Do you want to talk a little bit more about that and your thinking around the outlook for national broadcasters?

Yeah, as you say, I'm now reminded of a clip Sir Mark Stroll used to make about agencies, two drunks holding themselves up at a light post or something along those lines.

There's an image here, it's stuck in my head.

It's not that bad though, but I think there's, Certainly in the markets that I've looked at closely, you see broadcasters complaining, complaining, complaining about the global platforms, taking their share and how advertisers, for all their claims of patriotism and supporting their local broadcasters and local content and blah, blah, blah, they keep spending and spending and spending with the US-based digital platforms.

Yeah.

And then I look at what the incumbent broadcasters are trying to do.

They're trying to relive the 1980s and 90s, where they had these great protected markets by regulators.

Looking at the small medium enterprises segment, how much of a thing is the emerging SME class of advertiser in your view? Has traditional media properly appreciated or taken the opportunity presented by this pool of new advertisers?

those things

and rightly or wrongly I think wrongly in many cases we might suggest he's going down that path and trying to figure out how to get there and if I understand correctly they're just trying to eliminate people because yeah you're just gonna just kind of trim the fat a little bit right like it's not the cost per se as much as the people and what i mean by that is any bureaucracy forms around a set of choices and sometimes the bureaucracy begets more bureaucracy and it makes make choices happen i'm not saying that's what's happened here at all i have seen this in agency land for sure And I don't think that's what's happening here necessarily.

But I think that that would help explain why they're making cuts the way they're making them based on what little information we have so far.

Now, if that were true, if that were correct, Green is still very much firmly in charge with a very clear point of view about where the world should go.

Everything that Luke said, of course, I completely agree with in terms of the focus that they have is very different than what the market ultimately wants.

And I think that they're convinced that the market wants what they think the market wants, and they want to find ways to organize to get there.

So there may just be an organizational change for that purpose.

get worse.

What's going on here?

First thing you have to look at to form a view about whether or not this is, um, is shenanigans or this is just business is, is it compliant with the language of a contract? Um, and the vast majority of activities that agencies have participated in that, uh, got a bit of a black mark were either, uh, explicitly allowed by contracts or just not referenced, and they weren't prohibited, therefore they were allowable.

And, uh, as a noted, um, agency analyst Machiavelli once said, "A prince who is not himself wise cannot wisely be advised." When marketers choose not to pay for services from entities who can provide consulting capabilities, maybe yourselves, I don't know, um, who understand a thing or two or three about AI, and they get screwed in some form, well, that's, that's the marketer's fault.

But when it comes to something like this specifically, um, you know, it's, it's plausible it's just the way that something is getting priced because sometimes what the customer wants and what they're able to pay for are very different things.

Um, and sometimes the client, and we can call it complicit client syndrome, clients are fully aware of this, but it's just they know the way that they get their contracts done.

I think we've all seen this.

Certainly, uh, from a Wall Street perspective, my first ex- earliest experiences professionally, where you saw that, huh, um, investors don't really seem to care about paying for research.

Yeah

moat.For advertisers

Well, I think it's, uh, more important to say sports is this moat.

And s- all things sports related seem to have, uh, uh, so many legs to them, not just NFL, but also, [laughs] my gosh, speaking of hockey, not only do you have, uh, now you have a new series from Amazon, Off Campus, that's coming out, and then of course Heat of the Rivalry from Bell Media.

Uh, hockey, hockey, hockey.

But no, but it's, it's sports is really the key thing.

How is a, a hip streamer Amazon, Netflix up front different from a New York up front of ages ago?

They're not that different at the end of the day.

I, I think that they're fundamentally about getting, uh, advertisers excited about allocating incremental amounts of money.

So what are you seeing relevant to what we're talking about, advertising and marketing? Is it having an effect? And where do you see vulnerabilities?

Yeah.

Yeah, I mean, I do think it's largely overstated in terms of the near term impact.

Let's take a higher level view on all of this.

There is a relationship between investing or failing to invest and whether or not you grow.

In general, I have the view that when I see companies who do buybacks, That tells me they have a lack of imagination about where they would put the money to work in their own business.

It ultimately communicates that they aren't as confident in their business as they should be in the core operations of the business.

What are your thoughts? Start with Brian.

Let's listen to Brian Wieser on the moment at hand.

It's evolving.

Here's the thing.

I argue, and this is a contrary view, for all of AI, there's a lot of fears that AI's gonna replace a lot of people.

I argue it's gonna cause the need for more people, because it adds more complexity, and the complexity is what requires people to manage the processes.

We already saw this in ad tech.

Ad tech meaning the automation of most core media buying.

Okay

... uh, than we do.

Um, but nonetheless, they're sha- certainly taking share no matter what's happening here, and that's the main thing.

They're building these performance-based tools.

They're segmenting the market really well.

When I say segmenting, I mean finding the marketers who are willing to pay the most.

Fun fact just came out the 10-K an hour ago, their third-biggest market, Singapore.

I mean, is it, is the, is the, you know, Martin Sorrell and all that, and Rob Schwartz, and, you know, is it gone?

Like Luke mentioned, like what we're seeing in the economic data, you know, everything seems to be humming along pretty well for the most part.

I think we only make the point that, again, unless everything that we've ever learned from studying, whatever, 150, 200 years worth of decent economic research, unless it's all wrong, we know where this ends, or at least we think we know where it ends.

And unfortunately, the distinction between being early and being wrong is often indistinguishable.

Consequently, it could be wrong for a while.

We could be wrong for a while in terms of that negative view.

But as it is, you know, we certainly see right in front of us that things are strong.

Now, we probabilistically or we probability weighted where we think the world plays out when it comes to the year ahead.

How are you bringing those direct dollars from brands into creators as a part of the broader universe that we cover? Right.

And when you have a proprietary tool, as many of these agencies do, I think that's the move.

I'll give a shout out to Brand Tech.

I think that Pencil was obviously a pretty fantastic acquisition a number of years ago.

I do think that the big issue is that Frankly, it's the go-to-market strategy that is generally the issue.

And Brandtec is a good example, along with Pulisic as well.

But the basic premise that they've taken, if I could articulate what I think their vision is, it's this barbelling between Oliver, the inside company, the in-house version of a product paired with Jellyfish, and then Pencil in the middle.

It's a different approach to go into market.

Brian, give us your hot take.

So give credit to the

drum.

Well, actually, campaign is the one that broke it.

Okay, thank you.

There you go.

Let's go back in time.

I knew nothing about agencies, right? I went into, I would never have taken a job in an agency had I actually understood what they did.

Now, it

... uh, after this deal goes through?

You know, they seem to be really focused on the studio, uh, for, you know, maybe Ellison's reasons.

And to his credit, I think Skydance has actually done pretty well as studios go.

The problem is, the studio business isn't the greatest business right now.

Uh, (laughs) and I don't know that that trajectory changes by much.

But that does seem to be the primary area of focus.

Uh, certainly they do have some successful businesses.

How do you look at that environment, and what does it portend for you about further consolidation and, and what's gonna happen to, uh, to these legacy networks going forward?

Very good.

Obviously.

Why, you ask? Why, you're asking? No, I was always interested in the creativity of things.

And then I learned about Bowie Bonds, which was securitization of music libraries, right? Fascinating.

But anyways, on to Wall Street I went.

And from there, I just didn't really intend to go into advertising at all.

I hated advertising.

So why don't you tell us how you are seeing the potential impact of the tariffs, both in the short term and potentially further out?

What are they talking about? Is it, like, 100% they're talking about YouTube? What's the theme in the hallways at Michael's?

Here's the fun thing.

Even though YouTube may very well have the biggest single event this week-It's really not part of the upfront conversation, which is kind of weird, right? They want to be part of those conversations.

They might be bigger than NBCU and Disney and Paramount combined, but they're not really part of the overall TV budget process.

Um, but the, the bottom line is the future of Hollywood if they're exporting ever labor transaction outside California.

Yeah, well, the smart thing if you're in the production business outside of the United States is to make sure you're doubling down on your productions for outside of the United States.

The United States is, as you guys follow as well as anyone or more, pushing towards autarky.

I mean, the reality is that if you want to produce content or any business or product for the United States, you kind of are gonna need to have a US-based operation.

Tell us what upfront is and why do we even have an upfront season anymore? Tell us what upfront is.

right well the upfront is this period of time where the world's largest advertisers and the largest sellers of advertising in the united states and tv in particular come together the tv network owners and youtube and amazon all do big song and dances i think lady gaga is going to be at youtube's broadcast tomorrow wow um and uh yeah basically they show whether they've got planned for the next year And then once they've done that, then everyone can forecast what they think audiences are going to be, and then budgets basically start getting negotiated.

That's what the whole upfront period is about.

because just general political economic issues?

Uncertainty is a real issue because it's already a challenge when you're making these commitments for a period from, say, October to September of the following year.

Right.

When you don't even know what economic policy is going to be in about, oh, 30 days, let alone 60, 90, 120.

So I think that that uncertainty is the first top of mind thing.

Do you have any thoughts on that?

Absolutely.

Yeah.

And this is actually an important point.

2024 was a ridiculously strong year, I'd argue.

And I think that so many people got used to these unsustainably fast growing markets, especially coming out of the pandemic when these were just ridiculous rates of growth that we saw.

And there are other factors going into it.

Brian, reaction?

How often, though, does concern like that translate into action, like an actual pullback on ad spend or a change in strategy? Or is it just like a case of agita?

Yeah, well, we've never really had anything like this since the early 30s.

I did replace a guy named Bob Cohen, who literally built data sets back that far.

And I don't recall what his opinion of Smoot-Hawley was from that era.

Literally, he probably did write something about it.

There really has not been anything like this in the modern era in any developed country, full stop.

It's always been the other direction, freer trade, more open markets.

But what other chilling effects could there be?