Kara Swisher · 42:15
Gone down precipitously at the company, in terms of performance, in terms of value. She herself has lost billions of dollars in what it was worth and what it was worth now. She's put in a CEO that people are thinking have not... Has not run it well. Bob Bacch, I think is how... Pronounce it. And so... But she's still in the catbird seat, so she can reject. So she's been canoodling with David Ellison, son of Larry Ellison, and they have this very... If you wanna read the backs and forth, Bill Cohen's, I think, doing the best job of what's happening here. It's a back and forth. They're doing all these convoluted where they buy... National Amusement, which she owns, owns the controlling stake in Paramount Global, I think. And so you have to... She... He's trying to buy that, and then Paramount Global will then turn around and buy his company, Skydance, which makes very successful movies like the Mission Impossible movies, Top Gun two, stuff like that. Mhmm. So it'll buy it back. There'll be some recapitalization of some sort that looks like that or d... Whatever. Decapitalize. Larry Ellison's around, hanging around the basket. And then David will take the shares in the movie company. They'll sell off a bunch of... They own a lot of ugly theaters. Meanwhile, there's another competing... There's very few people wanting to buy this, by the way, FYI. Apollo, which is season opportunity, Mark Rowe... It's owned by Mark Rowe and has made an offer, but she can reject that Apollo deal out of hand if she wants to. She's doing better with the David Ellison one, but if Apollo came up a little bit, it probably... All things being equal, I think Bill is recommending the Apollo deal because it's a lot cleaner. Suddenly, Jeff Zucker is involved with Redbird with, Cardinale who runs that. You know, it's all these people machinating, and the Apollo deal is pretty straightforward. And and then there's another investor, Marco Ghibelli, who will probably sue. There's all kinds of people involved here. And so do you want a messy one that Sherry does better on, or do you want a cleaner one where she doesn't do as well? But we'll probably remove the idea of lawsuits against it. And the third option, of course, is nothing happens. Everybody walks away, and this company just gets bought and sold for parts at some point in the future. So it's a bad example of a dual class shareholder. Correct, Scott?
Scott Galloway · 44:24
That's exactly right. This is an example of when things come off the track. So when you Google and everything's up into the right, people will put up with the dual class shareholder structure because everyone is winning. It's champagne and cocaine for everybody. The problem is is when shit gets real and the business is failing and the valuations are going down because there's two things about the dual class shareholder structure that that leak value from all shareholders to Sherry. First and foremost, what you said, she can just cross her arms and say, yeah. It's a good deal. Maybe we're all gonna get fucked, but I don't wanna sell the company or I don't like the deal, so I can just cross my arms. Mhmm. And despite owning less than 50%, just say no. Even worse than that, I would argue, is what she can do is she can hold a gun to the head of the buyer and say, okay. You wanna pay us $10,000,000,000. I own 20%, so my stake should be 2,000,000,000. Nope. I want more money. So the buyer might go, you know what? I don't care about the other 80%. So, Sherry, I will pay $4,000,000,000 for your shares if you approve it despite the fact that would be valuing the company at 20,000,000,000, but the common shareholders only get valued at 10,000,000,000. And that's what she's doing. She's saying, I don't give a shit. I'm not a fiduciary for the other 80%. I want extra value for my shares to approve the deal, which is nothing but an additional 2,000,000,000 to her that all shareholders should be splitting. That spells shareholder lawsuit. Actually, the family that owns Conde Nast did the exact same thing when selling a cable asset. They said, we're not gonna approve the deal unless we get more. And the owners or the new bidders, instead of having to pay double to everybody, they just have to pay double to Sherry. This is where it just comes off the tracks. And more than anything, what this is a symptom of is the fact that this business just doesn't have the kind of bitters that they were hoping based on the fact that this business is in structural decline.
Kara Swisher · 46:15
Right. I I would agree. I think, you know, if this was doing well, it would be very, very different. Right? Correct?
Scott Galloway · 46:20
100%. They'd all be fine.
Kara Swisher · 46:22
We all like it when it's Mark Zuckerberg because it's doing well. So he... He's doing a good job. Let me just read Bill just very quickly. If we're gaming this out there, and I must note a number of people around the sales process that suggested to me half jokingly that Puck should get a deal for you, that I'm thinking the Apollo deal may be the best option after all. Again, non investment advice. Sure. It's not as exciting as the Ellison opportunity with all its bells and whistles and Jeff's. This would be Jeff Shelton, Jeff Zucker running the place, etcetera. And, yes, Apollo is trying to buy Paramount at a low point. But as low as Paramount is trading right now, it can trade down further. Sherry would obviously prefer the $2,000,000,000 that the Ellison is offering over the roughly $1,250,000,000 that she stands to make for the Apollo deal, but she will really risk letting a bird, in the hand fly away. If Blair and Faiza, Nick's... These are... This is the independent directors, Nick's Jerry and David, she'll be left with backish and a publicly traded Paramount and a pick preferred at NIA. That's national amusement. It's grown by 7.75% a year. If I were Sherry, I would authorize Trott to start serious negotiate... That's her banker, to start serious negotiation with Apollo to try to get the firm to raise its offer toward the Ellis and Jerry territory. The plot thickens, and it's getting nuttier than ever. So you said you thought they'd split the baby here in some fashion. I haven't seen that yet.
Scott Galloway · 47:36
Yeah. I I I just don't know. I... I'm... Like, they're both... Ellison and Rowan and the guy who runs the media practice at Apollo, they're very smart.
Kara Swisher · 47:45
Mhmm.
Scott Galloway · 47:46
And they're not gonna overpay for this thing. This is just... It's dysfunctional. But the thing is... And, you know, it's hard to predict if someone's gonna be rational or not. If she doesn't close with one of these two, it gets sold in twelve to twenty four months for half the price now. It's not it's not an asset that's gonna that's gonna grow right now in value. So Yeah. Yep. But I agree with you. I think Bill's done a great job. And I think I think Puck should open an advisory business with a huge conflict.
— Predictions segment begins —
Kara Swisher · 48:14
But But kind of do in a lot of ways. Anyway, then they do definitely take a side. Sometimes I don't agree with those things, but I think Bill has has the most clear headed vision of this. Anyway, if you've got a question of your own and you'd like answered, send it our way. Go to nymag.com/pivot to submit a question for the show, or call 85551 Thank you, Diane. Alright, Scott. One more quick break. We'll be back for predictions. Okay, Scott. I'm gonna make a very short prediction before you make a prediction. Taylor Swift's album's coming out by the time this appears. I suspect it'll be out. Beyonce's cowboy Carter is killing it. It's number top. It's making money hand over fist. The the women thing is still going.
Scott Galloway · 48:58
I think it's systemic sexism against male country stars.
Kara Swisher · 49:01
Women are better. It's just the facts. A Taylor Swift album is gonna be gigantic if it's good. I mean, I I don't... I I think it
Scott Galloway · 49:08
will It be doesn't matter if it's good.
Kara Swisher · 49:10
Yes, it does. No. She suffers when it's
Scott Galloway · 49:12
not good. It's gonna be it's gonna be huge regardless.
Kara Swisher · 49:14
It's gonna be huge. But nonetheless, if it's good, it's gonna be huger huger. And the Beyonce album, same thing.
Scott Galloway · 49:20
She could do a duet with Yoko Ono and would be triple platinum.
Kara Swisher · 49:23
Critics be damned, but Beyonce's thing is doing great. And by the way, I've listened to it a dozen times recently. It's good. It's so good. It's so fun. It's so interesting. And and beyond the, you know, Texas Hold'em song, which is just infectious, there's so many good songs on that album. There's so many really interesting songs. Not all of them are country, but a lot of... They all have a country feel, and I get that particular criticism, but I don't give a fuck. It's a great album. And by the way, my wife, Amanda, who is a... Was a music editor and knows her way around music, at first thought Texas Hold'em wasn't all that. And now she's like, I was wrong. This is a fantastic song. Like, you know, it took a minute to really listen to it. But I think this Taylor Swift album is gonna be a monster along with Beyonce. So the ladies prevail once again along with Caitlin Clark. And I think she's got lasting power too, by the way.
Scott Galloway · 50:13
Quite frankly, it's not a prediction if you're stating the obvious that the Taylor Swift album is gonna be big. And by the way, you'll like this story. Okay. Just a quick story. At the bar last night, after the dinner, for Ted. By the way, Chris Anderson is totally, totally pimping me out. He asked me how many entertainment at the
Kara Swisher · 50:31
theater This you did last is my understanding, but go ahead.
Scott Galloway · 50:34
Anyway, so I met this lovely young woman who works at... I think it's called Pivotal. It's Melinda Gates venture firm focusing on women owned businesses. And she came up to me. She's like, I like you. I loved your talk, but I hate it when you interrupt Kara. And I'm like, when I interrupt Kara? And she's like, yeah. You interrupt her all the time. And I'm like, oh, people usually say that she interrupts me. But anyways, I thought you would like that story. Okay. Anyways, prediction. I said this last week. Trump... If you look at... Trump's become... Or Donald j Trump media or true social, whatever we're gonna call it, it's become a meme stock. And I do think that valuation is gravity. You can defy gravity for a little while. Like, when Michael Jordan jumps from the foul line, he does look as if, wow, this guy can defy gravity. At some point, even Michael Jordan comes down to Earth. Every meme stock has had its moment, and then ultimately, it comes down to earth. All of the meme stocks, AMC, GameStop, all of them are off 90 plus percent from their highs because they never made any sense. I think that might happen sooner rather than later here. And my prediction is that within the next sixty days, it's a single digit stock. I also think there's an outside chance this thing goes to 2 or $3 a share that it lose 90% from here. Because people, they may love Donald Trump, but I do think at the end of the day, they love their money more. And, also, if you look at Kahneman's work, it's really interesting.
Kara Swisher · 52:03
This is Daniel Kahneman.
Scott Galloway · 52:04
Is just Kahneman, the behavioral economist who just passed away. One of his great breakthroughs was loss aversion theory, and it's really fascinating. It's actually... I read it a few years ago, and it's when I decided to cancel all of my insurance. By the way, I'm not recommending that. I can do it because I can absorb big losses. But, essentially, the reason insurance is the best business in the world is that people would rather have a guaranteed series of losses, of small losses, than risk one big loss. And we overestimate the likelihood of extraordinary events. So insurance kinda taps into this behavioral, you know, flaw in the species, if you will. And what I think is gonna happen here is I do think when people, no matter how much they like Donald Trump, have to consistently look at something where every day they're losing or every week, five, 10, 20% of their money. I do think that's painful even if they like the guy. And at some point, they're gonna go, am I the idiot in the room? It's like if you walk into a room and you can't figure out who the stupidest person in the room is, that means it's you. And I do think at some point, people are gonna go, even though they thought, I like the guy. I wanna buy it. Just the constant ping, the constant cut of, okay. The $110,000 I put into this thing, I lost $2,000 last week. And I think as soon as people start to vacate from this thing and said, okay. I did my best. You're gonna see this thing return to earth similar to AMC or GameStop or any number of meme stocks. Anyways, my prediction, below single digits within sixty days and a nonzero probability, it goes below $5 a share, in that time.
— Predictions segment ends —
Kara Swisher · 53:38
Yeah. Yeah. Wow. Okay. And, again, it's just not a business. Let's just keep stressing that to people. But... So buyer beware, as they say. Okay. We we covered a lot today. Where are you going next? Where's your next destination?
Scott Galloway · 53:52
I'm on a flight this afternoon to Orlando to speak to a large hedge fund, and then I go to New York for my book launch next week.
Kara Swisher · 54:00
Mhmm.
Scott Galloway · 54:02
And our good friend Stephanie Ruhl is hosting a a book thing for me, and I'm gonna be on... You know, I'm whoring myself out to every meeting. I'm doing a book event at Stern, and Bradley Tusk has this lovely little bookstore on the Lower East Side. He's hosting a thing for me. I'm doing a, you know, basically a book thing every day. And then I go to LA for Bill Maher, and then I go back to Florida for another hedge fund thing. The only people that can pay my speaking fees now are all these hedge funds. Hedge funds. And then I go and then I go home to home to London. So I'm crisscrossing across the great country of North America. By the way, Vancouver, third most expensive housing market in the world. And, again, again, the rich wanna weaponize government to make it more expensive for new entrants such that the value of the asset they already own, their own home skyrockets in value. Yet another transfer of wealth from the young to the old, Kara.
Kara Swisher · 54:51
You're right. Yeah. You know? Although, there was a good story in the journal about luxury housing prices being down quite significantly.
Scott Galloway · 54:56
Really? Yeah. Can you send me that? Wall Street Journal's doing a great job.
Kara Swisher · 55:00
They do.
Scott Galloway · 55:00
A quick shout out.
Kara Swisher · 55:01
Okay. Scott, let me just say congratulations on your book launch. I'm very excited, and I will talk about it next week. We're gonna focus on your book next week. It's gonna be all about Scott and and the things in your book.
Scott Galloway · 55:13
That's few of my favorite thing.
Kara Swisher · 55:14
Yes. We're gonna make it a section where we're gonna talk about what's in your book and what you... Tell me your advice, etcetera. I'll do a little interview with you. It'll be great. And and it looks great. I'm excited to read it, and my kids are both... Both my kids are excited to read it.
Scott Galloway · 55:26
I think all of that was true for... Except for the last part. I really don't think you're excited to
Kara Swisher · 55:29
read my book on your book. They... Alex loves your books. I don't care what what do you think they do. I wouldn't tell you if they didn't. In any case, that's the show. We'll be back on Tuesday with more, and let's wish Scott a wonderful book launch week.
Scott Galloway · 55:43
Thank you, Kara. Today's show is produced by Lara Nayman, Zoe Marcus, Travis Larchuk, and Taylor Griffin. Ernie and Rittat engineered this episode. Thanks also also to Drew Burrows and Miya Silberio. By the way, my entire TED Talk was courtesy of Miya Silberio. Everyone is so impressed with my talk and how much time I put into it and all the data. And the reality is I just show up, press play, get all the credit, and Miya does all the work. So thank you, Miya, and well done. Nishat Kurwa is Vox Media's executive producer of audio. Make sure you subscribe to the show wherever you listen to podcasts. Thank you for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com/pod. We'll be back next week for another breakdown of all things tech and business. Hit the craps table and scream out, mommy needs new shoes.
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