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Quest Means Business
US Embassy In Kyiv Due To Reopen After Possible Threat; Venezuelan Migrant Gets Life For Killing US Nursing Student; Target Cuts Profit Outlook Ahead Of The Holidays; Nvidia Beats On Revenue, Earnings Per Share; Comcast To Spin Off Most Of Its Cable Networks; Former One Direction Member Liam Payne Laid To Rest. Aired 4-5p ET
Aired November 20, 2024 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:09]
JULIA CHATTERLEY, CNN INTERNATIONAL HOST: The end of our market session. The Dow actually turning green as you can see there into the close after a
pretty weak session where retail earnings weighed. Now, it is all about NVIDIA, the world's most valuable chip maker set to report any moment.
Those are the markets and these are the main events.
Some western embassies in Kyiv close after the US warns of a possible large scale Russian strike on Ukraine's capital. The US now plans to reopen its
embassy on Thursday.
Target shares plunge after it warns of a weak holiday shopping season. And as I mentioned, NVIDIA will give us a sense of the AI sector's spending
spree when it posts earnings this hour.
Live from New York. It is Wednesday, November 20th. I'm Julia Chatterley, in for Richard Quest and this is QUEST MEANS BUSINESS.
And a good evening once more.
We begin with another major escalation in Russia's war on Ukraine. There are reports that Kyiv has launched British supplied storm shadow missiles
at targets inside Russia for the first time. US officials say Ukraine targeted Russia yesterday with American made longer range missiles.
Meanwhile, the US and some European nations closed their embassies today in Kyiv for security reasons. The US explained that it received intelligence
of a possible air attack by Russia. The US State Department now saying its embassy will reopen Thursday and US Defense Secretary Lloyd Austin now
confirms the White House has approved sending anti-personnel mines to Ukraine.
Nick Paton Walsh joins us from Kyiv, Oren Liebermann is at the Pentagon standing by for us.
Nick, to you first. What happened with this threat against potential embassies in Kyiv? And has that threat now been mitigated?
NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT: There have been no doubt that Kyiv is not suddenly a place safe from Russian
aerial assault. It has been intense over the past two months as they've been on many nights trying to hit targets across the capital.
What appears to have happened in the last 24 hours is something caused the US Embassy here to get particularly concerned, probably some quite specific
information, they closed their doors today.
Now during the day, we've heard the Ukrainian government come forward and point towards two or three specific bits of what they say are Russian
fakes, essentially on the internet, trying to suggest a large scale Russian attack was imminent, and they've asked everyone to calm themselves as a
result.
But still other NATO allies closed their embassies, too. There is a threat here, it is real, and it is based on the fact that this war is slowly
escalating. Here is what we saw today.
(BEGIN VIDEO CLIP)
(GUNSHOTS)
WALSH (voice over): Ukrainian special forces fighting up close and taking prisoners. Rare footage of them still inside Russia's Kursk Region, where
British storm shadow missiles were claimed to have hit Wednesday, these fragments found by locals.
Just hours earlier, American supplied ATACMS missiles also plowed into Russia, marking a stark new escalation in the war.
Yet it was also in Kyiv that fear grew. The US Embassy closing here for the first time since the invasion, citing a threat of air attack.
WALSH (on camera): It is a reflection of the heightened tension here felt in the capital, Kyiv. It has been under regular bombardment for over two
months, but other European allied embassies are also limiting their function today, perhaps a sense across NATO here that we are entering a new
chapter of this conflict.
WALSH (voice over): As Kyiv braced for another sleepless night of sirens, the bereaved planted flags into this sea of loss in Central Kyiv.
Anya's (ph) father died of his injuries three weeks ago after five months in a coma.
She is raw from both the talk of peace and fear of sirens
(ANYA speaking in foreign language.)
TRANSLATION: I will be honest, we went down the basement during every air raid siren today. It was really scary indeed.
I want peace very much. I don't want our country to be hurt. I want it to be as it was, but without the Russians, without all of this.
WALSH (voice over): But it is never over in Kyiv.
The air raids intensifying in the past two months, and the weekend seen here, the worst for a while.
So the heightened anxiety behind several NATO embassies reducing operations this day sparked Ukrainian officials to plead, they hold their nerve and
deride this piece of Russian misinformation online, a detailed and fake warning of wide scale attacks.
(MYKHAILO PODOLYAK speaking in foreign language.)
WALSH (voice over): "This situation should be interpreted," he says, "As Russia's attempt to use any elements of psychological influence. They have
one instrument, which is to scare. This has always been a classic element of Russian politics, so I'd like our partners to be more careful as to the
information coming from Russia."
[16:05:16]
WALSH (on camera): Now, I think Ukraine is still, I think, waiting to see exactly if there is to be an escalatory Russian response to the use of
American, and now it seems British supplied missiles by Ukraine to hit targets inside of Russia.
Last night, those attacks possibly using different weaponry, continued. Ukraine saying it had hit different Russian military targets inside of
Russia.
We are into a very dangerous phase here, frankly, where it looks like the President-elect Donald Trump may try and seek some kind of peace through
negotiation and all sides militarily are going to push frankly, as hard as they can to be in the best position they can ahead of any kind of diplomacy
-- Julia.
CHATTERLEY: Thanks, Nick.
Oren, just to Nick's point there, not the only major policy shift that we've seen from the United States. The first being the use of the longer
range missiles now to attack inside Russia, but also now the decision to supply anti-personnel mines to Ukraine as well. And of course, we've seen
an increase in funding for munitions and military hardware.
I know some part of that was announced in the September surge that the administration announced. Just explain to us what we are seeing and what is
new.
OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: So, in terms of the package that was just announced with Defense Secretary Lloyd Austin on a trip in
the Pacific, that is effectively more of the same $275 million in military aid to Ukraine. That's not a large number as we've seen before and there
still are billions in aid that the administration needs to get out before January 20th here, so just a couple of months left.
The anti-personnel mines, certainly an interesting decision here. The US hadn't provided those in the past. Instead, the US had agreed to provide
anti-tank mines and has given those to Ukraine since pretty much the very beginning.
But the US effectively looked at the situation and saw that even though Russia wasn't advancing quickly, their attacks with large numbers of forces
suffering large casualties, was gradually, slowly and brutally paying off, wearing away at Ukrainian defensive lines, and that's one of the reasons
the administration decided to give Ukraine anti-personnel mines to be able to slow the advance of these Russian forces here.
The goal, according to US officials, is that most of these, or rather the intention perhaps, is that most of these will be used in Eastern Ukraine,
and that is where Ukrainian forces face that brutal Russian assault that that they hope to slow down.
Ukraine has given assurances, according to US officials, that it will use them only within Ukrainian territory and will be very careful to make sure
these don't risk injury to civilians, and that, of course, is the major concern here that a couple of years ago is why the Biden administration
said it would no longer create export supply or store anti-personnel mines, with the exception of the Korean Peninsula, because of all of those
concerns.
But in looking at the situation and realizing the challenges Ukrainian forces face, the administration has decided to supply those at what is
effectively an incredibly late stage of the war and an even later stage of the Biden administration, and as you pointed out, it comes with that policy
change on the use of US long range missiles, the goal and I will just pick up on the last point Nic made here, perhaps to leave Ukraine in a strong a
position as possible if President-elect Donald Trump comes in and tries to push for immediate negotiations.
CHATTERLEY: And I think that's the point, Oren. I wonder what discussion is taking place there, if any, of what the Europeans are also doing. There has
obviously been these reports that the British supplied storm shadow missiles are now being used by the Ukrainians in Russia as well and I will
emphasize that is report.
But are you hearing anything about that? And perhaps that the Europeans are also loosening some of the restrictions and ties, along with what they are
seeing from the US administration exactly to the point that you're reiterating and that Nic made, that perhaps it is about providing Ukraine
with the strongest position they can be in to see what happens with the next administration.
LIEBERMANN: Well, the US has tried to move in lockstep with its NATO allies. So it wouldn't be surprising at all to see the UK allow for the use
of storm shadows just as the US allows for the use of the long range ATACMS.
Now, not all NATO countries have shifted in unison on this. Germany continues to say it will not provide its own long range taurus missiles to
Ukraine. So you see there are disagreements, there is friction here and we've seen that in the past, for example, with the provision of tanks to
Ukraine. So perhaps, not too surprising there.
In terms of preparing for what this might look like under President-elect Donald Trump, we have already seen the US begin to shift some of that and
to make this instead of a US-focused effort to assist Ukraine, to make it more of a NATO-focused effort, to effectively create a situation where it
can't just fall apart, it will continue, and it has the infrastructure to do so, that has been over the past several weeks and months, a major effort
of the US.
CHATTERLEY: Yes, and it remains to be seen how Russia responds to this.
Oren, great to have you, thank you. Oren Liebermann there; and of course, Nick Paton Walsh, too in Kyiv.
Now coming up on QUEST MEANS BUSINESS, missing the target. We will discuss why the US retail giant, Target is sounding the alarm on holiday shopping,
next.
(COMMERCIAL BREAK)
[16:12:48]
CHATTERLEY: In the case that started a political firestorm, an undocumented immigrant from Venezuela will spend the rest of his life in a US prison
after being convicted of killing Georgia nursing student, Laken Riley.
She was reported missing back in February after she didn't return from a run. Authorities say Jose Ibarra struck her in the head with a rock and
choked her.
Ibarra requested a bench trial meaning his verdict was decided by a judge rather than a jury.
Rafael Romo has been following this story and joins us now from Athens, Georgia.
Rafael, this case did become a lightning rod in the run up to the election for those concerned about the impact of illegal immigration, but really, at
the core of this story is a young woman who had a life to lead and lost it, and a family who is now facing desperate pain.
Is today some kind of justice for them?
RAFAEL ROMO, CNN CORRESPONDENT: It is, in a sense, but one thing that the judge in charge of the case said is that there can never be closure for
what happened here in Athens, Georgia because it is going to be something that the family will remember for many, many years forever, indeed and
Laken Riley's mother, stepfather, sister and father all chose to speak in court earlier today. They all referred to the defendant, Venezuelan
national, Jose Antonio Ibarra, using terms like "coward" and "monster."
The family, as well as several close friends of Riley and roommates wanted to make sure Superior Court Judge H. Patrick Haggard sentenced the
defendant, Jose Antonio Ibarra to life in prison without parole.
The judge had already found Ibarra guilty on all 10 charges against him including felony murder and kidnaping with bodily injury. Judge Haggard
sentenced Ibarra to life in prison without the possibility of parole for the murder of Laken Riley.
The prosecution chose not to seek the death penalty in the case, Julia. Special prosecutor Sheila Ross said that in fighting her attacker, Laken
Riley left more than enough evidence to convict him.
We also heard from Laken Riley's mother, Allyson Phillips, who made a very emotional plea. Let's take a listen.
[16:15:00]
(BEGIN VIDEO CLIP)
ALLYSON PHILLIPS, LAKEN RILEY'S MOTHER: There is no end to the pain and suffering that he inflicted on our family and our friends. I am asking you
to please give this monster life without any chance of parole, so that he never gets the chance to hurt anyone else, ever again.
(END VIDEO CLIP)
ROMO: Now, Julia, Jose Ibarra chose not to testify in his own case. At one point, it appeared, like his brothers, Diego and Argenis were going to
appear in court, but that never happened.
Julia, back to you.
CHATTERLEY: Yes, just a heartbreaking story.
Rafael, good to have you. Thank you.
Rafael Romo there.
All right turning now to the economy, Target shares plunging after the retailer said it expects weak holiday sales. They finished the session
down. Look at that, almost 22 percent lower on the profit warning. Investors were also disappointed by Target's sluggish third quarter sales.
More than half of the chain's inventory consists of discretionary items like home decor and electronics. Target's CEO said shoppers are being more
careful with those kind of purchases. Bricks and mortar sales fell nearly two percent in the past quarter despite a growth in store visits.
Nathaniel Meyersohn joins us now.
Nathaniel, I think they've slashed prices on 7,000 goods I read this morning, but despite that, consumers are not biting. The big question for
me is, to what extent is this unique to Target versus a warning, perhaps more broadly, on consumer behavior?
NATHANIEL MEYERSOHN, CNN BUSINESS REPORTER: So, Julia, I think that is the big question on everybody's minds and I kind of go back and forth on it
because, look, Target really is a bellwether. It is one of the largest retailers in the country. You know, many retailers are looking to Target,
you know, that its results are going to be.
So I think it could be, you know, a bad signal for particularly smaller retailers that don't have the scale that Target has, but in some cases, it
is kind of just related to the issues that Target has.
You know, you mentioned that Target, most of what Target sells is discretionary merchandise -- home goods, furniture, clothing, electronics
and that is where consumers are pulling back. They are focusing more on groceries and essentials and less on the discretionary purchases so that
leaves Target, I think particularly exposed.
You look at Walmart on the other hand, most of what Walmart sells is groceries. About 60 percent of Walmart's business is groceries, compared to
just 20 percent of Target's business, which is groceries.
So people, they are heading to Walmart, but they're not going to Target and that is particularly because of the sales mix between the two retailers.
Look at that, that wonderful graphic we have on the screen really comparing the two businesses that people think they are kind of alike, but there are
actually some significant differences between Walmart and Target.
CHATTERLEY: I love that "naughty" and "nice" there and to your point, it is exactly where you need to be targeting, and Walmart does take the prize in
that case.
I saw that the Target CEO said on the earnings call, and he described unique challenges and cost pressures, including expenses related to the
brief port strike, of course, in October. So that probably had an impact on inventory and perhaps prices and availability as well.
What is the plan for addressing this? Did they talk about that on the earnings call? Because sort of the investor reaction looks pretty bleak.
MEYERSOHN: Yes, 20 percent, I think Target is going to continue with its strategy. It has hit a little bit of a bump right now, but you're going to
see it kind of continue to lower prices, particularly in these discretionary categories, to try to get customers in the store and Target
has been on kind of a longer term strategy to try to increase its grocery sales, to try to increase its grocery business about 20 to 23 percent of
the business is food and beverage. It wants to become a little bit more like Walmart, which is, you know, 60 percent.
So I think we are going to continue to see Target really try to, you know, focus on the Target luster that it has known for, while also trying to get
more people into stores with food and beverage. You know, you're going to see more food and beverage on shelves. So that's really the playbook for
Target.
I know it is a big miss, but this is still a really strong company particularly the past several years. Just a bit of a blip right now.
CHATTERLEY: Yes, and investors clearly hoping for more.
Nathaniel, good to have you. Thank you.
Now if anyone knows anything about the whims of the consumer, its Edgewell Personal Care. The company owns brands that you might recognize like Banana
Boat, Edge and Skintimate, and it operates in more than 50 markets worldwide.
Rod Little is the CEO of Edgewell Personal Care, and he joins us now from Connecticut. Rod, fantastic to have you with us.
As we mentioned, you have a unique and acute insight into what the consumer is doing. Even on your last earnings call, you talked about higher
competition and increasingly cautious consumer. Where to and to what extent? Because you do have global reach, too.
[16:20:01]
ROD LITTLE, CEO, EDGEWELL PERSONAL CARE: Yes, hi, Julia.
Good to be with you. Yes, look, the consumer we are seeing is being very challenged at the moment. We are not seeing declines in our categories. Our
categories are growing, although the rate of growth has slowed and as we look at it going forward, I think, you know, we remain confident that in an
environment where there is lots of uncertainty, there is still a path forward if you focus on good ideas, strong innovation and working to
delight the consumer at a fair price, every day you're going to win and be successful.
So there is definitely a path there, and it is just basic fundamentals around how you delight consumers.
CHATTERLEY: I mean, I've got some of your products here that some of our viewers may recognize, may even use at home as an example. I certainly know
and read what we see in some of these bigger retail stores is they have own brands, too that compete with your products. Sometimes they even look
pretty similar, too.
What kind of substitution effect are you seeing and how do you try and prevent that? Is it about perhaps lowering prices which obviously puts
pressure on margins, too? How do you mitigate that? And are you seeing that?
LITTLE: Yes, well, in our case, we have a full range portfolio from premium priced products to mid-tier to value and in shaving, which is our biggest
category, we actually make private label brands for some of the biggest retailers out there.
We partner with Walmart, Target, Amazon for example. All of them, we make their private store brand offering. And so we are immunized, if you will if
the consumer does trade down to participate up and down the pricing ladder.
What I will tell you to this point that we are seeing, which is interesting, though, we are not seeing any material shift down to private
label. There is maybe a little more search for value with consumers, but no meaningful shift down to store brands or private label in our categories up
to this point.
CHATTERLEY: Yes, but that's how you insulate yourself, isn't it? You end up being the provider to some of these own label brands as well. So not only
do you see it, but you also try and insulate yourself, which I think is smart.
LITTLE: Yes.
CHATTERLEY: Can we talk about some of the China dependency that you face? Sunscreens is one of them, I believe, and I know it is a fraction of your
business in terms of the sort of Chinese dependency and the concerns about tariffs, but I guess some of the chemicals in this already have, what -- 25
percent tariffs. Is a 60 percent tariff on some of the chemicals that you add to this prohibitive? How do you mitigate that kind of increase in cost
if that is indeed what we see next year?
LITTLE: Well, it is not helpful certainly to have tariffs go up from here.
As you rightly point out, we already operate in an environment where we are subject to tariffs. And primarily, China as the source of the tariffs
relative to us and we are scaled as a global player as you said roughly 40 to 45 percent of our sales are outside the United States and so we operate
globally.
We have a very regionally oriented supply chain, so for example, what we sell in the United States, we largely make in the United States. What we
sell in Asia, we largely make in Asia, and the same goes for Europe. And so roughly five percent of our cost of goods would be subject to tariffs.
And so in this case, there are two areas. One would be blade steel. There is just no for specialty blade steel, there is no industry here
domestically in the States to provide that and specialty chemical compounds in this case, sun care chemicals that the entire industry has to source
coming from China. You can't buy the chemical compounds anywhere else at the moment.
And so we are stuck with that we obviously will look to move out of that if we can, but it is a small piece of our business and would not be a
meaningful financial impact for us, personally.
CHATTERLEY: Good to know, there is a beauty in having, what -- 40 to 45 percent of your business internationally and that you are well diversified,
that the downside is, I guess when the dollar is strengthening, bringing those profits back home is a headwind for your numbers just talk to that
and how perhaps you're mitigating or hedging that.
And now, are you expecting further dollar strength as we push through into 2025, and then why don't you just give me the good news. Is it potential
deregulation? Business optimism on the fact that corporate tax rates perhaps aren't going to go any higher now, as a result of the election?
Give me the good news, please?
LITTLE: Yes, I will end with the good news, but let's start with foreign exchange. I don't predict the dollar from here up or down necessarily. I've
got my own views, but I don't know that I would make money with my own views.
The dollar is strong, as you point out, and our investors count on us to put US dollars into US bank accounts at the end of the day. We are a US-
domiciled company.
So with the strength of the dollar, every sale we have in Japanese yen for example, or euro or pound based currencies, when we bring them back, that
is a negative impact to us financially.
You know over time, I think that will settle out to more normalized rates, but it is certainly a headwind at the moment in the environment we are in.
[16:25:10]
But I will leave you with two things that I think are good news as we look at where we are and where we go from here.
One is, I think in a declining rate environment, albeit maybe slower than what we had anticipated a month or two ago, but still a net declining rate
environment, I think that is .good for consumers. Borrowing costs go down and that creates a little stimulation in the economy.
The other area where I think there is potentially some good news coming is in the oil markets and the petrochemical complex. A big piece of our input
cost is oil-based -- polyethylene, polypropylene resins. Resins is the biggest thing that we pay for in our cost of goods with plastic use, for
example.
And as you have oil potentially moving lower, natural gas and those specialty materials that are feedstock based on oil, that is a potential
tailwind to help offset the foreign currency or potentially some of the tariff issues that we may face.
CHATTERLEY: Oh, just writing that down. Fascinating.
Rod, great to chat to you. I know we will catch up soon.
Thank you so much for your time.
Rod Little there.
LITTLE: Thank you, Julia.
CHATTERLEY: Thank you.
Now this just in to CNN, a vote by the House Ethics Committee to release its report into Donald Trump's pick for attorney general has failed. That
is according to a source familiar with the decision.
The Committee was investigating former lawmaker, Matt Gaetz over allegations misconduct and illicit drug use. Gaetz and Vice President-elect
JD Vance visited Capitol Hill today trying to shore up support with Republican senators for a possible confirmation fight.
Annie Grayer is at the Capitol.
Annie, so if this report now is not going to be released, the accusations are still out there, but does this effectively draw a line under this now,
when we go to potentially a confirmation process?
ANNIE GRAYER, CNN CAPITOL HILL REPORTER: I don't think this process is done by any means. We know that the Committee is going to meet again on December
5th, and the Senate Judiciary Committee, which is going to be leading the confirmation process for Matt Gaetz to be confirmed for attorney general
has also requested all of this information and the report from the Ethics Committee.
So there are multiple avenues that are still being pursued for this report to see the light of day, but just to break down what happened in this two-
hour meeting in the room behind me, members on the Ethics Committee there met. There are 10 of them in total, five Democrats and five Republicans and
they voted whether they should release this report or not, and that vote failed on party lines, meaning all Republicans voted to block the release
of the report, Democrats, meanwhile, were pushing to get this report out.
And after the meeting, the Committee's chairman, Michael Guest said that there wasn't consensus for the Committee to move forward with releasing
this report, which then led the top Democrat on the Committee, Susan Wild, to come out and make a statement because she said she felt "betrayed" by
the committee chairman for revealing the committee's internal process.
The Ethics Committee is a very secretive committee. It does not disclose its processes and practices normally. So, this is all new territory for the
panel. It was a big meeting today. The report is right now being blocked, but we will see what happens in the coming days.
CHATTERLEY: Yes, to your point, by no means done.
Annie Grayer on Capitol Hill, thank you for that.
Now this just also in to CNN, Asia's second richest man has been indicted in the United States on criminal bribery charges. Gautam Adani is the
founder and chair of the Adani Group. US prosecutors claim he offered bribes to Indian government officials to secure solar energy contracts.
They've charged Adani and several co-defendants for allegedly lying about it to US and international investors.
Now coming up for us, NVIDIA just reported its closely watched quarterly results. We will bring you the chipmaker's latest numbers after this.
(COMMERCIAL BREAK)
[16:32:11]
CHATTERLEY: Welcome back.
Nvidia shares are a touch lower after hours after releasing their latest earnings. Revenues coming in at more than $35 billion. That's over $1
billion more than expected. Earnings per share were also higher than expected. But it's not the growth investors have come to expect.
Nvidia's market cap has also swelled over the past year or so to more than $3.5 trillion. It's the most valuable company in the world according to
that metric. That is a lot of zeros.
Clare Duffy is with me now and has been looking over the report.
CLARE DUFFY, CNN BUSINESS WRITER: My eyes are popping out of my head.
CHATTERLEY: I know. I know. And let's be clear, they're up almost 200 percent. So, what, down 1 percent after hours. We have to put into context.
What do you make of the numbers?
DUFFY: Yes, Julia, I mean, look, this is the ninth straight quarter where Nvidia has blown analyst expectations out of the water yet again. So we're
seeing that slight share price decline. But the expectations were so high coming into this. And they really continue to deliver.
Look sales are up 94 percent year over year to -- sorry, you said $35 billion. That's huge. And I want to look just two years back at that sales
number. Sales over the last two years have grown 492 percent. That's insane. So this company continues to improve upon and sort of blow away
analyst expectations. We're also seeing profits, $19 billion, more than doubled, year over year. So the company is still continuing on this strong
growth pattern.
And I do think there are a couple of things that analysts will want to hear from the company in the earnings call in about half an hour. One of them is
what the demand looks like for its next generation AI chip called Blackwell. But CEO Jensen Huang did say in this release that it is now in
full production, so that should be a good sign. I think there will also be questions about what the new Trump administration next year is going to
mean, what some of those potential tariffs that we've been hearing about could mean for this company and its ability to feed this huge AI demand.
But I think largely these numbers are really solid for Nvidia, and look, I think the sort of anxiety leading into this earnings report really has to
do with how huge this company has become. I mean, all of those zeros. This makes up a huge part of everybody's, you know, 401(k)'s at this point. And
so there are huge expectations on this company that may account for some of that reaction in the share price. But I think the numbers still look really
solid.
CHATTERLEY: Yes, that's a non-reaction. Let's see what happens when we get the earnings call and what they say. And to your point about Blackwell, I
think it's very important because what they've said was that demand would outstrip supply into 2025 if they calibrate that even slightly and suggest
it's the beginning part of 2025, and then they'll catch up with production, that could be a real boost, I think, for investors as well. So this is
going to be one to listen to and then we'll make some judgment.
Clare, well done for going through the numbers. I know you did not have long on that. Good job. Thank you.
DUFFY: Thank you.
[16:35:03]
CHATTERLEY: Now Comcast plans to spin off most of its cable channels into a new company. It will include news networks like MSNBC and CNBC, as well as
some sports and entertainment channels. Together these channels generate billions of dollars in revenue and could attract suitors.
Comcast is holding on to the broadcast network NBC and the cable channel Bravo. Both of those provide programing for its Peacock streaming service.
CNN media analyst Sara Fischer is with me now.
Wow, this is big news. And the message seems to be that this is no longer a growth business, these cable channels, and they sort of want to get shot of
them.
SARA FISCHER, CNN MEDIA ANALYST: That's exactly right. So if they separate the companies out, Julia, Comcast can then try to make some sort of
investment or acquisition play to grow them or juice them for the remainder of their life cycle without investors freaking out because they're
investing in something that's a legacy industry.
You mentioned that what's going to be remaining is the NBC core broadcast network. It's good to know the other things that they will keep are the
things that fuel its streaming service Peacock. So of all their cable networks, the one that's not going to go over to the new bundle is Bravo.
And that's because there's a lot of Bravo content that's watched on Peacock. Of course, this also allows NBC to focus on some of its higher
growth opportunities, things like theme parks, movies and entertainment, and then, of course, for Comcast cable and broadband.
CHATTERLEY: Yes, I mean, that part makes sense to me. The sort of higher growth in the streaming makes sense to me. It was interesting watching CNBC
anchors this morning talking about this deal. I've got some of the quotes. Joe Kernen, one of my former colleagues as well at "Squawk Box," were going
out into a cold cruel world. David Faber, another one. We've been on a life raft and it's kind of been sinking. Now we're all going to be able to swim
for ourselves, you know? So it's up to us.
Can these networks stand on their own, Sarah? Like what is the message here? If you bundle all of these into some kind of spin-off company, do we
see consolidation? Do they get perhaps picked off individually by private equity? How do you see this going and how do you see the survival rate?
Because it's relevant for all of us, I think.
FISCHER: It is. So good thing to remember here is that with the announcement this morning, Julia, they said that they would be acquisitive.
CHATTERLEY: Yes.
FISCHER: So I don't think that they're trying to offload these networks. I do think that they're trying to potentially go for scale and again juice
those margins on a legacy industry while they can.
One important thing to understand here, though, Comcast feels very bullish on the quality of these cable networks. And that's very important because
other Comcast rivals, Warner Brothers-Discovery and Disney, have told investors that they have eyed these types of spin-offs before, getting rid
of their cable networks so that they could value their standalone companies better. But they haven't done it.
And I think the reason they haven't done it is because you need cable networks that still gross high revenues and profits to be able to stand up
a standalone company like this. Comcast said that these networks, you named a few of them, are about $7 billion annually in revenue. So these aren't
like weak performing cable nets. It's just that they're not growing. And I think that's the key distinction around why Comcast is doing this and why
Disney and Paramount and Warner Brothers-Discovery have decided not to, as well as, of course they think that these cable networks are not impactful
enough to their streaming services.
I think for some of their rivals, their cable networks, if you look at Disney, for example, FX is like a critical part of Hulu, they wouldn't be
able to separate them as easily without it having a major streaming impact.
CHATTERLEY: Sara, always great to get your insights and thoughts. It's a fascinating time to be in media.
Sara Fischer, thank you so much for that.
FISCHER: Thank you.
CHATTERLEY: All right. Former One Direction bandmates were among those who gathered today for the funeral of pop star Liam Payne. The singer died last
month after falling from the balcony of a Buenos Aires hotel. Authorities say drugs and alcohol were found in his system.
Salma Abdelaziz has more.
(BEGIN VIDEOTAPE)
SALMA ABDELAZIZ, CNN CORRESPONDENT (voice-over): Liam Payne's casket arrives at this 13th century church in the English countryside for a
private funeral. His heartbroken parents brought to tears as they bid farewell far too soon. His former bandmates, friends and loved ones
arriving one by one to sleepy Amersham, where fans, some still in shock, had gathered to pay their respects.
UNIDENTIFIED FEMALE: I was very upset. It sort of shook me and I've grown up with him since I was about 12.
ABDELAZIZ: The details of the ceremony were a tightly held secret, but the media was allowed access to a cordoned area across from the venue.
Liam Payne's small, closed funeral stands in stark contrast to his very public life as a global pop star, with mega fame.
(Voice-over): And just 16 years old, Payne took the music world by storm becoming a founding member of One Direction, a band formed on the reality
TV show "The X Factor."
[16:40:06]
The group turned global phenomenon sold more than 70 million records. Their songs streamed billions of times online. They toured the world, building a
massive fan base with hits like "That's What Makes You Beautiful." But childhood fame had a cost. And Payne spoke out about the consequences on
his mental health.
LIAM PAYNE, SINGER: That level of loneliness and um people getting into you every day, getting into you every day, like I say, it's just every so often
you're like, when will this end? You know, and then -- that's almost nearly killed me a couple of times.
ABDELAZIZ: His death at age 31 after a tragic accident, a fall from a hotel balcony. Investigators found his body riddled with alcohol and drugs
shocked millions. As the funeral drew to a close, a touching moment. Music Mogul Simon Cowell, the man who brought Payne into the limelight,
comforting his parents, mourning the indelible mark left on the hearts of so many.
Salma Abdelaziz, CNN, Amersham.
(END VIDEOTAPE)
CHATTERLEY: Our thoughts with his family, friends and loved ones, and of course, his fans.
And that's QUEST MEANS BUSINESS. Up next, "MARKETPLACE EUROPE." Thank you for watching.
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(MARKETPLACE EUROPE)
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