Off on it, okay? Yeah, yeah. All right. Actually, it's our show right now. I'm going to send it back over to Carl and Jim, who are standing right over there, sitting right over there.
David, we'll see you in a minute. Thanks, David. Faber. Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer at Post Nine of the New York Stock Exchange. David's going to join us in a moment, having just wrapped up that exclusive with Skydance's David Ellison and Shannon Price, talking about how the hard work now kind of begins. Jim, your thoughts?
I knew really well at Mattel before Mattel. I think he'll find a way to be able to cut costs. What was mentioned, David mentioned that he laid off a lot of people. He went to an asset like Mattel was actually brilliant, and I have been adamant that he saved the company with that. The company had way too much debt and too much manufacturing. You know, look, these guys, both David and Ynon, they're just saying it's growth, growth, growth. The unfortunate thing is that we know from the industry that we are in that it's not growth. Now maybe David Zaslav, the portfolio they brought did have more growth than a lot of others. And David put together a pretty good company. He did say it was worth 28. They overpaid, but just by a couple. It's the debt. It's the debt. And I don't like the debt. Service is really high. And if you look at the debt of this versus the debt that they're putting in AI.
We'll talk about that in a minute.
Yeah. You might just say, hey, listen, debt is dead, but it isn't because there's a lot of forgiveness, a lot of belief that the amount of money that's being raised in the data center is going to turn out to be far more, because the NVIDIA chips are worth a lot more. We can talk about an Australian IPO that may not be doing well, but what I thought mattered was that I don't see, and David, I think, was very precise about it, I don't see the ability in the first few years to be able to pay down the debt the way they'd like, or even maybe even to meet the interest costs. But, David, you were very perceptive about the idea that that's really the issue. They wanted to come back with growth. Great interview. They wanted to come back with growth, growth, growth. And you came back with rigor, rigor, rigor, and maybe sometimes they crossed and sometimes they didn't.
No, I mean, that's going to be the key for them as to whether they can deliver on these goals that they're talking about. And they can execute, obviously, on those synergies, which is going to be such a key part of it. But I mean, we made the point. They start life as a very highly levered company. They have aggressive timetable and growth and leverage reduction targets. And it's going to be interesting to watch. And, you know, you listen to Ellison talk about the portfolio of assets. It is pretty impressive and wide ranging.
12% of TV watch, which was interesting during the approval process to get through regulators. You're like, oh, there's so much competition now. It's about look at our scale next to you.
But of course, that does make the point as well. YouTube, which is the beast, it's the giant. And we've watched it happen over these last five to ten years. And it continues to be. And the growth there is obviously anybody in media would love to see that kind of growth.
I did like the framework of legacy Hollywood kind of lazy, let tech move in and merging that with muscle from Silicon Valley. And whether that's really a novel model, we don't know much about.
We don't. But I thought that Ellison articulated that well and in a way that even though I've heard him discuss it before, that was an aggressive and empowering almost in a way, it did make you say, hey, wait a second, you know, he's coming from a different place. And those who are backing him have said that all along, and now we'll have to wait and see.
I wanted when I went into the interview, I said, you know, that traditional media model, I obviously nobody likes it. We're stuck in ourselves. It's not what you want to be in. You want to be in growth. You want to be in. I came back and said, it's not traditional media. They have a real shot here. However, I'm still skeptical because in the end, they still mentioned the CBS nighttime lineup. They still talked about NFL, which is costly. And I don't want to be levered to the NFL if I don't have the cash flow.
Yeah, I didn't follow up on the NFL in terms of whether they're actually going to have to.
Beat yourself up already. The interview.
I always do that every single time. Can never do them.
That's why you never do them right.
Or HOF and the rest of us are playing a different game.
I don't know about that, but.
It did sound, Jim, like you're thinking more about the external environment, the competition for capital, not so much about what's happening inside that building.
I mean, this kind of company is correlating with the regular debt markets, correlating with what Michelle Gass is doing at Levi Strauss, even though she would tell you, look, I just missed the mark. I didn't have the right stuff. We'll talk about that. It's correlating with what Ramon Laguarta, the world that he's in, whereas the AI world is not correlating. That does not mean that it can't get too expensive. People keep confusing, although I'm saying it doesn't correlate with the GDP.
These guys did hit the corporate bond market for a huge amount of money not very long ago, in the same way that SpaceX is going to, and Broadcom and so many others that are fueling a very different.
Those are not correlative.
No, they're not correlated. You know, you mentioned.
Of course, discretionary. I mean, you don't have to go to the movies.
Yeah. You mentioned Ellison talking about tech disruption. Take a listen to what he had to say.
Media and fundamentally disrupted the business. Yes. Companies didn't pivot fast enough. We can talk a lot about the owner-operator entrepreneurial culture of Silicon Valley versus the more steward culture of Hollywood that candidly put the businesses in this position. This transaction is the solution to those mistakes. Ten years ago.
Very interesting and said it very clearly. And of course, they are the control. He's the control shareholder. This is a very similar model to some of the behemoths in Silicon Valley that also, like a Meta, have one person running it who is also the control shareholder.
Now, did you feel that it was rather remarkable how Ynon pivoted so quickly from Mattel to this new company? I mean, when and we see it, I mean, she's someone I saw a pivot to someone from Gap to Nike. I mean, there is just this kind of jump, jump, jump. I mean, you know, I was when I talked to him last, we were talking about Hot Wheels.
That was very quick. Yeah, it was.
We had MongoDB to Meta, right? Mattel to Skydance.
