Netflix Draws 60M Households in Live Sports Gamble & Are Spam Calls Over?

0:03When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets Mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. Good morning, Brew Daily Show. I'm Toby Howell. And I'm Kyle Heggie. Today, Netflix's foray into live sports broadcasting went about as shaky as Mike Tyson's jab. And the reason you haven't been getting as many robocalls.

0:44It's Monday, November 18th. Let's ride.

0:52Happy Monday, everyone. Hope you are having a great start to your week. I'll tell you someone who isn't having a great Monday, though. Spirit Airlines. The budget airline officially filed for bankruptcy this morning after years of losses, a failed merger with JetBlue and shifting consumer preferences. Yeah, Spirit has not been having a good time lately. Not only was it dealing with like failing demand, a failed merger, but it also had an engine recall, which had to ground a bunch of its planes earlier this year. And I think the final nail in the coffin was just post-pandemic travel inflation. It couldn't find a way to get back to where it used to be.

1:27I'm actually quite sad about this stuff because Spirit, like, it needs to exist just spiritually for America. Yeah, the last few years have just been a rough time for them. Spirit hasn't had a profit since 2019. It lost more than$335 million in the first half of this year. So the writing was on the wall. That said, if you are eyeing cheap flights home for Thanksgiving, Spirit says it does expect to continue operating normally and letting customers book flights. I'm getting on my last Spirit. I know. Spirit is down, but it is not quite out yet, Kyle. Now a word from our sponsor, Yahoo Finance. Kyle, the Purple Prince has once again made its return to MBD.

2:05And what a pleasure it is to have them back. I was actually using Yahoo Finance to prepare for the show today. Oh, do tell. Well, it's really the only place on the internet that you can go for both real-time market data and trusted news. So if you want a holistic picture of how a treasury appointment is affecting the market or how investors are reacting to an earnings call, Yahoo Finance is the only place to go. I like to think of it as the secret weapon of the informed investor, a shining purple light in a sea of darkness, and really one of our go-to sources for bringing you all this show every morning.

2:35It is our Purple Prince. And to check out the Purple Prince yourself, head to yahoofinance.com. That's yahoofinance.com. This episode is brought to you by State Farm. Checking off the boxes on your to-do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you. Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs. Like a good neighbor, State Farm is there. Well, Kyle, turns out putting a 58-year-old in a boxing ring with someone less than half his age doesn't lead to very compelling television.

3:16The much-hyped Mike Tyson vs. Jake Paul fight put on by Netflix was mostly a snoozefest that gave fans very little to cheer about, but the streamer's foray into the fight game did bring in huge viewership numbers. Netflix announced that 60 million households tuned in to watch Paul and Tyson slug it out for the main event, while 50 million watched the co-main event between Amanda Serrano and Katie Taylor, which actually made it the most viewed women's sporting event in U.S. history. But while the gaudy numbers were nice, There were some annoying technical blunders along the way, and I'm not just talking about Iron Mike's clumsy footwork.

3:51Yeah, hashtag Netflix crash, which if you're Netflix, you don't want that trending. It did start trending on X on Friday, and Down Detector received more than 500 ,000 reports that Netflix was having issues. Obviously, a ton of people wanted to watch this, and they were having some issues. Jake Paul, the marketing, legitimately the marketing master he is somehow, he took the opportunity to brag that we, quote, crashed the site in an interview after beating Tyson. What will likely have Netflix execs kind of sweating bullets right now is this fight was a dry run for Netflix. Christmas Day, they're going to broadcast NFL games.

4:24And the NFL, if there are streaming issues, they're going to get a lot more than 500 ,000 reports on Down Detector. So it was a smashing success for Netflix in some regards, but also maybe a failure or something they need to check before Christmas in other regards. Right. It was a cultural moment. So in that sense, it was a success. At one point, Mike Tyson's bare bottom was shown in the locker room by Netflix. That turned into a meme. But it also showed, this event showed that Netflix is certainly working out the kinks. A lot of people were just tweeting out, is it my internet or is this stream just buffering a lot?

4:56So it made headlines in that way too. But let's take a step back here and realize just how big 60 million viewers, 60 million households is. The 2023 NFL regular season averaged 17.9 million viewers per game. The most watched regular season game was the Cowboys vs. Giants on Thanksgiving. That only got 42 million viewers. So we're talking bigger than the biggest NFL game last year outside of the Super Bowl. So it is truly a big number. I was reading around, though, and some people in the industry were asking some questions about how that number was calculated. Did Netflix treat each individual effort to reload the stream as a new watch?

5:33Because you know a lot of people are pressing that refresh button. So maybe there isn't great apples-to-apples viewership numbers because these are self-reported numbers. But still, regardless, it is a massive, massive number. Yeah, I mean, there was a January playoff game a year ago. Kansas City Chiefs versus Miami Dolphins are a few years ago. And that drew 23 million viewers. And obviously that was streamed on Peacock. So they could handle the bandwidth of 23 million users. Just to talk about the scale of Netflix, there's 280 million subscribers in more than 190 countries. so I think the Christmas games could see more than what Jake Paul and Mike Tyson had and if it's more like Netflix is probably getting to work right now making sure the stream doesn't go down also apparently this morning breaking news Beyonce is playing the halftime show at one of these games so you probably double the number of subscribers that are gonna uh look into this game now so Netflix is definitely needs to get ready for these Christmas day games because the reason why we're talking about this fight even though it was a little bit of a snooze fest is that it is kind of a signal of Netflix's intention to push into these mega events.

6:37They've streamed some smaller live events before. Remember, they had stand-up specials from Chris Rock, this golf tournament they called the Netflix Cup. They also tried to stream the Love is Blind season four reunion special. Never forget. Love is Blind fans know that that did not go well at all, and that was obviously much, much, it was chump change in viewership compared to this Jake Paul and Mike Tyson fight. But we've mentioned the NFL games on Christmas Day coming up, So that will be a big test. But then another big test too is Netflix signed WWE's flagship show Raw. It's coming to Netflix in January.

7:11So they definitely have to get their ducks in the row here because you can't be having these buffering issues for these future mega events. Yeah, I think it's such a great point. Like not only is the Christmas Day game going to be important for Netflix to go off without a hitch, but it's also Netflix needs to be viewed as credible by some of these larger sports leagues because I think if they can crack the code on live sports, it just unlocks so much value for this company because that is the one thing people are still buying cable packages for. If they can crack the code, then they're looking really good for future growth and using this as top of funnel to get more permanent subscribers.

7:43Yeah, that's a great point. I think the final takeaway here is that the boxing match between a 27-year-old and a 58-year-old went pretty much exactly how you would expect a 27-year-old against a 58-year-old to go, and that maybe Netflix isn't ready for the big time. There is some cabinet drama going down in recent days over who should be Donald Trump's treasury secretary. And like Kyle's high school love life, it has spilled over into a messy public spat. The two main men up for consideration are billionaire Howard Lutnick, who Trump has already relied on as his chief headhunter to help him fill positions in his administration, and the former money manager for George Soros, Scott Bessent, who seemed to be the favorite in the clubhouse until Elon Musk and RFK Jr.

8:25started to weigh in. The two Trump allies started to make noise on X to their combined 210 million followers over the weekend. Musk wrote, My view is that Bessent is a business as usual choice, whereas Howard Lutnick will actually enact change. Business as usual is driving America bankrupt, so we need change one way or another. So you can see how this is turning into a proxy battle between a more status quo choice in Bessent, who is probably still the odds-on favorite to win the role, and Lutnick, who might upend the status quo. But according to multiple reports, the last minute push from Elon and RFK and Lutnick has rubbed the Trump camp the wrong way.

9:01And now he might go in an entirely different direction with former Federal Reserve Governor Kevin Warsh and Wall Street billionaire Mark Rowan now in the mix as well. So, Kyle, I compared this messy fight to your high school love life, but I hope it wasn't quite this messy. One, I cannot confirm nor deny anything about my high school love life. So let me set the record straight there. I mean, just to take a step back, what does the Treasury secretary actually do? And this is a really important position for the Trump administration. This is economic policy and advising the president on those economic issues, managing federal finances, overseeing the IRS, managing U.S.

9:35dollar and monetary policy, regulating financial institutions. And so much of what Trump talked about on the campaign trail was, one, tariffs. And so he needs a Treasury secretary that's going to go along with at least using tariffs as a negotiating tactic. and two, maybe some changes to the IRS, which this post would actually oversee. So I think it's a very important role. You've talked about kind of how the two candidates that were most in favor maybe have fallen out and there's some emerging contenders. I love in some of the reporting, they were like talking to Trump, what do you want from this person?

10:06One, he was like, he wants someone quote unquote big for the role that has respect on Wall Street, which maybe points to Mark Rowan, who's the CEO of Apollo Global Management. But he also said he wants someone handsome and he thinks that Kevin Walsh is handsome. You said that he wanted someone big on Wall Street because part of what a Treasury secretary does is kind of just project strength and stability to the stock market, to the bond market. You want someone there with a steady hand. I mean, think about our past Treasury secretaries. Janet Yellen is one of those kind of steady the ship type figures.

10:36So you want someone like that in the role. When it comes down to policies between some of the names up for grabs here, they are kind of similar. One of the big choices is who is going to support Trump's foray into levering this across the board tariffs. Pretty much everyone has come out and said, like, we will support that. They also both are candidates or all the candidates are generally in favor of lowering taxes to help offset some of those higher import costs. Also, cryptocurrencies, they've all been pretty across the board in favor of that as well. So it might just come down to who Trump likes the most at this point because it is one of those positions that you do want to have a good relationship with the president.

11:17I think what has been grading Howard Lutnick was supposed to be this person who has just helped with the transition team. But he has almost done this Dick Cheney model of saying, wait a second, I'm going to head up the committee, but also you should pick me. Yeah, it's like I have a really good person for the Treasury Secretary. It happens to be me. Right. No, and so that has been grading on Trump a little bit. And then you have, of course, the wild cards of Elon and RFK wearing it and saying, I think you should go with Lutnik. So a lot of moving pieces here. And it is just notable how much longer Trump has taken to fill this position than every other position within his cabinet, which I will just run down quickly some of the positions that have been filled.

11:56Recently, Trump chose Chris Wright, the CEO of this oil field services company, Liberty Energy, to serve as the next energy secretary. Wright is known as one of the pioneers of the American fracking revolution. And then also, you probably heard about this one last week, but Trump did name Robert F. Kennedy Jr. as his new Secretary of Health and Human Services. So outside of the Treasury Secretary, this cabinet is coming together, but clearly dragging his feet on this specific position. Yeah, but just one final note. These are just nominees. They do have to get confirmed by the Senate. And so none of these are finalized until they do that task.

12:28Warner Bros. Discovery settled their breach of contract lawsuit against the NBA, an agreement that will keep the company in business with the league for over about 10 years. Now, the backstory on this lawsuit, the NBA signed a new rights deal with ESPN, Comcast, and Amazon.com for nearly$80 billion. And then Discovery sued, saying that this violated a matching rights clause it had with its own TNT cable network. Now, the ref has blown the whistle. They've gone away from the review, and they're not going to court. The new settlement now focuses on the ability for Warner Bros. Discovery to develop new shows with the NBA, house some international rights for Northern Europe and Latin America, and then Bleacher Report and House of Highlights, two of their social media channels, will continue to have access to NBA content.

13:16The company is also going to partner with the NBA's digital operations. That'll drive about$350 million in revenue for Discovery. and then finally, which was the most important to me, Warner Bros. Discovery struck a deal with Disney to license the TNT show inside the NBA. This is kind of a cult classic show of NBA followers, so we're still going to have Charles Barkley and Shaquille O 'Neal on the big screen for the NBA season. Toby, what are your thoughts about this deal, and are you pumped that we're still going to have Sir Charles on TV? I am extremely excited for that. This was a big sticking point for TNT, which is owned by Warner Bros.

13:52Discovery. They had had the NBA for since 1988. It has just been a fixture on TNT. So losing the NBA was a really big deal. There was an NBA-sized hole. They did sue to try to claw back some of those games. What ended up happening for the most casual fan, though, is if we lose inside the NBA, we are going to be extremely mad. We will riot. We will riot. It is true a little bit because if you actually look at the NBA, despite this gigantic media deal it just signed with that trio of partners that you mentioned, And viewership is actually a little bit down this year. You have this crop of stars, you know, like the LeBron era, the Steph era, that is aging out of the league.

14:29So you kind of have these headwinds against the league right now, despite this record revenue that it is bringing in. So to keep these bankable stars like Charles Barkley, like Shaquille O 'Neal, that kind of make inside the NBA what it is, it is a big win. So they had to do some creative maneuvering here. They had to strike a deal to license the show. They won't necessarily run it outright anymore. But to keep this, you know, group of fan favorites, I think was big for the NBA. A hundred percent. I think three things to me are super interesting. One is international expansion will continue, that the rights internationally are still worth something.

15:02The second is I think just looking at viewers of games being down doesn't tell the whole picture of the NBA. This is a sport that's really leaned into social content. And so, so many people, they might not watch a regular season game between like the Portland Trailblazers and the New Orleans Pelicans. but they'll definitely watch the highlight of like Brandon Ingram dunking on someone. And that will get so much play across social. And I think the third thing is this ability for Warner Bros. to develop new shows around NBA content. We just saw the Netflix show that followed five NBA players. I think we're going to see more of that where it's not NBA games, but it's NBA content.

15:35And that's the real kind of breadwinner for the NBA to develop almost a universe outside of the games that'll keep the league relevant for a long time. That is a great point. And also, one final part of this deal is that college football is coming to Warner Bros. as kind of a tit-for-tat licensing agreement with ESPN, with Disney. And then they'll also do a new deal for NASCAR. So they are trying to fill this NBA-sized hole in their broadcasting with something like college football, with something like NASCAR. So the void will be filled by something else. We will fill the void. Yeah, they will fill the void.

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17:44Welcome to Winners of the Weekend, the segment where Toby and I introduce two entities that absolutely crushed the weekend, unlike your friend who brought that side dish at Friendsgiving that nobody ate. Toby, you won the pre-show game of Pickleball, so you're up first. My winner of the weekend is Elon Musk's AI ambitions. His company, XAI, is raising$6 billion to buy 100 ,000 NVIDIA chips in order to big a big old data center in Memphis. That pushes XAI's valuation to$50 billion, making it the sixth most valuable startup in the world. So for those keeping track at home, Elon now has SpaceX, which was valued at approximately$250 billion after a recent tender offer and is now the second most valuable private company in the world behind ByteDance, plus XAI, which is now the sixth most valuable company as well.

18:33The vision for the maker of GROC AI model is to take on OpenAI and Sam Altman. As part of that effort, Elon has also ramped up pressure on his rival by expanding his lawsuit against the company, adding in Microsoft and LinkedIn co-founder Reid Hoffman as defendants. That is an escalation of the original antitrust lawsuit he filed earlier this year, alleging OpenAI created an unfair monopoly in the AI space, as well as undermined its original open source promise. So Kyle, lost in everything else Elon does Is this massive AI bet he is also making with his company, XAI? Yeah, I mean, I think it is actually pretty super impressive.

19:11And Jensen Huang, the CEO of NVIDIA and founder, praised Musk a little bit ago, saying that to build this data center, it would have normally took it years or a year plus. He did it in 19 days. And so I think when Elon decides he is going to do something, he almost will stop at nothing to get it done. So I think that just the feat of engineering to get this data center up is really, really impressive. And obviously now it's just a money game. People need GPUs to build really large language models and other AI capabilities. So they've secured funding for that. And it's off to the races for Elon and XAI.

19:45I mean, I do just want to drill in on how big this supercomputer is. It is probably going to be the biggest supercomputer in the world. and why Elon is so confident in making this bet on just buying all these GPUs is that Tesla does have a, or Elon does have a really great use case for a data center like this. Not only will it help train the models put forth by XAI, but also Tesla's full self-driving is expected to rely heavily on this new supercomputer. It's nicknamed Colossus, and it is just going to play a role in a lot of the enterprises, not just Tesla, not just X, but also SpaceX, also Neuralink.

20:21So he does have a lot of use for this. So which is why I think investors are ready to fork over, you know, five billion or six billion dollars, pushing it to a valuation of 50 billion dollars. It really is crazy how big of a bet and how quickly this happened. Like Elon didn't have an AI company really even just at this time a year ago. Now he's got one of the biggest supercomputers in the world. Yeah. I mean, basically, if Elon wakes up and says, I'm going to start a company, he'll have five billion dollars at his door in about 10 minutes. I mean, you said he didn't have an AI company, but I want to go back to when he actually co-founded OpenAI because you mentioned the lawsuit.

20:51I actually think the lawsuit is very revelatory about both Sam Altman and Elon Musk. The emails that are coming out between them are now part of Discovery, so everyone can see them. Sam Altman, people are complaining that, like, we're not really sure what your calculus is, what your true ambitions are, which is what we've heard when he got kicked out and came back exactly about Sam Altman. For Elon, they were like, it seems like you want complete dominance and you want to own AI completely. And that's kind of what we're seeing, too. So interesting to think even five, 10 years ago, their characteristics were quite the same.

21:24Absolutely. I do highly recommend checking out these emails as well just to see the communication styles because Sam Altman will write this multi-paragraph thing about why he thinks AI is the bet to make right now. And Elon Musk will respond in one sentence that literally says, like, sounds good. Yeah. Count me in. Doesn't even sign his email. So for all of you being like best, Kyle, which I do, delete it. Delete it. You don't need it. All right, Toby, let me paint a picture for you. Your phone rings and it's an unknown number. You pick it up because you're convinced it's actually your crush calling from a new number.

21:54You say hello, nothing happens. You say hello again. A pre-recorded message plays telling you that you're behind on a car payment and you need to pay immediately. You don't even own a car. You're confused. You hang up. Yes, this is a classic American experience. But thanks to the FTC, it's happening less and less each year. Now, the Federal Trade Commission reported that unwanted telemarketing calls are down more than 51 % since 2021. And they've dropped in each of the past three years. Now, this has been a major focus for the FTC. In 2023, the agency announced Operation Stop Spam Calls, very creative name there.

22:29The largest crackdown on illegal telemarketing in the agency's history. They've also gotten the big phone mobile carriers to do anti-spoofing protocols and to stop people from spoofing numbers. and they've also put out new regulations around AI saying AI telemarketing is still telemarketing. Now, for every month in the fiscal year, robocalls made up the most of consumer complaints. Those are down. I just thought it was interesting the other common tactics, imposters, debt reduction fake calls, and then energy, solar, and utilities fake calls. Now, the FTC said they'll continue to be vigilant on this front.

23:05They also clarified that this doesn't mean you don't have to call your grandma anymore. So please pick up the phone and call her. Toby, have you felt like spam calls are down? I do think, generally speaking, there have been less. I'm still one of those people. I never pick up from a random number. I never do, but I feel like I get so many spam calls still. Right. It is one of those things where the FTC did finally put its flag in the sand and say, like, we are going to do something about this because it truly was just a massive problem that a lot of people, I mean, you took us through that beautiful experience at the start of the story.

23:35A lot of people have had that experience. I think one of the big things that the FTC did is that they now have the power to directly file a federal court complaint to force these scammers to return stolen money. So they've actually just basically grown some claws, grown some teeth to it, and actually go after some of these big robocall, big scamming operations. They estimate that the impersonation-based scam calls have cost consumers$1.1 billion during the last year. So this is still a pretty big problem, but also going after these AI-generated calls as well, that's been a big part as well. So it is good to see those numbers going down.