thing. >> i did a lot of instagram. >> those were great interviews >> very news-making. stay tuned between 1:00 and 3:00 p.m >> you'll be fresh you'll be fresh for 1:00 to 3:00 because we did two hours today i know are we going to owe money? give some money back make sure you join us tomorrow for now, "squawk on the street" is coming up next. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at the new york stock exchange david faber is in sun valley will join us in a moment to talk about that exclusive with disney's bob iger a few moments ago. meantime, stocks power on as yields fall to some one-month lows producer price inflation comes in light, nearly flat year on year, q2 earnings began, pepsi, delta, and more. our road map begins with disney extending iger's contract through 2026

june ppi, cooler than expected on a monthly and an annual basis. and earnings and the consumer, delta and pepsi with quarterly beats and both raising guidance let's begin, though, with disney and iger jim, we'll talk to david in a second, but espn, linear tv, the parks, the strike, box office, he got it all. >> he did, and to me, between the lines, what i heard is, listen, you may be really worried about how much money we're spending, but we've got partners we've got people who want to be in it. you may think what we have is an old line-up, but we've got new people i'm going to ask david apple, such a natural, because at the vision pro, there was bob. i felt bob was most tremendous when he just said, look, all of these articles you hear about parks not being that good, which is what a lot of people did, the whole pictures being sent, not true parks being once again the edge that they have over netflix, so i liked what i heard i own it for my travel trust to me, iger is readdressing a lot of things that we kind of

gave up on m movies that are not working. he's talking about movies that are working. parks not doing well, really worried about the cost of sports i feel better about a lot of things didn't really -- i also feel better about bob, the health issue. i didn't know. that was like an elon musk i was waiting for him to do a little "princess bride" answer there. i do like the extension because it seems to me what bob's doing is getting the new guy the right hand as opposed to giving him a hand that doesn't have the hulu. by the way, hulu is down there were a lot of people worried about the balance sheet. the confidence that bob showed made me feel better about the balance sheet. i wanted a question about the dividend don't have it. >> talked a lot about transformative thinking, the expansive in our thinking. david, i have to imagine you probably feel like iger broke a little more glass than you might have expected. >> oh, sorry, guys, it's cold here

yeah >> you put that short-sleeve shirt on yesterday you threw me off entirely. >> it goes up like 30 degrees over, you know, over the course of the day it was 48 degrees. i think it's probably 50 right now. sorry. but just trying to warm up you know, listen, broke a lot of glass, he certainly didn't sugarcoat things, did he in terms of the current state of the linear cable markets, for example, of linear network, and obviously, what do we got? we got, i think, a bunch of news it's espn, but you guys already quickly hit, but we can certainly talk about in terms of partner, jay-z, what they do there, and seems to be timed with when they do take it to a full streaming service and then abc listen, we've known for a long time, jim, abc, not necessarily core, but just to hear him talk

about that and fx, natgeo, what they may be thinking as those go along, those were two pretty important moments and continues to obviously think they're going to get to profitability in streaming, which still is the single most important thing that he needs to accomplish in these next few years speaking of these next few years, of course, i did ask him initially, well, why the need to stay around another two years beyond what he had originally agreed to. >> i came back to the company at the request of the board it's a company that i started working at in 1974, 49 years ago, when it was abc, and we became part of disney. and i obviously have deep passion for the company and the business i care a lot about the people. and after coming back, realized that the company was facing a number of challenges, some self-inflicted, some caused by changes in the business in large-scale disruption of certain parts of the business.

and while a lot of work has been accomplished in the seven or so months that i have been back, the board believes, and i agree with them, that there was a lot more work to do. and the timetable that we initially established, which was two years, you know, seemed like it was putting undue pressure on us, even though we're getting at the work really quickly, but to accomplish everything we want to accomplish so, in part, it was designed for continued stable and continuity, and also to give a team of very talented executives that work with me time not only to help me through what is a challenging period but to develop themselves >> yeah. you know, we sat down in february, back a couple of months, and i did ask you if two years was too short a time and you said, "you can get things done very quickly." setting the company up for success is what you were talking about. so, i wonder, did something change in your calculation of how quickly you can get things done >> well, we've gotten a lot done very quickly, significant cost reductions, a complete realignment of the company in

terms of its structure, major changes in terms of personnel, dealing head-on with some of our biggest challenges, and also looking for opportunities. i actually am quite pleased, as is the board and the team, with how much we've accomplished in a short period of time, but there are a lot of challenges out there. and you know, there's just so fast you can go with certain things and in some cases, the market has to cooperate. in many respects, some of these businesses are still recovering from covid, for instance dealing with some, you know, complexities in terms of continued disruption, as i mentioned, which we'll talk about. but i'm pleased with how much we've gotten done, but i also know how much we have to get done >> you know, and i think during the course of the rest of the interview, guys, you got a sense as to exactly why the board did ask iger to stay until the end of 2026. these are not easy times, and it's going to take a while, jim, to sort of try, in his opinion, to work through them in an

effective way, and again, not just resolve some of those questions about some of the other other businesses but get direct-to-consumer to profitability. by the way, they're in a quiet period, i should add we didn't and couldn't talk specifically about a lot of numbers, you know. they have said previously, direct-to-consumer would be break-even by the end of '24 expectation most likely is they're going to stick to that but that's one reason why we didn't get specifically into sort of numbers. as he indicated, at least, the quarter that just ended jim, probably not a great one >> thank you i mean, because you know, david, here's what i heard. for the position i have in my travel trust this quarter, bad. next quarter, bad. just not there can't change courses yet because there's too much to clean up david, i did not feel good about the earnings i did feel good about the vision, but i just don't think -- if you buy it right

now, i don't think you're going to be happy when you see the print. >> yeah. it's august 9th after the close, i believe. and we'll find out but you know, the ad market is not the greatest he obviously indicated things have gotten even worse than he thought they would in a quicker fashion. i've talked about this a lot in terms of cord-cutting and what's happening in the linear cable world. and parks, you know, he defended attendance and said that "journal" story was just not right, giving sort of the background in terms of florida, but all those three, jim, are not great for earnings in the near term. >> no. >> obviously, he's focused on the longer term, and now he's got a lot more time to sort of play it out. >> but you know, david, i keep thinking that he was in tim cook's presentation of the vision pro, and when we looked at this, this was the single best way to see a game that i have ever seen

what a natural partner and yet, of course, he did not tip his hand to you, but to me, it's apple, apple, apple someone who wants sports, he's got sports, someone who's long on money, he's got production. david, it's the natural, and it's the way it's got to work that, and get hulu done, and next thing you know, you could have a company that might offer dividend and have an upside next year, but i guess none of these deals are done and they're all taking a lot of time >> yeah. your point on apple is a good one. he was not going to get into who, but it makes a lot of sense, doesn't it, as that comes around and your ability to watch live sports with that vision pro, and how they could partner with them in terms of technology and/or distribution. >> yeah. it made no sense to have him in there. what was he doing there? he wasn't just, like, oh, now let's have this guy who's kind of checking out.

david, one last thing. you have this existential ability at the end of these interviews to really make a difference i mean, bob is 72. do you know something -- i mean, could he go to 80? could he go to 85? the guy, 49 years, i think he's just getting started >> yeah. he's, you know, he's doing great. obviously, still has the energy and the wherewithal to compete at a very high level, as we like to say >> and you played your hand, david. you played your hand you're not going anywhere. i thought that was significant >> well, i said i'm not going to retire i didn't say i'm not going to do different things, jim. >> oh, all right >> i'm not you i'm not you. not retiring doesn't mean that you don't work less, you know? it just means you're not sitting -- >> not retiring. >> -- sitting and relaxing all the time >> carl, i heard, and just to -- carl, i heard that the theme

parks are doing great, and you know what? that's been -- you think about netflix's theme park, which i have not been to it must be extraordinary, because their numbers are incredible >> as for the strike, david, interesting answer he called it a shame, disturbing you know, he talks a lot about the business changing, and how the company needs to be flexible, but i don't know, is his view that the actors and the writers need to sit still? >> you know, i think his view is that they're being unreasonable in what they're asking we're going to get the strike from the actors most likely, announcement later today so, you know, his claim is, you heard it, that they haven't adjusted to the new economic reality and they're making a mistake. we didn't really get into a.i. and how that could impact or what you could really -- how you could use it to deal with this in here where you're not going to

be getting a lot of content. he clearly, guys, was very unhappy, to be facing not just the writers strike but most likely as well the screen actors guild. >> desantis, writers >> first double strike in six decades. we'll watch for the vote announcement later this morning. incredible interview, david. glad they gave you the space, and the live shot doesn't hurt either david faber in sun valley. move on to markets, of course, on track to open higher after three days of gains. s&p, nasdaq hitting levels not seen since april of last year. today's producer prices, jim, almost a goose egg >> once again, you've got these big data numbers working well, but we've got to see an unemployment number with a 4 you can't ever, if you're the fed, say, you know what? we've got -- we can stop raising because of ppi and cpi what's going to happen is if we have wage inflation as i'm talking about for particular industries, than he just can't

afford to look weak. can't afford to look weak. just can't the veblt of the fed is going to be on the line if he reacts to these numbers and then we get an unemployment number next month that is really high. >> although, consensus is negative payroll growth in the next six months for q3 and q4. >> i still don't see the layoffs. i see some layoffs i see strikes. i see strikes in auto. i see strikes in transport, writing. >> u.p.s >> i mean, strikes are not what the fed wants to see you look at the numbers for pepsico. some disinflation. for conagra, a little disinflation, but no rollbacks remember, powell wants rollbacks. powell is not satisfied with, you know what, going in the right direction. what powell wants is it's going in the right direction and going down >> deflation >> he wants deflation. >> which historically you don't really want to see in a growing economy. >> we want to see the stuff at

the stock market go down because everybody has to pay i think that powell's winning. but the coup de grace would be -- i know it sounds bad, i'm not rooting for layoffs, but the coup de grace would be that there's a lot more people unemployed and therefore they can go to work on these different projects that the fed is funding, which i'm telling you is hundreds of thousands of jobs but they kind of misjudged >> pepsi north america beverage volume down four got some people's attention this morning. >> at the same time, i thought that pepsico had tremendous, tremendous strength in terms of share take now, the stock up 4, that typically does not hold because there are people who will start looking at numbers and say, i poked holes in this and quaker's not that good, and we're not seeing the growth in beverage that we would like but it was a real good quarter, and -- but they're not seeing, and this is what i don't like -- they're not seeing the raw costs come down yet. i was surprised.

hugh johnson told me that i shouldn't have been as aggressive as -- i didn't come out aggressive, but as bullish as i was about raw costs, because i do think raw costs are coming down for procter. but i don't know it's good. it's really good number. the algorithm's good it's a growth company like you wouldn't believe but this is a serious growth company that nobody saw coming at the same time, you should have had that margin expansion we didn't have that one. we have some if you include celsius, which is hot. celsius is the hottest thing not to quip -- that's the wrong celsius. not that >> different set of headlines. >> you can't drink that stuff. but i have myfour or five celsius this morning untrue it's like having a 5-hour energy send me one of those again, throw that over. but i think that pepsico had really good numbers. it's just that i want to see deflation everywhere, and you didn't see it. >> we did get some deflation in

airfares yesterday, and that brings us to delta with a beat >> what a number >> raised guidance, bastian even suggests that corporate travel could come back in the fall >> i continue to say, and i know that conagra wouldn't disagree, we are long on money and short on time, and everybody's being hurt to some degree by travel. now, pepsico has a terrific convenience store business and that's red-hot but people are going places, and they're on delta the load factors are incredible. look, you can't get enough planes and bastian was -- he gets together with phil, and you say, next time, i want to go delta. i want to go to delta to iceland. i don't know i mean, he was so, so positive but people are traveling like they never have, because they understand that there's only a limited amount of time and we're not going to just sit there. these people, obviously, the

people who are working at home, they're still working at home. they haven't come back yet that's insane. we don't know if they're really at home. they could be working from anywhere >> that is part of the issue, yes. >> i mean, they could be taking delta some place they want to be, be in an airbnb, numbers going up and they can think they're working. >> that was actually part of his point is that corporate travel comes back, but maybe fridays, mondays are loose, long weekends >> three-day weekends. i'm not sure what those are like they must be exciting, people going places i did go away for the first time i missed seven days. first time since '77 >> is that true? >> yes, bob iger and i are pretty much the same age he's 49 years there but i've logged 50 without a break. >> we're just glad you're back it was a tough time without you. when we come back, the ftc not giving up on trying to block microsoft-activision, lina khan

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sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. let's get cramer's "mad dash" as we count down to the opening bell, jim. >> when i was thinking about david's excellent interview with bob iger, i said, boy, they're challenged on so many fronts you know who's not challenged? meta they have trounced everyone. street numbers beat way too low, according to cowen reels engagement and monetization on fire potential for further cost cuts. they're going to be just flooded with money threads optionality, you know,

what can i say it is their time now, if you look at this, you say to yourself, well, have you missed it? but up 160%. the world's going their way, and it's really interesting, because you never read anything anymore about things that zuckerberg's doing that are bad >> yeah. now, td was -- they were at $220, and $345, are you getting the sense we're not seeing aspirational targets anymore >> no, we're not but one of the things i really -- when i look at what's going on, i look at this company, and i think, how few people they really need, and that's what's incredible and you know how when musk came in to twitter, he was able to fire lots of people, i think zuckerberg figured that he could fire a lot of people and still make a lot of money. now, we do, you know, he's got this meta thing. it's out there burning money like there's no tomorrow, but nobody talks about that anymore. a few quarters ago, i would tell you, it's a black hole they don't know what to do

it's disney plus no it's reels now, i'm on reels all the time i can't believe how good it is what can i say he's just -- he's changed. >> yeah. >> i think he's matured. i think people find him to be more -- let's say he's not hilarious, but he's pretty funny. >> yeah. well, the idea that the -- there's a further trade in the operating leverage story >> this is huge. >> and the opex story, that's interesting. some people thought, what more can they do? >> you're going to have eps here that is just going to blow you away just going to blow you away, and he's not even done unbelievable unbelievable good job. >> we got some earnings before we get to them, but it won't be long before we're looking at their quarter as well. opening bell coming up in four and a half minutes don't forget, you can catch us any time anywhere, just listen to and follow the "squawk on the streetopinbe" dct.: eng llpoas

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. goldman-sachs desk out with a note about the s&p, saying the

s&p is now 3% higher than it was when the fed started hiking for the first time in '23, we're currently being asked by multiple clients if we think the s&p is now on track to clock an all-time high before year-end. i'm going with a yes on this this is john flood, one of their desk voices, jim >> yeah. >> too aggressive? >> no, because, like i said, i think the fed has to stay up, but i don't think it's going to make -- the economy is not in a slowdown or a crash landing. the economy is going fine. we'll get unemployment back to 4% and change. we'll see at a certain point some wages that will stabilize to maybe go down a little. and in that environment, you can buy pepsico, but you can buy a caterpillar. so, look, i don't understand folks who say i'm worried about the federal government stimulus money. i think that it's certainly possible that the bears have to capitulate i really do. yeah >> you got any in mind

>> well, all i can say to the bears is, corner watch the show, and you'll know what i mean. corner >> let's get the opening bell here in the cnbc realtime exchange at the big board, it's marquee technologies, a ride-hailing app in turkey, celebrating a recent listing via spac at the nasdaq, abacus life, recently listed via spac as well we are nine points at the open here from 4,500. >> that's a fact there's money on the sidelines, and it's coming in look, i think that when you get -- when you start your season with something as strong as pepsi, it does make you think, wow but i see a lot of companies where the numbers are being raised i see so many price targets being boosted, and i see a lot of shorts. look, there is a -- there was a piece today about carvana. >> oh, yes >> it was a painful piece. >> jpm cuts to underweight

they go to $10 >> yeah. carvana -- now, this is the type of thing we're going to see. they're going to $10 on carvana, but carvana's at $35 okay so, that meant they stayed short. it meant that they were wrong. the bulls and the short-bussers are in control right now, and you need to see some really bad numbers from the banks to get them off their game. now, no one's really expecting any good numbers from the banks, but i just think that that's got to -- their last bastion, ed bastian, the last bastion is the banks must be bad, because on a day when you have delta good and pepsico good, and carvana, you get a $10 target, and disney, where we basically get the, you know, what we're worried about right out there, meta, stock just going higher. i just find that there's a lot of good news you read the research, and the area that i think is really starting to percolate, people fixing up their homes. i keep hearing that. good notes today about lowe's.

good notes today about azac, the stuff you use with faux wood that i like very much. trex i see a lot of things going right about people making their homes better, because they can't -- they want to keep that mortgage, and then travel and leisure. >> that's interesting. i know ppg yesterday, 52-week high >> that was a good example of raw costs coming down. >> people thought we kpais exhausted that trade, jim. people had retrofitted their homes for covid. >> they're back. they're making their homes look great. they can't lose that 3%. you double your mortgage who wants to do that make your house look a little better >> right >> and they're going back to lowe's and they're going back to home depot >> david, jim mentions the banks. we'll learn a lot more tomorrow. there's some reporting today about maybe some ipos coming down the pike further. the information has a piece on liquid death, the water backed by a lot of venture capitalists. can you talk about the mood out there? i mean, you got iger opening the door to some stuff

you got darren woods, and exxon, which we haven't mentioned yet is that getting reflected? >> yeah, you know, i'm not allowed on the grounds there, carl i wasn't invited i'm just out here where we have to sit when we're not allowed in so, i don't know what the talk is i'll just be straight with you >> david -- >> that said -- yeah >> david, did you see the beatdown of lina khan in that microsoft-activision judicial ruling >> of course i did >> that was a first-class beatdown she was down there giving lina khan the business. that was one of the worst -- >> the business. >> no, honestly. that was basically saying, you got to go back to law school, because you didn't even understand how the clayton act works. i can't believe, david, how much of a rebuke that was to the ftc. it was shameful about what she did in this, including when she filed, what she did. you have a million -- a million

pages of documents you have 30 different interviews, and she does this at the last minute. the judiciary is not happy >> no, that's true but they're -- as you know now, and as was expected, i think, although maybe it wasn't briefly, but the ftc has filed for appeal they're seeking a stay it's unclear whether they'll be successful in getting one. i think most would say, no you will not get a stay. even from a so-called liberal judge. but that said, we'll have to wait and see, jim, and then we get to the cma last couple of -- last day, we heard from bobby kotick yesterday. i don't know if we have anything from the interview he did with julia boorstin right here. you know, it's still somewhat unclear exactly what's going on in the uk in terms of, as i reported on tuesday, this small

and discreet divestiture that microsoft, at least, offered potentially as a way to try to get the deal past the objections of regulators in the uk. that process itself has been so hard to fully understand, at least for those of us who aren't as familiar with it, i think and by the way, the cma hasn't been around that long. so, you know, they're still in front of the appeals, but that has been postponed now it's a tribunal, all of which is to say, jim, you know, there's still this expectation that you may see microsoft potentially try to close the deal very soon, either with the cma on board or with the prospect that it would be soon and therefore can sort of close it anyway, because they don't want to have to renegotiate with bobby koet cohen- kotick, which is going to cost them a lot more money. kotick with julia did not really discuss that part of it, but that's a key part of it. this merger agreement expires

next week. so, you want to extend it, you're going to have to pay. >> look, i know -- look, some of the people -- look, kanter at the justice department, in truth, this is a vertical deal the clayton, the antitrust act does not -- is not against those. and the delta has agreed to keep this thing open. more people are going to be able to receive "call of duty" more than ever. the rebuke of the expert witness was so painful to read i don't get it i don't know what britain wants. this is not exxon. you know >> they're worried -- listen, jim, you do know if you listen, you know. they want, you know, they're worried about the cloud business that's -- which is a nascent business, so they're making predictions in terms of microsoft's ability to potentially, through xbox, dominate that business a lot of this has been about protecting sony, which seems odd to some people >> protecting sony

>> so devoted to defending a japanese company take a listen to what kotick had to tell julia yesterday. >> i think judge corley was very sensible she was very deliberate. clearly understood the details of the case, the law, and made a judgment based on facts and law and wasn't swayed by ideology. i can't imagine the ninth circuit would grant the stay you never know, but i would think that would be highly unlikely, and it just wouldn't be productive. >> well, there you have, in terms of the update on the legal side of it the ninth circuit with that. he says he doesn't see it happening. and then, that larger question that we have entertained so often, carl, which is, with the ftc's loss in the court, in the

u.s. district court in san francisco, will it open the door, perhaps, to other companies thinking more aggressively about going after deals that perhaps thought in the past that they might not it seems unclear, still, because even the prospect of the ftc coming after you, even if they have no chance of winning, might still make you say, well, i'm still going to hold off because it will take me 18 months to get this thing through, but it may be a positive sign for all those who are thinking about doing things, seeing that the ftc was beaten back badly in that. >> yeah. 0 for 4 in court as chair jordan said on "squawk" this morning. nice piece in "the washington post" about the ftc asking for records from openai now. >> oh, yeah, i read that yeah, okay >> and by the way, adobe's breakout would suggest maybe things aren't so bad in terms of regulation >> well, one thing i would say is you could argue that there is some -- look, adobe has to make that deal, i think, to be really

competitive, but i've got to tell you, and david, i got to bring you in here, i feel that the word that kotick used that is really swirling in the business world is "ideology. that whole work, the crusade that khan really had going against microsoft was about saying that nadella is not true, that nadella is making statements that he will not live by, and basically attacking nadella's character and his ability to be able to be trusted. that's where we are. that's ideological, david. that's a rich person who is being the target of this ftc chair. that's what it's about >> well, they would tell you otherwise, as you well know, jim. they would say that's not the case at all, that they simply are trying to remake antitrust law, which over the last 40 years has become far too p permissive and focus solely on

consumer good and they're looking to enhance competition and innovation as a result of the moves they're making >> they ought to come up with legislation. >> nothing to do with attacking rich people. >> go to congress and get some >> that would appear to be the case, because the judges may well not be there with them. that is true >> yeah. >> but yeah. listen, i wanted to come back to iger take a look at disney, see how things are looking on that front as well. as you might imagine, guys, been getting a lot of calls from just a lot of different people. competitors and the like, given the news that was brought up in the interview, and progress certainly, but you know, jim, there's the stock. i mean, hard to feel positively near term. hard in any way to feel positively near term >> no, not at all. i mean, now, i'm kind of hoping midway through the interview that maybe he's underpromising, he could overdeliver, but by the end of the interview, i just said, 85 or bust, man.

i just -- wow. just a lot of things not going disney's way right now they really need to come up with a partner, and they got to come up with it fast, and i didn't understand what they were going to do with hulu. where's the money? they got to fix that balance sheet. he never talks about the balance sheet. >> you know what that's -- maybe that's on me, because i should have asked him more about the balance sheet they are going to be free -- they are going to generate free cash flow this year, much more significant than last. they are going to buy hulu you know, if he didn't make that clear, that's been clear they're going to buy what they don't own of hulu. the question is only how much they're going to have to pay our parent company, comcast, what that's going to look like. $27 billion is basically considered the floor that very well may be the price, sadly speaking for comcast, which would argue it should be far high eer, but when you lookt the metrics and the multiples, what are you going to use? are you going to use a revenue

multiple that netflix used on hulu they're going to pay the price and they're going to own it, and then it's going to be incorporated with disney+, and that's what it is. i'm not sure what sound we have on this, but i've been told to take a listen. so, so, let's do that. >> i would say that in some cases, the challenges are greater than i had anticipated >> in what way >> well, i think the -- that we talked a few times about it over the years, but the disruption of the traditional television business probably is the most notable. i predicted when i was out of the company, i made a statement about the future of the multichannel ecosystem, i think, as i described it, being very pessimistic, and i must say that prediction that i made was actually accurate. if anything, i would say that the disruption of that business has happened to a greater extent than even i was aware, for instance that will be reflected and has been in some of the near-term

results. that said, there are other elements of the business that i have huge optimism about for instance, parks and resorts, which is just a tremendous business for us. we're invested significantly, but the investments we have made over the years are really paying off today. shanghai disneyland, a great example of that. for instance, you were with me when we opened up the "star wars" land in california some years back i really believe in the future of that business we actually have opportunities there to turbo charge that growth the studio business, which has been incredibly successful, movie studios, and drives so much of our other business, like parks and resorts, where the franchises are so omnipresent, and of course, streaming, but the studio obviously went through a difficult time with covid, it's coming back, had some creative challenges, but great set of franchises with pixar and marvel and, of course, lucasfilm and "star wars." and then, of course, there's streaming. >> you said in a memo to

employees, you've made important and sometimes difficult decisions. are you proud of what you -- you've accomplished, but there's more to accomplish before this transformative work is complete. so, what, again, what is the -- what's transformative here, and what is the work that is going to take another, perhaps, two years or even more, even after you do leave that needs to get done >> well, the transformative work, of course, is making sure that our cost structure reflects the economic realities of the business, and that includes disruption transformative work is dealing with businesses that are no-growth businesses and what to do about them, and particularly, the linear business, which we are expansive in our thinking about, and we're going to look expansively about opportunities there, because clearly, it's a business that is going to continue to struggle >> let's stop there for a second and just let me ask you about it we're talking, i guess, abc, the network, the stations, but then the cable networks as well >> yes correct. >> fx, natgeo. is it possible you would look to

sell them? >> we're going to be expansive, and i think if you can -- you can interpret what that word means. you know, we're just getting at that work, but we have to be open-minded and objective about the future of those businesses, yes. >> meaning that they're not core to disney? >> that may may not be core to disney, yeah there's clearly creativity and content that they create is core to disney, but the distribution model, the business model that forms the underpinning of that business and that has delivered great profits over the years is definitely broken, and we have to -- and we have to call it like it is, and that's part of the transformative work we're doing. >> we have been having this conversation for a very long time in terms of the erosion of the linear business. and now, it's kind of closer to obsolescence >> well, as i said, when i came back, one of the things i discovered was is that the disruptive forces that have been preying on that business for a while are greater than i thought. so, it's eye-opening there's a reality to it that we have to come to grips with, and we have to come to grips with

that now by the way, another business that is really has benefitted from that business model is espn, but that, we're looking at very differently >> i want to get to espn, obviously, but i just -- to understand, so, you don't know what you're going to do when it comes to these linear businesses, but you would be open to ideas that would perhaps separate them or change the structure in some way? >> well, i'll let you speculate. i'm not going to do any speculating now except to say that we're very objective about their future as part of our asset base >> pretty straightforward there from mr. iger in terms of the future of both linear -- abc, the network, which we've known for quite some time is not necessarily core, frankly. the cable networks and then just talking about that business being substantially damaged at this point. that said, let's not forget it still generates a lot of cash flow for the companies that have

these. i mean, they are going down. there's no doubt we talk every day about the ecosystem that has worked so well for so long no longer really being that at all, because people are simply cutting the cord and don't have the subscriptions anymore, but it still does generate an important amount of cash flow for the likes of disney but efb more so, for example, for warner bros. discovery and for paramount, but those are pretty sobering words, jim. >> oh, i thought so too. and it's funny because i was speaking to hugh johnson earlier today, the cfo of pepsico, and he talked directly about, when you want to reach people, you got to go to live sports there is some value to live sports, which brings me again to what apple is going to do, because apple is a company that wants live sports. they have mls. they need morefor vision pro i think that bob's got something up his sleeve, or otherwise, i would like, carl, a theme park company that has good cash flow and a decent dividend.

oh, my the one i work for, comcast. >> benchmark today does stick by their $49 target on our parent they do argue that whether it's the mix of reality on peacock or that we might be less affected by the strike than some others wbd is down almost 4% this morning. >> and then hulu, i mean, looks like -- look, i don't want to talk too -- we were talking in our office today about comcast technically is at a breakout that's something i don't think brian roberts, our ceo, is focused on, nor kavanaugh, our president. i felt great about hulu. i was worried that that money -- that you couldn't wocount that, but it's going to be countable >> derek thompson of "the atlantic" makes a great point that iger's first tenure was marked by adding pixar, marvel, lucasfilm, fox, and the second round might be characterized by subtraction. >> yeah, i mean, that certainly seems to be a possibility. we didn't talk about the idea of

any large acquisitions it's hard to imagine at this point. and obviously, given our conversation about antitrust still, consolidation that may need to come may not include disney when it comes to media and entertainment. but carl, you're right they are now sort of what i guess he would say, optimizing the company for this new future, which would potentially not include certain parts of it. >> no. >> we'll watch disney, of course, and its effect on the indexes. dow is up 85 you got yields here. take a look at bonds as we got cpi again, almost flat, year on year that's the lowest in three years. yields are about a one-month low. you got the vicks closing in on a 12 handle again. and the dollar, interestingly, breaking 100, 99 this morning. we'll be right back.

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. we've got three large-scale contracts with third parties, so companies in hard to decarbonize sects, fertilizer business, steel business, industrial gas business this pipeline allows us to continue to accelerate and grow that business, do it at a he lower cost and a lot faster with a very large opportunity to further reduce emissions. >> wow exxon is the center of the universe in sequestration. they are the world leader, gone from being a company i thought didn't care to being a company that cares the most of any one of them. it's remarkable. it's a remarkable transformation frankly. i love it denbury.

>> using some of their currency as a leverage and -- >> geez, i tell you, things are happening. oil companies really understand, they hear the drumbeat and they want to be good citizens denbury is the company that has the technology and exxon wants it a lot of people thought denbury, i had them on, i asked why aren't they being bought, but this is about -- i know there's a lot of people that don't like fossil fuels but exxon is the world leader in trying to figure out how to make it we ween ourselves off in a good way. >> yeah. >> and the optics around this current heat wave adding to the societal pressure. >> rockefeller would be rolling over in his grave. there are two rockefellers the beginning when we had 100% of the market and the bad one, well -- just kidding now tonight i have nikesh aurora yesterday palo alto was down big

because of something microsoft did. i'm smelling vapor ware what microsoft is doing if you're short cash, what do i say. invite me to your funeral. >> we have price target increases. >> yeah. >> the whole thing - >> look, i think microsoft is real when it comes to buying activision i don't think they're real when it comes tstpio opng palo alto. >> we'll see you tonight dow up 100 more on david's exclusive with iger when we return.

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good thursday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla live as always from post nine of the new york stock exchange david faber is live from allen and company sun valley media conference after his big interview with disney chief bob iger much more in just a moment take a look at stocks going strong here up 0.6% on the s&p 500. every sector higher except for the two defensive ones, real estate and utility consumer discretionary is going strong, financials are having a good day, up a quarter of a percent, communication services. nasdaq up a full percent

so far for the week we're up almost 3%. and carl, the latest data point that investors are excited about and celebrating ppi which is further evidence this is the wholesale inflation numbers that inflation is really moderating meaningfully they were really encouraged by yesterday's consumer price index, even though the bias going in was for a softer number, it came in softer than expected and ppi increased by 0.1% from a year ago smallest increase in nearly three years. if you add on top the other data point we got, which was also important, jobless claims came down 237 from 249 in the week before yes, it was a shortened week because of fourth of july, but we're not seeing major signs in the economy layoffs growing in an alarming way. you got that i hate the word goldilocks but that's the current mantra which is the fed is avoiding this worse case scenario and seems they're able to lower inflation while keeping the economy growing. >> we had macauly on this hour

say the soft landing, this is the stuff it's made of and we might get. it you're right. good labor data or decent labor data more continuing disinflation and the earrings we're getting as q2 picks off pepsi and delta, a beat and erase. >> let's talk pepsi for a moment because hugh johnson was on earlier, cfo and vice chair and raised guidance and saw strong growth i think what stood out to me most were his comments on margins. he said there was a margin improvement in the quarter and if you're thinking that's because they just raised prices, no, he said prices rose with commodities. we're investing in productivity, and he said that will sustain over a long period of time it's a really important signal to investors because everybody is worried that when prices normalize and revenue growth comes down for these big consumer products, then the

margins will get hit we've automated all this productivity, warehouses, for instance, it's all automated getting the cases to the trucks will result in more margins. inflation, we're just about the same price we're raising it the same as commodities, not gouging to preserve margins or anything it will come down in the back half of the year the biggest takeaway i have from hugh and pepsi is that services inflation and the u.s. consumer is still strong. he said, all the growth was in restaurants and events stores. double-digit growth in convenience stores, 20% growth in food service. that's restaurants, it's colleges if you're jay powell looking at the pepsi report it suggests there's more work to do. he's not seeing a slowdown in the u.s. consumer and inflation is moderating, but nowhere close to 2019 levels. >> we'll see some of the survey day data out

of the national restaurant association shows shopper restaurant intentions on the decline and open table seating on the decline we'll see how long it lasts. >> they're still high is his point an is the point and we're seeing numbers certain parts of the economy, staples and travel, like delta you're not seeing the manufacturers, fastenal didn't have great numbers today the market is excited and moved on one and done for the fed july they're expecting an increase the week after next. september not. november not and they're very excited about it the ts lombard, i don't know if you saw this note, fed hubris on steroids, the idea the market is the only scenario the market is pricing in now is fed will stop and economy is going to be okay. history really does suggest otherwise. >> yeah. meantime you have the spread between year-on-year cpi and year-on-year ppi, widest since the incarnation of the ppi, which is pretty good news for

corporate margins worried about earnings. >> ppi goes in the wholesale level and the consumer level, but i think the bottom line, they're both coming down market is encouraged about it. market is not betting it flairs up again if the economy goes strong, and that is i think a wild card and what fed numbers would be worried about we'll talk to mary daly next hour, san francisco fed president, an exclusive. she was sounding a little hawkish, before the cpi report we'll get her updated views. david, it will be good to talk to her because it's her first interview believe it or not since svb failed in her district we can talk about what that supervision looked like. >> yeah. i'm sure you will. i'm looking forward to hearing what she has to say because there are a lot of questions in terms of how supervision went there, what really happened, went awry, why they allowed the bank to pile on the long dated assets they weren't risky assets to be fair and how i guess, sara, anybody can come back, when you lose as

much as $42 billion in deposits over a short amount of time. sara, i wanted to come back to you on something you said about pepsi which is interesting, the automation in their warehouses or distribution centers. did they give you sense as to how much that contributed to productivity and/or will it continue to? is that something they're rolling out over time? you know, just interesting when you see those kind of comments >> right i thought the most telling comment he made regard to that is that margins will remain sustainably higher and that is a signal that look, when pricing increases fade and revenue growth fades, that we're going to continue to have strong profitability because these are more permanent changes that they're making in the system and i asked him an example of it he said, so now in the warehouses, the product goes into cases it's automated and it goes into trucks, it's automated as i mentioned it didn't exactly quantify it but did cite the strong margin

improvement and the fact that that's what they're looking at from here on out and that will, he think, give them an edge over competitors when the environment does change. we're in a sweet spot where consumers are paying up high price increases as we're seeing. >> yeah. interesting. again, i particularly was interested in hearing about the productivity increases want to move on to disney as well not that long ago, bob iger was sitting to my right about 40 minutes. it was a long conversation about many, frankly, the challenges that he fully admits the company is facing right now as its ceo something, by the way, that he -- a title and position he will hold longer than had been originally anticipated the news out late yesterday he will remain in that role until the end of 2026. he made some news during the interview, whether it is in the future of espn and what they may be looking for for that property

in terms of potential jvs, partner, future of the linear cable networks and abc network and on and on. why listen to me take a listen to him >> we have a great brand a great business and we're going to be open minded there too, not necessarily about spinning espn off, but about looking for strategic partners that could either help us with distribution or content, but we want to stay in the sports wise what would a strategic partner look like for espn >> i think, again, i'm not going to get too detailed about it, but we're bullish about sports in general as a media property there is an inevitability, by the way, you raised it, to taking espn in a direct to consumer. >> yeah. >> we haven't said when, but we know it will happen. >> sooner than you had thought, even seven months ago? >> no. i think i'm more certain about

when but not prepared to say when that is i won't say whether it's sooner or not, but i'm enthusiastic about it >> why you enthusiastic about about it >> i think sports stands tall in a sea of tremendous choice and many respects an advertiser's dream and consumer's dream it's a very, very attractive -- sports is a very attractive medium and we have a unique position in it we feel that we should stay in it >> our last interview, we talked about hulu and you had a different view of it at that point, which has gone back to i think what we've all expected, which is you're most likely going to buy the stake from comcast? >> yes. >> is this something you're thinking about but not sure. six months from now, we're not going to do that with espn >> part of the work i've focused on over the last seven months understanding all of these

businesses where they are today and where they could go and which businesses are going to throw off the most shareholder value for this company and the shareholders over time when i came back, i was open-minded about hulu because there is this agreement with comcast that actually calls for a transaction, their stake to us, some time in 2024, and i didn't want that to be an automatic. i wanted to look at that objectively. i spent a lot of time looking at that, as part of the future over streaming business, and ultimately concluded that we would be better off having hulu than not having hulu in fact, the plan is for hulu to be available starting the end of this calendar year, as part of the disney plus offering so in terms of the path to profitability of that business, which, obviously, is a tremendous amount of focus on and attention, combining hulu and disney plus is a major step in that direction. >> we're jumping around as you imagine we would on hulu your expectation is then

that you are going to come to an agreement with my parent company comcast in terms of the purchase of the 33% you don't own >> correct. >> comcast wants the valuation to be well above $27 billion i think that's the floor, correct? >> there's a mechanism to ultimately determine its fair market value, and, you know, we'll go through the process with them. the goal is to do it as quickly as possible. we are going to merge the apps at the end of this year. the agreement with comcast does not get in the way of us doing that, and the combination of those apps is designed to, obviously, help the business become profitable. obviously, hulu -- >> direct to consumer business. >> hulu is a diversified business in terms of its content offering, done extremely well on the advertising front and it will help in terms of viewer engagement and advertising, meaning the combined app, and it's the right thing for us to do as we prioritize turning that business not just into a profitable business but growth

business, i'm confident we can do. >> in the ten minutes we've been sitting here, you're considering the idea of linear cable networks and abc and the stations perhaps not being a part of disney and the longer term you told me you're thinking about looking for partners for espn, either joint venture or some ownership these are pretty significant decisions there, there looking at it somewhat fresh eyes after having stood aside for 11 months. >> what is the transformative work you're doing, and this is the transformative work. looking objectively at your assets, which ones will be the growth ones, parks, resorts, streaming -- we should talk about that - >> oh, we will. >> and figuring out a path for espn to be draekts to consumer business and staying in the sports business because we have a unique position and enviable

position n that business and i do believe it's a business that can make the transition successfully. >> you do why? tell me why. >> because - >> i'm looking at an nba contract that could double for you and others who choose to participate. sports rights go up for the reason you're stating in terms because they have such appeal on a broad basis. can you make it work economically in that model >> one of the things that we're trying to determine now, which is a factor in terms of the timing, is making sure that when we do it, you know, that it is economically viable. i believe it will be but it's a decision that has to be carefully timed and carefully made and considered. and that's why i've talked about possible strategic partnerships too. >> of course that day that we've been talking about for so many years, seems to be close now in terms of espn being no longer a pure cable network espn is a streaming option, but we're talking about moving the entire thing to a streaming

opportunity. something, you know, that i guess first came up august of i don't know how many years ago, carl, and since then, we've watched linear cable networks decline and decline and frankly decline at a faster rate than many of us, including mr. iger, thought was possible given the years that have gone by with those substantial declines. >> yeah. i was thinking back to his comments of code last september, david where he said, i'm, quote, not bullish on certain elements draft dishl cable and satellite business linear tv, i can't tell you when but it goes away if you are just in that business, you are in a world of hurt so his comments today kind of reflect the view he's had for a while. >> yeah. in fact, he said he may have been a little optimistic that gives you a sense of how bad, when he said that, how difficult things are right now again, i made this point earlier, these businesses, though, including by the way our very own, continue to generate a

good amount of cash for the companies that own them. it's that cash that's generated to help you fund the losses that you have to take on in trying to develop the new businesses, namely direct to consumer, which has been around for a number of years, but really which has only one truly profitable entrant and that was the one that didn't have a linear cable business to start with, namely netflix. >> question, david, on the contract renewal, i mean clearly disney is facing challenges, and he feels like he has to stay, right, to fix them this is just one of them how much of them are his own making >> well, sara, it's a great question you know, there are those who would argue that it was his decision in some ways to move so aggressively in direct to consumer that drew everybody else in the media entertainment space to do so in a head-long pursuit of subscribers bob will push back and says i

had to do it, saw what future was going to be, but that i think is one of the question key questions. was there a way to navigate this, for example, by not pulling all your content off netflix and cutting off a significant revenue source for the company. so i think that's sort of one key area you have to ask questions about. the other is, how expensive espn was through the years and whether that led to the disassembling of the bundle because of the expense of sports led by how much espn was getting by subscribers. >> the other succession botched once before with chapek, and he said, iger said it was his main priority when he came back. >> yeah. i know well, he actually, again, during our interview in february, made it clear that it's the board's priority, that it is very important that they get it right, but that board would take the lead there that will continue to be the

case mark parker, chairman, that's got to be their number one that said, sara, it's not something now that they are rushing towards. it was unclear to me, i haven't been able to fully understand did they really -- how deeply did they get into it you had the three division heads, all of whom were here watching the interview, and you have to believe they are the competitors for that job in the future, but it is interesting, isn't it, that, you know, after all this time, there's been an inability to find somebody to take over from the long term obviously, chapek's tenure was short and not successful. >> little rocky. david, we'll see you in a few. we'll hear more from your interview with bob iger. three big stories we are watching this hour s&p and nasdaq trading at 52-week highs. our next guest says there's room to buy here. citi joins us to discuss delta turning lower despite

record results ed bastion sees gains ahead. more of david's interview with be bob iger, take on the writer orrike and battle with the flida governor ron desantis and future of disney's theme parks. see the full interview at 8:00 p.m. eastern big show still ahead stay with us i was told my small business wouldn't qualify for an erc tax refund. you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. take the first step to see if your small business qualifies.

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s&p and nasdaq trading at the highest levels since april

22022. he still sees room for marginal buying scott crowner has a year end price target of 4,000 and joins us now what takes us higher from here >> i think the work on the big seven or top seven names within the s&p in aggregate have contributed to three quarters of the gains you would think with that concentration effect on the s&p there would be more signs of performance chasing and that component of the market. our work shows surprisingly not. mutual funds remain underweight and still room in our view for retail investors to enter the fray here. >> but don't you think it's as good as it gets in terms of the outlook for the fed being able to squash inflation but not kill growth or really hurt the job market >> well, i mean, our view and our 4,000 end of the year target has been predicated since well since the past month or so on

this view that there probably is a recession risk towards the end of '23 and first part of '24 that's mitigated, obviously, in terms of the sentiment reads off of the cpi and ppi there's still this tag on effect of the delayed impact of the rate hike we've seen here that we think can weigh on aspects of fundamentals like margins in the second half. >> so where do you think the leadership comes from? a lot is being made about the fact it's broadened out? the nasdaq going strong but you're seeing it in cyclicals like industrials and financials. we're going into earnings season can that and it places where investors should be buying >> that's been our call for the past couple months we made a strong case back in the first part of may and that's where we stand the view here is you want to own and hold these mega cap growers. we look to buy them on pullbacks. i'll come back to that in a

second for fresh money as we go down the path of maybe lesser recession risks, that opens the door for the cyclical component of the market which in our work is up only a couple percent year to date to be the most attractive place to go with new money at this point. >> got it. thank you very much. appreciate it with the advice. scott from citigroup the u.s. chief equity strategist. >> still to come, airlines losing altitudes after earlier gains in the wake of delta's record results, all in the red what investors need to know when we return. 't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

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been a volatile morning for shares of the airlines in the wake of delta's. that ceo sounding optimistic about the rest of the year. >> he's optimistic, carl he painted a picture of the second half of the year extension of the first half and when you look at what they reported this morning, they beat on the top and bottom line and beat by a wide margin in terms of earning 268, the street was at 240 remember a couple weeks ago, they raised guidance, so they topped even their raised guidance fuel cost in the quarter a big

contributory helping the company beat the street and dropped by 34%. revenue perceived mile was up 1.3% at one point they were expecting it to be flat to down 1% for the quarter. they came in stronger towards the end in large part because of so many people when they are booking tickets going with premium seats. >> the next five years, about as long as a crystal ball i can give you, we'll see that build in the premium it's what's driving this industry forward and separating the majors from the discount carriers you see that growth in premium not just in delta but the other airlines fortunately we've been at it for a decade and we're ahead of the game, but we continue to stay ahead of the game as a result of that >> in the second quarter up 25% squared to the second quarter last year. they issued guidance between 220 and 250 a share. the street was at 207. look for those estimates to come up and raised their full-year

earnings guidance, previously expecting to be close to $6 a share, near the high end of the estimate, now they are saying they expect to earn between $6 and $7 a share look at the other airline stocks today. i'm not surprised that we're seeing some of these stocks trade a little bit lower why? look at the run up they've had over the last month to month and a half these stocks have really exploded over the last six to eight weeks. as a result, that's not surprising that some investors might be saying, you know what, let me take a little bit of money off the table. back to you. >> thank you phil lebeau. interesting to watch pepsi too with a beat and raise coming off the highs of the morning up a little more than half a percent. still ahead on the show, more from david's sit down with bob iger talking all things disney plus, florida politics and more and we'll get an alynast take. we're back in two minutes with the dow up 91 points and the s&p up a half a percent and every sector higher except real estate

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welcome back i'm pippa stevens with your news update a daly birth control pill will be available over the counter in the united states. the fda approved the owe pill, making it the first contraceptive pill in the u.s. without a prescription no age restrictions. the maker of the o pill says americans will be able to find it on store shelves by the beginning of next year. the national weather service confirmed multiple tornados touched down in the chicago area on wednesday they caused extensive damage to buildings, cars and homes in several suburbs of the city. the nws hasn't determined the total number of tornados yet, but teams will be out today surveying the damage and working to make that calculation a source tells cnbc the founder and ceo of the bankrupt crypto currency exchange cell serious was arrested today by federal agents

alex ma shin ki has been charged with fraud the news of his arrest as federal regulators announced cell serious would pay a $4.7 billion fine as part of a settlement over the fraught fraud allegations. cnbc's reporting was cited in the criminal and civil complaints filed in this case. david, back to you >> thank you turning back to disney which we've been keeping a close eye on including the stock given our long interview with bob iger, ceo of the company this morning, so many things to discuss with mr. iger, including one that is very current or an issue that's current, namely the writer's strike and the very strong possibility that those writers will soon be joined by actors. i asked mr. iger what impact will be. >> well, i think it's disturbing to me. we've talked about disruptive

forces on this business and the challenges we're facing and recovery from covid, which is ongoing, it's not completely back this is the worst time in the world to add to that disruption. i understand any labor organization's desire to work on the behalf of its members to get the most compensation, to be compensated fairly, based on the value they deliver we managed as an industry to negotiate a good deal with the directors guild that reflects the value that directors contribute to this great business pe wanted to do the same thing with the writer and actors there's a level of expectation they have that is not realistic, and they are adding to a set of challenges that this business is already facing, that is, quite frankly, disruptive -- >> they're not being realistic >> they're not. >> why not >> i can't answer that question. again, i respect their right and their desire to get as much as they can in compensation for

their people and i completely respect that. i've been around long enough to understand that dynamic. and to appreciate it but you also have to be realistic about it with the business environment and what this business can deliver. it is and has been a great business for all of these people and it will continue to be, even through disruptive times, but, you know, being realistic is imperative. >> what do you do in the interim? does a.i. start to write scripts? >> it will have a very, very damaging effect on the whole business and unfortunately - >> the strike will >> huge collateral damage to people in the industry who are support services i could go on and on it will effect the economy of different regions even because of the sheer size of the business it's a shame it's really a shame. >> i want to talk about parks. specific to attendance, an article in the "wall street journal" that seemed to indicate people aren't going to disney world at the rate they did a

year ago and your fight with governor there or his fight with you. is he having an impact on attendance >> no. >> his criticism of the company? >> we seen no sign of that at all. the article you referred to as not accurate actually. it was measuring attendance at disney world on july 4th, which didn't really factor in temperature about 100 degrees and 99% humanity on that day but there are other factors as well one is -- and i think this is kind of complicated but florida opened up early during covid, and they created huge demand and strnts competition because there were a number of other places, states, that were not open yet if you look at the numbers in florida in 2023, which is recently, versus 2022, where not as much was open, and florida was the only game in town, there's a lot more competition today. so against 2022, the state of

florida has been we track hotel tax revenue across the state, which is probably a matter of public record and there are counties in florida that have been down 6, 7% recently. we also know that our competitors are discounting in that state so there are some near term issues in florida that i don't think have anything to do with politics. >> not about pricing eater when it comes to pricing in the parks you have a great understanding of what that can do >> one of the things we addressed as soon as i came back, whether our pricing was right or not and reflected value. i should say, i don't know the last time you visited disney world, i say it's where the disney brand lives in its most sublime form it's an incredible experience and very popular business and product and it's very successful we're not wringing our hands over it. there's near term issues in florida as we've talked about. >> yeah. >> and pricing is not an issue we address some of those. >> you're not concerned about some sort of a significant

decline over time in attendance? >> not at all. you're looking at a comparison to last year and it's very different and that's -- we do not have long-term concerns about that business. >> what about desantis who is going to be for the next year, he's made this a part of his campaign, attacking disney, saying it's a woke cooperrporat. they really embraced the idea of getting the sexualized content in the program line i'm not willing to cross that's what he said. i quoted desantis there. how do you respond to that >> well, so far, what we've said publicly is that we are concerned that he has decided to retaliate against the company for a position the company took on pending legislation in that state. and, frankly, i'm not sure it was handled well, it was within its right to speak up on an issue, constitutionally

protected right of free speech, and to retaliate against the company in a way that would be harmful to the business, was not something that we would sit back and tolerate and so we have filed a lawsuit to protect our first amendment right there's and to protect our business, frankly. the other issues that you reference, look, the last thing that i want for a company is for the company to be drawn into any culture wars we've operated for almost 100 years as a company, making product that we actually are proud of in terms of its impact on the world i joke every once in a while we're there to manufacture fun we're there to tell great stories. >> you can't be happy when there's literally nazis standing outside of the front gates of the park. >> that was horrifying quite frankly and concerning to me that anyone would encourage a level of intolerance or even hate, that, frankly could --

even become dangerous action that could be turned into, you know, some dangerous act of some sort so it's concerning to me but i don't really want to engage in the specifics except to say that it's not our goal to be involved in a culture war our goal is to continue to tell wonderful stories and have a positive impact on the world we are preeminent entertainer in the world and we're proud of our track record there the notion that disney is in any way sexualizing children, quite frankly, is preposterous and inaccurate >> there is going to keep going on, but do you feel like you need to engage in a more strident way or want to stay where you are? the lawsuit will speak for itself >> we'll keep doing what we do best and be proud of what we are doing and mindful of the environment, of course i've said this publicly, we're sensitive to the interests and

the needs of the great audiences that we are seeking to attract globally and we'll continue to do that. >> let's continue the conversation on disney and bob iger and for that we bring in michael nathanson, senior analyst who joins us now has an outperform rating on the stock. target price 120 michael, you know, obviously, we ended on the fight with desantis which is not insignificant, but i'm sure from your perspective it was more the comments about espn, linear networks, direct to consumer what stood out to you from the interview, if anything, that you perhaps didn't expect and what do you make of it? >> david, thanks it was great there was so much there. what jumped out at us was acknowledging the truth in the room, right, which is linear network. he sounds like an analyst covering linear networks

the challenge we have with the identification of linear, espn looking for a partner, is not satisfying the market. the issues surfaced and we're still waiting for solutions. we upgraded the stock when bob came back on the idea he's honest, he's decisive, and we're waiting patiently to see the payoff but i would say the acknowledgement in very, very clear terms about the things that we're all seeing on our side of the ledger. >> yeah. you know, obviously, as we always do, spend a good amount of time on direct to consumer, it's not as clear to me there was anything precisely new there. you know, i do wonder your expectations, again, they're in the quiet period, limited in what he can sort of talk about but does seem they're facing near term pressure, no doubt he seemed to be, i think, talking about a quarter that just ended that probably wasn't great, but

i'm curious about your thoughts about that and then direct to consumer which, obviously, s stilz -- is still a key part of the investment thesis. >> when i listened to you and cramer after the interview cramer went to that. quarter doesn't sound good we're at 89 cents. the street 1.05. they've been saying things in the press about weakness i think that's clear the longer term issue, though, is your point is around dtc and i think the lack of owning 100% of hulu is limiting what they can say, and i think that's their frustration. the more that you need to fix -- you can't do anything until you get hulu in, is a frustrating point. what everyone is worrying about now, in the short run, there's not a lot of earnings momentum there's negative pressure as you identified and you need to get to the buy-in of hulu to start another narrative, which is how we're going to integrate hulu and

disney plus. we're in the weird pattern of waiting for more information, but seeing things get weaker as time goes on. >> yeah. on espn, what are your thoughts when he talks about a potential joint venture or even equity partner in some way? do you go to apple what do you think about there as a possibility? >> yeah. a couple weeks ago we discussed the disney bundle. our view has been evolving and our view is that disney, espn, really in the bundle with hulu and disney plus. sports on stand-alone basis. and you were pushing him well on this he kept going back to is this a good business, will it make money. we didn't get answers, but i still think the idea is that espn should be embedded in disney's content to have sports drive those products i love the fact that you were trying to get an answer, but i still think that's the question. you can bring in partners but is

this a good business and what will have to change to make it a good business? it stands at a high fixed cost business that it requires a ton of either subscribers or high price points to make it a good business, and we don't see that, david. i was interested in bringing third parties, but doesn't answer the basic question, does the business make money on stand-alone basis, right. >> right it's less than a month ago you wrote a report about the disney bundle being able to save dtc you're viewing, as you said, i guess, hulu, espn and disney plus all being together, you think that is the solution of being able to secure growth in the future >> yeah. when it comes to sport, as a sports fan, you can see it from the guy behind me, you know, you don't have all the sports in all seasons, right the risk with espn over the top, that once you get to baseball season, you cut espn over the top or you get to college

basketball and drop the service. you need to basically create either all in one sports product with turner or, you know, fox sports or nbc sports, all sports could be there, or you need to put sports inside content to get the nba viewer into the disney plus environment, right. it's either or you need everything or need sports to drive engagement in a single app maybe when bob is alluding to partnerships maybe he's talking about partnering with other networks that have sports and that's what it could be. i think you need to solve the issue how does espn work a la carte and we don't have that answer yet to me it's putting as we see now, put sports into disney plus and hulu, though you and i would go into there, you know, occasionally and watch sports, but it would not be the sole purpose of going into the product. >> got it. listen there's a lot of questions as we know and iger

will have a few more years to figure them out potentially. michael, as always, appreciate you taking time. thank you. >> thanks, david be well. >> we should note, programming note, if you want to -- you missed it or want to wachts again there's going to be a full exclusive with iger tonight at 8:00 p.m in other words we're rerunning it that's we're doing said it like it's going to be a new one. we're we're going to rerun what we did this morning with bob iger at 8:00. >> yeah. live would be a long day for you, david you've done a lot today. >> yeah. >> david faber in sun valley. a look at s&p gainers as we're still a few points shy of 4500 les set'e. got some travel in there, casinos, chips, one-month high, alphabet 4%. back in a minute hear. i was hesitant to get the hearing aids because of my short hair. but nobody even sees them. our nearly invisible hearing aids are just one reason

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we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch. ftc share in the hot seat,

testifying before the house judiciary committee in a hearing examining the mismanagement of the ftc. eamon javers has been listening in and joins us with the highlights, which i'm sure there are fireworks, especially. given the ruling that went against them this week. >> just the name of the hearing alone gives you a sense of how this is going to go. take a live look in while lena khan is testifying before the house majority it comes at a pivotal moment in her tenure early on in the biden administration there were those in corporate america who saw lena khan as a towering and intimidating figure. this week the federal judge blocked ftc's efforts to block microsoft's acquisition of video game maker activision blizzard on the heels of that feet they're on antitrust lawsuit in the very near future this morning "the washington post" reported the ftc has

opened an expansive investigation into openai, the maker of chatgpt and whether it's putting personal reputations and data at risk one question lawmakers on their minds today is whether or not she can turn amazon or chatgpt cases into winners after failing against microsoft. in her prepared testimony this morning she stood by the ftc's ruling saying her agency represents america people's front-line defense against consolidation and points out over the past 18 months the ftc has moved to challenge major transactions in critical sectors of the economy, including semiconductors, defense, energy, health care, mortgage, technology, digital market and pharmaceuticals. that has had something of a bit of mixed success we have an exchange with a republican republican from california criticizing khan for her failures so far in some of the deal litigation she's been

engaged in >> this is how you think you're going to persuade congress to give you more authority, by exceeding the authority you now have >> congressman, again, we only bring lawsuits where we believe there is a law violation given the facts in the law at hand you know, we fight hard when we believe there is a law violation. unfortunately, things don't always go our way. >> so, sara, that's how it's going on capitol hill right now for lina khan. back to you. >> can anything come out of this or is it a public airing of grievances and political blowback >> well, it is a public airing of grievances. certainly there's political blowback, as you just saw. remember, congress authorizes the laws of the ftc operates under and the financing for the ftc, right they have enormous amount of power. obviously, the republicans in the house will have to deal with the democrats in the senate if they want to do anything unilaterally, that's unlikely. these agencies do report to

congress so this is the head of an agency reporting in to her boss, so to speak. >> pretty interesting. if you can't win in court, how do you convince congress to change the law eamon javers in d.c. quick programming note, if you want more on the disney interview with faber, tune in tonight, 8:00 p.m. eastern time for the full interview with bob iger a lot to dig into regarding both disney and the media industry at large, which is going through a lot today. dow losing some gains. up 46. "squawk on the street" continues after this ♪♪ at morgan stanley, old school hard work meets bold new thinking. ♪♪ at 87 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real.

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♪ good thursday morning. i'm sara eisen with carl quintanilla. san francisco president mary daly moments away calling for, quote, a couple more rate hike this is year, plus lessons learned from the svb failure. thomas sho is with us with banks on deck. charles schwab's liz ann sonders, what she's calling frothy sentiment. decent action in stocks today as