# Accrued Interest's Simeon McMillan on $VSNT and the evolving media space Yet Another Value Podcast · 2026-03-14 · 58 min · https://www.youtube.com/watch?v=Ht72rJJ2LC4 ## Transcript Andrew Walker With me today, I'm excited to have Simeon McMillan from Acred Interest. Simeon, how's it going? Simeon McMillan I'm doing great, Andrew. Thanks for having me. I'm a first-time guest, longtime listener, and longtime subscriber as well. Andrew Walker I really appreciate it. I'm excited. I can already tell you and I are going to have a lot of our energy on the same path. I think we're going to have a lot of fun here. Simeon and I are going to be talking about Versant in particular and media in general, so we'll be popping around with their names. Just remember, it's not investing advice. Simeon, the reason I reached out to you is that I've followed Acred Interest for a while, but you have just been smashing the Versant story. Versant is the spin-off from Comcast. I'll let you give the full overview. I wanted to talk about that in particular, and then we can talk about media in general. I'll pause there and turn it over to you: What is Versant, and why has your coverage of the company attracted me to you so much? Simeon McMillan Sure. Again, thanks for having me on, and I want to say hi to all the listeners on the podcast. As you opened up, I cover a lot of media. Just for context for the audience, because I think this is very relevant to how I describe the company, I have experience in investment banking, the buy side, hedge funds, and middle-market private equity, but I spent about a decade working at the executive level or supporting senior leadership inside media companies. I have a lot of experience in senior FP&A roles, ad sales, and investor relations. I worked inside the office of the CEO for Univision Communications, where I got to see them work with a very similar set of assets as Versant, and that's what brought me here. I wanted to have a different view on the company. There are a lot of newsletters out there that cover spin-offs, and I think a lot of the alpha has come out of spin-offs recently. You can't just mindlessly buy them. I think, for the most part, a lot of investors had a good read on Versant. This is one of the last spin-offs. We've been spinning off cable networks and TV networks for almost a decade, so they're very late to the game. I wanted to see what was actually there. Then I wanted to see if there was any strategic value, let's say, if something happened with Paramount, Skydance, and Warner Bros. I started looking at this before that whole merger saga came to its conclusion, and it might still not be over. To dive into the name Versant, to clarify for the listeners, it's a spin-off of the cable assets from Comcast NBCUniversal. When Comcast NBCUniversal separated its TV assets, it put everything in Versant except for 3 assets. They kept the NBC network—the broadcast network—Peacock, the streaming conduit for NBC, and Bravo, which is a general-entertainment network. Andrew Walker I was just laughing because you said they put everything in except for 3 assets. It's like they put everything in except for the things that actually matter, like the really good stuff. Bravo is kind of funny that they didn't put it inside here. Simeon McMillan Yeah, I did think that was kind of funny because Bravo is what I would call general entertainment. They decided that was the one they wanted to keep. Anyway, the spin-off happens. To skip ahead a little bit, this is the opposite of what happened with Warner Bros. Discovery and its linear spin-off. This spin-off was not done under duress, first of all. This has been a long time coming. Why now? It just so happened to be now. There's a key date that I want your listeners to keep in mind for 2028, because in 2028, that is not only the time when the Morris Trust spin-off is no longer held back from doing M&A and other strategic deals that could threaten the tax-free nature of the spin-off. That comes into play in 2027–2028. In 2028, NBC is separating itself completely from the ad-sales department of these cable channels. Very quickly, for your listeners, I think a lot of investors—and this is where I try to add my edge—pay far too little attention to the mechanics of what it takes to actually sell advertisements. It's a very difficult thing to do. You can't just pop up and sell ads to a hit show overnight. There are a lot of puts and takes. What your listeners need to know is that right now, all of the financials inside Versant, I would argue, are overearning. They're overearning because, up until today, they've had the protective halo of the NBC family. This gets especially relevant because Versant wants to really market itself going forward as having strength in news and sports, or live events. We can get to news in a second. The news is MS NOW, which used to be MSNBC, but I actually think you can sort of ignore the news and the politics of it. Let's just look at the sports. The sports rights they have are really just a compilation of sports rights from the NBC portfolio. It's NBC Sports that they didn't have room to put on the NBC network. Period. In a nutshell, that is what the assets are. I also want to point out that when networks and entertainment companies sell ads, the ads are sold through sales teams, and they're sold in a packaged way. Usually, you cannot just buy 1 show or 1 event. It's always done as a portfolio, as a formula. They use the stronger content to help sell the weaker content. The biggest thing your listeners need to know is that the Olympics, along with football and the Super Bowl—the Super Bowl rotates networks every 3–4 years, as your viewers know—those 2 marquee sporting events were the ones that I think were forcing advertisers to buy all these other networks. A big issue I have, and we can get to the forward forecast later, is that whatever forecast you want to make changes completely when the ad-sales relationship separates and the baby is no longer under the protective parent of NBC. I'll jump to the conclusion, and we can come back to it: Versant is underperforming not just because the fundamentals are deteriorating, which your listeners already know, but because it can't do the strategic moves it needs to get out of this. I don't know how you can put a multiple on the company. I don't know how you can put a dividend yield on the company until we get past the 2028 separation. Andrew Walker There’s one other piece. Again, this is why, when I was reading your piece, I could imagine a younger me seeing this spin-off. When I was following all the Paramount-Warner Bros. stuff, you’d hear the CNBC hosts—talking about their own stock—say, “We’ve never seen a stock with this much selling pressure,” right? These are generally well-reasoned guys. They’re not investors, but they’ve seen a lot, and they’ll say, “The selling pressure is relentless.” I remember David Faber saying, “This is a coiled spring,” and David Faber is generally very measured when he’s talking about something. So you look at this and say, “Oh my God.” I get it: these assets are terrible, but they’re trading at 4.5 to 5 times EBITDA, and you’re not the only one. I mean, AMC Networks is out there trading at 5 to 5.5 times, and you’re like, “Yeah, Versant’s assets are shitty, but they’re not AMC Networks-shitty.” So you see that, but then your piece is the one where I really started thinking, “Oh my God.” The one thing you didn’t even mention—which you’ve pointed out, so it’s not that you didn’t see it; you just didn’t say it in the rant—I mean, we didn’t even talk about the fact that carriage was done under the NBC umbrella, right? Their carriage, too. But then you start thinking exactly what you’re saying: “Oh my God, when they go to do this advertising, they’re like, ‘Hey, does anybody want USA Network? Does anybody want USA Network and the sports portfolio?’” I was looking at the sports portfolio, and they love to come out and say, “Hey, 60% of our viewing is live sports or news. This is what you want.” You’re like, the sports portfolio they’re going to get as soon as they’re out of NBC is going to be the worst of all worlds, right? Right now, with NASCAR, they love to say, “We’ve got 4 NASCAR races.” I think, as you said, they’ve got the 4 NASCAR races that they couldn’t put on NBC. Well, in 2028, when they’re out from NBC, either NBC is going to say, “Oh, we’ll take those NASCAR races back; they’re performing well,” or NBC is going to say, “These things suck. All right, Versant, go bid for them.” But they’re so small. All their sports rights are going to be gone. They’re in a tough spot. So I rambled a lot. I just wanted to throw that all out. Simeon McMillan Perfect. No, no, no. Along the lines of what you’re saying, I think what’s interesting is that, as I mature as an investor, making content for a living will make you a little more contemplative. I love that line, “making content for a living.” I’m going to steal that from you. Andrew Walker Oh, please do. With the crisis we’ve got going on right now, there’s a lot of content to be made. Simeon McMillan We’ll get there in time. I think what’s also interesting is that you have this sort of holding pattern until the time runs out in 1 to 2 years. I wanted to put on people’s radar that, under the right circumstances, there are lots of bits and pieces that different middle-market private equity players could probably want to be a part of. Let me tell you this, Andrew. I know this from experience working inside Univision and working with and looking at other similar companies. Everyone internally, I guarantee, knows exactly what the stakes are. You begin to see little—I won’t say tricks, but little cues and tells—of what they talk about, what they choose not to focus on, and what they do want to focus on. If you put yourself in the seat of the management here, we like to talk about incentives. Management knows that their hands are tied. They literally couldn’t even sell the company if they wanted to. Something that made me laugh a little bit: I don’t give action alerts, and I don’t pitch a portfolio with precise buys and sells. I think this is an underperform, but the stock has rallied recently. Why was that? Well, on last week’s quarterly earnings—which we can talk about—it wasn’t because of anything they said about the actual performance. It was because they announced a relatively large dividend. The dividend comes out to about $1.35 a share, I believe, which, around $35 or $36 a share, comes out to about a 4% to 4.5% dividend yield. With the dividend announcement, it forced the stock to rerate. I’m not sure when this is going to air, but the stock is currently trading around $35 or $36, so it’s bounced off the lows a little bit. In my analysis, I want to be conservative. I think this is probably worth $27 a share. I look forward to 2028, and I put a multiple on that. To your point, to bring it full circle, I actually think this is very much like AMC. I think this is very much like AMC. In the article, I actually showed that, if you adjusted their multiples, the stock price is the same as where it was about 3 months ago. AMC Networks, at the time, was trading at about 7.5 to 8 times enterprise value to free cash flow. Enterprise value to free cash flow is sort of my version of owner earnings, which I tend to use a lot in A Crude Interest. AMC was at about 7.5 times that in 2028. On my adjusted math, I said, “Oh, yeah, Versant is trading at about 7 times 2026, but that free cash flow is rapidly falling.” Free cash flow is falling between 15% and 20% a year. It’s scary out there. Andrew Walker I think one other thing—and this is just technicals—is that people were shorting Versant against Warner Bros. because, if Netflix won and there was the Warner Bros. spin, I think this was the one nobody wanted: that Warner Bros. spin. So you hedge out this, and it’s not lost on me that, the day Paramount won the bid for Warner Bros., this was up quite a bit. Let me go to 2 pretty negative points, and I want to come back to all the reasons to be negative. But the other thing I found really interesting in your article is that I read a lot of these spin-off presentations. When I read most of the investor-day presentation, they’re talking about the Golf Channel and, particularly, the tee-time service they have. If I read that just as a general observer, my first instinct was, “These guys are smoking something, right? There’s no value there.” They’re desperate; they’re trying to get something to hang their hat on so that people can get excited. It’s also not lost on me that people who buy stocks are generally old white men who like to golf, and they’re your key buyers. They run a lot of portfolios, right? So it’s not lost on me that this is something you talk up, and it excites your customer base. But your article was the first time I saw, “Oh my God.” I knew they’d mentioned, “Hey, it’s about 10%,” but your article was the first time the math got laid out, and I was like, “Oh my God, they might actually have a growth category killer”—the type of thing that a private equity firm might really pay for and get behind. One of the things I liked about your article was that it hammered the stock, but then you pointed out this and a few other things we’ll talk about: some hidden gems in here. I’d love for you to talk a little bit about the golf play, and particularly the tee-time business, so the listeners have a little bit of upside—or, if the stock crashes, something to hang their hat on. Simeon McMillan Sure. Speaking of the golf assets, so everyone knows what we’re talking about, I’ll tell you how they present the business and how I think about it. They put the golf assets together, and it’s about a 50/50 split in terms of revenue. It’s about $600 million, let’s say, on each side. You have the Golf Channel, which I would say right now has no synergies with this golf business. If they want to advertise, they can advertise on it. They don’t need to own it. Andrew Walker It’s the type of thing—it sounds good when it’s one of those 1 plus 1 equals 1.5 mergers, and people come out and they’re like, “Hey, we’re merging.” You’re like, “Dude, you could solve that with a contract. You could solve that with a license.” You absolutely do not need to have these 2 businesses together. I’m trying to think of another good one, but I completely agree with you. Simeon McMillan Oh, I can give you an example right here. We’re seeing this with the NFL and the NBA. There really was not that much value in the NFL Network. Andrew Walker There really wasn’t. There really isn’t. Same thing with NBA TV, with Warner Bros. The NFL Network was a tax, right? Cable channels—you’ve been doing this long enough. 10 years ago, RSNs—and I fell for it—were the crown jewel in a portfolio, right? They were the best things you could own. The NFL Network basically formed its own RSN and was like, “Hey, 4 NFL games a year. You’re going to have to carry this channel because everybody loves the NFL.” And then there’s no need for them to have it now. So I think that’s a pretty good one, though. I’m sure we could think of some better ones if we came up with them. So, with Versant, all the numbers I’m giving are high-level estimates I triangulated. Please do your own research at home. I just want to point out that the company has never provided specific numbers, probably for a reason, on the most recent call. If you read between their guidance, the GolfNow business is probably growing at mid-single digits, maybe high-single digits, if that. I just want to note that. So, we’ve got the Golf Channel at about $600 million in revenue and falling because it’s losing carriage, or will be losing carriage, because it’s not a must-see channel. As your viewers also know, the must-watch golf events aren’t even on the channel. But back to the actual software business. The business is GolfNow and GolfPass. I think it’s about $600 million in revenue, and what it basically is, is they have somewhat of an oligopoly. I’m sorry. I don’t play myself, but for any listeners who do, Versant owns both GolfNow and TeeOff—number 1 and number 2. In case you’ve seen different brands, it’s estimated they control about 75% of the third-party aggregator market for people who want to reserve tee times for a local golf course. Andrew Walker Can I drill in on that? Sorry. So, are they saying, “Golf course X, we want 10% of your inventory”? As in, if you’ve got an 8 a.m., a 9 a.m., and a 10 a.m. slot, we’ll take the 8 a.m. slot? Or are they saying, “Every time someone books through us, we’re just taking a percentage of sales”? So, somebody pays $50 for the tee time, and we’re taking $5. Which one are they—what model are they following? Simeon McMillan Sure. I’m not sure exactly about the mechanics of the sales agreements, but I think it’s probably much more percentage-based. Andrew Walker I would guess so. The former is interesting, but it would make sense. If I remember correctly, this is largely what Mindbody does. This is what DoorDash does. It’s completely standard, but I think it’s a very interesting model. Please continue, and I’ll add stuff at the end. Simeon McMillan Sure. So, they had this model. There’s a whole separate research vertical [laughter] where, if I were younger doing this, or if this were a standalone business, I would say, “Hey, I think golf is actually still growing.” It had a big burst during the pandemic. I thought it was a fad. I did a little research, and it turns out it’s not. It’s still growing. It’s a healthy sport. I think it’s a good business. But the key thing we need to know—and this is what I always have to remind myself—is what is material to the stock. This $600-million-to-$700-million-revenue business is not growing fast enough, with margins high enough, to really make noise in the equity story. And that’s why, if you go inside the filings, they break out almost nothing. [laughter] You really have to work hard. I would argue that if you actually look at how little they tell you about the golf business, Versant basically talks about the golf business as, “Look, we have these other growth businesses that are creating enough revenue to offset the declines of our media businesses.” Okay, so I gave a little overview of the mechanics. I think it’s an attractive business, but it’s clearly being trapped inside of the structure. I can see this being one of the assets that, at a later date, is probably going to find a new home. It looks to me like everything about this business reminds me of Mindbody right now. The nice thing about Mindbody is that you tend to book gyms. Mindbody, for those who don’t know, is the software that powers most boutique fitness gyms and some other businesses. That business was acquired years ago for, I think, 7 or 8 times revenue, back in early 2019. Now, this was before the SaaS sell-off, when interest rates were at 0%, and all that sort of stuff. But I could imagine having golf-course inventory, just like boutique fitness. There are 100, 200, or 500 clubs, and they’re turning over a lot. Once you get golf—if you get exclusive rights—it’s pretty damn sticky. It’s not like there are 15 golf courses changing every month. You get one, you lock them in, and people get used to it. I could imagine it being a pretty damn good, sticky business. As you said, it’s inflation-protected. I could imagine it being a pretty high-multiple business. Andrew Walker It’s so funny. He’s like, “Where are they going to get studios?” It’s like the Golf Channel is declining like crazy. And by the way, have you seen the stock prices of some of these office landlords? The AI revolution is here. I’m sure they’re going to be able to find a warehouse to stash a bunch of people in if they really need to, or something. I don’t know. Simeon McMillan I would say so. What asset do you want to talk about next? I want to talk about one other interesting asset that I think has a lot of upside, and this is probably their trophy asset. I would say you could correct me if I’m wrong, but CNBC—and I mean this in a few ways. CNBC is so interesting because it is a bedrock of the financial community. Yes, people like to go on Bloomberg Television, but as the CEO said, “I was just at Davos, and you should see all the businesspeople who want to talk on CNBC.” If the administration wants to send somebody out to make an economic point, they send them to CNBC. So, it’s got that brand name. It’s got a little bit of clout. There are a lot of interesting possibilities and leverage you could pull, and you explored them in your article. But at the same time, I kind of look at it and I’m like, “Hey, man, okay, yes, it’s nice, but it’s CNBC.” They’ve stubbed their toe a lot on launching financial news. Is it really that great that, in 2 years, Bloomberg is out there, Reuters is up, and there’s a lot of other competition? It’s a legacy news network. I could imagine it’s getting undercut in a lot of ways. So, I could see upside and downside, and it’s probably the crown jewel. I’d just spend a minute talking about CNBC and what you see for that. Andrew Walker Sure. I think you’re very astute in recognizing the disruption risk in CNBC. It’s actually something that, if I had to write the article again, I’d probably go a little bit more into giving my views on why I think CNBC actually has a similar disruption risk to—sorry, old habits. I’m used to MSNBC—MS NOW, MS NOW. At first glance, they’re completely different. MS NOW is a very liberal network. I just want to say that I actually have extensive experience in radio. In my last corporate role, I spent about 3 years in what actually was a carve-out of radio stations—Hot 97, WBLS—with some billboards. It was a random combination. All the radio stations have billboards. I mean, the old CBS Outdoor radio billboards always got mashed together, and I guess it was because it’s a local sales business. Or maybe it’s because 50 years ago they were the best business. For some reason, radio and billboards were a match made in heaven. Simeon McMillan All of the above—radio, billboards, and television. I got to talk with the head of programming over the years and learned a lot, and he explained to me that liberal talk radio and conservative talk radio are really different products. I think that, just as that’s true in radio, it’s also true in television. What I think is similar between CNBC and MS NOW is that I think both financial news reporting and political talk are clearly being disrupted by podcasts. You have cross-pollination. You have CEOs and finance people who will go on lifestyle podcasts like Rogan or Theo Von, or other shows, and break news like that. You have financial people who will go on podcasts like the All-In Podcast. It feels like a lot of investors have their own podcast to break news. You have companies with their own. Andrew Walker They can come on this one whenever they want to, my friend. Simeon McMillan Exactly. Did you see the one—I don't want to butcher her name—but it was the CFO of Meta, and she had a hat that said “free cash flow”? She was on someone’s podcast wearing a hat that said “free cash flow.” It was right before they hiked their CapEx forecast [laughter] and killed their free cash flow. But I digress. The whole point is that I actually agree with you. I actually think, in time, I could definitely see CNBC getting slowly disrupted by the proliferation of podcasts. I think that another tricky part about CNBC is that CNBC is very much a channel tied to the linear bundle. I think it's one of the last channels that will be left standing as the bundle shrinks—the bundle keeps shrinking and keeps whittling everything away. I tell people Fox News will be the last channel in the cable bundle if it was a battle royale. I think, close to the top 5, you have CNBC; that would make the cut. But, yeah, I think they have some obsolescence risk. I also know that CNBC is looking to try to sell B2C. They're trying to sell some more high-value subscription financial news products. Join the club. Andrew Walker Everyone's got a Substack, as we both know. Simeon McMillan It makes sense on paper, but I'm not sure how much revenue there is. Andrew Walker I'm going to get to the point. I think CNBC would be a great trophy asset, but you need a trophy buyer who's willing to pay a trophy price. I think it'd be a great trophy asset for a large tech company that sells stuff because they have one of the highest-income, one of the highest average-income audiences out there anywhere. So, Amazon—just anyone. In my piece, I threw out there—and this is really pie in the sky—a Robinhood. If they wanted to have a news product, you must have seen it in their mind because I could see it, right? You think about how E*TRADE used to integrate with Yahoo Finance, I think, but you could see how a Robinhood integration could make sense. You could see how integrating this with a data provider, like an S&P or something, could make sense because it does have a brand name. As you said, you could see a lot of different ways. I'm really interested in the B2C side, where CNBC still does break a lot of news. You could imagine a professional tier where the news is getting to the professional tier 10 minutes before it's hitting the public. I'm not 100% sure, but it does seem like there are a lot of optionalities. I will tell you, I think CNBC is mismanaged. CNBC's YouTube presence sucks. How can CNBC's YouTube presence suck? It feels like that's a place where a lot of these stories are pretty topical, so it feels like they should be doing more. They've got several different channels, but the one I looked at just had months-old stories and very few views. They do have one that kind of runs little clips, but it just feels like an untapped asset that has a lot of different levers. It feels like they didn't—maybe my imagination is too wild for a legacy brand—but it feels like they weren't really pulling the right levers or looking to maximize its value here. Simeon McMillan So, here's my thought on that. I think that—and this is where I'm not predisposed to defending management—I'm not rooting for any side in this. I think investors are right to push management, to be skeptical, and to make sure that they're thinking as forward-thinking as they are. However, what I like to talk about on Accrued Interests is what it's like to be inside the boardrooms of a lot of these media companies. I can tell you, if there is an overarching theme of year 1 of Accrued Interests—I'm coming up on my 1-year anniversary of launching my Substack in a couple of weeks, with about 10,000 subscribers in the first year, which is more than I ever would have imagined—the thesis, the overarching theme that I've come up with is that YouTube competes with everything. YouTube is the force. It's the force in the ether that we don't talk about, but it matters. I can tell you, from having built revenue models, that putting your content on YouTube if you're a legacy television video provider is a devil's bargain. You have to do it, but the economics are horrible, so you try to do as little as possible. If you ever see someone whose YouTube presence isn't as big as you might think it should be, or needs to be, it probably is that way for a reason. But to your question of whether it's mismanaged or what they could do, I think that another tricky part about media is the unbundling of all aspects of media. Let's focus on video. A big reason why Versant is in the position they are is because I think the whole streaming ecosystem made the whole concept of a network irrelevant. As you search for something, a show is a tile on the screen, and I can tell you most people really don't know what show comes from what network or what studio made it. Another problem where I actually have some sympathy for CNBC, MSNBC, and ESPN—really anyone who wants to try to do news—is that all these companies want to be forward-thinking. They let their talent do podcasts. They let their talent go out there. But what ends up happening is that your talent ends up competing with you. I don't have in front of me a list of all the talent on CNBC. I'm more of a Bloomberg watcher. It's a little calmer. It's easy viewing—lazy viewing for me in the background. But I know from the Bloomberg anchors, almost to a T, almost half of them have a podcast. They go on other people's shows. So what happens is that, just by nature of existing in the digital ecosystem, you have no choice but to disrupt yourself. You made an observation in a piece that you wrote, I want to say, last week, when you were preparing for your webinar that you're going to be hosting on Netflix, where you point out, Andrew, that Netflix outperformed every other media stock over the last 10 years. Sometimes it literally is just that simple. I really do think that sometimes a lot of these media companies are structurally handcuffed and they can't make the changes. But, to wrap up your point, I think CNBC probably could have done more. Short of bringing in some of the podcast guys, though, if you look at ESPN, I think ESPN is a good example of what CNBC is probably going to have to do, but it's not ideal. Are you familiar with the Pat McAfee Show? Pat McAfee, for any listeners who aren't familiar, was a podcaster—a sports podcaster. He was a former NFL kicker, right? He wasn't a superstar, and he wasn't dating a pop star or anything, but he built a great show and a big following. Now ESPN licenses his show, and they paid him to take the show off of YouTube. Now he's on air on ESPN, and he's tussling with them. I could see a business model where maybe CNBC goes to the All-In guys or another finance podcast and says, “Hey, maybe we don't need Jim Cramer on for 2 hours yelling at people.” Andrew Walker It's funny you say that because I think Jim Cramer is their Stephen A. Smith, and it hits me now. Cramer is older, but when you look at their desks, every show on CNBC has him. But I think you're onto something, right? You think about CNBC—I've not watched CNBC in so long—but they've got Cramer, they've got the Fast Money traders. You could imagine, as you're saying, it kind of hybridizing, like ESPN has SportsCenter, which is the news, and then they've got Pat McAfee filling a big block. They've got a lot more personality-driven shows. You could imagine a CNBC where they break it into: “Hey, we're going to have the news for part of the day, and then we're going to start licensing.” Maybe if people love Andrew and Simeon, maybe it's, “We license the Andrew and Simeon show to talk about media.” You can imagine— Simeon McMillan That's the future. Andrew Walker That's the future. Simeon McMillan Let me go back to Versant in 2028. We talked about how they're boned in a lot of ways, right? First, they're going to lose a lot of these sports rights that they share with NBC, whether it's the Premier League, NASCAR, and a lot of others. They're kind of going to come out of that, and I think they're going to get the negative end of every single one of those situations, right? That's just a scale thing, right? USA is going to reach 70 million people and be getting 10 cents a head, and NBC is going to be reaching 100 million people and be getting a dollar a head. They can just pay a lot more and distribute over more people. So, I think they're screwed there. I think they're screwed on ads. The other interesting thing, I think, is that they gave 2026 guidance, and I can't remember if they gave 2027 guidance or not. Andrew Walker No, they have not. Simeon McMillan Yeah, they haven't. But 2028 is where the big cliff is, where the majority of their subs are going to end. They even said, “Look, we've negotiated this under the NBC umbrella.” How bad will it be when they go to Cox—or I guess it's going to be Charter now—when they go to Charter, when they go to the old mothership, when they go to Comcast, when they go to Verizon, and they say, “Hey, we're here to renegotiate,” and they're negotiating just for USA, CNBC, MS NOW, and whatever rump of other channels they have? I think they’re going to be completely railroaded. I think a lot of these channels are going to absolutely drop carriage. They’re going to lose their spot on a lot of different providers. So here’s something I want to contextualize for your listeners. A lot of my pieces on A Crude Interest are trying to point out the media stories that aren’t necessarily financial, but I think are really important. I think the most important television strategy negotiation was last fall, when YouTube TV gave Disney a black eye. YouTube TV—for maybe several weeks—had what was the most contentious cable-carriage dispute with Disney channels, and they did something that had— Andrew Walker Even more contentious than the Charter one the year prior? Simeon McMillan Yes. For this reason, Andrew: for the first time, I call it “shooting the hostage.” YouTube said, “We’re not going to fold,” and they let their subscribers miss, I think, 2 weeks of NFL games. They missed NFL games, and they missed some college football games. For your listeners who aren’t familiar, I’m an elder millennial, okay? I’m an ’86 baby, so I remember TV in the old regime. For those who aren’t familiar, when there used to be a negotiation between your local cable company and your local channel, if they had an NFL game, it was a wrap. The cable company was going to have to fold because they could not deal with everyone being mad. Andrew Walker The executives were worried that their subscribers were going to come with pitchforks if they missed an NFL game. The subscribers would come with pitchforks and just force them to take the settlement. Simeon McMillan 100%. So, to get to the point and answer your question, I think we entered—without people realizing it—a new, more contentious set of carriage negotiations. We’re in a period now where channels are just getting dropped and staying dropped. So Disney, on the latest call, had a huge charge. It was like hundreds of millions of dollars for being kept off. And this is where it gets really fun. YouTube not only bloodied them, but YouTube set a precedent—or reinforced a precedent—where they basically said to Disney, and this is really where Versant is going to get killed: “Okay, we’ll carry your channels, but you’re going to have to give YouTube TV subscribers, for free, all the goodies that you were giving to your subscribers. ESPN+, you’re going to have to give that away so they can ingest that content. All those WWE pay-per-view events, all those UFC pay-per-view events—yeah, we’re getting that for free.” Andrew Walker Versant doesn’t have those. Let me pause you there, because one of the most interesting things—and I still don’t quite understand it—is Charter’s Q4. This is much talked about, and I still probably don’t understand it because I’m not as deep in the weeds. Charter’s Q4, for those who don’t know Charter: they own Spectrum, a big cable company, and they’re about to merge with Cox. I think they’ll be the largest cable company, even bigger than Comcast, after the merger. They reported a surprise increase in video customers. Now, there are a lot of things going on here. One quarter does not make this trend. But I think one of the things they’re saying is, “Look, we’ve succeeded in our negotiations because they had a contentious negotiation with Disney.” And they’re saying, “Hey, if our subscribers are going to pay you $10 a month for ESPN, then gosh darn right, they’re going to get access to your DTC service. You’re going to have to let them connect.” And I think that’s what’s driving it. But I’d love to know: What did you think of the Charter Q4 video number? Simeon McMillan Sure. So, full disclosure, I don’t cover Charter extensively, so I was not familiar with that. I can tell you it did not register to me, partly because in my tracking notes for the last 1 to 2 years, almost 100% of the net customer adds in the pay-TV bundle have come from YouTube TV. I forgot what analyst it was. I’m not sure if it was MoffettNathanson, but I track the numbers myself. If you just add up all the pay-TV losses from all the distributors and then the industry gains, it pretty much all came from YouTube. I’m not sure what that short-term blip was for Charter, but cord-cutting is still happening at an egregious pace. Andrew Walker Here’s an interesting question. I think the next big shoe to drop—and you can correct me if I’m wrong—is the NFL signing a new agreement this summer, right? Despite the fact that they just signed a new agreement, and I think the current agreement runs till ’29—I can’t remember for sure—they’re signing a new agreement this summer, right? They basically go and say, “Hey, we’re the NFL. We’re signing a new agreement.” Simeon McMillan And I think there are 2 interesting things about that. I don’t think people realize that the Fox network—and I’m just going to be a broken record; I’ll say this on 15 different podcasts at this point—but Fox, there is no point for them to exist without the NFL. That is one of the big 4 broadcasters. If they lost the NFL, I think that network goes away, basically. Andrew Walker Kind of existential for them. They do have other stuff, but— Simeon McMillan I don’t think people realize that when you’ve got 3 bidders that are existential, how crazy the bidding is going to get here. I mean, I think NBC wants it. Andrew Walker You’ve got all these players. I think Netflix was—Netflix keeps saying, “We’re not going to do a whole season,” but Netflix seemed very happy with how the Christmas games performed. Amazon’s been very happy with how they’ve performed. So, the 2 things I’m driving to here are: A, how crazy do you think the NFL bidding is going to get? But then B, YouTube, which you mentioned, is the biggest growth—and I think YouTube TV is so interesting because it’s the biggest growth. And as you’re saying, the channels are breaking. YouTube TV has, I believe, the new Sunday Ticket, right? Simeon McMillan Yes. Andrew Walker Why wouldn’t YouTube TV just take a package? Say, “Hey, we want that Paramount Sunday NFL games package.” Now, maybe the NFL doesn’t want it. Maybe they still want distribution parity, and maybe they want to broadcast. But if you’re YouTube TV and you take that package and cut out the middleman, your numbers go through the roof. You are the TV channel at that point. So, I threw a lot there, but the 2 questions I want to ask are: how crazy does the bidding get, and why wouldn’t YouTube—or I think YouTube TV is in the best position for this—why wouldn’t YouTube TV or Netflix just take one of these packages? Simeon McMillan Sure. Here’s how I would frame it for your listeners, and here’s how I sort of think about it. I think that things change in television faster than you realize, but maybe not as fast as sometimes the headlines might seem. A key thing to keep in mind with the NFL is that the NFL is overwhelmingly a domestic sport. They’re trying to get more international reach. Some of your listeners are probably tired from getting up early when they find out one of their teams is playing in Paris and then they didn’t check the schedule. The NFL is still very much tied to the U.S., which means, for better or worse, no one would disagree that the NFL is worth more money. And I think that, a little belatedly, the press figured that out. Yes, the NFL has leverage to get more money. I think the press and some investors might be a little bit ahead of themselves. Let me talk about some of the limits to how much the NFL can actually squeeze. This is where you think about the give and take of both sides. The NFL is domestic, and the most important thing for them is that their games are seen by the most viewers possible. That is different from an F1 or an MLS, where we’ve seen them sometimes take a bigger package to go with Apple TV. The NFL cannot do that. The NFL actually can’t play but so much hardball with the broadcast stations because, at the end of the day, the NFL can only move as fast as the audience. If there’s anything that your listeners take away from this, I think you can make yourself a better media investor if you think more from the audience and the ad buyer. The audience is moving away from linear. They are— Andrew Walker But they’re not going to go all streaming in 2 years or 3 years. So, can I push back on you a little bit there? Simeon McMillan Go ahead. Go ahead. Andrew Walker I do agree, and especially the last time that they had the— their media rights deal came up, which was only 2 or 3 years ago. It’s crazy how fast time flies and how we’re already in another one. There was an argument—a lot of people were saying what I’m saying: YouTube TV should take a stake with Amazon. People said no; they went with the broadcast. And I think another thing to remember is the NFL—a lot of the older owners are much older. I do think that influences where they want. You know, if you go to the owners and you say, “Hey, Apple TV is going to give us $6 billion—” That’s more than Paramount’s $5 billion. A lot of the owners would be like, “How do I get Apple TV on my bunny ears?” I’m being a little facetious, but $6 billion versus $5 billion would be a lot. But I hear you. My pushback would be that they did the Netflix game—2 games on Christmas. They did an all-streaming Wild Card game, so I certainly hear you. That’s not the whole playoff slate, but they did an all-streaming Wild Card game. I think people are getting comfortable with this, and I think the road has been paved, right? You’ve seen the NBA on Amazon, right? That’s all streaming, and I think that’s doing quite well. How much do you trust the numbers? I don’t know. But that seems to be doing well, so the road’s been paved a little bit. And I do wonder what the NFL is probably going to do: split the difference and go to CBS and say, “Hey, the CBS package is all these AFC games except for 3 that we’re tossing onto YouTube. Take it or leave it.” But I do wonder how much the audience is there, I guess, is what I’m getting at. Simeon McMillan Oh, okay. So here’s another thing that I want you listeners to think about. The reason why I don’t think the more extreme scenarios you laid out—or rather, the reason why I don’t think you’re going to see Netflix bid for a whole season or a larger package—is because, at the end of the day, the sports video product is the lowest-margin part of their business. It just is. It’s far more profitable for Netflix on a per-hour-viewing basis to show, like, a cheap drama. You do the big, expensive content because you have to, because it expands the tent. There are lots of reasons, but on a per-hour basis, if you did the optimization math, you know what Netflix is doing. I would push back a little bit. I actually think it’s funny that people have this skepticism about Netflix. I think Netflix has actually been the most consistent, and I think they’re telling the God-honest truth. Netflix realizes that, over the course of a whole season, there are a lot of games you don’t want. I also push back on the NBA a little bit. I think the NBA gets a bit of a bad rap. People poo-poo it because it’s not the NFL, but they completely overlook the fact that it’s light-years ahead financially of the NHL and MLB, which are having huge issues. Andrew Walker I think the last package for the NBA was aggressive, but I mean, kind of— Simeon McMillan Yeah, but no. Back to why you’re not going to see Netflix do this: Netflix has shown you—and I do believe them—that they bid on Warner Bros. because it was available. This is coming in another article. Some people say, “Well, you said you wouldn’t buy into content, but you’re buying the content.” In my notes, I say this is like the Golden State Warriors going after Kevin Durant. They didn’t need him, but if you can get him, you can, and you keep him away from a competitor. But here’s the thing for Netflix: Netflix has shown you that there are a lot of games that you don’t want. Everyone likes to talk about how the NBA season’s too long. There are a lot of NFL games that Netflix doesn’t want. Andrew Walker Are there NFL games they don’t want? Simeon McMillan I’m sorry. Andrew Walker Are there NFL games you don’t want? Because the Pro Bowl, which I don’t watch, everybody always says is a joke. The Pro Bowl gets more viewers than the NBA Finals does. I don’t know if there are actually any. The Germany game, where you send the 2-7 Jets to play the 4-7 Dolphins, starts at 9:00 a.m. and gets huge numbers. I don’t know if there are any NFL games that you actually don’t want. Simeon McMillan Okay, I’ll push back. They actually redid the Pro Bowl for the NFL, and it’s a shadow of itself. Andrew Walker It still gets huge ratings, though. Simeon McMillan No, it actually does. No, no. Andrew Walker Oh, it didn’t get huge ratings. Simeon McMillan No, no. So they changed the NFL Pro Bowl to a flag-football game, and it has its worst ratings in the last 30 years. Andrew Walker Down 60% year over year this year. So I would have been right until this year. Okay, okay. Simeon McMillan But Andrew, let me tell you something. It’s what I love about media: a lot of times, the narratives don’t always match the ratings. The NFL is such a religious brand that I think people are far too hesitant to criticize them. But I digress. What Netflix is good at is—you’re absolutely right—the NFL game is the most valuable unit of television. Let me rephrase it: Netflix is the king at finding the piece of content that has the most juice and taking that out. Netflix is going to be airing the Home Run Derby. Andrew Walker That’s a perfect example. They’re not even wasting time with the games. Simeon McMillan Netflix got the World Baseball Classic rights for Japan. With the NFL, if the owners would let them surgically carve out the package, they would. The problem is they can’t. The other reason why I think the NFL is going to keep all the same broadcast partners is because they need that coverage in the United States. There are still some places that only broadcast TV can reach. They’re not going to get Netflix and YouTube and the other guys to bid for a whole season. In the future, yeah, they could, but I think the NFL negotiation might not be as big of a game changer as some people think. We’ll see. Andrew Walker I agree with you. I think they’re going to keep all the same partners. I just think all the same partners are basically going to bid their enterprise value to get it, right? Simeon McMillan It’s existential. I think they’re going to bid huge numbers, and they’re going to get worse packages, in the same way that ESPN bid a big number for the NBA rights and got a worse package. And that was the NBA, which I love, and I think it’s got a lot of content. People forget that if you can get somebody tuning in every Tuesday night and every Thursday, that’s got a lot of value. It’s 82 nights. That calendar—people forget that. Not to cut you off, but let me lay a hot take here: HBO as a network is so overrated. So overrated. A big reason why it’s overrated is because HBO only has maybe 2 or 3 hit shows at any given time, with 8 episodes. You can’t build a network or a service around that. Andrew Walker No, you’re right. At the same time, when you’ve got shows that good and that break through, it does have a little bit of brand, and it forces people to sign up. The whole vision for Warner merging with Discovery was that you’ve got HBO, which is this great draw. They get the sign-ups, right? HBO is the thing that gets people to sign up. Then you merge it with Discovery—the Dr. Pimple Popper, right? The things that you watch in the background. That’s the thing that stops customer churn. That’s the innings eater. Then you have HBO, with the big Game of Thrones-type shows, to lure people in. It’s a perfect marriage, and the execution’s probably left a lot to be desired there. Simeon, this has been awesome. We’re coming right up to the hour mark. We hit a lot. I actually wanted to hit some more, but I’ve had a ton of fun. Any last thoughts we should have hit that you want to wrap up with before we call it a break? Simeon McMillan Sure. Well, I just want to thank you again, Andrew, for having me on. I’d love to be back, and we can talk more about Versa or other stocks. The piece of content I’m most proud of is a monthly series where I break down a TV-viewing report called the Nielsen Gauge report. It measures the market share of big-screen, non-mobile TV viewing. In this monthly series, I’ve been tracking the meteoric ascendance of YouTube— Andrew Walker I thought you were going to say the downfall of cable. Simeon McMillan Exactly. You see Warner Bros. stuck at a 1.5% market share every single month. You see Paramount stuck at less than 2% every single month. I just want everyone to know that media is great, and we can read all the financials, but if you don’t have the audience, you’re not going to have the value. Financial engineering is not a strategy. Eventually, the audience is going to dictate who wins. Andrew Walker Dude, I’m not going to spoil the news here, but obviously the big news over the past 10 days is that Warner Bros. abandoned the Netflix deal and agreed to merge with Paramount. What are the odds you would give Paramount-Warner Bros. of being a success? Simeon McMillan -10. I think the question is, when is the breakup coming? I think that’s more the question: when is the breakup going to come? History suggests it’s going to be a disaster. I couldn’t be more negative. I generally like the assets and think they could be mashed together, but I couldn’t be more negative on how it’s playing out. Andrew Walker This has been great. Look, there's always stuff going on in the media. We'll just have to make this a quarterly occurrence or something. I really appreciate you coming on. This has been fun to jet through everything for about an hour, and we'll do it quarterly. It'll be a lot of fun. Simeon McMillan Thank you, Andrew. Have a good one.