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Today we take a look at momentum for cruise lines in twenty twenty four.
Plus the future of award shows may be at risk. But first, it was a real week of earnings with names like Netflix, Tesla, and IBM reporting. For more on the numbers from IBM, we spoke with Bloomberg Intelligence Senior technology analyst an Arab Rana.
One of the biggest things we talked about was the free cash flow number came out at twelve billion. I think we were you know, we were slightly above the street and saying that, you know, I'll be happy if they do eleven billion. So I think that really speaks both to the organic growth rate of the company, operational efficiencies, you know, improving margins, taking care of accounts, receivers, all
sorts of things. So I think it's really good print for IBM in terms of free cash flow, but also the you know, the guidance on the you know, organic growth rate because we were going in so in fourth quarter they did three percent growth rate in constant currency. We thought, at least for the first you know, few quarters, they're going to talk about three to four percent and then accel rate, but they strayed away went with a
mid single digit number. So I think overall, good for IBM, good for the rest of the tech space, and I feel pretty happy about it.
What I know, this is kind of a probably dumb question, but like what in IBM's business model to let it like me, are they doing well, like break down the different categories in a way that makes sense to alex So they I mean.
They still are a very big piece of the entire tech ecosystem. They have very strong relationships, they have a good consulting business, they have red hat, they tell mainframes. Now, remember one thing, I mean, I know people got very getting very excited. But if software spending is climbing between ten to twelve percent, IBM still growing you know, six to seven, So they are still underperforming the entire broader software space. But that's okay because you know, when you
go from three to six, that's a big change. Also in terms of the growth rates. This is just a matter of overall tech spending improving after two years of under investment. This is something that we have been saying for so long. Tick as a portion of total GDP is a very small number. Most of the companies around the world, barring the consumer technology companies that we see,
have underinvested in technology. So when you have rail companies or airlines or auto insurance companies, they really need to be more digital. And one way to get digital is to move a lot of their infrastructure to the cloud. So all of those things play in well. We have not seen good spending in two years. I'm pretty happy that twenty twenty four May we may see a rebound.
How does IBM and fit into the AI discussion, because I know the CEO called out the client demand for AI is accelerating. How do they play in that space.
The majority of the stuff that they're going to do is on the consulting side. So if you are a large company, you need to figure out what to do. They have a lot of consultants that can help you clean up the data. You know, use whichever model we want to use. You want to use something from open ai Andthropic, all these companies that are out there. They'll help you with that, help you train the models, and then at the end of the day make it for
your business case. It's not as easy as just you know, using chat, GPD and answering questions for this. For an enterprise use, you need to do a lot of data clean up, data aggregation because that's what's needed to clean up your you know, the models itself.
How fast and long can that kind of growth rate six seven percent go?
I think if this year they are able to go to six seven percent, you know, I could expect then you know, another one hundred to two hundred basis points improvement next year. And that's actually not a bad deal because you remember the old IBM just about four or five years ago, they were not growing at all. So in order for them to actually come up with a high single legit number next year would be would be really welcome by the market.
So what's the read through here, Anna rog for you know, greater tech here from IBM? Is can I say I'm just going to go out and start buying more of these stats I'm looking at like Nvidia for example, up twenty five percent year to date and of course up two hundred and twenty percent over the trailing twelve months. I guess this is a pretty good readthrough? Is that? Can I do that?
Yeah? So, for you know, we had run a CIO survey back in December, and you know, we were we kind of got the indication that it's going to be a year of spending more aggressively compared to the last two in twenty twenty four. But you know, the way we had built that and you know, we got the chip strength going on right now that probably carries on the summer, and then after that we see you know, strength in the software and the consulting area, which are
more of the downstream play. But it's possible that we may see that bounce back, you know, as early as second quarter road, you know, going into it because you know things, I think the leading indicators are good at this point. So so I'm pretty optimistic that you know, when we were thinking about a second half recovery for tech spending, you know it may actually happen in second quarter road, maybe even as late late as first.
Quarter our thanks to Bloomberg Intelligence senior technology analyst and er Agrana.
Let's turn out to airlines or names like American, Southwest and Alaska air surprised analysts by beating expectations for more. We spoke with Bloomberg Intelligence senior defense and airlines analysts George Ferguson.
You know we got American, Alaska and Southwest yields were down in the domestic business on all three. Alaska yields were down six or seven percent, American yields down similar number. Southwest really just let a load factor fade away into the seventies and took a yield down to two percent. So to me, you know they're guiding to better results is as you know, next year, as we get into one que doesn't look great, but as we get past one queue, the overall guidance for the year looks a
bit better. So airlines, I think, I think things are going to affirm as they get into next year, but I don't think it looks like a healthy market at all. From the numbers I'm seeing huge.
Forour So give us a sense of where we are and just in terms of air travel, have we established a new post pandemic normality in terms of where leisure traffic is and where business traffic is? Do we kind of know how that market looks?
So comments from United where that business traffic wasn't back to the twenty nineteen levels, They said they saw hopeful signs in one queue, So business hasn't come back fully. Is this the new normal? I would guess it is right because we're, you know, we're I don't know when the pandemic actually sort of ended, but we're probably a year and a half passed, and I would expect most of you know, normality to have returned to our lives.
So it seems like we still have some level of deficit on pre pandemic business travel, but leisure travel has definitely exceeded that. I think the airlines are just sold capacity. They would have sold the businesses into the leisure side, and I think that's making the fair softer.
So you say that the quarter did that great, first quarter looks soft. I get that, But then you said that after Q one things start to look a little better. What's going to look a little better. Is it business travel? Is it we just keep doing vacation stuff, we do it domestically rather internationally, or is it still across the board.
I said that after Q one, the airlines, I think it's going to look better. I don't see it right. I think the big leisure bounce back was last year twenty twenty three, and I think that you could see software domestic yields all through the year. But you know, we had Scott Kirby at United Airlines earning earlier in the week and he's telling us how you know, he's getting traction from premium products and that's going to help
and drive better profitability through next year. I mean, you know, companies like Alaska they have premium product, but I think they're a roughly the same amount, unlike United that's adding it. Southwest has no premium products, and there's a lot of other airlines that have no premium product, and I think they're going to be fighting for the base leisure traveler. I think it's going to be difficult. But George against the airline that they see it coming.
Sorry, George, you're at in Los Angeles the Aerospace Supply Chain Conference. How is the supply chain for the airline industry? Can they get the planes they need?
That's rough. So we saw the news. I'm boeing about not allowing them to increase the discussion that the Aerospace Supplier Conference is all about labor, labor and labor. There's been a lot of turnover. Yeah, there's a lot of turnover in the industry. The backfill needs to be trained. They're not fully trained, they're not efficient, and there's still people having a hard time finding and so the US
aerospace industry is in pretty tough, tough straits. I think I think young kids, you know, a lot of discussion here is that young kids, you know, young professionals don't want to come to this industry. They'd rather work for Amazon, they'd rather work for Google than go to work in the aerospace industry. And so having a real hard time backfilling and training and keeping people in the industry.
So to that point, what happens if Boeing isn't allowed to produce the plane that the FAA said, I can't even treat keep track, to be honest with you. But if they can't produce it, what happens to those that have ordered it?
I mean, right now, what the FA said is that Bowing can't increase production right, increase of the mits they're already building. They were building about thirty one a month last year. They were supposed to rate break to about thirty eight a month at the end of the year. The question is have they so will the FA let
them continue at thirty eight? And then as I understand that, the FA is going to inspect their manufacturing processes because they're quite concerned obviously after the Alaska incident, to make sure it's stable, make sure that Bone can build aircraft safely. So my guess is you've got something that's going to last part of this quarter. I mean, there's only so many sites that can really inspect, right. You've got a lot of inspection down in Wichita, a lot of inspection
up in Renton, Washington. Those are the two main factories. If they could go deeper into so many other suppliers, which they probably will, but there's not a lot of sites to inspect. My guess is that deliveries for customers that expect the airplanes in twenty twenty four could get pushed out, probably will get pushed out, maybe into twenty twenty five. Could be customers core customers like United Southwest, Ryanair, Alaska Airlines. They've taken the majority of the orders recently,
so you'll hear some howling from them. I think you already hurd some howling from United CEO Kirby right on the Max ten. So I think that's what's you go to see deliveries getting pushed out and pushed into next year. Hopefully boll And can recover that and bounce to higher rates. That's all about their recovery.
I mean, I just kind of feel like they're kind of too big to fail, or too big for anybody to really do anything, because it's a daopoly them an airbus. But what is it like a downside scenario here for Fox? It would it be government regulation, would it be what's kind of spooking the market?
Well, I think you already have part of that downside, right and that's more intense oversighting regulation. Frankly, that probably should have occurred anyways. You know, the FAA has also going through some difficult time during the pandemic, lost a bunch of personnel. They need their skill sets developed sharpened, so this process could be slow.
But I don't.
I mean, I do think they're you know, I think they are close to too big to fail, given that there's such an important government contractor you know, one of the few big primes that can make airplanes in serial production. Question is, you know, what could the government do if they had real big problems on the commercial side. I don't think we're there yet, though, I think it still
isn't duopoly. If you wanted to get in the back of the line for an Airbus eight three twenty, the competitor right now, you know, if we just add up all the orders they have in their production increases, you're out eight years. I think some of those orders are definitely long data orders, so maybe if you got in the back of that mind, you'd be out five or six years before you started getting airplanes. That alone is going to keep Boeing, keep folks going towards Boeing for airplanes.
But that's only if things don't degrade from air things degrave from here, you got a much bigger problem.
Thanks to the Bloomberg Intelligence senior Defense and Airlines analyst George Ferguson.
All right, coming up on the program, Baker Hughes breaks free from rivals with a lower shale view. This year we speak to the CEO.
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Conflict in the Middle East and uncertainty in the global economy have the energy sector facing a lot of unknowns.
Baker Hughes, the world's number three oil field contracted by market value, is also filling the pressure. This week, the firm announced earnings that will blow expectations and analysts are raising concerns, all right.
To take us through how Baker Hughes plans to manage all the risks facing oil, we spoke to Lorenzo Simonelli, Chairman, president and CEO at Baker Hughes.
First of all, we're coming off some great results in twenty twenty three, and also we've laid out a clear strategy as Baker Hughes over the coming years. As you look at twenty twenty four, we've given a guidance that is the balanced approach with all of the geopolitical and also onsetty that's happening around the globe. So we stick to our guidance and we think that we're executing and as you look at the guidance, we've got considerable growth in twenty twenty four and great performance as well.
So if you're more conservative than your peers, where is the question mark? Is it going to be the new energy orders? Is it going to be on shore demand or is it going to be offshore? Is it domestic or international that has you thinking questioning the most.
You look at what's happening around the world, and you see the geopolitics, you see what's happening from the opequ cuts. You see what's happening from the consolidation in North America, and that leads some uncertainty relative to the activity levels
within North America Land. We still see that North America should be flatish, but US Land will likely be negative for the year given some of the consolidation, and also some of the activity international again will be in the high single digits, So we still see that being robot and I think again, as we look at giving guidance, we're taking a balanced approach to what's taking place around the world at this moment, and also giving a predictability to our investors on what can be achieved and also
confidence in what we can achieve.
Lorenzo, I just looking at your business here and I see that about three quarters of your revenue has comes from outside of the United States. So obviously you are attuned as much as anyone to the geopolitical risks around the world. What are you telling your investors about what's happening in Eastern Europe, what's happening in the Middle East, and how that may impact your business.
We're telling them that we've taken every caution and also we're managing the situation. We haven't seen any impact and we don't anticipate a big impact, but we do think some of the development plans may be delayed slightly over the long term. No change in what the NOCs and also large customers are laying out from a capital spend,
but there may be some i would say delays. Again, as we look at the outlook internationally, we're still anticipating high single digit growth and we think that international is a key place for us to be and we look to perform there over the coming years.
Lolrenzo, what's your take on the demand side.
Well, Alex, it's always difficult to predict some of these elements, just like it is oil price and you know this space well, I think demand continues to be robust. A lot of it's going to depend on the economic situation as you look at some of the events unfolding also globally, and we anticipate that again demand will increase this year and continue to be strong, especially in the developing world.
What are your customers telling you here? I know obviously close contact with them. What are they telling you about their spending plans over the next couple of years?
Again, it varies. You've seen in North America obviously some consolidation, so people are going through that consolidation and they'll be looking to adjust some of their spending plans in the short term, but again continuing to be robust on the long term as you continue to see the demand be there. On the international side, these NOCs have multi year projects
that they're executing. There'll be some variation in the timing of those, but again the long term continues to be solid, and as you look at our guidance, again we're anticipating that maybe there's some tempered view on some of the case of the developments, but the developments are going to happen.
NC Paul just you know, national oil companies just pull up with the oil jargon there, Lorenzo, you mentioned the M and A situation, and I find that so interesting because that was one of my questions to all these CEOs when they announce these big mergers, is are you actually going to be slowing your oil production growth over time? And they're all like, no, no, no, no, no, it's going to be really good, it's going to keep growing.
What do you think that timeline actually looks like? In the beginning, their synergies, they get more out of the ground, but then that tapers off. What do you notice?
So as you look at the normal evolution of consolidation we've seen this cycle before. You are going to continue to see production increases, but you're also going to see synergies between the consolidation and as they go through their integration activities, I think you'll likely see some temperate measures relative to some of their procurement, but again production, they're going to seize the opportunity to continue to increase production as the demand is there.
You know, I'm not an expert in this, unlike Alex, but a term you see here a lot, and I don't hear it that much anymore is peak oil? When are we going to be at peak oil? Are we at peak? I don't hear that discussion anymore. So when you're talking to investors, how do you talk to them about the long term kind of demand for oil?
You've got to look at it from a standpoint of the energy transition is going to be multi decades and it's going to require an energy mix that is abundant of providing as clean as possible fuel sources to the public, and that means oil is going to have a role to play, and we see oil and gas in particular having a strong robust outlook as we go forward. And the question on PEA coil has been asked many times.
There will be a time when PEA coil comes. I think it's not at this stage, and we continue to focus very much on gas and also LNG.
Lorenzo somehow restricting LNG exports in the US is becoming something people are talking about. The permit process has gotten a lot slower.
What is going on, alex It has gotten slower, and again we're monitoring the situation, and I'm disappointed because as you look at the benefits of USLNG not only for the US, but also for the world and also what's been achieved with the geopolitical uncertainty and also providing to Europe, there's been commitments that have been made and we should continue the USLNG exports and also the permitting of these projects.
That being said, international projects are continuing to move forward, and we have an expectation that again in twenty twenty four there'll be sixty five mtpa FIDD, and we're again seeing about thirty to sixty mtpa FIDD in twenty five and twenty six and by twenty thirty there'll be a global capacity in place of eight hundred mtpa. So you know, we'll monitor the US situation. It's disappointing. I think it
will sort itself out. There's been a lot of commitments that have been made to international partners.
Lorenzo, I really appreciate that, the conservative approach and then sort of moving a lot faster in the next couple of years. Thanks a lot. I look forward to seeing you next week in Florence, Italy. Thank you, Lorenzo Semonelli for what good He's chairman, CEO and president of Baker Hughes. Now we're going to do something that only Paul and I can do. Talk to a CEO, then bring a Bloomberg Intelligence analyst who's been covering the company for years on to then talk about it. This is what we
can offer you. On the Bloomberg Inteligence Show every day Scott Levine, he covers oil services for Bloomberg Intelligence. What did you make of the numbers? And just talking with Lorenzo in the last ten minutes.
Frankly, the guidance that Baker gave for mid teens EBITDA growth is almost identical to what SLB gave. I think the difference here is probably the conservatism around the messaging. Number one, certainly the mid load to mid single digit decline that they're calling for spending growth in North America, high single digit growth in international trails what we saw
out of both of those two companies. And then secondarily, you know LNG, as you mentioned, is a really big driver for Baker, that's unique to them, certainly much more so for them as a producer of modules for LNG plants, which neither SLB and holl do. And I would say that the commentary there was maybe a little bit more downbeat as well. They're looking for modest growth FID capacity this year. They focused more on some of the businesses
outside of that. So I think it's probably more so the tone out of Baker being a bit more sober than the guidance per se, which was in line with consensus. And the growth outlooks similar to what we saw it at the piers there.
So I'm looking at the an R function for Baker, Hughes, Hallibert, all the comps. Street likes this stuff. They like these oil services companies. What's the bull call on this? Is this people you're going to need oil forever.
Yeah, well, you know, they are investing in the future with the energy transition and the new energy business as well.
But I think you.
Know, so, look two years ago, twenty twenty two, this group was outstanding, right, you know, the group was up sixty percent, the market was down closed to twenty percent. Last year, the group performed okay in a much stronger market, and the growth expectations for the group have moderated and
are moderating still in twenty twenty four. I think within that context, folks are still comfortable with large cap globally diversified oil field service companies like Baker Hughes, like SLB, to a lesser extent, Haliburton because they're more focused on
North America. But they're still comfortable with these companies. They're large, they're global, the balance sheets are in good shape, they're returning more than fifty percent of the free cash to investors, and so that appeals to investors that kind of are attuned to this new energy environment where it's discipline, growth and capital returns rather than the wildcatter mentality. So I think it's what I like.
I like the wildcatter.
I like that yeah, I called SLB slumbers. I'm definitely gonna hear from them later, but SLB. So to that point, though, I feel like if you talk to SLB they'll talk a lot about digitalization and all that kind of stuff, whereas Baker Hughes talks really about LNG and they build these big terminals they help to do that, like with the likes of Bechtel, for example. Do you feel like at some point these guys are going to be you can really bet on them different ways, Like I'm gonna
bet on Baker Hughes for LNG. I'm gonna bet an SLB for an AI component and digitalization, Like can I do that yet?
You can? And I think those are accurate depictions of the business. But I wouldn't overstate their significance, Like I feel like Halliburton gets maligned a lot for the North American exposure, and.
They're also solid international.
It's over half their business.
I totally didn't know that until yeah, no the other day.
But SLB is eighty percent international, and these guys are closer to SLB than they are to HOL in terms of that geographic split. So you know, while the statement is true, I think it's it's equal parts branding as it is the business mix, and investors are naturally going to look for ways to differentiate between the companies, and so they'll, you know, they'll gravitate towards the differences more than they will the similarities. But I think there are
a lot of similarities in the balance sheet. All the companies are focused on global markets to more or lesser extent, and so with Baker, the LNG emphasis is a differentiator.
For sure.
They have a much bigger equipment business than either SLB or Halliburton does, and so it's natural folks to focus on that specifically. And some of the weakness and demand out of Europe maybe is weighing on that story a little bit, but it's still a very strong business for them.
That's Bloomberg Intelligence senior Industrial Services analyst Scott Levine talking outlook for oil. Following up on our conversation with Baker Hughes Chairman, president and CEO, Lorenzo Simonelli.
Coming up on the program, We're going to get the outlook on the cruise industry and our award shows Fading from the Spotlight.
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Royal Caribbeans Icon of the Seas embarks on its first official voyage this weekend and the journey is short to make ways.
Oh nice one. Bloomberg Intelligence Senior credit analyst Jody Lourie covers a leisure sector and we spoke with her about it, her sneak peek at the world's largest cruise ship, as well as what to expect from the cruising business in twenty twenty four.
So when you think of a cruise, it's your standard cruise is you have just rooms on the outside right, the balcony rooms that you can see the oceans. Then you have the internal rooms with no windows, and so you just have two rows of that of those sets and then you have a bunch of floors that have things like dining hall experiences that are main big dining room. Then you have shows, right.
So this is Royal Caribbean owns Icon of the.
Seas, right, So Royal Caribbean owns Icon on the Seas.
Talk to us about the cruise business. You covered from the credit side for Bloomberg Intelligence. Are these good credits?
These credits have been a very interesting set to cover. You think about the pandemic and they were sort of written off for dead yep. Now they've had this massive turnaround. The momentum around them has been pretty palpable, and I think the Icon of the Seas, the reason why it's so important is that the narrative around it speaks to this rebirth in the cruise market that we've been seeing.
These companies have been generating cash flow, they've been repaying debt, they've been setting their sits on investment grade and have been targeting it as much as they can. They're really trying to bring down their debt loads. I mean, you're talking Carnival's thirty six billion now down to thirty billion, and it's going far farther down.
So I appreciate that Paul wants to make this about finance and stuff because that's what we do. But I want to go back to what it looks like. So okay, so you laid out sort of what cruise ships normally are, right, So then why is icon of the Seas different? And I'm asking really, because that's where the money's going to come from thro that paydown debt, So like it's kind of a market question.
It is definitely a market question. So it's the wire people going to be willing to be one of the seventy six hundred people on this ship in addition to the twenty three twenty four hundred crew. Well, they have things like six water slides. They have ginormous areas for children as well as, of course the Kids Club for you to just check your kids in and leave them there for the whole day. They have different specialty restaurants where they try to rival something like a Las Vegas casino.
The feel of it, the look of it. If you look at it at night, which I got to see at the night before I drove by it, it looks like it's lit up like your Vegas. It's like Vegas on water, And I think that's what they're trying to compete with. And I do know for a fact that you know, we actually got to sit down with management a month ago at the Celebrity Ascent naming and they.
Be Celebrity naming. What now what celebrity a scent?
So Celebrity is one of Royal Caribbean's cruise lines, right, So they have Celebrity and they have Royal Caribbean. The Ascent is their newest ship. It's one of their Edge series and they had a naming so all ships have this big naming ceremony where they break the bottle of champagne. They have a godmother or godfather of the ship and they have this whole big ceremony and it's a big party. So they invited us finance folks on there as well, and we got done with management and it was before
they were in their quiet period. They basically told us that they don't see the other cruise lines as competition. What they see is competition is on land vacations.
It's interesting.
So your casinos, your theme parks, that's where they see them taking share or that's where they see people convincing people to go elsewhere, not to the hotels. And the casinos and the theme parks, but on the cruise ship entirely.
What are the cruise companies telling me about businesses? Revenge travel over Hou's business in twenty four.
So more so than what management is saying. We actually ran a survey that we did. The results quite a substantial number of people want to travel and want to spend more when they travel this year. So even though revenge travel as they call it, post pandemic revenge travel, that's the people who are cooped up inside want to go play, don't care how much they spend, even though that might be fading, and a lot of companies have indicated that. At the same time, the conversation around people
spending on experiences is still very much there. Whether that holds up into the end of the year as we see what the FED does, as we see all the different sort of economic points and pain points come out, I think it remains to be seen. But we are seeing that people are prioritizing experiences over stuff and they
continue to do so. And the way that the cruise lines benefit is that they get to encourage people to spend on onboard spending, so all the add on features, so you go to their perfect day Coco Kae Island. Guess what you want? A cabana and no other fifteen hundred two thousand dollars for the day.
All right, Speaking of this research, you can go to you can just get Jody Louri's bio if you're sitting in front of a terminal and put a buyo up there and the list all her research and that's the top research notice point published today focus on cruising in twenty twenty four BI survey. So check that out.
I'm still were well, here's the thing.
We went down to rub but we went to a resort. They give you the little bracelet. Yeah, oh man, that's your key to your room. You want to buy anything, you just go bank.
Wow.
They make it so easy and you know you're.
Doing it, and all of a sudden you're paying. You're like, wait, what this was all?
That's why this year we went to an all inclusive.
Yeah, oh that was the way.
Aren't there also addams for all inclusives too, Like all inclusive, but this super fancy restaurant isn't included.
Now, I mean, if you want to buy like a bottle wine, that was extra, but I should have done that one I had four kids. Because you check out every resort and your bill is like fifty pages.
I mean, we're seeing that Marriott, we're seeing four seasons. They're going into the smaller vessel ships. We're seeing that people who used to like Crystal, which was the high end and it went through a little bit of a restructuring, just a little bit that people are then going over to these higher end ships, and they are also going to the Norwegian higher end line. So Norwegian has a few higher end lines, Carnival has a few higher end lines.
So people are moving to their from these other ships. Because they are smaller vessel, they are much more manageable. You're you're viewing it both as a way to lounge but as a way to get to a room.
But what kind of like this reminds me of is what people are doing with the airlines. Right, no one wants basic economy. They all want to trade up. So everyone goes to business class, and then all people who normally fly business class, like get me out of here, they go to first class, where they go to private Like I feel like it's it's just sort of the up tier at the end of all everything.
So everybody wants to feel like a VIP.
That's that we're not VIP.
I know, that's the model. I mean you look at all the rooms. I mean they have the suite room, and they have this sweet room, and the presidential suite, and then this suite and then that suite, and that's all designed to make everybody feel special and feel like they're a VIP, and also to make it instagrammable, because that's the age where.
Jordy was posting on social and she had a lovely room with a lovely view.
That it was great fe I mean, any view of the water is a great view.
So just to end for a moment on finance stuff, would you like any of these credits? Like what's your favorite play?
So I do think that the cruise lines in general still have some room to run as compared to other parts of leisure. I think that other parts of leisure, it's really more of a company by company's story. So something like a SeaWorld has been repaying debt, they've been restructuring their capital structure and it's been very positive for them in that sense. But from a momentum in terms of travel, that top line isn't necessarily going to grow as much. We're still seeing that the cruise lines are
benefiting from that booking. Similarly, we're seeing a mixed result in the hotel space. So you have the Marryouts of the world, you have the Hiltons of the world. Those companies have been improving from a growth standpoint and have
been focusing on other parts of the market. But you have something like a Choice that's in a hostile takeover with Windham and so that kind of throws it out the water and you say, Okay, we don't really know what we're going to do with this, but this is a company that is not necessarily in good standing from a credit quality standpoint.
That was Bloomberg Intelligence and your credit endless, Jody Lori.
Let's turn out to entertainment, where waning audience numbers are causing big concern for ward shows.
Like the Oscars.
We spoke with Bloomberg Opinion columns Bobby Ghosh about viewers are less inclined to watch a three and a half hour TV extravaganza.
So you know, all the award shows, Oscars, Emmy's Golden Globes, the audiences have been dropping precipitously over the past decade, It used to be that an Oscar night would be forty million viewers, and then it became about thirties. Now it's down to you know, if they get ten twelve, then they're lucky. Last year there was a little bit of an uptick. I think a lot of people sort of basically dialed in to see if there'd be a repeater of Will Smith's slap on Chris Rock. There wasn't
a slap This year. Ironically, the nominations are going to get a lot of buzz for the reasons we've just been talking about. Because Margot Robbie gets snubbed, because Greta Gervik gets snobbed. There'll be a lot of buzz around the nominations, but for those exact same reasons. I suspect
few people will watch the actual oscars. It's too long, it's you know, they're just too much sort of pomp and circumstances, very little actual content, and most people will will consume the highlights on YouTube and on TikTok on.
That's not what the ABC Television network wants. They hear that means because they I mean that's historically these events which the CEO of former CEO of CBS would call oh wow, events, that's what brings in huge advertising dollars. So well, that's just another emblematic of the overall issue of TV cord cutting.
And so yeah, they'll sell out the ads. They sold out the ads the last time as well, last year as well, but at a lower rate. So that's something that they need to worry about. If they'll you know, sufficient numbers of people will tune in that advertisers will still remain interested in the event, but for progressively or you know, smaller and smaller amounts of money.
Here goes this. This is the sales pitch that broadcast and cable television have been making the Madison Avenue for thirty years. Yeah, okay, here's the pitch. Right, I'm going to give you no inferior product what I gave you last year. I'm gonna charge you more.
That's not going this way.
And it works every single year.
So they're charge more for the space right now.
Every year up until the last couple of years when court cutting became so bad. But broadcasting cable television, which is yeah, I know my ratings are down because there's five hundred and more channels, but still I have the biggest audience at CBS. Yes, it's half of what it was ten years ago, but it's still bigger than anything else out there. Oh by the way, for that, I'm gonna charge another five six seventy percent. And that worked forever. Now the issue is, I.
Don't think that can be sustainedful very well.
So yeah, I don't know.
Yeah, I think again. You know, unless you're.
The super Bowl. If you're the super Bowl, you can go.
This is a different category. Yeah, But you know, sports, if you're a fan, you don't want to just watch the highlights. You want to watch the live performance. But with Oscars, with any award show, more and more people are quite happy just to see the highlights immediately after the award is announced. They don't want to watch the whole awkward moments, the awkward moments, the songs, the skits. You know, it seems like too much of them.
Used to be that used to be must watch it really, I know it does that. John Tucker's the whole World's coming to an end.
I would have oscar parties. Literally, we'd like do both. We put in money. We like people walk home with a couple hundred bucks, like it was it was like, I guess you can the people in my home. Sure, I mean, oh, like in the reality of the maybe maybe.
But but what I also wonder too is do you think that these kind of live events will go the way of sports in different ways of viewing it like we saw WW and Netflix for example, Like would Paramount be like, hey, let's just air it streaming and save something like that thing?
Well, I think you probably if the audience continues to shrink, they'll have to find new ways of making it relevant. You know. In time, I think you'll see the duration of its shrink. I don't think a three and a half hour program, which invariably goes closer to four hours, I don't think that's sustainable anymore. This year, they're bringing
it forward. They're starting broadcast in an hour early because they're conscious that in that last hour past bedtime in the East Coast, a lot of people the next day is a school day, lots of people just switch off, and that's a real problem for them. So they're bringing it forward to try and see can sort of juice the audience that way. I think you'll probably see certain amount of stunt casting in the in the people who are host to presenters that we've seen that happen in
the in the Olympics, for instance. You know, Olympic audiences have been down. NBC has been bringing in people like Snoop Dogg right to try and get audiences interested. I say, okay, let's have a let's have a switch and get some Olympic performers to present the oscars. I'll watch them on bios.
ABC doesn't totally.
ABC doesn't have the rights of the Olympics, that's true, but you can bring an athlete in. So yeah, exactly, Well that's the good thing. I mean, bringing in athletes to just some stunt hosting.
Yeah.
I think you'll see progressively more and more desperate attempts to try and hold on to that audience. But I think that ship has said O right.
Thanks to Bloomberg Opinion columnist Bobby.
Goesch, that's this week's edition of Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries.
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