Mario Gabelli on MSG & Joseph Stiglitz on the Trump Economy 2/19/26

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0:29Joseph Stiglitz:Taxes and fees extra. It's smart to always have a few financial goals and a really smart one you can set. Earning cash back on what you buy every day. And with Discover, you can. Get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. Bring in show music, please. This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, first, the biggest headlines. OpenAI is nearing a$100 billion fundraise.

1:13Joseph Stiglitz:Mark Zuckerberg took the stand in a social media addiction trial in California. And Andrew Mountbatten-Windsor, formerly Prince Andrew, arrested. Plus, the big media deal on the table. What's to become of Warner Brothers Discovery, Netflix, and Paramount? With legendary media investor Mario Gabelli. Netflix, according to him, might not win the deal.

1:40Mario Gabelli:The stock at$80 is oversold.

1:43Joseph Stiglitz:Where each asset and shareholder money lands when the dust settles.

1:49Mario Gabelli:This is terrific. My clients own Warner Brothers. We own a little bit of Netflix. We're thinking about adding to it. We obviously own some Paramount, not a lot.

1:58Joseph Stiglitz:Then two-time Nobel Prize-winning economist Joseph Stieglitz. He's taking a hard look at the Trump administration's economic progress. The whole idea was to bring back manufacturing jobs to the United States. You know what's happened to jobs in manufacturing in the last year? They're down. They're down. They're down. Did he succeed? Might be a lag. Might be a lag. But they're down. It's Thursday, February 19th, and Squawk Pod begins right now. Stand, Andrew, bye. In three, two, one, cue Andrew. Good morning and welcome to Squawk Box right here on CNBC. We're live at the Nasdaq market site in Times Square.

2:43Joseph Stiglitz:I'm Andrew Ross-Sorkin, along with Joe Kernan. Becky is off today, so it's just the two of us as it is. Also, we've got a news alert coming up just right now. We want to show you this. The company OpenAI reportedly now close to finalizing the first phase of a new funding ground that's likely to bring in, you ready for it, more than$100 billion. That's according to Bloomberg. And then speaking exclusively with CNBC earlier today, CEO Sam Altman said that he cannot comment on any potential deal. But when asked about fears that China is beating the U.S. in the AI arms race, he said concerns may be warranted.

3:18Joseph Stiglitz:I don't know about being underestimated, but certainly the progress of Chinese tech companies across the entire stack, and also not just in AI, but in many fields, is remarkable. The reason I'm pushing back on underestimated is it feels like every conversation I have is like, oh, China's beating us. What do we do about it? So I think people are aware of what's happening there. But yes, Chinese progress is amazingly fast. And that interview taking place in India as these talks or finalization of the talks for that$100 billion taking place right now. I see little wrinkles emerging as you age. Wisdom.

3:55Joseph Stiglitz:Wisdom. I'm hoping that 50 does it for you, but we talked about that last night. We see each other a lot. We do see each other a lot. But it's happy birthday. Thank you. You're a year older. Thank you. I would hope a year wiser. I have high hopes for you next year. I know. You think 50 years old is the... 50 things happen. A lot of things happen. 50 things happen. 50 things happen when you're 50? I'm not 50, by the way, folks. Don't age me. No, I know. No, neither am I. I'm trying to think back about what it was like when I was there. That's tough. But today is your day, and I want you to have a great birthday.

4:29Joseph Stiglitz:And I'm going to really take this into account in everything we do today. Oh, really? Yeah, in terms of deferring to you. You're going to be sweeter and... I'm just going to, I'm going to nod. I'm not going to interrupt you if I disagree with something. I'm going to nod and just defer to you that you have thought a lot of these things through as a young person thinks things through. And I can't always just think, well, you know, you need to think of it my way. But just so I understand, when I do turn 50, what happens? This great progress that a lot of people note on Twitter that they have seen over the years, as you've come closer, I think, to my viewpoint on a lot of things, that that will, there might be almost a quantum, what are you laughing about?

5:14Joseph Stiglitz:There might almost be a quantum leap, not this gradual thing we've seen, but an actual quantum thing where you finally take a look back at things. Say all of this is a mistake. No, just say he was right the entire time about almost everything. Okay. Fireworks. And I think there's big surprises coming today. No, there is not. Well, not big surprises, but the kind of surprise I think that you would like. Maybe you don't know about it. Yeah. I don't know about anything. Oh, you don't? No, you just gave away a surprise, but I don't know what I've missed. You don't know when, where, or what? No. Okay.

5:46Joseph Stiglitz:No.

5:49Joseph Stiglitz:Fireworks in a California courtroom during Meta CEO Mark Zuckerberg's testimony in the a landmark social media addiction trial. He defended his company's algorithms and practices in the face of allegations that he put profits and addiction over teen mental health. Zuckerberg says Tim Cook was among the stakeholders he's reached out to about these concerns to discuss the well-being of teens and kids. This is a tough one, and none of us know what the answer is on how to, what kids should do around the world, Andrew there are more and more places it started maybe with something in Australia more and more places happening in Europe do you think it's coming here should it come here I don't know we probably we should probably think about it something but I don't know what the right answer is the the discourse and everything else in the world we'll talk more about there there is loose talk everywhere and in really incendiary unacceptable stuff that but that is slander or libel, whatever the hell it is, if you write it or say it, but it is everywhere.

6:54Joseph Stiglitz:We have lost our way in some higher institutions in educating, in my view, our youth, because I look at some of the stuff that there end up, some of the conclusions that they come to, and we've missed something somewhere along the way. I'm thinking about Columbia, some of the things we saw. All these people die in Iran. Not a single person is anywhere on an Ivy League campus protesting against that. They didn't even know what they were protesting half the time with Gaza, and yet they were there. And do you see how they've been molded into... And so the question, therefore, is that about social media, though?

7:30Joseph Stiglitz:Is that about education? No, no, no, it's not. Is that about... What are we talking about? I don't know. You know, you would know more about how these kids got this way than I would. Number one, you're younger. And number two, some of the people that you don't immediately condemn are, I think, responsible for some of this on the far left. Andrew, Mountbatten, Windsor, formerly known as Prince Andrew, has been arrested on suspicion of misconduct in public office. Police told the BBC that Andrew, the brother of King Charles, is in custody and officers are carrying out searches at his address. the arrest coming after police said they were assessing a complaint over the alleged sharing of confidential material by the former prince with Jeffrey Epstein.

8:17Joseph Stiglitz:Andrew, who turned 66 years old today, also his birthday I did not know, has denied any wrongdoing. His birthday's not going so good. I'm going to knock on wood and hope mine is a little bit better. Happy birthday, Andrew. Come with us. That's harsh. I'm not expecting anything like that. You can just call me Prince Andrew. I could. And we have a surprise for Prince Andrew. Oh, you don't want to. That's right. No one wants to. You can call me Prince Andrew today. Okay. Of all days. You're right. The guy was just arrested. He's not. He's Andrew Mountbatten. He's not Prince Andrew. Well, he was Prince Andrew.

8:53Joseph Stiglitz:Formerly known as Prince. Which, remember. Anyway. Happy birthday. Crawlers. Daily provisions. They got an even. They sent over some donuts. I have an early birthday gift because there's a donut. Or there's a bacon one. They got you a bacon one. Danny Meyer, thank you. And the Daily Provisions folks. That is awesome. These are my favorite, by the way. Do you know that? These are my favorite. So what, on your birthday... I go this way. I know, but on your birthday, what are we talking? How many would you... Oh! Is my bacon donut on the floor, Stack? How many will you have? I don't know. Now I feel sad and bad.

9:30Joseph Stiglitz:Will you have three? No. Remember Krispy Kreme's? What was your record? Oh! What was your record? 30-second rule. Three-second rule. Come on. Pick that up. I have three dogs. God knows what they do with their mouths. Oh, my God. Grab them. I'm not joking. You should have those. I'm going to. What was your record on the Krispy Kremes that day? You were up the night. Years ago. It was a couple years ago. Years ago. Nine. I might have had nine donuts or something like that. Nine. And you were flying. I was. Thank you, Joe.

10:03Mario Gabelli:Cheese will be next.

10:05Joseph Stiglitz:Coming up on Squawk Pod, a wide-ranging conversation with legendary media investor Mario Gabelli. Where Warner Brothers' discovery lands in the Paramount Netflix fight, the future of our own parent company, Versant, and of course, what's really going on at MSG as the company's board explores splitting up the Knicks and the Rangers.

10:29Mario Gabelli:You basically have two assets that are totally different. Can they then sell a piece of Remainco, which is, let's say, the Knicks and the minor league, the other league they have, I want to call it a minor league. And can they sell a piece of that the way Bob crafted of the Pats? And that is what he did was terrific. And that's another option for them that they don't talk about.

10:51Joseph Stiglitz:Gabelli, an MSG investor, joins us next.

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12:24Joseph Stiglitz:That's unstoppable energy.

12:47Joseph Stiglitz:And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. Welcome back to Squawk Pod. Here's Joe Kernan. Shares of MSG gaming, or sports, MSG sports are gaining ground. And yesterday, the company's board said it's exploring potential spinoff to split its New York Knicks and New York Rangers business into two publicly traded companies. He's joining us now with his insight billionaire and value investor Mario Gabelli, as well as a shareholder in MSG Sports. And we're going to get to you on all the latest developments with Warner Brothers as well.

13:32Joseph Stiglitz:But you can start with this, Mario. Does this make sense for you?

13:35Mario Gabelli:Thank you, Joe. Good to see you all. And what a privilege to be here. When Bob Kraft wanted to raise some money for the Pats, what he did is he sold some interest in his whole code, which meant they didn't sell a piece of the teams. What the Knicks and the Rangers and MSGS, Madison Square Garden Sports, announced yesterday was that they're examining on the section of an IRS code, 355, not relevant, that they are considering spinning off one of the splitting up the teams. Forbes has a value of about$13 to$14 billion for them. We think it's clearly$11 billion. So the value per share is north of$350.

14:12Mario Gabelli:But there are other options that they can pursue while they're doing this. So what you have is the Rangers, you know, they're having a challenging season. The Knicks tonight are playing Detroit, and we'll see how they do. So those are the dynamics there, Joe. At 350, it was up significantly yesterday. It's at around 340. We still like, because we're passionate fans, own one share for grandkids. You got to put it away.

14:39Joseph Stiglitz:We always talk about the valuation for most sports franchises. You wouldn't say that it's overdone at this point.

14:49Mario Gabelli:Well, short term, you have to adjust. You know, I can't tell day to day. I mean, if we have this geopolitical issues, that would make the stock like others, you know, go down. But independent of that, you have 32 hockey teams, 30. you know, there's a scarcity value, plus the basketball teams are going more global. This is interesting.

15:11Joseph Stiglitz:You're on the record. You at this point think that Paramount's bid is superior to Netflix and Netflix.

15:18Mario Gabelli:That's a great question. You know, we go and shift experiences, live entertainment, sports. Those are drivers. In the case of Netflix, their stocks dropped from like 110 to 80 over the last four months. but we're not getting their shares. We're getting cash, but cash is adjusted depending on how much value they put in. So when I get$30 a share, the ARBs are saying if they don't bump, that is a 6%, it's actually 5.7 % to a December close. If they bump to 31, it's closer to 9.5%. So the hands are, the deal right now, the stock at Warner Brothers, now the question for me is always the same. You look at the amount of content spend at Paramount.

16:03Mario Gabelli:You look at the content spend at Warner Brothers, and the number they give you where they expense completely the sports dynamics, and you look at the content spend at Netflix, and you say, hey, who's going to win? And then what is the entity that's not winning, what are they going to do? And so from our end, Joe, the question is, can they cut a deal among themselves of some sort, independent of that, at least they're starting to talk. And that was something that had not been on the drawing boards before. So, you know, our clients own some Warner Brothers, but it's in the hands of the ARBs right now.

16:40Mario Gabelli:And they're doing the dynamics, the math, and so on.

16:43Joseph Stiglitz:What was your point about the drop in Netflix? I was down in the 70s, actually, the drop in the shares. It's not stock anymore. So what point were you making it? And why is it down? Is it down just in general on the, I don't know, market action or the environment? Or is it down because people are wondering if this is a worthwhile acquisition to go after with, you know, with Netflix money?

17:09Mario Gabelli:Well, it's a change in the historical culture of Netflix where they would, you know, rent or lease the licenses. So what are they going to do next? The stock at$80 dollars is oversold however as you point out the concern is what are they going to do next since they're not in the in the highest position to win the the challenge so this is terrific my clients own warner brothers we own a little bit of netflix we're thinking about adding to it we obviously own some paramount not a lot and uh but within the context our bigger holding is medicine square garden sports or even john deere as they reported this morning so obviously we're staying tuned.

17:52Mario Gabelli:And at the moment, the WBD at$28, you know, you get a cash return to one of the winners over the next 10 months. Hey, Mario, can we just go back to the garden for a second,

18:06Joseph Stiglitz:if we could? If they split these things, how do you think it works in terms of the control share of the Dolans? I mean, one of the reasons there's never been a real premium on this stock is there's almost been a discount on the stock because of his family control of the company, no?