Rich Kleiman, the Knicks, & Barry Diller’s Bid for MGM 6/1/26

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0:35Like Amy, who's traveling solo in a city she's never been to before. Or Danielle, who works night shifts at the hospital. Or Kelly and Jana, who were way overdue for a night out. because sometimes comfort comes from having another woman with you. Request women drivers with woman preferences on Uber. Learn more on the Uber app. Bring in show music, please. This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, a warning on our ability to manage an Ebola outbreak from the director of the University of Minnesota's Center for Infectious Disease, Dr. Michael Osterholm. We actually had a very serious Ebola outbreak back in 2014-2015 in Western Africa with over almost 30 ,000 cases.

1:31I think this has the ability to far outstrip that. But don't panic. He says transmission is nothing like COVID-19. Then a lighter note. famed sports agent and entrepreneur Rich Kleiman.

1:46Andrew Ross Sorkin:When I was younger, a lot of times I always imagined that when the Knicks were in the finals, that the whole world would be watching. What this extraordinary run for the Knicks could mean for the media. I think the ratings in this series, because of the story around the Knicks, because of Wemby, I think the ratings, and just the overall demand on these events right now, I think these finals could be the highest rated or one of the highest rated in a long time. Plus, the many other stories that got us squawking today. A delay at Blue Origin after a rocket explosion. Barry Diller's People, Inc. preparing a bid for MGM Resorts.

2:21And Berkshire Hathaway is getting busy under its new CEO's direction. That's kind of the Berkshire way to try and move quickly on these things. It is Monday, June 1st, and Squawk Pod begins right now.

2:35Andrew Ross Sorkin:Stand Becky by in 3, 2, 1. Cue, please. Good morning, everyone. Welcome to Squawk Box right here on CNBC. We are live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. In time, NVIDIA jumping into the PC business. The company dominates the market for AI data center chips. Now it's going to be making chips that serve as the main processor for personal computers as well. Speaking at the Computex tech event in Taiwan, CEO Jensen Wang unveiling a new N1X processor made alongside Microsoft. It's going to be incorporated into a new RTX Spark super chip and debut this fall in a new line of Windows PCs from Microsoft, Dell, HP, and several other manufacturers.

3:22There is no question this reinvention of the computer is as big of a deal as the reinvention of the phone into what we now know as the smartphone. And so this is the beginning of that journey. This is the beginning of a new line. And so we have a roadmap for this. This is a brand new product family for us. Every single generation of architecture, we will have a desktop, a laptop, a workstation, and then a desktop, a laptop, and workstation.

3:53Andrew Ross Sorkin:And this may be the beginning, or at least another indication of just this idea of quote-unquote moving to the edge more and more AI processing ultimately may get processed by physical computers. That's not been the case thus far for the most part. But if that is true, perhaps this is to some degree even a hedge, if you will, against whatever you think is going to happen in the cloud. Shares NVIDIA are rising, while shares of PC chipmaker Intel, we should mention, pulling back in a pretty significant away about 5 % this morning. So if you own NVIDIA, you are happy. If you're a taxpayer, you may be less happy, which becomes sort of the next interesting sort of dynamic in terms of how folks root or root against different stocks.

4:45Andrew Ross Sorkin:I don't think we're going to be able to spend any of that Intel money anytime soon as taxpayers. Are we getting, I mean, I feel like an owner, but I don't feel like we're ever going to really see it. I remember when we were all supposed to get dividends. Do you remember when the Trump dividend was coming? So I'm still waiting for my check. I've looked. I haven't. There's no address on my house. You know what I'm saying? A lot of people have them, but we don't have an actual. I don't know why. Maybe it's in the mail. When we talk about chips in South Korea, the cost will be surging to a record high amid a tech stock rally in South Korea.

5:22Andrew Ross Sorkin:And Samsung shares rose by 10 percent. I'm looking at something I'm going to read in a second. Very troubling. Topping a$1.3 trillion market cap, LG shares were up by 30%. Executives from both Samsung and LG are expected to meet with Jensen Wang later this week, raising expectations for potential collaborations on AI and robotics. And I was just going to say 400 points on the Dow again on Friday. So it's like every version of some type of resolution for Iran, even though then it sort of peters out, the market seems to go up. And then it doesn't pull back. And then there's more talk about it today.

6:04Andrew Ross Sorkin:The market's up again today. Right. Oil prices are up and the equities go up. And we sit here and we talk about it. And then I read this today. I got very troubled. Market watch. It's not just tech stocks. The broad-based strength of the market right now gives investors reason to stay the course. Make you nervous a little? People are starting to buy into it. And we were not buying into it for a long time. We were like, this makes no sense. This makes no sense. Why does this keep happening? And as we close in on 7 ,600 first on the S &P, we're getting near year-end targets. Why cite that? The journal's front page.

6:44Andrew Ross Sorkin:The S &P 500 just posted one of its best two-month runs ever. That often means more good times ahead. More good times, yeah. Both of them. I saw both of them. And both of them... You're thinking it's the Sports Illustrated. I'm just thinking it's starting to... I love it when a rally is really hated. Whether it's hated enough to continue. This is good, probably, right? It is. There's some deal news to tell you about. Berkshire Hathaway is buying home builder Taylor Morrison for$72.50 a share in cash, or$6.8 billion. That excludes debt. If you include the debt, it's$8.5 billion. It's a 24 % premium to Friday's closing price.

7:25It is expected to close in the second half of 2026, and it will add the home builder to an already sizable housing portfolio that includes Clayton Homes and Berkshire Hathaway Home Services. There are also a lot of derivative companies that Berkshire owns that go into home building. If you think of Acme Brick or Shaw, which makes carpeting and flooring. You've got Benjamin Moore paints. You've got John's Manville, which makes insulation. So there's a lot of other companies. You have an Acme brick. You and Wiley Coyote.

7:57Andrew Ross Sorkin:Yeah, Warren sent me an Acme brick when I asked for a Netflix NetJets. NetJets card. Probably was. I've never put it into anything I've built. That's valuable. It's a gift. This is the first big deal for Greg Abel since he's been the CEO. I did speak to Warren Buffett about this yesterday. He said, Greg did this faster than I could have done it, smoother than I could have done it, and I never talked to the CEO. He has launched. This is just really interesting in the idea of would Greg Abel be able to move quickly and to do these deals quickly, as Warren Buffett has always done. If you had Warren's word on a deal, it was as good as done.

8:45And it sounds like this is basically what Greg has picked up and done, too. He spoke with Warren Buffett about it, told him, I guess, when he first went down to meet with the CEO, with Cheryl, he went down to Arizona, spent about five hours with her. And when he came back, he didn't think that he had a deal. Talked to Warren about those things. But I guess about four days later, she called back and said that her directors were OK with it. The price is fair. Nobody else we would do a deal with like this. And again, he spoke with Warren Buffett about this, and I believe he spoke with the lead director, Sue Decker, about these things, but didn't talk to the rest of the board until after they had completed the deal.

9:18And that's kind of the Berkshire way to try and move quickly on these things if you've got a deal that goes through with some of these. We did speak with Sue Decker in May, I guess just last month, beginning of the month at the Berkshire Hathaway annual meeting, about what the parameters would be for Greg, whether he'd be able to do deals like that. She said at At a certain level, there would be a process.

9:37Andrew Ross Sorkin:So what's the size? Do you know what the size is? I don't know. I threw out numbers like$10 billion,$20 billion. She just said at a certain level, there would be something. This is, I guess, eight and a half when you assume the debt that goes through with it. It's a practice that's been happening for a while to consult a couple people if there's a deal going on. But it's not, it doesn't take away at all from the core principles of being able to act quickly, that our trust is our bond. If we say we're going to do a deal, we're going to do the deal. and to not have leaks by involving a lot of people.

10:07But could Greg do a$10 billion deal, a$20 billion deal? Could he just do that? Or is there a clear set of rules that you've got to talk to these people before you do it? There's a practice that would happen at a certain stage of size. But Greg can do these deals pretty quickly, and he can do them without necessarily asking for the full board approval.

10:27Andrew Ross Sorkin:It really doesn't help with the amount of cash that they have that they need. No, this is like less than 3 % of the cash on hand. They have close to$397 billion in cash on hand. So it's small numbers, but the idea that they are betting on home building is pretty important. Some of these stocks have been fairly depressed because interest rates have remained high above 6%, high over the last 10 or 15 years, not high historically what you would think of, but the number of housing starts has been down, has been declining. And so they're buying into that market. In geopolitical news, the U.S. saying it struck air defense radar and drone sites in Iran over the weekend.

11:12Andrew Ross Sorkin:And CBC's Dan Murphy joins us live from Abu Dhabi with the latest. Good morning. Andrew, good morning. Well, the Iran deal remains elusive this morning. President Trump also seemingly losing some patience with his critics. On Truth Social, Trump said Iran wants to make a deal, but he also hit back at what he called political hacks on both sides of the aisle for negatively chirping, he says, about his approach. Just sit back and relax. It will all work out well in the end. It always does, he wrote. Markets aren't so sure, though. We're watching oil prices pop right now after Israel's prime minister gave the order for his forces to strike inside Beirut today.

11:52Prime Minister Netanyahu posting on X saying, in response to the repeated and ongoing violations of the ceasefire by Hezbollah and the attacks against our cities and citizens, I've instructed the IDF to strike terrorist targets in the Dahye district, that is Hezbollah's stronghold in the southern suburbs of Beirut. Kuwait also reporting a new wave of attacks this morning, and strikes between the US and Iran also resumed over the weekend, with each side claiming to have hit military targets near the Strait of Hormuz. Tehran also weighing in the senior negotiator Mohamed Ghalibaf responding on X, saying the naval blockade and escalation of war crimes in Lebanon are clear evidence of U.S.

12:37non-compliance with the ceasefire. Every choice has a price, he says, and the bill comes due. So we don't know how the Israeli strategy in Lebanon could complicate this latest US diplomatic effort. But we do know that Tehran wants a halt to fighting in Lebanon as a condition for any deal. Right now, it appears that there is an escalation path in Lebanon, which is certainly going to ultimately perhaps delay the diplomatic off-ramp that the president has been pursuing. So we're watching and waiting to see exactly what happens next here. Let's back over to you.

13:13Andrew Ross Sorkin:Hey, Dan, what's the explanation there for how we're just talking about the equity markets? We keep looking at these equity markets moving higher and higher. And yet here we have, you know, WTI crude back at at at 90 bucks, Brent at 93, 94 dollars. What's what's the what's the feeling on the ground about that? I would say it's a headline driven market right now. Now, we also had Axios reporting over the weekend that the U.S. and Iran were discussing this MOU that would lift the blockade in the Strait of Hormuz. That has, of course, pushed oil down double digits through the course of last month.

13:50Inside this MOU, there is also talk of extending the ceasefire and setting up this 60-day negotiation window to resolve the big ticket item here, which is Iran's nuclear program. And for the Iranian side, that sanctions relief as well. The reporting suggests that Trump is asking for several amendments to that draft right now, particularly around the nuclear issue. CNBC has not independently verified that report. But analysts that I'm speaking to today are saying that that is the primary reason why we've seen oil move off the back of this. You can see just a modest pop in the grand scheme of things, up around 4 % right now.

14:29But again, coming off a pretty low base here, given the positive momentum, the positive headlines that we've seen around the diplomatic track that have really helped to pull crude off the higher highs that we've been following over the last couple of months.

14:42Andrew Ross Sorkin:Okay, Dan, thank you. Appreciate it. There's also a shocker at the weekend box office. The movie Backrooms, which is a film based on 20 year old Kane Parsons popular YouTube series, brought in$81.4 million in North American ticket sales that set a record record for independent and independent distributor a24 that film cost just 10 million dollars to make it's about a furniture store owner who finds a door to an endless maze of empty off-putting spaces the box office hall is roughly on par with the opening of the latest star wars film on memorial day weekend that one which is the mandalarian and grogu i I think, had a budget of$166 million to make.

15:28Andrew Ross Sorkin:There's some other weird thing going on, too, that I've been told called Obsession. Yep, that's the other one. $750 ,000 to make. Yep. That's$60 million. Wow. Right now. It's another horror. The worst horror movie is great, you've got to admit. Horror movies are the way to make money. Certainly. But they're fun. I mean, Halloween to this day. But that's always been the model. This is the Jason Blum model. Jason Blum, that's what I was just thinking. Is this a Jason Blum? I don't know. I don't think it is, but I'm just saying the horror genre is a lot cheaper to make than typically most other kind of movies, and the margin can be meaningfully higher.

16:06Andrew Ross Sorkin:Blue Origin reportedly faces a months-long setback this after last week's New Glenn rocket explosion damaged the launch pad. We talked about that damage to the launch pad when it happened. That is the big challenge that they now face. Among the projects said to be impacted, the rollout of Amazon satellite internet service LEO and future NASA Artemis moon missions. And we discussed LEO as well and what that ultimately means, whether Amazon's going to have to try to put some of those satellites on X flights or others in the future to try to get that service up and running. And there's a downstream effect, as we discussed, because there are big customers.

16:46Andrew Ross Sorkin:I don't know if the customers in this case include Delta, but, for example, Delta is planning to use the LEO satellite service instead of the X service. And so they need to get as many of these satellites in the sky as quickly as they can. In hindsight, did you read any of the analysis about how devastating this really was? That it really wasn't there's not a backup. It really wasn't covered by media correctly, that it was like existential, like almost an existential threat to Amazon's business. I mean, the rocket business, the Blue Origin business. So it destroyed everything. I mean, you saw the images.

17:35Andrew Ross Sorkin:It really destroys the entire launch pad. The launch pad is, you know, it's interesting. If you go into that factory, which is gigantic, they're building lots of different engines and all of the different stages and the like. And that exists far away from where that's taking place. That's not the part that you need to worry about. You need the launch pad to be able to actually do this. And if you don't have the launch pad, and by the way, the launch pad unto itself is custom for the designs of what they've already done, too. I read some analysis, though, that suggested that X had multiple launch pads for reasons like this, that SpaceX had problems when they were doing some of these things.

18:16We all remember some of the launch problems early on that they had. But they had duplicates of many of these things, redundancies, so that you weren't reliant on having to rebuild that one. I don't know how quickly they can rebuild this.

18:29Andrew Ross Sorkin:I mean, they're talking about months. It could be two, three months, could be longer. And then the question, of course, is, you know, you're going to have to start up and do all of this stuff again. So it's not just and then there's a question and maybe the answer to this point of duplication. Maybe if you're going to do this again, you would create two launch pads or three launch pads. And I also don't know how much real. I mean, they have a lot of real estate down there, but I don't know how, you know, the spaces that you can get to do that as well. Is SpaceX, did the valuation go up on the IPO based on that?

19:01There were some people who were talking about that Friday. We mentioned it on the program.

19:04Andrew Ross Sorkin:It clearly puts SpaceX more in the position of being the monopoly power. I mean, right now, SpaceX is the monopoly. How long will it take to get back to where they were? I think the argument is a minimum of several months. Or just months. I mean, that doesn't seem like it's big of a month. Several months. At a minimum. But it could be longer. And by the way, they need to also make sure that the engines work so that it's not just... This was just a test. This was just a test. So you have to get the whole thing up and running and then make it all work. The big issue is I think we all have to root for competition in space.

19:43Andrew Ross Sorkin:And so you have to root to some degree, whether you want to or not, for Blue Origin to work so that there are at least two of these companies that are competing in space. Otherwise, you do have a single company. I mean, Bezos himself was pretty— Also a single point of failure to some degree, too. Yeah. And Bezos himself admitted it in his statement that he put on X. He said it was a tough day. It's a very rough day. But we will rebuild whatever needs rebuilding and get it back to flying. It's worth it. What I think it will do, and I think we talked about this briefly in the interview with him, there is, or at least the plan had been to start to take outside money for Blue Origin.

20:24Andrew Ross Sorkin:Thus far, Blue Origin has been completely and utterly financed straight by Jeff selling Amazon stock. What I don't know is how this impacts that plan, meaning does this make you more likely to try to go out and get outside money because you maybe want to actually build more? That could be one answer. But on the other end, are the investors going to be as excited as they might have been otherwise? I think these are all the questions. Rocket science is hard stuff. SpaceX had a lot of fiery crashes in its early days, too. Great surgery is not easy, either. Cheese will be next. Coming up on Squawk Pod, a warning from the director of the University of Minnesota's Center for Infectious Disease Research and Policy, Dr.

21:11Michael Osterholm. Cases of Ebola are rising, and the U.S. health agencies are still looking pretty lean. If you look at the CDC and the expertise there, they've pretty much routed out the expertise with, in many cases, up to a third of the employees in given areas are no longer there. So we really have been left hamstrung.

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