From Mahart. We're Innovation, Money and Power Collie in Silicon Valley, NBN.
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I'm Caroline Heiner bluemgg's world headquarters in New York, and I'm Ed Ludlow in San Francisco.
This is Bloomberg Technology.
Coming up Paramount Warner Brothers. Are they in talks for a possible merger. We're going to break down what we know on any talks between the two biggest media companies in the world.
We'll get the outlook for the tech sectors.
Then, as that one hundred bounces back from a sell off, the knocked it off record highs dnny Fish of Janis Henderson in the house.
Plus Apple rams up production of its Vision Pro headset, so in the stage for a launch by this February.
The one story that everyone's talking about.
Warner Brothers, Discovery and Paramount have held talks about a merger.
According to Bloomberg's sources.
Who else to turn to on the details than Bloomberg's Lucas Shaw, who leads our screen time coverage of Global Hollywood And Lucas what do we know?
Well, we know that that Warner Brothers Discovery CEO David Zaslav had lunch with or had a meal with Paramount Global CEO Bob Backish, and that there have been sort of informal conversations between the two companies, also involving Sherry Redstone, who sort of controls Paramount.
You know, it's early.
Warner Brothers Discovery can't even do a deal like this for a few months because of some complications or some tax issues related to the deal that they did. But look, we have been assuming that there would be greater consolidation in the media business over the last few months, and a deal between these two is one of many scenarios it's been proposed. I don't think this was a huge
shock to anyone. I think people may be a little surprised by how quickly it came or at what point they were thinking that maybe there'd be some discussion in spring of next year.
I think that's exactly it isn't it, Lucas.
Everyone's been deciding how we're going to see consolidation. Everyone's been eyeing, you know, the ongoing narrative that maybe Paramount's going to be selling off some of its assets, but ultimately have we sort of open Pandora's box here.
Can it be closed that.
These sorts of companies actually are a going concern in their current scenario and their current forms.
Well, it's a good question, and some of that is really up to Sherry Redstone, right, she has to decide what she wants to do with her family company.
That can mean that she.
Sells it for pieces, they have explored a sale of bet they've been approached about someone who wanted to buy showtime, or she can try to sell the whole thing, or she can try to buy something or hold on.
Most people assume that things.
Are going to get worse before they get better, and may never be able to get better. You know, the linear TV business is just moving in the wrong direction. But that's what happens when a family controls a company, they get to decide what.
They want to do.
We want to thank you, Lucas Shaw just all across this story as always and throughout what's happening in the world of Hollywood. We're now joined for some more perspective on an analyst who's kind of been calling this joining together of two of some of the biggest companies media companies in the world she's over at Needham Senior Entertainment and Internet. Aalyist is Laura Martin. You've got a hold rating on Aller Brothers Discovery shares, You've got a buy
rating on Paramount and naturally. Back in November, we're thinking about how these two juggernauts could sort of perhaps be bigger than the some of their parts that they come together.
Do you still stand by that? Do you think they could be better together?
Yeah?
I think they'd definitely be better together because both of their streaming assets at Paramount Plus and HBO Max or subscale, but you put them together, they would be bigger than Netflix or the Disney Plus bundle with Hulu, so that would make them They got way too much debt over at Paramount. When you put these companies together, especially if you issue equity to do the deal, suddenly the enterprise
isn't as overlevered. And we've got a world class cost cutter at Warner Brothers Discovery, so we think they could get a billion to two billion dollars worth of cost cutting if you put these companies together, which would delver the enterprise much faster than either company can delever standalone. So we think these two companies are worth more than the some of their parts. Importantly, Amazon and Apple are
DC contacts. I would not be allowed to buy Paramount or anything else really but not be allowed.
And because Paramount owns CBS, which is a.
Broadcaster, Disney can't buy it because they own ABC, nor can Comcast buy it because they own NBC.
So limited. The number of people that are big.
Enough and could buy Paramount, including the CBSS.
Is sort of limited to Warner Browners.
It's sort of the only bidder.
So on that point of Paramount having something that Warner Brothers doesn't CBS to traditional broadcast network. In the Axios report, they made this idea that Warner Brothers executives see that as a reason that it might pass the regulatory test that they are acquiring something or would acquire something that they already have.
I agree with that.
And also regulators really care about the number of local voices and CBS broadcaster in the hands of Paramount, where the debt is fifteen billion and the equities ten billion, which actually has the risk of financial distress which means CBS might cease to exist, is they should, they would be happy, I think to put it with Warner Brothers Discovery, where the whole enterprise becomes less leveraged overall, which increases the chance that CBS can survive as a local voice in every market.
I think back to some valley earlier in the year. The same existential question still is there. How do you make any streaming platform profitable? And in that respect, Laura, how would this deal achieve that?
So everybody's raising price, right, we have streamflation, I mean streamers.
Are taking inflation.
Nice streamflation up thirty to fifty percent.
So everybody's raising price and you must cut content costs, you must, and they are are doing that. So we're getting higher prices for consumers and lower original content.
So the consumers getting squeezed in this.
But Wall Street and the consumer are often at odds, and it is time to play wall Street's game because these stocks are down sixty to seventy percent because Wall Street is moving capital out unless you consolidate, which drives earnings for share growth, or unless you get profitability in your streaming assets.
What other configurations do you see, Laura, if this is to you the better outcome, what are the other areas?
What asset sales you anticipating?
We keep on talking about it around Paramount, but sometimes market narratives get ahead of actually what would really occur.
So you know, we think that.
The streaming So right now consumers have five streaming platforms and the biggest frustration for consumers is it feels like no matter what they're paying for the content on something they're not paying for. Super frustrating for consumers. So you know, I think at the end of the day, there are three big streaming platforms total. Amazon Prime Onion will be one of them because Amazon the entity never needs to make money on its video service. So Amazon Prime winner.
I would guess that the Disney Bundle winner, although I would like to see Apple by Disney, but can't be done so long as we have the current administration because big is bad in Washington, DC right now. So then that's the third. A lot of people will put Netflix in that camp, which means there isn't room for Peacock, which is owned by Comcast.
There isn't room for Paramount Warner Brothers.
But it just tells you there should be more consolidation in this group in the larger entities.
Well, all you've just done is list off every subscription I have in my household.
And you raise a good point that that's a lot.
I mean, let's go back to the point that content is king right, and this deal we'll do Apple and Disney on another day, Paramount and HBO Max. From a content perspective, I think of The Last of Us being my favorite series of the year. Is there a content advantage to doing this, Laura, Yes.
Absolutely.
One of the largest film, largest and high quality film libraries sort of on planet Earth is that Warner Brothers Library CBS, which was the number one TV network okay with NBC taking like sixty years for the last fifty years, has the largest television library. So putting these two libraries together, you end up with sort of an unparalleled, enormous IP content library that you can then make sequels from or license to other people. So yes, the library would become
best in class. And that then feeds your streaming app, which would be the combination of HBO plus Paramount plus, so you'd get a really big streaming app, and you would have the option to license content to other streaming apps if you wanted, like Netflix, if they wanted to pay a fortune for a couple of your mission impossible movies or er some of your great ncis some of your great CBS long running TV.
Shows Needums or a Martin.
You have an encyclopedic knowledge of what to watch literally as well as good insight on this deal. It's great to have you on the program again. Okay, there's just a few days of trading left. In twenty twenty three, the market winners of the year have been tech stocks, with then as that one hundred outpacing the S and P five hundred and fifty percent or more than fifty percent gain year to date. That puts it on track for its biggest annual jump going back to two thousand
and nine. Joining us here in San Francisco on set Danny Fish, portfolio manager on the Global Technology in Innovation Team at Janis Henderson. If you go back two years or five years when I moved to the Bay Area, or with respect to nineteen ninety five, when you move to the Bay Area, technology comes out on top, it will it continues to come out on top?
Is the question?
Yeah, I mean it's it's a really good question. And I you know, given the secular trends that we have in place in the foundation that we've lead over the last twenty five years, I firmly believe that's the case.
And the reality is.
If you look at the tech sector in general, look at now at this point in time, by the end of twenty twenty four, if you look at the largest spenders on CAPEX globally, seven out of ten of those are going to be technology companies. If you look at companies that are spending the most on R and D across the global economy, six or seven out of the
top ten globally are tech companies. The scale that's required to compete on an ongoing basis is at an immense level that continues to advantage the magnificent seven, let's call it. But then in addition, there's so much innovation that's being unleashed in areas like artificial intelligence that are taking the handoff from the generational value creation we've seen in cloud and SaaS and other areas of the economy.
I mean, AI seems like the easy catalyst to point to. Th if I punch MRR into my Bloomberg terminal and just bring up the top performers on the nastat idea today, Nvidia has been the standalone top or former.
I get that story.
But next you have names like Meta, AMDs not far behind, but then Door Dash, Tesla, Brolcom. Is there any commonality in AI or something else.
Well, there's some commonality. Most of those companies that you just mentioned in one form or another are instituting AI into their business, either to sell it directly to consumers or businesses or to enhance.
Their value proposition.
So I view AI as an enabling technology that companies and the long term winners are actually going to leverage in ways that create durable competitive advantage. And that's not going to change in twenty four. Now. Look, the market finally woke up to AI in twenty twenty three, and I think as we look forward, what we have to think about is now this is where the rubber starts to meet the road, and we actually have to start
to see the revenues start to come through. You know, things like if we think about Microsoft, example and co pilot, you know they're a natural winner with copilot. Do we need fifteen co pilots? I don't think we do, you know, as consumers or enterprises. And so we're really going to see companies start to separate in terms of actually monetizing AI as we go forward.
Denny to that end, Is it then earnings that we have to become obsessive about. Is it are the guides that throughout the year. Is it product innovation and launches? What's going to dictate when we decide which are the winners and losers?
Well, I think it's all of the above, and we're in that position now where the financial performance really needs to come through for the companies that are getting an AI halo effect. But what I would also say is, you know, if we look at you know, you were just talking about Micron, there are actually parts of the technology market that have actually underperformed, but where there are really high quality businesses. And you know, memory is an area that you know, it's you know, there are three
providers globally. It's been in the most significant downturn we've seen in many years because of the overbuild during COVID,
But now it's slowly starting to improve. And you know the most important thing for stocks like that is when things start to improve, And that has implications across both memory providers as well as semiconductor capital equipment providers that actually provide the equipment to build new fabs to support demands in memory that are being driven by all the things that have been driven historically and now a little bit of a kicker with AI. And then another area
I would point to too is analog semiconductors. They're great businesses, they're GDP dependent, they generally grow to multiple GDP, they have higher operating margins and returns than the average company in the S and P five hundred, and they grow
a multiple of them, and they've really lagged. And so this can be an opportunity with rates coming down with a better global macroeconomic backdrop, that you start to see some areas that don't necessarily get an AI halo but are actually great technology businesses.
I mean, isn't it wild sixty eight percent year to date increase on Micron as an underperformance, when, of course it is when you're looking to two hundred and thirty two percent increase on the year of an Invidia or a Meta that's like more than doubled.
I'm interested in.
Who ultimately should be being avoided, if anyone at the moment. What's interesting is I go to, like, who the worst performing companies on year to date for the NASDAQ one hundred, and it's it's PayPal. I'm interested as to whether you know, it's fintech and those sorts of names still going to be under pressure.
Yeah, so it's a really good question. And you know, PayPal is unique in that it's a classic example of what I would call a value trap. At least over the last couple of years, the company was deemed a winner through COVID. But what's happened is the competitive advantage is for the company have significantly dwindled. The take rate for the company has come in, and you've seen margin pressure in the business. And generally that is is a
recipe for stock underperformance because two things happen. One is the financial performance over the near term period is actually less than inspiring than what investors are looking for. And then investors start to discount the stock and the terminal value because of questions about what the stock is going to be worth over the next decade. And that's what we've seen with names like PayPal.
Denny, it's always great to get your perspective on individual names on the sector as a whole. Pushing forward, Denny Fish, we look forward to seeing you in any year of Janice Henderson say, well, meanwhile, coming up, the Apple rumbling off its production of its Vision pro we're going to be breaking down everything you need to.
Know next time.
Now for Talking tech and first up US semi conductors, they continue to flow to Russian military.
Link companies this year.
That's despite an export restriction aimed at cutting them off. Now, shipments of the semiconductors actually surged in the first half of the year, many of them traveling through Kong on their way to this sanctioned country. Texas Instruments analog Devices emerged as the biggest makers of those chips. Plus, the Biden administration is weighing a tariff to increase in increasing of that tariff on Chinese electric vehicles and other goods in an effort to make US clean energy.
Products more competitive.
The talks are part of years long deliberations that began shortly after Biden took office. And artificial intelligence startup Anthropic It's in talks for a seven hundred and fifty million dollars in funding. That's an evaluation of as much as eighteen point four billion now. The potential deal is being there by Silicon Valley venture capital fair Menno Adventures, startup founded by open AA open AI defectors, focuses on responsible aied all right.
Another top story, let's turn into Apple gearing up for its launch of the Vision Pro joining us down to break it all down is the man with the scoop blue most mark Germin.
We think February for a launch. What do we know? Hi, Ed, Yeah, thanks for having me.
So Apple has ramped up production overseas in China of the Vision Pro headset. This is going to be the first product category from Apple since the Apple Watch launched in the beginning of twenty fifteen.
Right now, the plan.
Is to get units stateside and ready to put into customers' hands by the end of January, and they're ramping up for a retail launch late January, early February time financial buy February is what we said. So this is coming sooner than I think most people had anticipated. When the Apple Watch came out, Apple said that would launch in early twenty fifteen. For Apple, early twenty fifteen was pretty much the last week of April. So this is coming quite a bit sooner than I think a lot of
people expected. So we're only a couple months away from this headset. Pretty significant launch for Apple, but it's.
Going to be a bit muted.
I don't think they're going to hold another media event to introduce additional functionality. I think users will either have to experience that on their own through the media, but of course Apple will probably have a ton of videos online on YouTube, on its website, tons of stuff on their website to indicate all the new features coming to the headset that weren't shown back in June at the
developer comp diference. They're already working on a subsequent update to the software on the headset, Vision OS two point zero that'll come out at the tail end of twenty twenty four. So this is a big priority right now for the.
Company, big priority getting their staff train up to be teaching us consumers on how it really works.
Mark I'm interested in.
At the same time, we know that Apple's still having to deal with potentially well already taking the Apple Watches off the shelves and showing that they can't be sold during their holiday period or the back end of it.
Have we got any update on that.
Actually, today is when they're going to be removing the Apple Watch from its online store. That's going to happen at three pm Eastern time noon Pacific. The Apple Watch will be removed. The reason they have to do. This is because they need time to actually import those Apple watches, actually ship those Apple watches, get them into the hands
of consumers. So you have that three four day window before the ban actually comes into place on the end of Christmas Day and December twenty fifth, and then those are going to be removed from sale at Apple's physical retail channels by December twenty fourth, So Christmas Eve and all indications still show that you'll be able to still get one at Best By Target, Walmart. What have you just not an official Apple stores?
Mark German always on the news, We thank you so much.
Warner Brothers Discovery paramount in talks, according to sources, about a possible merger.
Meanwhile, let's just get some of the analysis the takes on this potential set of talks that we're hearing about. So we need an entertainment and internet analyst, Laura Martin. Let's get another take from Rich Greenfield, like sheared media and technology analysts, who will have us be wearing a bit of an asset a Warner Brothers Discovery today.
Of course they made Barbie.
I'm interested in Rich whether you think that sort of content Barbie plus what paramount has would be a good equation together.
Well, putting content together always makes a tremendous amount of sense having scale and content. But honestly, I couldn't disagree more with the analyst's viewpoint before putting two linear TV companies together, Well, one plus one does not equal to as we've seen when you put Viacom and CBS together, you've ended up with point five when you've put those two companies together. Putting one Media together with Discovery has led to, you know, maybe point five.
You put these two.
Now combined companies together, you're not going to get more than two. You're gonna get a lot less because at the end of the day, the problem is linear. Your TV is collapsing, advertising is never getting better.
It's in secular decline. For TV. Viewership is in secular decline.
Cord cutting meaning cable satellite, these virtual cable companies like a YouTube TV or a Hulu Live. The overall number of subscribers are in secular decline. People are moving away from bundles of channels to streaming services. Those are not fixable things. And so when seventy percent of your company is linear your TV, that's Warner Brothers Discovery today, and one hundred and fifty percent of your earnings at Paramount today are from linear your TV. Putting them together doesn't
solve the problem. The way you solve the problem is dramatically shrinking your line your TV business, galing it down dramatically, not trying to enlarge it and try to take out some cost. It means literally cutting seventy eighty percent of the employees at these cable networks, at these broadcast networks.
You have to dramatically reduce cost.
Let's put to one side.
Okay, whether or not you think the deal should happen, Can the deal happen? Would it ever pass the regulatory test?
Well, you know, that is a great question that I think is not being talked about enough actually in the last twenty four hours. So thank you for asking that. The reality is no, I think the odds are actually very slim. But first of all, we don't even know what administration. You know, let's just say this was announced in February or March. Let's just you know, for humor me, you wouldn't get approval within twelve months. You would need
both doj antitrust. You would also need FCC approval. This would be a long, arduous process given a potential shift in the administration.
You know whether that happens or not, no idea.
But the odds of this thing gets approved I think would be very difficult in a democratic administration we have today, given the way they've looked at horizontal mergers. And I also think it would be very difficult in a Republican administration, given sort of their dislike of a lot of the traditional media, news media especially. You'd be talking about putting CNN together with CBS News Good luck though those are not going to be easy transactions.
But again, I don't think it's going to get to that because I.
Don't think there's any real story here. I think this is sort of a There is reasons why both of these companies want to be seen as merger candidates. It's because their businesses are in secular decline and they want they'd like to have some form of M and A happen in twenty twenty four.
The reality is it's unlikely.
And it's certainly unlikely before April, right because the Warner Brothers. Discovery's got its hands tied in terms of doing any sort of.
Deal post the Pride deal.
That they're still sort of putting together, but rich what therefore could happen? Both of these assets, parts of the assets are in play. I mean, goodness, Consolidation across the entire industry is in play. Pandora's box is open. Where do we go? What should be sold to?
Who?
Well?
I think go back.
I mean over the summer, you probably remember Sun Valley Barbieger got up and said, oh, ABC's for sale, or linear TV channels or for sale. You know, I think everybody in the media sector is realizing we've hit the point of secular decline, and so everyone's you know.
Everyone is rushing for the exit.
You know that classic like cartoon where everyone's trying to squeeze through the door. Everybody wants to sell. The problem is who wants to buy? And I think the investors. I mean, I'm sure if you pull up stock charts on Paramount and Warner Brothers Discovery, you'll see both are down on the news.
Investors don't like this.
You know.
More linear TV is not the answer. Anyone who says that putting linear TV in linear TV is going to magically make it better is just wrong. It's a flawed thesis. These companies lead to focus less on mergers and focus more on what is the right strategy. And so the right strategy is not trying to be a streaming company, not trying to be Netflix.
It's too late. They can't do it.
They don't have the balance sheets of the financials. And so take the content. Take Barbie. You mentioned that at the outset, these companies make great content. HBO is a great content engine. Stop trying to be Netflix. Focus on what you're good at, which is creating great content and monetizing it to whoever wants to buy it.
On really think that's the key.
You started by saying you fundamentally disagree with Laura Martin of Needham. Her point was that the content's the key. If you combine them, you have a much bigger library of content, making you more competitive against the Lights and Netflix, etc. So let's go back to space. If one, do you think this is a good deal? It sounds like know and be what about the content combination.
It's a sort of you're missing you know, she's missing the entire story here, which is sure. If you could just buy Paramount the studio and combine it with Warner Brothers Discovery, that would be great.
I think there would be.
As we've written, there would probably be seven or eight potential buyers of Paramount the studio if it was for sale. Again, the problem here is not the studio. The problem is is that one hundred I want to make this clear, over one hundred and fifty percent of the earnings of this company come from the cable networks, the broadcast the linear TV assets.
So again not the content creation.
Vehicle, the linear TV assets, and so putting linear TV assets together is not a smart idea. It's why the stocks are down. This is not just about Anyone who says this is about putting the content together is completely missing the fact that what you're actually doing is putting two dying linear TV businesses together, and you're not solving the fundamental.
Problem that make it betterat does not make it better at a streaming product.
Sure, it would definitely make a streaming product better, absolutely, but you'd be weighing it down with having an even greater exposure to linear.
TV, which is in rapid secular decline.
So yes, it adds more content to the streaming service, But then you have to ask yourself, should you actually be in the streaming business or should you be an arms dealer. Sony is sitting out there smiling, making hundreds of millions of dollars of profit.
There are no losses.
They're laughing at the rest of the industry, looking at how everyone else is just burning black holes and streaming. You don't have to be a streamer, you know, you don't have to. We thought these companies could, and I don't think they can. Peacock is not a business. Paramount Plus is not a business. I think Max honestly, it's a good idea Originally, I don't think the balance sheet
and the financial situation is capable. I think they should go back to HBO, go back to something smaller, and just execute on what they can and sell their content. Ballers does far better on Netflix than it did on HBO. Suits did far better on Netflix than it did on Peacock.
Like, do what you're great at, make great.
Content, and stop trying to be a streaming platform if you can't do it. And I think the last couple of years has really proven and I think the capital markets are telling you these companies can't do it, and so.
M and A.
It makes bankers fees.
I understand why every banker is proposing and I understand all the leaks and all the trying to get something to happen, but I honestly believe you're fixing the wrong problem. The problem is the strategies need to shift. Making these things bigger is not the right answer.
Rich Rich Greenfield of light Shehd. We love having you on the show. Thank you for debate, come back to your need. Yeah, all right, thank you so much. I'm coming out here on Bluemberg Technology take jobs just on what they used to be. It's the focus of today's Tech Daily, and we'll discuss it next for Jessica Kreegel, Culture Partner's Chief Scientists of Workplace Culture.
Nice, this is Bloomberg Technology.
Okay, tech jobs over the last decade gained a reputation for being lucrative, comfortable, and stable. This year that changed in several rounds of cuts. Meta laid off thousands of people, citing the need for greater efficiency in a tough economic environment. So did Alphabet, Amazon, Microsoft and Salesforce, and even in the last couple of weeks some smaller names have made more trims. Let's continue that conversation and bring in Jessica Kreegel,
Culture Partners Chief scientist of workplace culture. Just a few days left of twenty twenty three. That was our summary at the tech jobs market. What's yours?
Well, twenty twenty three was a year of transition away from the Great Resignation and towards the next year, which is going to be an election year. And election years create a lot of dynamics in the workplace that are going to be challenging for both CEOs and white collar workers and frontline workers. Frankly, everyone is going to struggle this next year. I don't think people will continue to leave their jobs, and I don't think there will be
as many layoffs. I think there will instead be strife and conflict, and that will be what we have to deal with next year.
Okay, so next year conflicts.
Potentially we have an economic environment that well, web is it right?
The pendulum has shifted.
We've got people ultimately feeling that they were empowered as employees. Now we've got AI, plus the fact that people are running to run tighter ships. What happens in terms of culture at these companies, Jessica.
Well, internally, interestingly, this last quarter we PubL a state of Culture report, and we're asking employees what they love about their culture what they hate about their culture. And for the first time in the history of the report, we saw political polarization rise to the top of the list is what people love and hate about their culture.
People love diversity, equity, and inclusion. And we also saw woke ideology rise to the top of the list about what people hate about their culture, which means this political conflict happening internally amongst workers is creating a problem for managers. It's creating toxic workplaces, and you're going to continue to see that. It's going to amplify in twenty twenty four.
It's been hard to draw conclusions from the job stata, the jobless data.
Next year we have an election.
Everyone is hoping from a consumer point of view, that interest rates come down. What does that set us up for in technology jobs next year?
Well, it's interesting.
We started this year with one point eight job openings for every job seeker. We're now around one point four. And that jobs data, the employment reports come out and the economists and leaders say, Okay, we're on track. That sounds good. Why doesn't the frontline worker experience it that way? There's the tale of two economies right now. There's the real economy according to the charts, and then there's the
perceived economy that young people have today. They're looking at the price of gas, they're looking at the price of groceries, and they're frustrated. And the issue isn't necessarily is there a job. The issue is, even if I have a job, can I afford to live? That frustration is increasing unionization efforts. For example, you're seeing a lot more union activity than
you have before. And as a CEO, that's what I would be worried about, is the collective action that my employees might take, the way that I handle that as I get ahead of it. The CEOs who are listening to their workforces, that are making space for people to feel heard, that are making sure that problems that are at the bottom of the organization bubble up quickly so they, as the CEO, solve those problems. Those are the CEOs that are less worried going into the next year.
We've actually had some CEOs in tech saying I don't want to hear you on political divisions.
Keep that at home. Is that the way it's going to have to go in twenty twenty four?
Jessica, Well, I actually agree I think that's fantastic. I don't think that it's appropriate for CEOs or business leaders middle managers to offer their opinions about political issues in the workplace.
That's not the place for that.
And when you create a environment where we're debating political issues, you're distracted from the work at hand, and it's just unsafe. It creates a lack of psychological safety. It's unsafe also for business results. Social activism is the greatest threat to American business in twenty twenty four. Companies are great at dealing with regulation. Whatever happens with the election, people will adjust. But what they're not great at right now is understanding
cultural norms at a societal level. The end zone about what's acceptable keeps moving. You're going to see DEI as a battleground this next year, and CEOs are worried about what do I say? Should I see anything, should I not say anything. It's not seeing something a problem and that is going to be the main focus for CEOs figuring out next year.
I got to have you back then, Jessica Kruegel Culture Partners, Thank you. It is going to be a pretty volatile year, that's so sure. Meanwhile, let's turn now to actually those that are running the businesses, the leaders, the CEOs, particularly of certain startups in particular, and entrepreneurial and as that Entrepreneurial Center on women entrepreneurs in particular, have been running the research trying to understand where they're starting to see
shifts within the viewpoints of these leaders. Nicola causes with us, executive director of nazac's Entrepreneurial Center. I've been running research ultimately trying to get into the psyche of these business leaders and ultimately what's helping and hindering.
What is it the moment, Nicola, That's a great question.
A lot of the challenges are not surprisingly around access to capital, but we found some very interesting and unique perspectives that emerged in the lived experience of our women entrepreneurs in America, things that are not always well talked about,
such as the importance of paying oneself. You know, we have a large amount of disparities with our women entrepreneurs, including rating higher than average in the US around food insecurity and the worry of being able to make it to cash flow break ethen which right now is taking
about eight years for our women entrepreneurs. But the importance of realizing if they actually pay themselves, it's the fastest indicator of getting them to cash flow break even the problem is we don't talk about the importance of paying oneself.
So this emerging research is identifying some of the mythologies and challenges that we need to get away from and start to really address at a core kernel of what is going to bring vibrancy and opportunity to our new majority of business owners in this country.
And Nikola, you are to all intents and purposes and not for profit that wants to help entrepreneurs or another word, founders, get going. That's right, and carrying on from our last conversation, one of the stories of this year was the thousands of people that lost their jobs at very big technology companies suddenly having some time on their hands and being able to start new companies. Is that reflected in what you see day to day?
Yes, Actually it's really interesting. Some of the things that we didn't expect to see was the idea that it takes a little bit of age to find the opportunity when it comes to entrepreneurship.
I mean being literally older, quite.
Literally older exactly exactly. There is a reverse correlation right now of If our business owners are between forty to forty nine, they have the highest chances of success in this country, which is really interesting when we think about the typical environment of thinking, oh, I got to be eighteen industright out of college, no problems, no challenges to think of, no worries in the world. But it's actually
quite the opposite. Our most successful business owners are our ones that have typically ten to twenty years of work experience behind them. And I think that's really exciting when we imagine what's possible by looking at a new appreciation of intellectual currency that's being missed in the country right now.
And Nikol, what was interesting is you also say those that basically get to success break even quicker pay themselves value.
Them That's right, that's right, that's right, And again I think that's not often talked about.
Right, you say, go all in, don't pay.
Yourself week for that payday that is eventually in a come at some point in the ever possible future. But the challenge of what we find there is that we lose so much market value in that and it actually impeded the ability for our business owners, especially our women business owners, to be successful. This is the culmination of two years of work that was funded by Wells Fargo Foundation.
And were it not for these eight hundred and sixty women that took us behind the scenes, that helped us see things differently around what really drives success in community entrepreneurs and then the rise of high tech entrepreneurs, we would never have been able to discover this. It's been one of the reasons we've been so inspired to be able to share this research obviously on a national stage, including most recently being cited in the annual sec R on Recommendations to Congress.
Nicola Cuisine of the NASDAQ Entrepreneurial Center, Great to have you here on the program. Okay, Cerberus and Blue Origin compete to buy SpaceX rocket rival Ula. Earlier this year, I sat down with Ula CEO Tory Bruno. Here's what he had to say when I asked him about the idea of being bought.
I would never be allowed to talk about an M and A activity as the company's CEO. I've been asked this question twice a year for the last nine years. I have not been able to talk about it. Then. I can't talk about it now. Even if there were such a thing and I'll also share with you I'm not a board member of ULA's board of directors. I'm not an owner. I'm just an employee.
But you did say if I were to buy a space business, I'd look at ULA, which is like a bit of a wink wink.
I'm just an employee. I'm interested at. Ultimately, what is it that they're looking at? What are they seeing? What would hold them back from lurgy.
It's a great question. It's the government contracts. They see all the money going to SpaceX, and despite the delays at ULA, I think a lot of investors want a piece of that.
They're certainly eyeing it. It feels like MNA is just something we're talking a lot about as we end this year. And meanwhile that does it with this addition of Bluemo technology.
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