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Everybody thinks it's about data volume or complexity, but really Chip, it's about the strategy, culture and governance.
I'm Chip Kleinexel, host of Resilient Edge, a business vitality podcast paid and presented by Deloitte.
Learn how the right data strategy can turn the data your company has into real ROI.
Available now, wherever you listen to podcasts.
Today, drama in the boardroom as a mighty media empire goes up for sale.
If you won't budge, then I'm afraid we have no deal.
Can two empires merge?
Marriage or any partnership for that matter is a give and a take.
Yes, we're taking a dramatic take on talk of a Warner discovery and paramount merger here.
On World Business Report from the BBC.
I'm Ed Butler and today we're looking at those reports that Warner Brothers Discovery could be listening to offers from potential buyers.
We're also hearing why everyone's going nuts for pistachios and what the market offers to this week's audacious jewellery heist at the Louvre in Paris.
MUSIC
First, though, let's go to our main story, the media giant Warner Brothers Discovery.
It has sent Wall Street and the entertainment world into something of a spin.
You're a wizard, Harry.
I'm a what?
Everything I've done in my life, I've done for my children, because I love them.
I, Eddard of the House Stark, Lord of Winterfell and Warden of the North, sentence you to die.
Yep.
Harry Potter Succession, Game of Thrones some of the titles that Warner Brothers Discovery calls its own.
Earlier this year, the media conglomerate announced plans to split into two separate entities a streaming and studios business alongside a global networks business earlier this year.
But now the producer of all of those titles and many other hit streaming shows says it's received unsolicited interest from multiple parties.
And it's going to review all its options.
Could Paramount Skydance be among them?
Reuters news agency says there are unconfirmed reports today that the Warner Brothers Discovery Board rejected an initial offer from that rival media conglomerate.
Let's discuss all of this now with Ross Benner.
She's a senior analyst covering TV and streaming for eMarketer.
Hi, Ross.
Just tell us first.
I mean, you're hearing the rumours, right?
This is definitely...
Going on, do we think that, for instance, Paramount is in the game early here?
Paramount's definitely in the game.
They look to be the most serious bidder at the moment and they're one of few companies that would probably be interested in the totality of Warner Brothers Discovery, both the studio business as well as the TV business.
OK, Meg James also with us, a senior entertainment industry writer for the Los Angeles Times.
Hi, Meg.
Now, the media industry has been consolidating, hasn't it?
I mean, that's the context here.
It's been pressure from those streaming services, from a decline in traditional pay TV and advertising.
And Warner itself and Discovery, I mean, they only merged three years ago.
That's true.
This company has seen three different sets of owners in the last decade.
So it's quite weary of deals.
Although, as you point out, the media economy is not great and it's looking for consolidation or at least growth.
Players like Paramount with the Ellison family, they're looking to gobble up a much larger rival.
Right.
Let's just quickly listen to this.
This was what the CEO of Warner said earlier.
Just a couple of years ago it was talking to the New York Times and it was talking about the strength of the company after that merger that it made three years ago with Discovery.
The capital markets had run away with Netflix as the leader and the industry was following.
And so when we came in, we really had a look at the core business economics and we have a really strong, healthy company now.
And that allows us to invest more and focus on what's really important, which is take Macs around the world, produce great content and tell great stories.
Ross Benesch, strong and healthy.
Perhaps that's not the way the market looks at Warner Media right now.
I mean, would you think things have changed that much in the last two years?
Well, they weren't strong and healthy when he said that, and they're even in a worse position now.
Since the merger, the company has lost value and shed a lot of jobs.
And I think part of the reason they're looking to be acquired is because they're out of ideas how to grow the business otherwise and they're looking for an exit.
So talk me through this then exactly.
I mean, there are going to be issues, aren't there Meg, when it comes to the idea of Paramount taking over.
Because I guess I mean as much as anything because of the news titles, that both of those groups control.
There's CBS in the hands of Paramount.
We've got CNN in the hands of Warner Brothers Discovery.
I mean, that could be, I suppose, that could be one for the regulators.
Oh, definitely one for the regulators.
But here's the deal.
The Ellison family has a very strong relationship with President Trump.
And some of the other potential bidders think NBCUniversal a part of Comcast, which owns Sky.
They do not have a great relationship with President Trump.
So I think what the Ellison family is counting on is money from the family, money from other investors and a much clearer path to get the regulatory approval, at least in the United States.
Ross, what is the appeal of Warner Brothers Discovery right now then?
I mean, you were saying it's weak.
It doesn't have that strength in streaming that the likes of Netflix perhaps do.
What is its appeal?
It still has recognizable TV networks, particularly HBO, but the biggest appeal is its studio.
We'll be right back.
That's one of the old school Hollywood studios and it's still a pretty successful business that not only would like Paramount be interested, but any streaming service like Netflix would love to have something like that.
So, I mean, where does this go next, do you think, Meg?
Are we going to see a bidding war?
Comcast is said to be throwing its hat into the ring.
I mean, are there going to be many different groups coming, or are we basically just looking at a convergence where we're going to be down to three or four names in the US kind of entertainment and TV market when it comes to these kinds of things?
Well, Warner Discovery is clearly hoping that there will be a bidding war so that the price will go up.
They would love to have Comcast, NBCUniversal jump into the hunt here.
It's unclear, though.
I mean, the price to the company is incredibly rich.
And as you pointed out, it's struggled in the last few years.
And the main reason it has struggled in the last few years is has not only been the pandemic followed by the writers and actor strikes, but also because the last deal, the deal in 2022, saddled the company with more than 50 billion US dollars in debt.
They've spent a lot of time to try to pay down that debt They've got it down to $35 billion.
But still, that is an enormous nut for any company to swallow.
And that's one of the reasons why...
It hasn't come on the market before now because, as Ross and others have pointed out, Warner Brothers has jewels.
Their assets are incredible.
Superman, Game of Thrones, Harry Potter.
So there is a tremendous library.
And I think now we're at the point where the Ellison family and perhaps others will really show whether or not they're truly that interested.
OK, we certainly will.
I want to bring in Mandy Hsu now.
She's head of derivatives market intelligence at SIBO Global Markets in New York.
Hi, Mandy.
You're looking at the markets generally today and I guess they were excited, weren't they, by what Rauner Brothers were saying shares up by 11.
Yeah, no, I think so.
Not just Warner Brothers, but obviously we had Netflix, kicking off the earnings season for the mega cap tech names.
And what we've seen across a number of these names is just very elevated options activity going into earnings as investors kind of position for results.
So, for example, Netflix kind of going into earnings, the market in the options market was implying about a 7 move.
Stock is down about 5% last time I checked on the back of earnings.
So we'll see where it opens up tomorrow.
But I think the theme of elevated options activity, as well as just a lot of expected volatility being priced in at a single stock level on the back of earnings, that's been a very notable theme that we've seen in the market in recent weeks.
OK, thank you.
I mean, volatility.
Just a quick final thought from you, Ross.
I mean, do you feel like this is a good day, a happy day when it comes to for a regular consumer who loves their TV shows?
Is a consolidation in the market, a sign of strength or a sign that we should be worried that the products out there are going to be narrowing.
It's not good for consumers because when you have a narrowing of products, you usually have more price increases and you will be left with an oligopoly that can do whatever it wants to gouge the consumer.
It's kind of been going that way already, but –
I don't think we should be cheering for less independents and more mega corporations.
Ross and Meg James, Ross Benesch, I should say, of eMarketer and Meg James of the Los Angeles Times.
Thank you both very much indeed.
Mandy, just returning to the other stories in the news today on the markets, at least...
Tech company OpenAI has launched a browser powered by artificial intelligence, a direct challenge to Google Chrome.
We're hearing.
I mean, is that...
It's going to be a big ask to challenge Google Chrome, but this shows the enormity of the pretensions of the OpenAI platform nowadays.
Yeah, I mean, the theme of AI has been a very dominant one in the market in recent years, and particularly in recent months.
So we've seen in the derivatives market I mentioned earlier just a tremendous amount of Interest from investors in using options to really play that theme.
So option activity and a lot of the AI names and the mega cap names have been very elevated and the volatility in those names relative to the broader market is actually at a record high.
So that's something that's very notable to us on the options side.
And we're actually launching next month what we're calling the MAC-10 Index Options and Futures, which is an index tracking kind of the top 10 options tech slash AI names in the market and giving investors a more direct way to play that theme.
So that's definitely been resonating with a lot of investors.
Okay, Mandy Hsu, thank you very much indeed.
You're with World Business Report from the BBC World Service.
Now, New York City is just two weeks away from a significant election.
A 33-year-old socialist is leading the race, it seems, in the polls to become the mayor.
If elected, Zoran Mamdani would make history and possibly shake the foundations of America's financial capital.
If New York truly is the city that never sleeps, we deserve a mayor who fights for those of us who labour at every single hour of the day.
He's young, he's bold.
I will be that mayor.
And he wants to tax the rich.
Zoran Mamdani, a democratic socialist and son of immigrants, shocked New York's political establishment earlier this year with a surprise primary win.
Now he's leading the race to run America's biggest city.
I think he'll be a good change for the city.
I think this is what we honestly needed.
You know, I think a lot of people have felt very invisible for a long time and like especially by politicians and government.
Mamdani wants to freeze rents, make public transport free and open subsidised grocery stores.
He says the wealthy can pay for it.
New York City deserves better than yet another mayor bought by billionaires.
Delivering on that agenda, though, won't be easy.
I'm in Lower Manhattan staring at the elegant steps of City Hall, the building that houses the mayor's office.
Now, most of the city's tax powers don't actually lie here.
They lie with the state government in Albany.
New York State Governor Kathy Hochul has said she won't support any new taxes, although she has endorsed Mamdani.
I've made it very clear that we have differences, but I also believe that he brings a sense of optimism and the can-do spirit.
Still, Mamdani's rise is unsettling the city's corporate class.
Economist Steve Moore at the Heritage Foundation, who served as an economic advisor to the Trump administration, warns of economic fallout.
It's the home of Wall Street.
It is the financial capital of the world.
And I do believe that if Mondani wins this race with his kind of socialist soak, the rich agenda, that Wall Street will no longer be located in manhattan.
The problem is the rich keep leaving and that means you know, if a billionaire moves out of new york you don't get money any money out of them, because now they're paying taxes in some other state And the timing couldn't be worse.
Texas now has more finance and banking workers than New York, a first.
The city that once defined global finance is losing ground.
That's why Mamdani is racing to win over big business.
With less than a month to go, he met behind closed doors with top CEOs.
In general, I think it was positive.
Catherine Wild was there.
She runs the Partnership for New York, a group representing New York's corporate elite.
He did a good job of convincing the business leaders that he wants to listen to them, get their ideas, have their help.
He is not going to make ideological, narrow political appointments.
So I think that was very reassuring.
I absolutely think there's total agreement on affordability, financial insecurity being the issue that is really dividing America, whether it's on the right or the left.
I don't think that the business community is aligned with some of the ways that Mamdani wants to address that issue, but I think they totally agree it's the issue that must be addressed.
For now, Mamdani is well ahead of rivals Republican Curtis Sliwa and independent Andrew Cuomo, the former governor.
If elected, Mamdani would be New York's first Muslim mayor, its youngest in decades, and the first major left-wing figure to rise during Trump's second term.
Whether he's the future of the Democratic Party or just a flash in the political pan remains to be seen.
Our North America business correspondent, Michelle Flurry, in New York.
Now, have you seen the viral Dubai chocolate craze that's taken over social media this year?
Chocolate on the outside, green on the inside.
£8 for the viral Dubai pistachio and canapa chocolate bar.
I'm so excited.
Got the Dubai chocolate bar.
Whoa, this is so exciting.
Right, when we were in Dubai, in the airport, there was a huge queue, right, for this.
This is the Dubai chocolate.
It is a rich bar layered with pistachio, tahini and crisp filo pastry.
And it's sending pistachio sales soaring and making chocolate lovers crazy, it seems.
But behind the sweet trend is a tougher question.
Pistachio trees, it seems, are pretty thirsty and with droughts intensifying...
Can farmers keep up with global demand?
Let's go to California, the world's top pistachio supplying region.
I'm joined by Zachary Fraser.
He's the CEO and president of the American Pistachio Growers Association.
Hi there, Zachary.
You're in Fresno, California, right?
I mean, good times, it sounds like.
Dubai chocolate causing prices to surge.
Yeah, we're fans of great product development, and Dubai chocolate has been a fun one over the last couple of years to be a part of.
Are you a fan yourself?
I do enjoy it.
I'm a diabetic, so I have to pay attention to how much sugar I eat.
But I'm grateful that if I'm going to eat something, at least have something in there that's good for me, like a pistachio.
Quite right, too.
So tell me about pistachios themselves, a good crop to farm.
They are.
They are.
And they grow really, really well here in Central California.
We also have growers in Arizona, New Mexico, and Texas.
So the southwest and the west coast of the United States is one of the best regions in the world for growing pistachios.
And they are...
Because they're a permanent crop, they tend to do well financially.
You don't have as much variability.
You still have challenges with weather and water, just like you do growing anything else in this world.
But it's a hardy crop that can withstand a Difficult growing conditions from year to year and tends to produce relatively consistently.
Okay, well, are they?
Because I'm a bit confused by this.
On the one hand, it's quite a thirsty tree compared to perhaps others, right?
But...
You're saying relative, not really?
Not really.
It uses similar amounts of water.
The difference being is in a bad water year, you can still produce a decent pistachio crop.
Uh, you don't want to do that for three or four years in a row, but it's.
It's a more resilient.
It's a hardier tree than some of the other permanent crops that you can grow around the world.
Because the roots go deep, I guess the roots go deep.
And it's a, yeah.
And it's by.
By its nature, it's a.
It's a, It's a tree, it's a bush that has grown historically in dry, semi-arid deserts.
I mean, the other producing countries in the world, Iran, Syria, all have similar water concerns.
Spain is another example, and yet still produce water. high quality pistachios.
So it is a tree that If you're going to grow something in semi-arid and high desert areas, it's a good one to grow.
OK, let's go back to this craze then for pistachios in chocolate.
I guess everyone's favourite subject, particularly in your industry.
How are you managing with those demands for production and for export?
We are grateful that our growers in years past were thoughtful about what a future could look like, with more people eating more pistachios.
Um, you know we had have enough production to meet that demand.
It's growing uh, the demand is growing and our production has.
Uh, the number of acres of trees that we have coming into production this, this past year, is now up to 500 almost 30000 acres of trees.
So we are well positioned for a worldwide craze and we are grateful that a worldwide craze hit while we're well positioned.
Yeah, that sounds good.
So, I mean, but what about the...
The tariff situation.
Obviously stuff coming into the United States is being taxed much more highly than it was, or a bit more highly than it was, depending on where it's coming from.
But I mean, does it affect you with your exports?
It could and it potentially will.
I think the area that it's currently affecting us is in certain materials, steel product, other materials you need on the farm beyond just the tree itself and the costs associated with that that are affected by existing tariffs.
Specific to tariffs on export.
We're likely to see some effects of those here over the next couple months as our product starts to hit the market.
But, as I shared earlier with some of your team, a lot of that's a little bit conceptual right now because there's a lot of headlines about tariffs.
There's not a lot of things that are locked into place today.
So it affects us because the buyers, there's some skittishness around buying.
Certainly the export markets.
People making decisions based on what could be the case as opposed to what is the case right now is probably our biggest challenge.
Zachary Fraser of the American Pistachio Growers Association.
Thanks.
The chase is on this week for French and international investigators.
They need to track down some audacious jewellery thieves before they filter eight priceless pieces of antique jewellery, originally belonging to the French Empress of Napoleon III onto the black market.
The fear, if those jewels do make it that far, is that these historic artefacts could be dismantled and sold for parts.
I've been speaking about this with Christopher Marinello, a lawyer and founder of the firm Art Recovery International.
Keeping items intact is a problem for criminals, because especially high visibility thefts like this Louvre theft.
Everyone has seen the jewels.
Everyone knows that they're stolen.
So the thieves don't want to keep them intact.
There's no incentive for them to do that.
You could say that they're more valuable as historical pieces, but the thieves don't care about history.
They don't care about the cultural heritage of France.
They don't care about anything.
They're just common thugs.
They're not romantic characters that we see in Ocean's Eleven.
These guys are just looking to cash out.
And to do that, they need to break them up.
They need to take them out of the settings.
They need to look at the raw diamonds.
And they need to move them on. in order to sell them.
And the larger stones, they need to recut.
And to do that, you need to go to a place where they cut diamonds.
That's Antwerp, Tel Aviv Delhi, India and find a dodgy dealer that's willing to cut the stones with no questions asked.
Because, as you say, these individual precious stones are pretty big and pretty distinctive.
And to the experts, they know exactly the cut of these things.
So even if you'd taken them out of their settings, people would be able to identify the diamonds and the rubies, and so on.
To some degree.
There's thousands of diamonds smaller diamonds that are still very valuable that I don't think anybody would be able to trace to this particular theft.
But the larger stones, there is a possibility.
But there are always dodgy dealers, dodgy jewelers that are willing to help criminals by asking no questions.
So what is the job of someone like you in a situation like this?
Not that you're directly dealing with it, but what role can you play...
In the effort to trace.
I mean presumably the opening days after the theft are crucial here to stand any chance of getting this stuff back.
Well, jewelry is always very difficult to recover because of the likelihood that they're broken up.
You know, gold is melted down.
We remember the Blenheim Palace theft.
We saw them breaking up that golden toilet as they were walking out of the museum.
Yeah.
So with a painting...
That's a lot easier to try to recover because they may try to sell it at an auction somewhere, or they may sell it to a dealer, or may approach a dealer who will contact us and say I'm being offered this.
Can you tell me if it's stolen?
But with high-profile jewelry...
It's very difficult.
So my role would usually be that you know somebody would contact if there was a reward offered which I had been calling for for some time over the last 24 or 48 hours.
Criminals would call me or someone connected to the criminals or someone who knows who the criminals are, and say look, I want to collect the reward.
I know who these guys are.
I know where the jewels are.
Or they may say look, I don't have any connection to the theft, but I was wondering if there was an insurance company out there that was willing to pay an amount of money to recover them a finder's fee.
Is there any risk there that you'd be literally paying off the thieves themselves?
Never.
We don't do that.
But do you think that there would be even a percentage in doing that for the sake, as you say, of keeping intact a priceless piece of historical artifact that would otherwise be broken up?
Well, that has been done in the past, but it's usually done by governments and with the authorization of the police, like such as the Turners that were recovered.
Payments were made.
It was kind of a ransom, effectively.
Yeah, we don't pay ransoms.
We will pay a reward to somebody who's not connected to the theft, but ransoms are a whole different story.
They're illegal, they're unethical, but there are people out there.
In the art recovery world, who hold themselves out as recovery experts who consistently pay thieves.
And we refuse to do that.
I'm a lawyer.
I'm not going to lose my license over a case.
What chances do you think do the Louvre have of getting their stuff back here?
Very slim unfortunately, because they have a huge head start on the police, who can only find these items by locating all the criminals and sitting them down and demanding that they tell them where they are.
So there's been a race with a massive head start for the criminals.
Chris Marinello of Art Recovery International.
That's just about it from World Business Report.
On the day that the media giant Warner Brothers Discovery said it was open to being sold.
From me, Ed Butler, and the rest of the team, take care.
