad does that number need to be on Friday to open the door for you to make it your base case. They're going fifty.

Well the way the rest of the street is talking. It sounds like it needs to be pretty weak. But you know, I think that that's part of the problem, right, because you're almost talking yourself out of going fifty when the data up to this point are already consistent with fifty. So I think, you know, I thought the FED didn't want to be data point dependent, and that seems like what they're doing right here.

Well the way the rest of the street is talking. It sounds like it needs to be pretty weak. But you know, I think that that's part of the problem, right, because you're almost talking yourself out of going fifty when the data up to this point are already consistent with fifty. So I think, you know, I thought the FED didn't want to be data point dependent, and that seems like what they're doing right here.

So you know, I don't have a good sense.

So you know, I don't have a good sense.

I mean, I think if you get another uptick in the unemployment rate, it's probably a lot. But you know, at the same time, you know, we tend to overweight the establishment.

I mean, I think if you get another uptick in the unemployment rate, it's probably a lot. But you know, at the same time, you know, we tend to overweight the establishment.

Survey to begin with anyway, so it's hard to know. You know, we'll see how it comes out.

Survey to begin with anyway, so it's hard to know. You know, we'll see how it comes out.

But I think even if the number does come in better, because you know, let's say there were some one off factors in the last month that kind of unwine, what's the overall slope of the data, we already know what that is. It's weaker, right, I mean, if you look at the Conference Boorts labor differential, which was released last week, consumer attitudes about the labor market are deteriorating full stop, and consumers tend to spot changes in their local economies before the data. They know when the pink slips are going out, they know when factories are hiring people, they know when they're help wanted signs in their neighborhoods. But the fact that consumers are telling you that the labor market situation is getting worse suggests that there's still probably a pipeline of weakness that's still in front of us with respect to the labor market.

But I think even if the number does come in better, because you know, let's say there were some one off factors in the last month that kind of unwine, what's the overall slope of the data, we already know what that is. It's weaker, right, I mean, if you look at the Conference Boorts labor differential, which was released last week, consumer attitudes about the labor market are deteriorating full stop, and consumers tend to spot changes in their local economies before the data. They know when the pink slips are going out, they know when factories are hiring people, they know when they're help wanted signs in their neighborhoods. But the fact that consumers are telling you that the labor market situation is getting worse suggests that there's still probably a pipeline of weakness that's still in front of us with respect to the labor market.

No, you mentioned the Establishment survey. I just wander this Friday for you and from the clients you speak to, are you more likely to put more weight on the household survey given the difficulties that we've been ha ac.

No, you mentioned the Establishment survey. I just wander this Friday for you and from the clients you speak to, are you more likely to put more weight on the household survey given the difficulties that we've been ha ac.

Well, I think one of the benefits right now of the Household survey relative to the Establishment Survey is that you know it's about revisions. We just got a fairly significant down revision to the Establishment Survey up to March twenty twenty four. We sort of knew that was coming. But what does that tell you about whatever the peril number prints at in the coming week. Whatever the number is, it's probably going to be weaker in reality, even irrespective of whatever is published. The good thing about the household surveys that the ratios in the job surveyed aren't really revised, right. I mean, maybe there are changes to population estimates, but ultimately it's those ratios, the unemployment rate, prime age employment.

Well, I think one of the benefits right now of the Household survey relative to the Establishment Survey is that you know it's about revisions. We just got a fairly significant down revision to the Establishment Survey up to March twenty twenty four. We sort of knew that was coming. But what does that tell you about whatever the peril number prints at in the coming week. Whatever the number is, it's probably going to be weaker in reality, even irrespective of whatever is published. The good thing about the household surveys that the ratios in the job surveyed aren't really revised, right. I mean, maybe there are changes to population estimates, but ultimately it's those ratios, the unemployment rate, prime age employment.

Those ratios don't really change.

Those ratios don't really change.

So I think there's a signal in the fact that the unemployment rate has been going up for five of the last six months. It tells you that there's a slackening in the labor market.

So I think there's a signal in the fact that the unemployment rate has been going up for five of the last six months. It tells you that there's a slackening in the labor market.

Yeah.

Yeah.

I got to say, there's this question about whether we've overly gotten confident about the soft landing, And I look back at history, and there are only three soft landings where the FED is orchestrated a rate cut coming down from high rates, where you haven't seen a recession. That was not the case in two thousand and eight, two thousand and one, nineteen eighty nine, nineteen eighty one, nineteen eighty nineteen seventy, nineteen sixty, nineteen fifty seven, even though it looked like it was going to be a soft landing. How confident are you that this time the soft landing thing isn't a headfake?

I got to say, there's this question about whether we've overly gotten confident about the soft landing, And I look back at history, and there are only three soft landings where the FED is orchestrated a rate cut coming down from high rates, where you haven't seen a recession. That was not the case in two thousand and eight, two thousand and one, nineteen eighty nine, nineteen eighty one, nineteen eighty nineteen seventy, nineteen sixty, nineteen fifty seven, even though it looked like it was going to be a soft landing. How confident are you that this time the soft landing thing isn't a headfake?

Well, I still think.

Well, I still think.

I mean, I think part of what's happened in markets is that we went from pricing in no risk of recession to some risk or recession, and it happened very quickly, which is why we got that sort of hig up in markets, you know, maybe a month.

I mean, I think part of what's happened in markets is that we went from pricing in no risk of recession to some risk or recession, and it happened very quickly, which is why we got that sort of hig up in markets, you know, maybe a month.

Or so ago.

Or so ago.

I think I still think soft landing is the overall sort of base.

I think I still think soft landing is the overall sort of base.

Case, but I do think that the FED has a role to play.

Case, but I do think that the FED has a role to play.

I mean, you know, when when I hear people saying that, well, maybe they should string out a bunch of twenty five basis point moves between now and the summer, I think that's kind of ridiculous. I mean, the fact that core inflation is running below two percent. Frankly, if you look at it since last summer, we've been below two percent annualized on a monthly basis most of the time, believe it or not.

I mean, you know, when when I hear people saying that, well, maybe they should string out a bunch of twenty five basis point moves between now and the summer, I think that's kind of ridiculous. I mean, the fact that core inflation is running below two percent. Frankly, if you look at it since last summer, we've been below two percent annualized on a monthly basis most of the time, believe it or not.

To me, that suggests that they're already too tight.

To me, that suggests that they're already too tight.

So going fifty on the first go is not a particularly big risk because we you know that they're way above neutral, and if you string out a bunch of twenty fives, getting back to neutral will take a long time, okay, And that puts the economy at risk in the process because it'd be mean it would mean that you'd be running a restrictive policy stance.

So going fifty on the first go is not a particularly big risk because we you know that they're way above neutral, and if you string out a bunch of twenty fives, getting back to neutral will take a long time, okay, And that puts the economy at risk in the process because it'd be mean it would mean that you'd be running a restrictive policy stance.

In the interim period.

In the interim period.

Just quickly here, Neil, does this mean that if the FED were to cut fifty basis points and every analyst that I've read says that probably risk assets would sell off immediately on the knee jerk reaction of a fifty basis point rate cut, You'd be saying this is the time.

Just quickly here, Neil, does this mean that if the FED were to cut fifty basis points and every analyst that I've read says that probably risk assets would sell off immediately on the knee jerk reaction of a fifty basis point rate cut, You'd be saying this is the time.

To go buy, absolutely, because it tells you the Fed's trying to get in front of the eight ball. I mean, there's nothing about the economy that the FED knows that the rest of us don't.

To go buy, absolutely, because it tells you the Fed's trying to get in front of the eight ball. I mean, there's nothing about the economy that the FED knows that the rest of us don't.

They don't have an edge like that significantly.

They don't have an edge like that significantly.

This is more about them coming to recognize that's something the rest of us already do, namely that the unemployment rate's gone up and that inflation slow.

This is more about them coming to recognize that's something the rest of us already do, namely that the unemployment rate's gone up and that inflation slow.

No dutsa making it easy, nod'sa of remmac Noil, It's never that easy. But we appreciate your take, Sat, Thank you very much. This is complex stuff.

No dutsa making it easy, nod'sa of remmac Noil, It's never that easy. But we appreciate your take, Sat, Thank you very much. This is complex stuff.

It's difficult.

It's difficult.

It is vital for our nation to maintain strong American steel companies, and I couldn't agree more with President Biden. US steel should remain American owned, an American operators, and I will always have the back of America steel workers.

It is vital for our nation to maintain strong American steel companies, and I couldn't agree more with President Biden. US steel should remain American owned, an American operators, and I will always have the back of America steel workers.

So here's the latest Kamala Harris alone with Joe Biden and her opponent Donald Trump in opposing the proposed takeover of US Steel by Japan's Nippon Steel. Harris catering to the union vote over Labor Day weekend, just one week shy of the first presidential debate set to air on ABC. Henrota Trees, a vader partner's writing, Harris is ahead and the polling nationally, but the electoral college remains extremely tight and continues to favor Trump and the Republican Party in our view, Henrotta joined us now for more. Henrietta, welcome back. We'll turn to the polling in just a moment. I want to start with the Steale issue. First of all, on this issue, is there any daylight whatsoever between the two candidates.

So here's the latest Kamala Harris alone with Joe Biden and her opponent Donald Trump in opposing the proposed takeover of US Steel by Japan's Nippon Steel. Harris catering to the union vote over Labor Day weekend, just one week shy of the first presidential debate set to air on ABC. Henrota Trees, a vader partner's writing, Harris is ahead and the polling nationally, but the electoral college remains extremely tight and continues to favor Trump and the Republican Party in our view, Henrotta joined us now for more. Henrietta, welcome back. We'll turn to the polling in just a moment. I want to start with the Steale issue. First of all, on this issue, is there any daylight whatsoever between the two candidates.

There's no daylight between the two candidates, and frankly, there really can't be. I have some really fantastic clients who were asking this question a year ago, where the presidential good candidate is going to be on the yah X versus Nippon Steel deal, And the answer is, effectively, they're going to stay. They're against it for the duration of this election cycle. If anything, you should expect for none of this to be concluded.

There's no daylight between the two candidates, and frankly, there really can't be. I have some really fantastic clients who were asking this question a year ago, where the presidential good candidate is going to be on the yah X versus Nippon Steel deal, And the answer is, effectively, they're going to stay. They're against it for the duration of this election cycle. If anything, you should expect for none of this to be concluded.

Until after the election.

Until after the election.

There's no reason for a rush, and there's no other alternative for any presidential candidate. The alternative of saying yes, I think demand should come in and buy one of the most American brand companies in the Rust Belt before an election cycle is sort of unthinkable. So this should have been well understood and predicted many months ago, if not a year ago.

There's no reason for a rush, and there's no other alternative for any presidential candidate. The alternative of saying yes, I think demand should come in and buy one of the most American brand companies in the Rust Belt before an election cycle is sort of unthinkable. So this should have been well understood and predicted many months ago, if not a year ago.

Henrietta though this time next year or January twenty first, after the inauguration. If one of these individuals is becomes inaugurative and then.

Henrietta though this time next year or January twenty first, after the inauguration. If one of these individuals is becomes inaugurative and then.

Bax tracks, how is that.

Bax tracks, how is that.

Going to affect them in the future.

Going to affect them in the future.

Well, I think what you need to think about is that the regulatory agencies have the option to go in and study the issue, whether it's DJ or some of the other administration agencies, go in and say, look, what are the cost benefits here, and then either give it it's blessing or not. During that interim, they're going to have to go a long way towards given the unions what they need to the point where they get unions on board.

Well, I think what you need to think about is that the regulatory agencies have the option to go in and study the issue, whether it's DJ or some of the other administration agencies, go in and say, look, what are the cost benefits here, and then either give it it's blessing or not. During that interim, they're going to have to go a long way towards given the unions what they need to the point where they get unions on board.

That's the only way that this progresses.

That's the only way that this progresses.

So that burden and the onus is really on the company on the pond Steel to make sure that the unions are behind them, and once that occurs, then you have a situation where the deal can go proceed.

So that burden and the onus is really on the company on the pond Steel to make sure that the unions are behind them, and once that occurs, then you have a situation where the deal can go proceed.

But it's never going to be you have my blessing. It's either going to be there.

But it's never going to be you have my blessing. It's either going to be there.

Haven't had enough issues to derail this or proceed in the free market society that we live in, Henriette.

Haven't had enough issues to derail this or proceed in the free market society that we live in, Henriette.

In Pennsylvania, Kamala Harris said, let's not pay too much attention to those polls. You were one individual that thinks Trump has the edge when it comes to the swing states in Pennsylvania specifically, Why do you think he has that edge even though she is doing the work there and going to places like Beaver County.

In Pennsylvania, Kamala Harris said, let's not pay too much attention to those polls. You were one individual that thinks Trump has the edge when it comes to the swing states in Pennsylvania specifically, Why do you think he has that edge even though she is doing the work there and going to places like Beaver County.

Pennsylvania has slowly become more and more of Republican leaning, And a big part of my bias towards Biden in that state early in the year was mostly because he's scranted Joe.

Pennsylvania has slowly become more and more of Republican leaning, And a big part of my bias towards Biden in that state early in the year was mostly because he's scranted Joe.

He was, you know, raised in the state, and I think that carries a lot of weight.

He was, you know, raised in the state, and I think that carries a lot of weight.

Kama Harris is deploying Joe Biden in that area, and I think Tim Wallace goes a long way towards speaking to that demographic.

Kama Harris is deploying Joe Biden in that area, and I think Tim Wallace goes a long way towards speaking to that demographic.

But it's an.

But it's an.

Issue where we see the unions play out with the top of the union structure, for example, has strong support for Kamala Harris as the Democratic candidate who has you know, minimum wage issues in mind and is fighting for unions.

Issue where we see the unions play out with the top of the union structure, for example, has strong support for Kamala Harris as the Democratic candidate who has you know, minimum wage issues in mind and is fighting for unions.

Joe Biden famously went on the picket line. Kamala Harris has been on the picket line.

Joe Biden famously went on the picket line. Kamala Harris has been on the picket line.

But then you have the members themselves of you know, the million persons strong Teamsters union, for example, who are very conflicted and they personally support Donald Trump and his brand of politics. So I think it's a harsh disparity between people at the top of the unions and then their rank and file members who may prefer about a different direction. And it's slowly been trending more and more red, getting closer to Ohio, which consistently has voted for Trump plus eight plus nine and is now plus twelve in that state, which is just right next.

But then you have the members themselves of you know, the million persons strong Teamsters union, for example, who are very conflicted and they personally support Donald Trump and his brand of politics. So I think it's a harsh disparity between people at the top of the unions and then their rank and file members who may prefer about a different direction. And it's slowly been trending more and more red, getting closer to Ohio, which consistently has voted for Trump plus eight plus nine and is now plus twelve in that state, which is just right next.

Door trending read especially in western Pennsylvania. But it has a very popular Democratic governor. Does that not favor Harris.

Door trending read especially in western Pennsylvania. But it has a very popular Democratic governor. Does that not favor Harris.

It does have a very popular governor and that's great.

It does have a very popular governor and that's great.

And I think Shapiro has been an exemplary speaker on the trail. His speech at the DNC was notable in terms of getting support.

And I think Shapiro has been an exemplary speaker on the trail. His speech at the DNC was notable in terms of getting support.

But you really have to just keep that trajectory open.

But you really have to just keep that trajectory open.

What the comp the Hiris campaign is trying to do right now is turnout youth voters. We saw a one hundred and seventy eight percent voter registration uptick amongst Black women in America in the last three weeks or five weeks since Kamala Harris has been the campaign front runner. We saw a one hundred and forty eight percent increase in Latino females registering to vote in.

What the comp the Hiris campaign is trying to do right now is turnout youth voters. We saw a one hundred and seventy eight percent voter registration uptick amongst Black women in America in the last three weeks or five weeks since Kamala Harris has been the campaign front runner. We saw a one hundred and forty eight percent increase in Latino females registering to vote in.

The United States.

The United States.

So it's all about voter turnout in these high urban density areas where Kamala Harris is going to try to run up the numbers and get it on par with two thousand and eight with Barack Obama, who won the state overwhelmingly. So that the trajectory that they're trying to pursue, and you're not going to see that translated to the polls.

So it's all about voter turnout in these high urban density areas where Kamala Harris is going to try to run up the numbers and get it on par with two thousand and eight with Barack Obama, who won the state overwhelmingly. So that the trajectory that they're trying to pursue, and you're not going to see that translated to the polls.

For reference, all.

For reference, all.

These new voter registrations, those are not going to be taken up in the polls because polsters are not reaching those new voters. So they also have a higher propensity to vote than somebody who's.

These new voter registrations, those are not going to be taken up in the polls because polsters are not reaching those new voters. So they also have a higher propensity to vote than somebody who's.

Been on the roles for years or decades.

Been on the roles for years or decades.

So I think that there could be a sleeper voter in Pennsylvania and other states nationwide, which is these new registrants.

So I think that there could be a sleeper voter in Pennsylvania and other states nationwide, which is these new registrants.

That Kamala Harris has turned on in the last couple of weeks.

That Kamala Harris has turned on in the last couple of weeks.

When you look at the polls, Henriette, what's the main campaign issue of this campaign cycle.

When you look at the polls, Henriette, what's the main campaign issue of this campaign cycle.

Right now? It's immigration and abortion. Those are the two top issues.

Right now? It's immigration and abortion. Those are the two top issues.

When you look at voters and they say it's the economy or inflation, those are no longer reliable data sets because they skew partisan one way or the other. If you like Donald Trump, you think the economy is trash and we're going to a recession.

When you look at voters and they say it's the economy or inflation, those are no longer reliable data sets because they skew partisan one way or the other. If you like Donald Trump, you think the economy is trash and we're going to a recession.

If you like Joe Biden or Kamala Harris, you think the economy is improving.

If you like Joe Biden or Kamala Harris, you think the economy is improving.

You feel good about your own personal finances, you feel good about your state's personal finances, and you feel like the inflation issue is coming.

You feel good about your own personal finances, you feel good about your state's personal finances, and you feel like the inflation issue is coming.

Down, which it is at two point nine percent.

Down, which it is at two point nine percent.

I think that the Federal Reserve lowering interest rates in a couple of weeks is going to be really powerful for that message as well. But you keep having these upticks and fears about recession that keep being unproven and unnarrative, and that is something that needs to resonate with the American voter, but they don't receive that information due to partisan leanings. As a result, the most reliable data that you can look at as an investor watching the polling is where do you stand on immigration and where do you stand on abortion? And that's really what's driving the gender divide, which is outrageous and so big this year. It really is becoming men versus women in this election cycle.

I think that the Federal Reserve lowering interest rates in a couple of weeks is going to be really powerful for that message as well. But you keep having these upticks and fears about recession that keep being unproven and unnarrative, and that is something that needs to resonate with the American voter, but they don't receive that information due to partisan leanings. As a result, the most reliable data that you can look at as an investor watching the polling is where do you stand on immigration and where do you stand on abortion? And that's really what's driving the gender divide, which is outrageous and so big this year. It really is becoming men versus women in this election cycle.

So let's put abortion aside for one second. With immigration, what is the daylight between people who are for much more stringent types of rules and those who would like to see a more measured approach. I mean, how much is this really dividing between Republicans and Democrats? And how much does it really room to negotiate.

So let's put abortion aside for one second. With immigration, what is the daylight between people who are for much more stringent types of rules and those who would like to see a more measured approach. I mean, how much is this really dividing between Republicans and Democrats? And how much does it really room to negotiate.

You know, it's interesting, there's not really that much of a Democrats have come very far to the right in their latest bill that was rejected by Republicans in the early part of this year at the request of Donald Trump to say, you know, let's keep this issue front of mine.

You know, it's interesting, there's not really that much of a Democrats have come very far to the right in their latest bill that was rejected by Republicans in the early part of this year at the request of Donald Trump to say, you know, let's keep this issue front of mine.

But Joe Biden has.

But Joe Biden has.

Introduced and signed on the most extreme executive orders that have more than had a legal immigration since the beginning of this year, and we're now down to twenty twenty levels when he took office. So I think that the Democratic Party has gone far to the right on this issue. It's really a question of whether voters are prioritizing immigration or not. Everybody is pretty much in favor of increasing drones at the southern border, boots on the ground, expanding you know, judges in the area, having a more streamlined asylum process so we can process illegal immigrants more quickly, and certainly compelling Mexico and southern border country nations to improve economic situations in their regions so that they do not have this surge of immigration at the US Mexico border. So I think it's really about who talks about it in what kind of a way as opposed to what functionally do we want to see.

Introduced and signed on the most extreme executive orders that have more than had a legal immigration since the beginning of this year, and we're now down to twenty twenty levels when he took office. So I think that the Democratic Party has gone far to the right on this issue. It's really a question of whether voters are prioritizing immigration or not. Everybody is pretty much in favor of increasing drones at the southern border, boots on the ground, expanding you know, judges in the area, having a more streamlined asylum process so we can process illegal immigrants more quickly, and certainly compelling Mexico and southern border country nations to improve economic situations in their regions so that they do not have this surge of immigration at the US Mexico border. So I think it's really about who talks about it in what kind of a way as opposed to what functionally do we want to see.

Two months ago, Henritta, thank you, Henritta Trece of Vader Partners. The comdown to the US election continues. Let's take the opportunity to get you some morning calls. First up, ever, Core Issi of Granning Southwest to outperform with a thirty five dollars price target the amlyss citing new revenue initiatives said to be outline of the company's investor day of September twenty six. Your second call from Morgan Stanley, lowering his price target on Alphabet to one ninety from two to five, keeping an overweight rating the alyst weighing potential fallout after a judge rule of the company illegally monopolized the search market. We're down there by zero point six percent. And finally Wells Fargo down, grounding Boeing to underweight with a street low price target of one nineteen. The ambless seeing the company's free cash flow peaking by twenty twenty seven as aircraft development costs offset production growth. That's stark. That name is down by almost three point eight percent in early training. That's one to watch at the opening bout Turning to streaming DirecTV customers losing access to ABC and ESPN after the pay TV service and Disney failed to come to terms on a new contract. Matt Delgan of morning Star, who maintains a by rating on Disney, expecting the blackout to be resolved by the weekend, writing, Disney is in the stronger position as it can more easily withstand the loss of DirecTV than DirecTV could withstand. The family of Disney Networks. Matt joins us now for more.

Two months ago, Henritta, thank you, Henritta Trece of Vader Partners. The comdown to the US election continues. Let's take the opportunity to get you some morning calls. First up, ever, Core Issi of Granning Southwest to outperform with a thirty five dollars price target the amlyss citing new revenue initiatives said to be outline of the company's investor day of September twenty six. Your second call from Morgan Stanley, lowering his price target on Alphabet to one ninety from two to five, keeping an overweight rating the alyst weighing potential fallout after a judge rule of the company illegally monopolized the search market. We're down there by zero point six percent. And finally Wells Fargo down, grounding Boeing to underweight with a street low price target of one nineteen. The ambless seeing the company's free cash flow peaking by twenty twenty seven as aircraft development costs offset production growth. That's stark. That name is down by almost three point eight percent in early training. That's one to watch at the opening bout Turning to streaming DirecTV customers losing access to ABC and ESPN after the pay TV service and Disney failed to come to terms on a new contract. Matt Delgan of morning Star, who maintains a by rating on Disney, expecting the blackout to be resolved by the weekend, writing, Disney is in the stronger position as it can more easily withstand the loss of DirecTV than DirecTV could withstand. The family of Disney Networks. Matt joins us now for more.

Matt.

Matt.

Not the first time we've seen this, and what we do see this is typically around this time of the year. What's different about it this time around, Well.

Not the first time we've seen this, and what we do see this is typically around this time of the year. What's different about it this time around, Well.

There's not too much different in this one. As you said, we see this pretty frequently. It seems to follow the same playbook, and eventually these things get resolved. The thing that is becoming different is that with the cable bundle is going to change. So although this one might not look different than the past ones, and we expect it to get resolved in the same way, we think coming up pretty soon there is going to be a bigger change to the pay TV packages that these distributors, the cable companies, the directvs of the world get and are allowed to put out there. So although this might not be the one where we see the big change, we do think that's coming.

There's not too much different in this one. As you said, we see this pretty frequently. It seems to follow the same playbook, and eventually these things get resolved. The thing that is becoming different is that with the cable bundle is going to change. So although this one might not look different than the past ones, and we expect it to get resolved in the same way, we think coming up pretty soon there is going to be a bigger change to the pay TV packages that these distributors, the cable companies, the directvs of the world get and are allowed to put out there. So although this might not be the one where we see the big change, we do think that's coming.

So let's talk about that a little bit more. What would that change as we look like in practice in us to come.

So let's talk about that a little bit more. What would that change as we look like in practice in us to come.

Well, right now, what direct TV is looking for is the ability to offer a skinnier bundle, basically not having to put in in this case, all of the Disney family of channels into their stream packages. So they can offer their customers and packages for a lower price.

Well, right now, what direct TV is looking for is the ability to offer a skinnier bundle, basically not having to put in in this case, all of the Disney family of channels into their stream packages. So they can offer their customers and packages for a lower price.

The network providers.

The network providers.

Like Disney have been resistant to that because the business model for these companies has been get people forced essentially to subscribe to all of your networks, and that's their best way forward. The thing that's going to be different, however, is that with streaming, there are becoming other ways to see this content content other than through a PATV package, and that's going to actually next year become even more and probably the greatest extent once ESPN, the linear the flagship service the people watch on only TV right now becomes offered to consumers also, So that's the biggest thing again right now it's going out with DirecTV.

Like Disney have been resistant to that because the business model for these companies has been get people forced essentially to subscribe to all of your networks, and that's their best way forward. The thing that's going to be different, however, is that with streaming, there are becoming other ways to see this content content other than through a PATV package, and that's going to actually next year become even more and probably the greatest extent once ESPN, the linear the flagship service the people watch on only TV right now becomes offered to consumers also, So that's the biggest thing again right now it's going out with DirecTV.

The other thing that we think.

The other thing that we think.

Is a good way forward is what we've seen Charter do the cable company.

Is a good way forward is what we've seen Charter do the cable company.

They did it with Disney last year. They subsequently did it with.

They did it with Disney last year. They subsequently did it with.

Paramount, where they're offering a similar type of bundle, but their subscribers get the stream.

Paramount, where they're offering a similar type of bundle, but their subscribers get the stream.

Packages of these companies along.

Packages of these companies along.

With their cable subscriptions or their PATV subscriptions. So those are the couple of ways we think the changes will come and we expect them to happen, even if again not necessarily in this deal and not quickly.

With their cable subscriptions or their PATV subscriptions. So those are the couple of ways we think the changes will come and we expect them to happen, even if again not necessarily in this deal and not quickly.

Can you zoom out and give us a sense of where this dispute, which is a couple of years running, now sits in this overall shift away from cable to what purportedly should be the new future, which is, we don't know what, maybe another bundle. It just looks a little bit different, but something that excludes the cable companies.

Can you zoom out and give us a sense of where this dispute, which is a couple of years running, now sits in this overall shift away from cable to what purportedly should be the new future, which is, we don't know what, maybe another bundle. It just looks a little bit different, but something that excludes the cable companies.

Yeah, and that's the thing is, we do think that another bundle is the way to go.

Yeah, and that's the thing is, we do think that another bundle is the way to go.

The question is who is it that offers it.

The question is who is it that offers it.

Is it these traditional PATV providers or do the streaming companies do it themselves? As I mentioned with the Charter deal, we think that the cable companies and the PayTV distributors are the ones's best position to do it. But as far as why it's happening, that is the point is the companies that rely on PayTV, so the cable companies, the directvs, their businesses are shrinking drastically as we see more cord cutting and they need to be able to do something different. One of the reasons we think DirecTV isn't necessarily the company that's going to be able to cause the biggest change is because it has less leverage, in part because it relies on PayTV a lot more, and so it's in a bad position. Like the rest, It's subscriber base is coming down very much, and there's really nothing these companies can do about it because consumers have the ability to go through streaming and they're preferring it in many cases. The difference though with the cable companies versus DirecTV is that they rely much more on broadband revenue than PayTV revenue is certainly for profits, and they also have bigger, more diverse side businesses Otherwise, in many cases, certainly with compact cast, so they would have better bargaining power to drive that change. But ultimately what's happening is PayTV as we knew it or cable subscriptions as we knew them have I mean for many they've gone away.

Is it these traditional PATV providers or do the streaming companies do it themselves? As I mentioned with the Charter deal, we think that the cable companies and the PayTV distributors are the ones's best position to do it. But as far as why it's happening, that is the point is the companies that rely on PayTV, so the cable companies, the directvs, their businesses are shrinking drastically as we see more cord cutting and they need to be able to do something different. One of the reasons we think DirecTV isn't necessarily the company that's going to be able to cause the biggest change is because it has less leverage, in part because it relies on PayTV a lot more, and so it's in a bad position. Like the rest, It's subscriber base is coming down very much, and there's really nothing these companies can do about it because consumers have the ability to go through streaming and they're preferring it in many cases. The difference though with the cable companies versus DirecTV is that they rely much more on broadband revenue than PayTV revenue is certainly for profits, and they also have bigger, more diverse side businesses Otherwise, in many cases, certainly with compact cast, so they would have better bargaining power to drive that change. But ultimately what's happening is PayTV as we knew it or cable subscriptions as we knew them have I mean for many they've gone away.

They are changing very much, and so that's what.

They are changing very much, and so that's what.

This ultimately will be about, is that this can't be the same thing year after year where all each side is trying to get the best rates for themselves in an industry that goes on. This industry is different now and it will be much more different in the future, and the business model has to adjust for both sides, we think, and so that's what will happen again, even if we don't think this deal that we expect to be resolved, most likely a boy the time the NFL season serves, which is what we often see, might not be the one to drive the major change that we expect again, probably beginning more in twenty twenty five when ESPN does become available for subscribers through streaming.

This ultimately will be about, is that this can't be the same thing year after year where all each side is trying to get the best rates for themselves in an industry that goes on. This industry is different now and it will be much more different in the future, and the business model has to adjust for both sides, we think, and so that's what will happen again, even if we don't think this deal that we expect to be resolved, most likely a boy the time the NFL season serves, which is what we often see, might not be the one to drive the major change that we expect again, probably beginning more in twenty twenty five when ESPN does become available for subscribers through streaming.

And then was all over again and again and again. Matt, Thank you, sir Matt Delaghan and bones style just keeps going random, random ramp. This is the Bloomberg Surveillance Podcast, bringing you the best in markets, economics, antient politics. You can watch the show live on Bloomberg TV weekday mornings from six am to nine am Eastern. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and as always on the Bloomberg Terminal and the Plume Dog bits this out.

And then was all over again and again and again. Matt, Thank you, sir Matt Delaghan and bones style just keeps going random, random ramp. This is the Bloomberg Surveillance Podcast, bringing you the best in markets, economics, antient politics. You can watch the show live on Bloomberg TV weekday mornings from six am to nine am Eastern. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and as always on the Bloomberg Terminal and the Plume Dog bits this out.

Yeah,

Yeah,