transcript

Speaker 1:
[00:05] This episode of The Town is presented to you by AMC Networks. Billy Magnuson and Zach Galifianakis star in the new series, The Audacity, on AMC and AMC+. Influence rises, people unravel, and CEO meltdowns are business as usual among Silicon Valley elite. Executive produced by Jonathan Glatzler, a writer, producer of Succession and Better Call Saul. Watch new episodes of The Audacity, Sundays exclusively on AMC and AMC+. It is Thursday, April 23rd. For better or worse, WarnerMount is one very big step closer to becoming a reality. This morning, the shareholders of Warner Bros. Discovery voted to green light the $110 billion sale to Paramount and the Ellison family. The vote was overwhelming, they said, though we don't have the final certification yet. This was pretty much expected. Remember, the Warner stock was trading at about $8 or $9 before Larry and David Ellison came along. The final deal values the company at $31 a share, an easy yes for these shareholders. They did not rubber stamp everything, though. Our guy David Zaslav, the CEO of Warner Discovery, his pay package was rejected by these shareholders. They voted no on a golden parachute, valued it anywhere between $500 million and $800 million, thanks to the controversial tax reimbursement plan that is highly unusual in corporate America. We'll talk about that. Unfortunately, that vote is non-binding, so it's not clear what, if anything, this board will do in response. My guess, considering their past actions, is nothing. The deal isn't done yet, of course. There's the regulatory issues that we've talked about on the show, the whole movement to block it, the signature campaign that's now up to 4,000 Hollywood people. But a major milestone has been achieved, and it's on track to close in the third quarter of this year, as the Ellisons want. With this all moving pretty fast, I wanted to get the Wall Street view of this deal, which is now the biggest ever in the media industry, especially the Ellison's role, the Netflix factor, the Zaslav pay question. He's been on a bit of a media tour lately to try to get everyone to think he really tried to save the company, not sell it. I'm not sure people believe that. I got Liz Hoffman here today. Liz is the business and finance editor at Semafor, the digital media outlet, and she's a veteran M&A reporter on all kinds of deals. We'll do a little on the Michael Jackson movie and the whole sordid backstory there. Today mostly it's the WarnerMount deal, One Step Closer and the View from Wall Street. From The Ringer and Puck, I'm Matt Belloni and this is The Town. All right. We are here with Liz Hoffman, business and finance editor at Semafor, host of the Compound Interest Podcast. Welcome, Liz. All right. I wanted you on the show because I really want the Wall Street view of this merger. Because obviously we had a big milestone this morning. Pretty much expected. It went down as we thought. It went down very quickly. Now we've got some next steps coming. But before we get there, give me your sense of how the general business finance M&A community is looking at this massive merger, the biggest merger in media of all time.

Speaker 2:
[03:20] Yeah, and like a real signpost for where the industry is going. If this works, if Warner Bros inside Paramount can be more relevant, better funded, on more platforms, reaching new audiences, I think you'll see a lot more deals like it. It will be a reminder that there is still a little juice in this particular stone. Blood in the stone? What is it? Yeah. You can squeeze some value out of this dying, decaying industry. If it doesn't, this is just going to be right up on the wall of what were they thinking.

Speaker 1:
[03:55] Yeah. The AOL Time Warner Wall. Honorary AOL Time Warner Wall of shame.

Speaker 2:
[04:01] Which by the way is heavy with media carcasses.

Speaker 1:
[04:03] Same company by the way.

Speaker 2:
[04:05] I've joked for a long time, just stop messing around with Time Warner. It has never worked for anybody. It didn't work for AT&T. The cable business was a mess. I mean, this thing has lost people a lot of money. It's lost almost everyone a lot of money over time, except David Zaslav, which I'm sure we can get into.

Speaker 1:
[04:18] We're going to get into that. But that's what I'm questioning about the Wall Street View here. Do you think people think this can work? Or are people looking at this being, man, what is Larry letting his kid do?

Speaker 2:
[04:30] I think the prevailing sentiment for the moment is on the second of those two things. Though also fueling that skepticism is a real questions around Oracle and AI and Larry's wealth, that if we were living in a more certain world about, Larry could afford to spend some money on this, that would be one thing. But it is now somehow plugged into this AI economy around which there are a million uncertainties. And so I don't think it's going to be the thread that unravels that particular sweater. But it's just a reminder, at least to me, that a lot of parts of the economy are being plugged into the AI machine at a time when that thing is starting to throw some springs loose too. The other thing that I've been thinking a lot about and people are talking about is actually the player that's not here is Netflix. And I think, you're a much closer watcher of the media business than I am, but having covered M&A for a long time, I've seen a lot of M&A related egg on people's faces and I can't quite think of a situation where a potential acquirer came out of the process having sort of unnecessarily raised so many questions about their own business model and strategy as Netflix did here. So that I think is going to be a weird hangover.

Speaker 1:
[05:47] Why were they going after this? They had spent 20 years talking about how we're builders and they had a great business and they ran the rest of Hollywood off a cliff. So much so that they're now going to try to pick up the Radford lot in the Valley for 300 and something million when it was valued at 1.8, I believe, a few years ago. But it did raise questions and they have kind of had to address that. The stock was down. Now it's come back up and they did some stock buybacks today, I think, for that purpose. They had great earnings and yet I think there's a lingering question as to why they felt they needed this.

Speaker 2:
[06:24] I do too. And that's, you know, they got this far, as you say, without a legacy studio. Like, why bother now? If they thought they needed it now, why weren't they building it earlier? This is a company that actually has seen around corners pretty well and, you know, pulled off one of the biggest kind of product pivots that, you know, modern corporate history. So like, where were they on this one? And if they don't actually need it, why were they willing to spend, you know, whatever it was, $80 billion to buy it? You know, like, that's the problem with transformational M&A, which is that if you swing and miss, you leave everyone wondering, well, why did you need to transform? And, you know, it kind of reminds me of a long time ago, but when Microsoft went after Yahoo 15, 20 years ago almost, they didn't get it. And, you know, I don't think it would have mattered. Microsoft was never going to make it as a consumer internet company, but it like raised a lot of questions about where they were in that era. That took them like a while to recover from and, you know, did, you know, probably started the sort of clock ticking on bombers' time there. So these things can have like really long hangovers. And I was struck, I think, when Ted Sarandos was sort of out doing, you know, beating the bushes and doing the media tour for this. He had gone on CNBC and said something that just like perfectly encapsulates why M&A is hard for people who don't do it. Like in the same breath, he was saying, you know, I think it makes sense, obviously, for us to, you know, continue. He was talking about the theatrical window. He's talking to talent, you know, in one breath. And then immediately it was like, but, you know, the, you know, what we've always done for the American people is deliver more for less. And you're like, yep, those are two different statements for two different audiences. Good luck.

Speaker 1:
[07:54] Yeah. And to be fair to Netflix, I mean, they didn't have an opportunity to buy a studio like this. They don't come up for sale very often. And it's hard to prepare your business for 100 years of IP. Like, that's what they were buying. They were buying a library that they could plug in and they know the value of these libraries because they rent them from the other studios. They're currently renting from Sony and Universal to a lesser extent. And they license Warner's movies. So they see the value on the service. And they say, listen, we got $2.8 billion to walk away. We drove the price up for a competitor who's going to have to shovel $80 billion in debt out of that company to make it work. A lot of people in the business and entertainment communities don't believe that the Ellisons will be able to make that math work. And ultimately Netflix comes out of this fine. Do you agree with that?

Speaker 2:
[08:49] I think certainly they made the deal a lot more expensive. And that's something like Comcast has done well over the years. It's a side hustle that some companies have going. I think that's fine. I don't know that it counterbalances any strategic confusion that they may have sowed in their investor base for it.

Speaker 1:
[09:07] Where's the engagement coming from is the question. Yeah. If you are so worried about engagement that you need to buy this, people are going to start looking at those engagement numbers every quarter, a little bit more skeptically.

Speaker 2:
[09:20] Yeah. That's a place where Netflix has been pretty opaque over the years, and you got to wonder, are they going to come under some pressure to justify.

Speaker 1:
[09:29] Well, that's why they're fighting over the Nielsen gauge.

Speaker 2:
[09:31] Totally.

Speaker 1:
[09:32] There's this whole fight over Nielsen because they were going to change the calculation that would benefit linear, Netflix had a cow, and now they're putting that off till the fall. I think that Netflix knows that that has become the default arbiter of how you're doing is how much time spent on TVs. And I know it drives Ted crazy to see YouTube leading that gauge every month because YouTube is just a different thing. I mean, most of the engagement on YouTube is garbage. It's not premium. It's not stuff that you would even know what it is. And he doesn't like that.

Speaker 2:
[10:12] Yeah. I mean, they have a high-class offering there. And it sits sort of uncomfortably with the 800-pound gorilla, as you say.

Speaker 1:
[10:19] So back to the Warners thing, because while the shareholder vote on the merger was overwhelmingly yes, the vote on David Zaslav's pay package was overwhelmingly... Actually, we don't know the exact numbers on the pay package vote. They have not revealed them yet. They will at some point. But it didn't get through. Now, this is only advisory. This is non-binding. He can stick up his middle finger at these shareholders and say, you know what, I'm taking my money. But do you think... Sometimes companies see these votes and alter the packages. Take us through the process there and both how unusual this pay package is and what might happen next.

Speaker 2:
[11:03] Yeah, it's just a ton of money. And look, to make the case...

Speaker 1:
[11:09] A crop ton, a crop ton of money, as Jim Cameron would say.

Speaker 2:
[11:12] $887 million, I believe. And by the way, that's on top of, I think, he got like 200-something million when Warner was spun out of AT&T the first time around. So he's made a billion dollars. And look, to be fair, this deal got done at $30 or whatever it was, right? Like that is a huge premium over where the stock was trading a year, 18 months ago. So you got to ask, why was the stock trading at $12 18 months ago? And the answer is that it wasn't a very well-run company.

Speaker 1:
[11:41] Oh, it was lower than that. It was like $7 and $8 before that.

Speaker 2:
[11:44] I mean, this thing, the management here destroyed a lot of value and then created a lot because David Ellison really wanted to own this thing. So that is the market speaking.

Speaker 1:
[11:54] Did they create it? Or did Larry Ellison create it?

Speaker 2:
[11:57] I'm trying to be fair here. I think that FOMO created it. But look, you have a generational asset. Someone really wants to own it. Like who cares how you get there?

Speaker 1:
[12:06] Well, they did do things. They did things that made it more attractive. They created the studios and streaming unit that was tailor-made for a streamer to buy it because they didn't want TV networks. Netflix took the hook on that. They created that environment. But that's deal machinations. That's not value building.

Speaker 2:
[12:27] Right. And yes, they spent a lot of money doing that too, right? That kind of work is expensive and time consuming. And ultimately, maybe you could say it better because it brought Netflix to the table, which only wanted the one piece. But ultimately, the company got sold. Look, I've been doing this a long time. I don't get like super like wrapped around the axle on pay packages. This is a big one. And I'm not surprised that it got rejected. I don't think they'll retouch it. Like, you know, companies do that sort of in their annual pay packages. Because if you like fail these advisory, you know, if you get kind of under 70, 80%, kind of like one or two years in a row, you start to have a real problem with your your board of directors and other things. This is just sort of a one time thing.

Speaker 1:
[13:08] But the board doesn't seem to care.

Speaker 2:
[13:10] No, and because they're not going to be around. Like, this is not a problem they're going to have to deal with next year.

Speaker 1:
[13:14] I mean, Glass Lewis, the corporate governance experts, they said it was worthy of, quote, severe concern. ISS, the other one said it, quote, represents one of the highest golden parachute estimates ever observed and is, quote, problematic.

Speaker 2:
[13:29] I can't say that I disagree.

Speaker 1:
[13:31] Yeah, but what does that actually mean?

Speaker 2:
[13:33] It means they don't like it, that it feels gross, that it is...

Speaker 1:
[13:36] No, I know they don't. But what does it mean for, practically speaking, the pay package? Is there a chance this board is shamed into altering it?

Speaker 2:
[13:46] I don't think so. I mean, I'd be surprised. Again, you see boards react when the company is going to be around in a year and they're going to have to go back with another one. This company is going away. Like, this board is going away. Like, I don't think that thing will dog them. The thing that actually I think is sort of most galling here, and you mentioned that was it $2.8 billion that Netflix is walking away with, that breakup fee? Like, that is owed to Netflix because Warner Bros signed a deal with them before getting Paramount's best and final bid. Like, that is money that should go to shareholders. And if they should be mad about anything, it's that. Like, presumably there was another $2.8 billion of value. You do the math and that's more money per share. So, that one, I really never understood why people were not asking tougher questions about how that process was run. And we saw some, like, texts come out. I think it was, like, Blair Efron at Centerview was kind of, like, trying last minute to say, we will pay more. Like, don't, you know, keep the papers unsigned. And...

Speaker 1:
[14:46] Zaslav wanted Netflix.

Speaker 2:
[14:48] Correct.

Speaker 1:
[14:48] I think Zaslav thought that there was a better chance of him staying on and running the unit if he were with Netflix. He's friends with Ted Sarandos. He got a bad vibe from the Ellisons. Like, all the signs were there. The whole, you know, ghosting him on text messages. Like, it was all, it was all there. But, and that gets to this whole press campaign that Zaslav has been on this past week. Unbelievable press campaign. There was a variety story in which David Geffen, one of Zaslav's good friends, he went on the record, which Geffen does not do very often, hates being in the media. He said, if you asked him, him being David Zaslav, if he'd rather have the job or the money, there's no doubt about that. He'd rather have the job. I really believe that. Zaslav himself talked to the New York Times and said, my intention was never to sell the company. My intention was to build and run that company. We were in the middle of a generational disruption and had to make a lot of hard calls in the beginning. This is clearly him trying to make sure that he still gets dinner invites in LA after this deal closes. Everybody knows he walked away with $500 to $800 million. He wants people to know that it was never his intention. I saw from the beginning, I was talking about this three years ago, I'm sure you were as well, that this entire transaction seemed set up to bolt the dying discovery networks onto something a little bit more viable, the Warner Assets, the streaming service and wrap it all up, so a streamer or some other buyer would come along and buy it. Zaslav knew that, John Malone knew that, they all knew that the most likely outcome was a three to five year flip of these assets. We know that because Zaslav's entire career has been about M&A, acquiring this, doing that. It's not been about running a movie studio or sitting behind Jack Warner's desk or going to dinner with Charlize Theron. It's been about hardcore M&A and leveraging and making money. I can't believe that he's trying to get us to think that he would have liked to stay in this job. Sure, of course. Everybody wants to stay in the job as long as you can. But the goal here was to make as much money as possible.

Speaker 2:
[17:15] I mean, look, I'll leave it to you to put David Zaslav on the couch. You know, I'm better than I do.

Speaker 1:
[17:21] You're not willing to call him a robber baron?

Speaker 2:
[17:23] Clearly, this thing was, you know, we all said at the time, this thing was spun out to be sold. I mean, it was structured in a way it didn't have a lot of protections that you often see attached to media companies. Like, you're a public company, you're for sale every day. And I actually had always wondered, I suspect it's just because the timing didn't work out, but someone should have just bought this from AT&T, right? Like, think about all the mishigas and handwringing and value that was wasted trying to stand up a public company and kind of make it work for a while. I think you're right, this was always going to be tucked in.

Speaker 1:
[17:49] And what value did the Discovery assets bring to this transaction? Zero. The entire thesis of the Warner Discovery transaction was your TV networks and our TV networks and all the great HGTV shows and Dr. Pimple Popper, all of that would create a streaming service that would challenge Netflix globally. That failed. That entire strategy failed. So if AT&T had just gone directly to the Ellison's, obviously they didn't own Paramount yet. But if they had gone to the Ellison's or someone else, they could have cut David Zaslav out of this entire thing and prevented a giant value suck of money from the company. This episode is brought to you by HBO Max. Half Man, the new HBO original limited series from baby reindeer creator, Richard Gad, examines the tumultuous relationship between two estranged brothers tracking the highs and lows of the pair over the course of 40 years. Starring Emmy Award winner, Richard Gad, and BAFTA Award winner, Jamie Bell. Half Man is now streaming on HBO Max. The main thing that a lot of these advisory firms are complaining about is this tax gross up clause, which was added late in the game and would potentially cover Zaslav's tax hit on the severance package. Have you ever seen this before? It seems like it's a relic that doesn't happen in M&A anymore.

Speaker 2:
[19:19] You used to see it a lot more and then it kind of went away for exactly the reason you're describing is that the firms that make recommendations to shareholders don't like it. But with the companies-

Speaker 1:
[19:30] Everybody else pays taxes on their windfalls. Why shouldn't the CEO?

Speaker 2:
[19:33] Absolutely. What the companies will say is, well, we intended for David Zaslav to have X amount of money as a reward for having done this thing. We want to make sure that that is what he takes home. Again, I find it a little gross. That is what tax lawyers do with their time. That's what the exact comp people do with their time. It's not great.

Speaker 1:
[19:51] No, it's grotesque. When you talk to Zaslav, I've talked to him about this. It just bounces off him. He's happy to engage with you on stuff like the value they brought to the company or the choices he's made in hiring executives and creatives. But you start talking to him about the pay package stuff. It's like talking to an animatronic. He just goes like robot mode and it's just like, there's no engagement on it. It's like he can't hear that everybody thinks he's overpaid.

Speaker 2:
[20:22] It's interesting. It just doesn't matter. I've been covering corporate governance for 15 years. All of that time, we've only gotten more disclosure. There actually has been a push. If you're a shareholder and you want to know exactly what David Zaslav is getting out of this, it's not hard to find out. The company has to tell you right in the documents, and it's not even hidden or in a lot of legalese. It's kind of right there, and it never matters. Pay goes up every year across the board, because these are fundamentally signals that are being sent. This is a competitive, socially competitive market more than it is a financial one. They're not worried about David Zaslav leaving for a different job. He's already leaving for a different job. This is a signal that's being sent.

Speaker 1:
[20:59] Yeah. I do want to get into the money issues. The three Middle East funds, the Saudis, Abu Dhabis, Qataris, they are in this deal. Paramount put out a statement this morning, saying that they're moving forward on syndicating the equity in the company. They presumably are going to bring in more investors. Do you think the source of the money on this deal is a problem, or is everyone's eyes just going to gloss over? What kind of control or influence do these funds actually have, if any?

Speaker 2:
[21:33] I mean, Netflix certainly tried to make it a thing, if you remember, and they did force the deal to be kind of restructured in some ways. You know, I think like...

Speaker 1:
[21:41] According to my colleague, Eric Gardner, they are still trying to make this a thing. He reported this week at PUC that Netflix lobbyists are making those concerns about this deal known in Washington. Netflix denies that, by the way.

Speaker 2:
[21:54] Sure. Look, I think if we'd gone back five or 10 years, you would have seen some real questions around it, in part, I think for three reasons. One, our relationship with the Middle East has changed dramatically, and literally has changed dramatically in the last eight weeks. I don't think the president is going to be making a lot of trouble for partners and quasi-allies in the Middle East right now, so that's one. Two, just what is and isn't corporate control was a lot clearer back when I was covering M&A 10 years ago at The Wall Street Journal. I just wrote a piece about it this morning, particularly what AI, big AI guys are doing. What is M&A anymore? Who even knows what is control? People are giving people tokens, not getting board seats. I don't know. I think the influence in the boardroom landscape has really changed. Wait, I said there were three things, right? That was one, that was the other. Oh, and I think particularly for the golf, they want different things than they used to. When they first splashed on the international financing, they were really trying to buy influence abroad. This is when they were throwing money at WeWork and trying to do all kinds of crazy stuff.

Speaker 1:
[23:09] MBS and his Hollywood tour.

Speaker 2:
[23:11] This is like, hello, we are here, we are rich. Come to Riyadh and come to this.

Speaker 1:
[23:15] They're still doing that, though. They're still throwing around a lot of money.

Speaker 2:
[23:17] What's interesting is that, and then they went through a brief period where they really wanted financial returns. They became an investor. To varying degrees at some of these, they're not all the same, so I want to paint with the same brush. But where they've really gone in the last couple of years is they want economic returns. They're happy to spend money, but they want it to come back in projects on the ground. They threw a lot of money into the EV car Lucid, which is now building cars in Saudi Arabia. Not because that's a logical place to build cars and then export them to Europe, but because Saudi wants an export economy. So I think the deal for Electronic Arts is an interesting one. They want something to come back. Actually, I don't know, I could see some Harry Potter theme parks in Abu Dhabi. That's not crazy to me. So what do they really want?

Speaker 1:
[24:05] Well, Disney is doing a park in Abu Dhabi, but yes. For sure. They're getting out of live golf, and that seems like an economic decision.

Speaker 2:
[24:15] It is an economic decision because they were throwing good money after bad, and they weren't getting anything for it. That to me is a very Saudi 1.0, 2.0 kind of investment. I think you are going to see them say, look, we still want to be in the sports game, we still want to be in the media game. And actually, one of the big sovereign wealth fund executives told my colleague Matthew Martin a few months ago, I can't remember which one it was, that if you play the AI futurism forward, entertainment is the last thing that's going to exist when the robots do all the jobs. We're just going to be staring at screens all day, so they're making some kind of large entertainment experiential.

Speaker 1:
[24:47] Except the entertainment will be robots also.

Speaker 2:
[24:49] The entertainment will be robots also. Yeah, yeah. That's a fight you would know more about than me in Hollywood.

Speaker 1:
[24:55] No, I do. And I'm joking there. I don't actually mean that.

Speaker 2:
[24:57] Yeah, but I think that they're looking for more strategic returns. Are they going to be monkeying around in what the movies are? I mean, this is not a China cultural influence. I don't expect that.

Speaker 1:
[25:13] No, but if there is a moment on CNN or CBS that they don't like or a commentator, I wonder if they pick up a phone.

Speaker 2:
[25:24] Sure, but isn't the problem for CBS or CNN just like a lot closer to home? Isn't the problem that the President of the United States also does that? Yeah.

Speaker 1:
[25:31] No, I know. And I think to Ellison is at least smart enough to know, to like defer to his people on that front. The problem is the people he's chosen may not have the best judgment. But whatever, that's a separate conversation. All right, Liz, thank you very much for coming on the show. Really appreciate it.

Speaker 2:
[25:47] Thanks, Matt. This was fun.

Speaker 1:
[25:51] We are back with the call sheet, Craig. It's finally here, the Michael Jackson movie, Michael. You and I went to the premiere on Monday night. I'm glad you got to see that because it was very much an old school premiere in the sense that it was gigantic. There was a lot of hooting and hollering during the screening because they packed it with Michael Jackson fans.

Speaker 3:
[26:15] It was at the Dolby. It was a huge crowd. It was completely packed and it played like Avengers Endgame in the room.

Speaker 1:
[26:20] Absolutely. Every time Barry Gordy comes on the screen, it's like, Holy shit, it's Barry Gordy. Yes. Michael's various incarnations, like people cheering. The party was fun. They took over the Roosevelt, had the full outdoor party, full dinner served at 11 o'clock at night, just like the old style premieres. Who's the oddest person you saw at the premiere?

Speaker 3:
[26:41] Well, one, I didn't know Mike Myers was in the movie. So seeing him, because he's always disguised in makeup in the film, so we barely knew it was him when we saw him at the premiere.

Speaker 1:
[26:48] That scene he's in is a little cringy for me. I don't want to give it away, but I cringed a little at that scene.

Speaker 3:
[26:53] I agree. Then we saw Jon Voight just roaming around the dance floor.

Speaker 1:
[26:57] Mookie Betts.

Speaker 3:
[26:58] Mookie Betts was there?

Speaker 1:
[26:59] Yeah, Mookie Betts of the Dodgers was there.

Speaker 3:
[27:00] Magic Johnson was there.

Speaker 1:
[27:02] Was there. You could definitely tell when Magic's sitting four rows in front of you.

Speaker 3:
[27:08] I got to give it to Jon Voight, man. That music was loud as hell. He was 15 feet from the DJ table walking through a crowd.

Speaker 1:
[27:14] I know. Good stuff there. Amazing. We don't have to get into what you and I thought of the movie. Nobody should care what we think of these movies. I will say though that I think it's a generational thing. I enjoyed a lot of the recreations of the 80s stuff, like the Motown performance and the Thriller video. You were less enthralled with that.

Speaker 3:
[27:37] I don't know. I thought it was incredibly entertaining as well, but I'm just more cynical about it. I think in polite terms, you can call this movie a crowd pleaser.

Speaker 1:
[27:48] Fan service is probably better and a whitewashing. I mean, there's nothing in it that engages with the accusations, but I got to tell people, listen, I have read the original script for this movie, the one they couldn't make. If you want the description of the movie that they wanted to make, I will tweet it because I wrote about it in my puck newsletter. There was a demonization of the accusers in this movie. It was a total image reclamation process.

Speaker 3:
[28:18] It was exonerating him in a movie.

Speaker 1:
[28:20] Yes. They wanted to show that these were all money-grubbing accusers that did not actually have much legal or factual standing. Michael is like the victim here. He gets strip searched in the script for the original. Who knows if we'll see that in part two, but there was a real effort by the estate and producer Graham King to exonerate Michael, not just whitewash and not address it, which is what this movie does, but to actively take on the accusations and tell people that they are false. So we didn't get that movie. We got this movie. People are criticizing it for not engaging with the accusations, but it could have gone even further. Maybe the fans would have loved that. I think the fans will like this movie. The tracking is about 70 million, which would make it the biggest opening for a musical biopic. The current record holder for domestic is straight out of Compton. It's 60 million domestic Bohemian Rhapsody, did 51 million domestic. Now, those are not adjusted for inflation and were over a decade ago. This movie, I think despite the reviews, the reviews are bad. Critics not loving this. I think this movie will hit the over.

Speaker 3:
[29:35] I agree. I'm not letting the negative reviews influence me. I think the average person sees the trailer to this movie and is like, that looks great. I love Billie Jean. I love thriller. I'm going to go see that and all of those sequences in the movie are fantastic. I got to say, Jafar Jackson as Michael Jackson is fantastic. He's amazing. I mean, Colman Domingo is great. I just felt like once you get over the fascination of watching Jafar Jackson play Michael Jackson, there's not a lot there outside of the musical performance.

Speaker 1:
[30:02] No, there's not. If I was a critic, I would have had a negative review, but I'm not. And I'm reviewing this from business perspective, and they play the hits, and it's a very easy to watch movie, and fans will like it. And I think the question is not opening weekend, because we saw the enthusiasm in the room amongst the fans. It was such a bizarre scene at the premiere. It was like a mix. It's like with Michael Jackson, everything. It's just craziness. There's craziness associated with him. Everywhere he goes, it's just crazy. There were a lot of business people there. We saw a lot of the older Hollywood people that were involved with him and were contemporaries. And then we just saw these crazy fans that were dressed up, that were just going nuts when they played the music. Even when that opening note in the movie of, don't stop till you get enough, people just stood up and started screaming.

Speaker 3:
[30:55] I know. I don't know what... There seems to be some rabid support of him, where if you like him, you have to absolutely adore him and there's no in-between.

Speaker 1:
[31:03] I know. And they show a lot of that in the movie. It's very much, a lot of shots of fans fainting and being carried out and things like that. But again, what the fans want. The question on this movie will be the second and third weekend. It's up against Devil Wears Prada. And with the reviews not being good, I think maybe they lose some of the looky-loos that might have come in second or third weekend. But the fans will show up, so I'm taking the over.

Speaker 3:
[31:28] I agree. I don't think word of mouth is going to be bad. Obviously, this movie will do incredibly well internationally. I think people are going to leave this movie happy and tell their friends, the musical numbers were great. You got to see it.

Speaker 1:
[31:38] You think so?

Speaker 3:
[31:39] I do.

Speaker 1:
[31:39] Maybe I'm overestimating that.

Speaker 3:
[31:41] We'll see.

Speaker 1:
[31:42] Okay. That's the show for today. I want to thank my guest, Liz Hoffman, producer Craig Horlbeck, artist Jon Jones, and I want to thank you. We will see you next week.