Disney Goes to War Against the FCC & People Can “Rent Now, Pay Later”

0:01Are you sucking wind from trying to keep up with AI and its impact? Take a breather and tune in to the Intelligence Shift, Morning Brew's new podcast with PwC. It bridges the gap between big picture AI concepts and what it actually means in practice. Host Dan Priest is joined by expert guests to discuss AI's role in sports, music, HR, and more. Listen to the Intelligence Shift wherever you get your podcasts. Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Kayla Lopez. Today, Disney goes to war against the FCC. And people are using Buy Now, Pay Later for rent. It's Wednesday, August 19th.

0:37Let's ride.

0:47A busted cocaine drug ring at Penn State might have brought us one of the best nicknames in recent memory. So this week, the Pennsylvania AG charged 14 people, including current students, with running a major drug ring at two off-campus frat houses at Penn State, where pledges and members were made to cut and package coke in what officials described as an upper-level trafficking organization for this region in Pennsylvania. The ringleader of the scheme, Agostino Abatiello, has been dubbed Pablo Pledgecabar. And despite the seriousness of the allegations, you have to admit that this is an incredible nickname.

1:23The internet had a field day with others wondering whether Austin Powders was an accomplice or Nostral Domus should have seen this coming. Gosh, those are funny. I didn't see those last two. I really love that. And honestly, I've heard of some crazy hazing stories in my day, like, you know, cleaning the entire house with a toothbrush while listening to Hillary Duff. But making your pledges cut and package cocaine for your high-level drug organization is pretty crazy. And now a word from our sponsor, Rubric. Neil, how important is cybersecurity? Did you get hacked again? No, I learned my lesson after the 11th time.

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2:31That's R-U-B-R-I-K dot com slash MB. We have a saying here at Morning Brew Daily. Whenever you hear about bonds on this show, it's usually not great news. And so it is again today. Surging bond yields have hit historic milestones this week, jacking up borrowing costs and signaling something, several things, might be a little rotten in the economy. First, the numbers, then the reasons behind them. This week, 30-year U.S. Treasury yields hit their highest level since 2007, 19 years ago, while French long-dated yields are the highest since 2008, and Germany's the highest since 2011. Remember, yields rise when prices fall, so this jump indicates demand for sovereign bonds has fallen.

3:16It's been really rough on governments, which issue these bonds to fund their spending plans, but now must pay a lot more in interest. I promised the reasons, so here goes. It seems like bond yields are rising due to a mix of factors. One, concerns that inflation will heat up and central banks will have to raise interest rates. Two, deteriorating government finances, widening deficits and ballooning debts across many countries. And three, competition by corporations, which are issuing bonds in record amounts. Wall Street is divided on whether it's time to be super worried or not. Some say the bond market is sending a clear warning about rampant inflation and government overspending.

3:54Others say we've seen a rise like this before and weather the storm perfectly fine. Overall, though, it does mean that it's going to cost more to finance anything you'd want to buy. Yeah. First, I'd like to point out that it is really scary and shocking that 2007 was 19 years ago. I don't like that. Time is moving too quickly. But I'd like to dive a little bit more into one of the factors that you mentioned, which is corporate bonds. So what could be causing additional pressure on yields? Well, corporates are looking to borrow more money for, surprise, surprise, AI. As they're trying to build out AI or increase their spend in computing power, they are turning to the bond market at near record levels.

4:34Basically, they're asking the market for huge loans to help finance their investments in AI technology. According to Bloomberg, so far this year, investment-grade companies have sold about$1.5 trillion with a T dollars of bonds. which is up 36 % from last year and is on pace to beat the 2020 record. So how is this impacting government bonds? Why does this matter at all? Well, Bloomberg outlined something here called the crowding out theory. This is basically the idea that when governments borrow a ton of money, it actually crowds out corporations. Basically means companies don't have a ton of flexibility to borrow money at cheaper levels, so they have to increase their yields in order to be competitive.

5:18Well, this is actually the opposite of that. It's the reverse crowding out theory. This is basically saying that companies are asking investors to finance their debt and people are so interested in AI investments that they're actually selling their U.S. treasuries to buy these longer dated corporate bonds that offer higher yields. And it's not going to slow down anytime soon. NVIDIA recently announced it's working to raise another$500 billion for its AI investments. And I'm sure other companies are doing the same. Yeah, this is all bad news. if you're the Treasury Secretary Scott Bessent or any other Treasury Secretary across the developed worlds where bond yields are rising because of a variety of factors, including all that corporate debt issuance.

5:59Because think about paying interest on some of your debt, right? Maybe it's$10 ,000, maybe it's$20 ,000. Well, the United States has a$40 trillion national debt, and now it's going to have to pay higher interest rates, and it has been for the past couple of years. That is just an astronomical bill. So far this year, the U.S. has paid$1.2 trillion in interest payments, and that is equivalent to 3.3 % of GDP, which is the highest level in history. Typically, over the past half century, the U.S. federal government's interest costs has averaged about 2.1%. Now it's 3.3%. And according to the CBO, it's only going to rise from there up to 4.6 % in 2036.

6:45So this is the big problem for governments when you talk about rising yields is that they just have to pay more to borrow. And we know the United States borrows a lot. We're$40 trillion in debt. And so those interest costs are rising. That$1.2 trillion that we've already paid this year is more than we spend on defense. So this is the big worry. That's why Treasury Secretary Scott Bessent came into office during the Trump administration, aiming specifically to lower the 10-year yield. Well, now it's actually going up, and that's a huge problem. Yeah, so it sounds like obviously the U.S. government is going to be paying more, but what about you?

7:18If you are looking to buy a house anytime soon or maybe finance a car, take out some student loans, this will impact you. All of these things, 15 - and 30-year mortgages, car loans, credit card rates typically rise and fall with Treasury rates. as lenders use these rates as the floor or the guide when they're pricing their loans. And so just like treasuries, mortgage rates have increased this week. As of yesterday, they hit 6.75%. And as somebody who does not personally follow the mortgage rate market, considering owning a home for me is a pretty distant dream, I was curious, is this reasonable?

7:57Has this happened before? And the reality is, yes, this isn't the highest mortgage rates have ever been. The highest was actually in October 1981 when a 30-year fixed rate mortgage would cost you a rate of 18.63 percent. And the lowest was actually just a few years ago in January of 2021 when rates hit just 2.65 percent. So it could be better. It could be worse. Yeah. The people who bought homes in 2020 and 21 are listening to that thinking, yeah, I got a pretty good deal. All right, moving on. After getting bullied like the ducks by Eden Hall Academy, Disney is bringing the fight back to the Trump administration.

8:35Yesterday, the company's ABC network sued the Federal Communications Commission for allegedly violating the First Amendment in its attempts to stifle programming because of anti-Trump comments made on ABC. In the suit, ABC wrote again and again, the administration has attacked ABC's speech, the stories its journalists report, and the viewpoints its network programs air. Over time, those attacks have escalated into express demands that ABC be stripped of its broadcast licenses because of its speech. Stripped of its broadcast licenses. Let's talk about that since that's at the crux of this battle.

9:07Back in April, the FCC launched a review process for some of ABC's broadcast station licenses two years early, which is basically unprecedented in American TV history. FCC Chairman Brendan Carr says it's because of concerns around Disney's DEI efforts, which the agency has been investigating for at least a year. However, Disney claims it's a retaliatory campaign for anti-Trump viewpoints expressed on its network from the likes of Jimmy Kimmel and the hosts of The View. New Disney CEO Josh DiMauro is all in on this fight. In a recent CNBC interview, he said, we're going to stand up to what we believe is journalistic and integrity, and we're not going to be told how to run that side of our business.

9:46Yeah, I mean, you talked about unprecedented moves. It's extremely rare for the FCC to actually revoke a license. The last time they did that related to a station's programming was in 1969 when the regulator took action after a Jackson, Mississippi station defended segregation on air. So what would this mean for Disney if the FCC did revoke this license? Well, Disney directly owns and operates eight local TV stations through ABC. After buying ABC 30 years ago, it includes stations in NYC, LA, Chicago, Houston, and San Francisco. And if the FCC did revoke Disney's license, these stations would go off air.

10:24So Disney's argument is that the FCC is stifling its First Amendment rights by launching this quote-unquote retaliatory campaign. I thought this was really interesting in the suit talking about what that actually means in practice. How is this pressure allegedly changing its editorial operations the way it reports the news? Well, they cited this July 16th address by President Trump about election security, which happened in primetime. Typically, ABC said we would not air this. This is just not something that we would put on in primetime. But in the suit, they said, quote, ABC was aware that the president wanted the address to be broadcast live and consider the risk of resulting in administration retaliation, ABC ultimately decided to live stream the speech on ABC News Live, which it ordinarily would not have done.

11:10So they're saying that because of the threat that Brendan Carr at the FCC or President Trump would go after their broadcast license, they decided to put this on their streaming service in something that they would not have normally done. So they're saying that's what Josh DeMauro is saying, the new CEO. He's like, yeah, we're literally changing our editorial operations operations because of what's happening at the White House, at the federal level, because we are just freaked out that we're not going to be able to have our stations anymore. Yeah. And the FCC has also launched a separate inquiry into The View, which is one of the news or talk shows on Disney's networks based on the equal time rule, which basically says non-news shows that feature political candidates on air should also feature their opponents for equal amounts of time to give everyone kind of a fair shake.

11:59The view has been exempt from this rule since 2002. But if the exemption was revoked, this could make it harder for the talk show to have political candidates on the show. Meanwhile, Brennan Carr at the FCC is kind of doing a victory lap because they have put a lot of pressure on media who have expressed anti-Trump viewpoints. And a lot of them have just gone by the wayside or resigned or quit. So at the Conservative Political Action Conference last year. He said President Trump took on the fake news media and President Trump is winning. Look at the results so far. PBS defunded, NPR defunded Joy Reid, gone from MSNBC, sleepy eyed Chuck Todd, gone Jim Acosta, gone John Dickerson, gone Colbert is leaving.

12:40CBS is under new ownership and soon enough CNN is going to have new ownership as well. So they're looking at the media landscape and they're saying because of this campaign that we've launched, they say it's legal. A lot of these places say it's not legal and we'll figure that out in this particular case with Disney versus the FCC. They're saying, look, a lot of our goals have been accomplished. All these people who don't like us are gone from the news media. Moving on, if you saw Usain Bolt break the world record for fastest 100 meter dash in 2009 and thought who could possibly go any faster, it looks like only a humanoid robot can.

13:15This week, Unitree, a Chinese robotics firm, released footage of its new humanoid robot called Superman, which the company claims can reach top speeds of 12.66 meters per second, slightly faster than Usain Bolt's top speeds during his record-breaking 100-meter dash more than 15 years ago. It's unlikely that any of these Superman robots will make their way over to the U.S. anytime soon, though, since just a few weeks ago, the FCC cracked down on foreign-made humanoid robots, four-legged robot dogs, and some autonomous mobile robots, citing national security and cybersecurity concerns. The ban has mixed reviews.

13:51On the one hand, large U.S. robotics companies generally are pleased because they see Chinese manufacturers as cheaper competitors. But on the other hand, smaller startups and researchers in the U.S. argue that these affordable Chinese robots are some of the only hardware they can actually afford to experiment with. And obviously, Chinese robotics companies are not a fan of the ban either. There is some reason behind the move, though. A previous analysis found an undocumented backdoor in a Unitree robot dog that could potentially allow remote access to its camera and control systems. Neil, I saw the video of the Unitree Superman robot, and I have to say it is really unsettling to see this Terminator-esque thing kind of creeping down a track at top speeds.

14:33Yeah, I mean, it was also a calculated release ahead of Unitree's IPO this morning, which made it the first humanoid robot company to go public in mainland China. The results are in, and this IPO went absolutely gangbusters. Shares were up 542 % in their trading debut. So this company went public at a$9 billion valuation, and then it rose to a$59 billion valuation after trading began, making it one of the most valuable companies in China. Retail investors, which means just the regular people who are investors, me and you, were obsessed with this company. This IPO was more than 5 ,500 times oversubscribed.

15:15So there's so much hype for Unitree and robotics, humanoid robotics in general in China. I remember the time we used to see robots from Boston Dynamics, that company outside of Boston. And now all we see online is videos of Chinese robots. It's really a sign of the times. Yeah, and China already dominates the humanoid robot market, accounting for roughly 90 percent of global shipments last year. And in the first half of 2026, Unitree, the company that just went public, shipped almost 6 ,000 humanoid robots, according to Smart Analytics Global. And it makes a lot of sense that the U.S. wants to kind of protect its market share, what little market share it has, because the robotics industry could be absolutely massive.

15:57Morgan Stanley analysts predict that the market could reach$7.5 trillion by 2050, which is an incomprehensible number. They also said that about the metaverse. So I'm taking that with a grain of salt. There is a big question to be asked about what are these things going to be used for, right? We've seen humanoid robot prototypes come in. Great. This guy can do the 100-meter dash in less than eight seconds, but they have to scale commercially. They have to actually get buyers. And 5 ,500 humanoid robots, I guess, is a start, but they need to be placed in factories or actually in the home. They need people to buy this for their house.

16:33And right now, the costs are pretty prohibitive. Right now, these robots from Unitree start at like$13 ,500 and go all the way up to$80 ,000,$90 ,000 for more industrial uses. But I think that's the big question. Yeah, it's super exciting to see robots dancing and sprinting and jumping super high. But I think the big question for all of these companies, which includes Elon Musk at Tesla and a bunch of other American companies which are getting walled by China right now, is where do we find commercial uses? How do we actually make money from these robots? Up next, would you take out a loan for rent?

17:08This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new.

17:40It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+. Neil, when you need new running sneakers, is an AI agent placing your order for you? You're the Gen Z one here. Wouldn't you be more likely to do that? Fair point, but it is becoming increasingly common. Agents are comparing products, evaluating inventory, and completing purchases for customers.

18:16An IDC study sponsored by WooCommerce found that open source platforms give e-commerce brands more freedom than SaaS to optimize for agentic commerce. That can mean more sales, whether the buyer is a person or a bot. Check out the study at WooCommerce.com slash trends. That's WooCommerce.com slash trends. Rent is due, and now some companies are offering to help you pay it. Buy now, pay later companies, which give users short-term financing to break up purchases into smaller amounts over time, are not just for laptops and designer clothing anymore. These fintechs are letting renters pay their landlord in smaller chunks instead of just one hefty check on the first of the month.

18:57For example, lending app Flex gives you loans to pay for basics on top of rent, like bills, Wi-Fi, and health insurance for a small monthly fee. This company has already financed$40 billion in rent payments for 3 million tenants since it was founded in 2019. And about one-third of its customers use its services every single month, while the rest only use it occasionally. But why is this happening right now? The trend is growing as Americans struggle with high housing costs and incomes that aren't keeping up with inflation. However, some proponents of Buy Now, Pay Later say that rent has always been a challenge to pay, especially for those people with once-monthly paychecks, off-cycle salaries, or unpredictable income streams, and this is making it easier for those people to pay their rents reliably without as much stress about the timing of their payments.

19:48And for some, these BNPL loans mean they can avoid more expensive lending products like payday loans or high-interest-rate credit cards. Neil, regardless of the individual circumstances behind renting and installments, on the whole, it does seem like a concerning trend for the health of the American consumer. Yeah. Do you remember when DoorDash launched a partnership with Klarna and people were scoffing at this concept of, you know, taking out a loan to buy a burrito? Well, people actually are. About a third, 29 percent of Buy Now, Pay Later users said they've used them for short term loans to buy groceries.

20:21That's up from 14 percent in 2024. 18 percent said they used a BNPL loan for car repairs or maintenance. 13 % used it to pay rent. And then another survey, 42 % of respondents who have used these kind of loans did so to pay medical or dental care, 39 % to pay utility bills. So I think when this industry first launched, it was, look, you're going to use a, you're trying to buy something pretty expensive. Maybe it was a couch or something for your home that costs in the thousands of dollars, you could divvy up the payments over four separate times. Now we're seeing people use it for just those monthly subscriptions, like not, not even subscriptions, just these monthly payments that you have to do to just live your life, like utilities and rent.

21:04Yeah. And maybe this is a hot take here, but it does feel like one of those things that's like, I don't know if you saw that trend. That's like, what's chic if you're rich, but tacky if you're poor. Um, I mean the, the super rich has always been using leverage. They're, uh, you know, taking advantage of debt opportunities because they're, you know, using a, uh, their, their yacht as collateral for a massive loan. So why can't this be the same for less wealthy individuals? Well, obviously, on one hand, these super rich have actual assets that they're using that are kind of backed up. When you can't pay back your$100 million loan, there's the yacht that you can take.

21:40Whereas here, it's a little bit riskier if you're unable to pay all these loans. There's a little bit more implication here. So let's look at how this actually works. So Flex is maybe the biggest name in this business. A firm just recently got into it, but it's just doing a pilot program. Flex charges a$6 monthly fee plus a charge of 3 % of the sum that's borrowed and a processing fee. What you do is they basically pay your rent for you at the first of the month or whenever you get it. And you pay them back in smaller installments over the course of the month. So they're basically fronting your rent payment for you and dividing it up into smaller chunks.

22:19They say this is a good deal for you because there's no late fees or compounding interest. And they say, when you look at all the credit options available to you and you need credit because America runs on credit, we're actually not that bad because of no late fees or compounding interest. You're not going to get into this cycle of debt with us. And so that's what they say. I mean, another guy from another company, SplitPay, chief executive Andrew Borofsky, said, look, in an ideal world, my product gets used less, frankly. The social contract in this country, you work really hard so that you can buy a house that's really deteriorating.

22:53So these companies, I guess, are not necessarily proud of what they're doing, but they're saying, look, this is a necessity. People can't pay their rent in time. And we're going to step in because another factor that we haven't talked about is they need to grow their business. Affirm, Klarna, these are companies that are publicly traded. They have investors that want to see them grow. They need to expand into new business lines. So they're looking at rent, utilities, health care, some of these basic necessities that you need to pay and say, wait, actually, that's actually a market that we can move in to grow our business.

23:22So you have to look at that side as well. Yeah, and it definitely does feel like once you get on the hamster wheel, you're not going to be able to get off. The executive director of advocacy group Protect Borrowers told the Financial Times, quote, if you don't have money to pay rent today, it's not likely you'll have money to pay rent later. And it feels like you're getting on the hamster wheel and you won't be able to get off. So, I mean, it'll take probably a few more months to actually see what the impact is of this. But I'm not super hopeful. Let's bring to the finish with some final headlines.

23:49You're never going to believe this, but hours before punishing tariffs were set to go into effect on Canada, President Trump delayed their imposition, citing a deal that will soon be finalized. At midnight this morning, the U.S. was planning to slap 50 % tariffs on$20 billion worth of Canadian goods, from hockey sticks to tongue depressors. While not hugely impactful from an economic standpoint, the tariffs could have invited retaliation from Canada and escalated a political squabble between the once-friendly neighbors. But 90 minutes before the deadline last night, Trump posted online that he paused the tariffs for three more days, citing a deal that would soon be agreed upon.

24:27Canada was more circumspect about an agreement. Prime Minister Mark Carney said substantial progress has been made, although there is important work still to be done. Yeah, the Canadian Prime Minister Carney said, quote, the talks are very delicate and intense. So that feels a little bit euphemistic, but we'll see what actually happens in a few days. the tariffs that were paused would be the first use of Section 338 of the Tariff Act of 1930. The first use, and it's been almost 100 years since it's been enacted. This actually allows the White House to impose up to 50 percent tariffs for any nation placing unfair or unequal rules on the U.S.