Needham’s Laura Martin on Why Disney Should Ditch ABC

Scott Wallsten: Welcome back to Two Think Minimum, the podcast of the Technology Policy Institute. Today is Tuesday, September 23, 2025. I’m Scott Wallsten, president of TPI, and I’m here with my cohost, Tom Lenard, TPI’s president emeritus and senior fellow.

Today we’re talking with Laura Martin. Laura is the senior media and internet analyst at Needham and Company and also a member of TPI’s board. She’s known for her incisive and provocative analyses, and today’s conversation continues in that vein.

Today we explore a deliberately provocative thought experiment she raised – that Disney should shut down ABC rather than deal with FCC regulatory pressure. It’s an argument that reveals fundamental differences between how Wall Street and Washington think about media, regulation, and risk.

We also dive into the rapidly evolving digital advertising landscape and what AI disruption means for both businesses and policymakers

Laura, today you released a report where you suggested that Disney should not just sell ABC, but completely shut it down as a response to the Jimmy Kimmel thing. Tell us about your note, and why you came to that conclusion.

Laura Martin: Sure. So, we did some math here, and the important point from a Wall Street point of view, which is economic, is that we quantified the value of ABC, the entire broadcast network, the 8 channels it owns, plus the network at a value of less than 5% of its market cap. If they just shut it down and wrote the whole thing off tomorrow, it’d be about a $10 billion write-off, of which about $2 billion is the free spectrum that they get from the FCC, and $8 billion is the lost free cash flow, based on current valuation multiples that Wall Street gives broadcasters.

Laura Martin: And they would write that off and account for ABC as a discontinued operation, which normally Wall Street adds back, because it’s a one-time thing. Disney is a $200 billion market cap company, so the $10 billion is less than 5% of the total market capitalization of the Walt Disney Company. After that, revenue would accelerate because ABC, the network, is shrinking, so if you shut it down, now you have a higher revenue growth rate forever.

And then Wall Street awards you with a higher valuation multiple, because you’re growing faster. So, we calculate that after they took the $10 billion write-off by shutting down ABC, you would create $20 billion of value, which is 10% upside to the $200 billion starting point of market cap of Disney today, so it’s actually value accretive to shut down ABC, the network.

And another form of value that we couldn’t quantify, is in a generative AI technological disruption environment, it is increasingly important that management teams have the ability to adjust and react in real time. And therefore, anything a regulator can do to stop you is increasingly expensive. If Disney shuts down ABC, it doesn’t have another business with federal regulation. The film business that Disney owns is not regulated. The streaming business that Disney owns is not regulated. The cable networks that it runs are networks, not distributors, not regulated. So, there would be no other regulatory authority that could prevent Disney from reacting quickly to consumer demands and technological demands for change.

Tom Lenard: The question I had when I read your note was about the feasibility of shutting down ABC, at least in the short run. Presumably, Disney has lots of contractual obligations to its affiliates that are multi-year, I would think. I don’t know the details of it, but I’m sure you do, but they’re presumably contractually obligated to provide them with content, and so how would that work if they were to shut down?

Laura Martin: Well, as you see, both Nexstar and Sinclair, two of the biggest ABC affiliate groups, have preempted Jimmy Kimmel.

Tom Lenard: That’s just one show, though.

Laura Martin: I know, but same idea, and they’re allowed under the contract. I think the bigger point I’m making is that while the FCC in Washington, D.C. thinks this license threat is powerful, my attitude is, Wall Street does not think so. The numbers don’t bear that out. Walk away. Take the lawsuits. Don’t be regulated.

In real life, no CEO would actually shut it down, they’d try to sell it. But the problem is that then the FCC gets involved in the license transfer. But the point is, Wall Street does not care about the broadcast business a tenth as much as Washington, D.C. cares about the broadcast business, because there are no economics in it.

Scott Wallsten: So, like you said, the regulatory risk in this case comes from the FCC controlling the licenses for the broadcast side of the business. They’ve always faced that risk, and other FCCs have tried to get involved in one way or another, but this time seems different, you think. I mean, suddenly there’s more risk than there was before, or at least it’s causing a bigger drag than it used to. Is that correct?

Laura Martin: I think this administration is more heavy-handed with its points of view. One of the great competitive advantages of America is to move fast and break things. I think that’s what Donald Trump is doing in DC. And so, I think Wall Street has an easier time with that, actually, than Washington, D.C. people do. But, it does mean that he breaks things, and I think our attitude is, look, if he’s going to try to hold hostage the entire Disney empire because of licenses that are 5% of the value of Disney, my attitude is shut it down.

Or sell it, or get out, and at least do the numbers. My job is to do the economic consequences, and my attitude is they don’t lose a lot if they get out of the broadcast business. We quantified that the free spectrum that the FCC has granted to television broadcasters is somewhere between $55 billion and $85 billion, because they have public service obligations. Like, that’s a lousy deal for U.S. taxpayers, in my opinion.

Scott Wallsten: Always has been, yeah.

Laura Martin: Brendan Carr is powerful from a Washington, D.C. point of view, because he shouldn’t be allowed to be transferring $85 billion of taxpayer money to this tiny little inconsequential media business that’s slowly going out of business, but he does have that power as the head of the FCC.

Scott Wallsten: Right, and to be fair, he inherited that from a long time ago.

Laura Martin: But it tells you how important broadcasters are to Washington, D.C. It quantifies that. And my point is, on Wall Street…

Tom Lenard: Not that important, because economics are not that big in the broadcast business.

Scott Wallsten: So Trump and the administration believe that they can move fast and break things, and that might be for the good. And are they forgetting that others can also move fast and break things if they wanted to? The companies they regulate may have ways to get out from under their thumb?

Laura Martin: Yeah, I actually think it’s hard to move fast. I think it’s a great idea to move fast and break things. I think in established ecosystems, it’s actually really hard, as we see with the courts blocking the tariffs. I don’t know if a CEO that owns a broadcaster could actually get board approval to shut down for a bunch of reasons that are complicated, but based on history, and to Tom’s point, contracts.

Scott Wallsten: That’s right.

Laura Martin: The sports rights deals.

Scott Wallsten: Blah blah blah. Yeah, the sports are huge.

Tom Lenard: Also, the local broadcasters, the affiliates, have a lot of political power in their domain. I mean, you know, if they lose the affiliate relationship, they lose their income, they can’t support local news. All of that’s important to local politicians, you know.

Laura Martin: It is, but my point is, from a Disney shareholder point of view, I don’t care. My job is to protect the Disney shareholder. You’re looking at things of free speech, and things of multiple voices. You’re raising bigger points that Wall Street does not have to care about.

Tom Lenard: I’m just trying to think about the feasibility of it, you know, given the politics and all the other things involved, the contracts, how feasible it would actually be.

Laura Martin: Let’s say it’s completely infeasible. It is still a really interesting thought experiment that highlights the distinction between a Wall Street perspective, which is purely economic for Disney shareholders, versus a Washington, D.C. perspective that’s transferring $85 billion of value to an industry that Wall Street thinks is inconsequential.

Tom Lenard: I would be in favor of putting the spectrum on the open market.

Scott Wallsten: You were in favor of shutting down the entire FCC, Tom.

Laura Martin: Great!

Tom Lenard: I don’t know, try it.

Laura Martin: But I think I want to make this point. To me, this action of Brendan Carr accelerates the demise of the FCC, because it only regulates this broadcast business that it’s intervening in. So our advice is Disney should immediately simulcast everything on ABC onto Hulu, which is unregulated, so the next time any regulatory agency intervenes, they put up a placard on ABC saying, Jimmy Kimmel can be seen right now on Hulu, get your 7-day subscription free.

And therefore, you move people faster from the regulated entity, which is ABC, to Hulu, which is completely unregulated, and Disney owns both, and Disney makes a lot more money from ads on Hulu, because the average age on Hulu is 37 years old, and the ad dollars are much higher per person at 37, the broadcast network’s 59 years old, and no advertiser pays for over 49-year-olds.

Scott Wallsten: Why don’t they do that currently? Is it just contractual reasons that they don’t simultaneously?

Laura Martin: I don’t think so, I just don’t think it was a thing. But now, I bet every one of these broadcasters would be silly not to do that, so this just accelerates the demise of the regulated entity, and Carr is working against his own interests. In my opinion.

Tom Lenard: Do these late-night shows, like Jimmy Kimmel, do they make money? I had the uneducated impression they’re money losers.

Laura Martin: So, I can give you numbers, we have estimates on Jimmy Kimmel specifically. We think they make about $100 million in revenue, he gets paid about $20 million. Therefore, normally, we think they make, after all their costs, about $50 million. If Nexstar, and if Sinclair don’t broadcast for the whole year, they probably make $40 million instead, but Disney will get that back when they renegotiate the next affiliate deal, because they’re costing Disney money now, so they’ll get it at the next renegotiation for rates.

And it’s just, sorry, the Disney empire, which is the comparison, is $95 billion a year in revenue. So $100 million, even if you lost all of it, it’s inconsequential to the Disney empire.

Scott Wallsten: Do you think Chairman Carr has overplayed his hand?

Laura Martin: Yeah, I do! Especially because it hurts him most!

Scott Wallsten: Right. Although, in the time horizon, maybe he doesn’t care, because he’ll be long gone and doing whatever it is he wants to do next.

Laura Martin: Yeah.

Scott Wallsten: Fair enough. But let’s talk about digital advertising. You’re still very, since we’re talking about Wall Street, you’re very bullish on it. Tell us about the digital advertising market, and why you feel that way.

Laura Martin: So, one of the things we’re hearing from our companies, and we cover Google and Meta, which are two of the biggest, but we cover probably 12 of these stocks of all sizes and shapes and all types of digital advertising.

So digital advertising is $260 billion in America this year, and I think classic advertising, linear TV is the biggest component, I think it’s $55 billion, and if you add everything else, maybe it gets to $100 billion. But digital advertising is probably 15 years old, that’s when Google started, so it’s gotten to $260 billion, versus now classic advertising is down at $100 billion, because newspapers went out of business, and magazines went out of business, and radios going out of business, and TV broadcasters are shrinking 10% a year. So, classic media continues to sort of shrink, stay flat to shrink, and digital media continues to grow anywhere from, like, 5% to 12% a year. So, optimistic because one of the things that’s happening is I think there’s a general pendulum swing from that saying that John Wanamaker had, which half of my ad budget is wasted, I just don’t know what half.

Digital advertising tells you which half is wasted, because there’s data. So, there’s a lot of data attached to digital ads that couldn’t be attached to television or newspapers or magazines.

Scott Wallsten: Right, but didn’t you also report that web traffic is declining? Or has been declining recently? So, why is digital advertising still growing, while web traffic is decreasing?

Laura Martin: Okay, so this is actually a really important real-time point, like, this is a 6-month-old point, so super inside baseball, real time.

Scott Wallsten: So, really important, but I’m way behind the times.

Laura Martin: No, no, no, 6 months is really current. Oh, okay. Washington, D.C, are you kidding? You guys are, like, years, like, months is a Wall Street timeframe, so you’re keeping up.

So what I would say is this. So, what we’re seeing is because Google Search would send you links, and you would go and click on the link and end up on the website for Travelocity or TripAdvisor, and they would therefore get the traffic from Google Search. That’s happening less now, because Google Search is using Gemini, its large language model, to just answer your question. So, Google tells us that about 40% of the searches now, they just answer the question, and there’s not a follow-through. So, therefore, websites that depended on traffic from Google Search are getting injured because their traffic isn’t as big as it used to, which means their ad revenue isn’t, because ad revenue is cost per thousand. So if you have fewer thousands visiting, because Google isn’t sending them to you anymore, your ad revenue goes down.

So, this is the threat to the open internet, to the digital ecosystem of advertising. What we are seeing, though, is, like in almost all technological disruption, Reddit is turning out to be a really huge beneficiary, because high-quality publishers that see lower traffic from Google Search are approaching Reddit and saying, Reddit, why don’t you represent us, and you put our links in Reddit, and we’ll dedicate a person to talk about, you know, rust prevention at the beach, right? And it will be a product for rust prevention, right? And so these companies aren’t going dead, and they can’t force Google to send them links, so they’re figuring out ways to get more traffic, and Reddit is a great example of a way they never would have done that before, but now a lot of publishers. And what’s happening is, where the links are falling away fastest is the lowest quality publishers.

So, while there are 2 million websites in the open web, 10,000 or 20,000 of them are high quality, and they’ll last the longest.

Scott Wallsten: So wait, but are you saying then that, digital ad revenue is still increasing, even though the links are not showing up on Google anymore because they’re moving to places like Reddit? And so Reddit’s the beneficiary? Reddit and other Reddit-like places?

Scott Wallsten: So digital advertising has both walled gardens, which is like Amazon, and Facebook, and Google, and YouTube, and Instagram, and TikTok.

Laura Martin: And I would call Reddit a walled garden, they would not, they would violently object. But the point is, walled gardens are growing faster, double digits. I mean, we saw Meta, which is massive, grew 23% last quarter, so that alone is, like, one of the biggest, you know, if it’s growing 23, then the whole internet in general has to be growing, at least single digits, because it’s such a big part. And Google over-delivered our estimates, I think they grew 12. And these are the biggest on Earth, so, anyway.

Scott Wallsten: You consider Google a walled garden?

Laura Martin: YouTube and Google Search are growing 12%, last quarter. So they, and those are both walled gardens. You cannot buy an ad unit unless you go to Google software.

So the point is that digital advertising is still growing. Amazon has built a $50 billion ad business in 5 years. It didn’t exist 6 years ago. So, that’s a great example of digital advertising growing, and the open internet is still growing slower, 3-5%, probably.

Scott Wallsten: People don’t tend to think of Amazon as an advertising company. But they are, right?

Laura Martin: I had an ad agency guy tell me, Amazon isn’t in the ad business. I said, well, what’s this $50 billion of revenue that they call advertising, then? They said, well, it advertises products on Amazon. I said exactly.

But anyway, yeah, you’re not the only person that thinks Amazon isn’t in the ad business, but I violently object.

Scott Wallsten: Oh, I agree, I think it is. And, do you see, you talk about Gen AI a lot, is it affecting ads yet?

Laura Martin: Yes. Absolutely. In a couple ways.

So, of the 15 companies we covered that are ad-driven, 5 of them are sitting in Israel, and we really see lead indicators, like, the tech stack in Israel is really best in class, and all of those guys are using it to make their yields higher, which is a jargony word that means when you put an ad, they have generative AI sitting behind it to personalize the face of the ad that you see is different than what I see. Mine probably has a girl, yours probably has some kind of brilliant person in the version, because it makes it more likely you’ll click on that.

And then also, once you get the ad, that’s personalized to you, too. Like, not only your geographic location, if it’s an auto ad, it will have your zip code and your pricing on that Toyota, or the weather, like, if the weather’s raining outside, Unilever might deliver you soup commercial, whereas in LA, where I live, where it’s 73 and sunny all the time, they might deliver a sunscreen ad at the same moment. They’re using generative AI to personalize ads to get higher yields and to make them more narrowcasted, which means they get a higher CPM.

Because those ads are more effective. So that’s one way, and everybody’s going to have to do this. It’s just they’re slightly ahead. I’d say they’re 6 months ahead. But everybody in the tech.

Scott Wallsten: Wait, who’s they in this case?

Laura Martin: So, Trade Desk, Magnite, Viant, these are the U.S. versions. They will all have to follow the Israeli companies, like, Nexen, and Teed, and Taboola, who are slightly ahead.

More importantly, when you look at Amazon, Meta, and Alphabet, which are the big three-walled gardens. All of them are using generative AI to cut costs.

Mark Zuckerberg of Meta has come out and said he believes that he will be able to replace every junior-level programmer with Copilot, which is a generative AI idea, to write the first draft of code, and we’re hearing that from all of our companies, that they are no longer hiring entry-level out of college programmers, because they’re letting Copilot write the first draft, and then mid-level engineers edit the work.

Sorry, I apologize, I used the wrong name. He is using Llama to replace engineers. I have many ad tech stacks that are using Gemini, or they’re using OpenAI, they’re using Anthropic, they’re using an LLM to replace people at the entry level.

Scott Wallsten: Why do you think that’s, or is that doing anything to their hiring, do you know? Are they just not hiring junior programmers anymore?

Laura Martin: Absolutely. We track for every stock we cover revenue per FTE, full-time equivalent, and free cash flow per FTE. So, in the big companies that are spending $100 billion a year on generative AI infrastructure, their free cash flow per person is falling off, it’s horrible, but their revenue per person is accelerating, and all these other companies that are using generative AI to wipe out that bottom level of hiring also are seeing both. They’re seeing both free cash flow per FTE, per full-time equivalent employee, and revenue go up, which drives higher valuation. 80% correlation between labor productivity, because these companies don’t have assets, they have people.

Scott Wallsten: Does this suggest a pipeline problem, in terms of people? Because if you don’t have entry-level people, eventually you’re not going to have middle-level people. And or will, do they just expect that Gen AI will be good enough that eventually you won’t need the mid-level engineers either?

Laura Martin: I think that’s what they assume, that now I talked to somebody today that said they aren’t training their machines with humans anymore, they let the machine train the machine, and then a mid-level person looks at the new code, makes sure a human makes sure it works. But they can get rid of 10 people. Or labeling, like, which is an entry-level job, how do you label content? They let the machine do it, and there’s a mid-level person that goes in and edits it to make sure there’s not big errors. So, no, I think this just creeps up. It’s starting at the lowest level, and I think the ability of generative AI keeps moving up the employee stack.

Tom Lenard: So, could I ask about another area of regulation? Concerning advertising. I mean, how much, if any, effect are privacy or data regulations having on the advertising models that these companies use?

Laura Martin: So, I mean, they’re getting fined, in the EU especially, they’re getting fined. America’s a little more lax. I think the points I’d like to make from a Wall Street point of view is that, American companies sort of don’t care as long as everybody’s on an equal playing field. So if the EU says you can’t have access to data, everything has to go back to the way newspapers were, where you have no idea who anyone is, your cost per thousand goes down, but still, Google versus Facebook versus Amazon, they don’t have competitive advantage over one another, because they’re all regulated in the same way, right? So, they make less money than they did before, which means their revenue growth steps down for 12 months, after which they just go back to growing whatever they were growing before, and it doesn’t improve one person’s market position over another, because the regulation applies equally to all data privacy.

And I don’t see this happening in the U.S. I think people in America who think they have privacy are naive. I don’t think they have privacy.

Scott Wallsten: But they may not care.

Laura Martin: I think young people for sure don’t care. Let me give you a statistic that I think is fascinating on this subject. If you go and ask people what they want to earn for their data, they’ll give you quotes of $25 a month, $50 a month, $100 a month to share their data. Okay.

However, we have a good statistic on this, because Amazon Prime, in January of 2024, said on January 15th, all of our Prime Video subscribers are now ad-driven, unless you pay $3 a month to not have ads, and therefore we won’t sell your data. We’ll keep your data in an Amazon perimeter, and we won’t sell it to monetize it. 15% of people pay $3 a month to protect their privacy. So those are the real numbers. People might think they don’t want the shared data, but that’s just not how it plays out in the real world.

Scott Wallsten: That’s also crazy, because even setting aside the privacy protection suggests that they don’t value their time at all.

Laura Martin: Correct. Both the privacy and time. Should be worth $3 a month, you would think, but no.

Scott Wallsten: Huh. 15%. That’s amazing.

Laura Martin: Amazon tells us that’s the stat. Maybe over time it goes up to 20. But the point is, you know, there’s no privacy, and actually, no matter what people say, they actually don’t care. They’re not willing to put money behind where their mouth is in terms of paying for privacy protections.

Scott Wallsten: I’m very disturbed by Americans’ lack of value of their time. What’s wrong with us?

So, alright, here’s another question, and you know, I don’t really know how even to think about it, but on Wall Street, and probably other places, you use sort of a 10-year discounted cash flow model when you’re thinking about, when you’re trying to think about how to value a firm. In an age of Gen AI, when technological progress is speeding up, and companies are changing their business models, how do you handle your projections? How do you think about it? What do you have to change?

Laura Martin: Okay, great. So, this ties in beautifully with this suggestion that Donald Trump has made of, should we go to every 6-month report instead of 3 months, right? So, and the answer is that a bunch of white papers went flying around Wall Street on this. What you find is that long-term projections are better the more data points you have along the way, so that as disruptive as generative AI, I think, will be, it is still better to get data points every 3 months from companies than every 6 months, where things can really go off the rails for a long time at the 6-month mark.

You get massive volatility, which then lowers people’s multiples, because risk has gone up, and therefore it increases the cost of capital for everybody. And my opinion is, having worked for a long time in Paris for a large French company, where they do only report twice a year, I believe that one of the reasons America has the largest capital market is because we do have much more, twice the transparency, and allow people to correct after 3 months if they don’t believe what a CEO says, or if the numbers fall off a cliff. We get 40% moves sometimes after a 3-month interim. What if you had a 6-month interim? It would, like, 70% moves. That does not give confidence in a stock market. So, I like the 3-month.

But the point is that this just ties into we have the job on Wall Street of projecting forward 3 years, 5 years, 10 years. That is made best in class in the world, because we have 3-month reporting. In a disruptive period like the internet, like the invention of the iPhone, usually, Wall Street is too fast, and our magnitude is too big for the first 5 years, and too small for the 20-year frame. But that is a typical problem of ours.

Tom Lenard: If they did something like change the requirement to 6 months rather than 3 months, what do you think, do you think the better, however you define, better companies would still report more frequently?

Laura Martin: Yes, I do. If there’s a competitive advantage and you lower your cost of capital, it is really expensive. And I think the real problem would be, like, we’ve seen a shift, like, Netflix stopped reporting subscribers, Roku stopped reporting subscribers. I think maybe even Disney is now not reporting, specifically for their streaming assets, right? But Netflix is a pure play streaming company, so that’s a big data point for Netflix, not so much for Disney, they have theme parks. But the point is that there is CEOs love to not report. Given a choice, they won’t report data points, because every now and then, those data points are bad, and they don’t like the volatility that Wall Street creates.

Because then that hurts their employee morale, and then employees all get in a big upset about their stock price being down 20% in a day. So, I think that it is possible that if you change the rule, a lot of people would keep it, but over time, CEOs love the idea of just running their business. And apparently, I haven’t read this particular study, they did find that when you elongated reporting, there was more capital spending and more investment by CEOs, because they don’t have to be under fire every 3 months about uses of capital, because that’s my job, are you allocating capital properly? And every 3 months, I get to yell at you if I think you’re doing bad work. So if they only do that every 6 months, it emboldens them to spend more capital with lower returns, because they only have to put up with us twice a year. So I don’t like that, that’s another reason that the stock market would go down, and therefore the cost of capital up.

Scott Wallsten: So there’s, I mean, there’s nothing magical about every 3 months, except we’re just used to thinking in terms of quarters, but, if do you think there might be ways to make reporting less costly? Because, like you said, it’s hugely costly, and make an argument for even more frequent reporting, as long as you can find ways to keep the cost down?

Laura Martin: Almost all companies have monthly metrics they track. Does Wall Street need those? No, there’s probably a lot of volatility in them. I don’t know, but 3 months, like, if we’d gone to 4 months, would it make a difference? I don’t think so, but 6 months, I do think, makes a difference. Look, I think we have the experiment. We have the largest stock market in the world, and we report every 3 months, and Europe, which has twice as many people, their stock market is not as big as ours. So, I think part of that is transparency, and believability, and the fact that Wall Street does get to yell at these people every 3 months if we think they’re doing bad work.

Scott Wallsten: So Wall Street and DC live in very different universes. So does Silicon Valley, but let’s leave that out. What do you wish policymakers understood better about Wall Street and the way investors think and the way investors respond to what policymakers say and do.

Laura Martin: So, two things spring immediately to mind. One is timeframes. Liquidity in the markets only has value if you use it, which means if a CEO says something, and you think he’s not being truthful, or you think he’s hiding something, and with liquidity, you sell first, and you get the facts later.

In Washington, D.C, where they are working for years to create cohesion to get a bill passed, or a public policy thing. There’s a lot more talking, there’s a lot more thinking, and there are a lot more parties that have to be involved to get anything done. That is the opposite of Wall Street. Today, if you’re a money manager, you can sell shares or buy shares.

And so, the timeframes are massively different. Literally, if I own Apple today, I’ve decided to buy Apple. Not because I decided to buy it, because I didn’t decide to sell it. The benefit of Wall Street stocks and bonds is you can trade in and out of them. So if you’re not trading in and out of them, you are making a proactive statement about what you think the value of that asset is tomorrow and the next day. So, timeframes are the biggest difference.

Scott Wallsten: Right, so your first time frames, what is it that policymakers should take from difference in timeframes? Why should they know that?

Laura Martin: I think because things like the FCC, Brendan Carr, using a statement like, we can do this the hard way or the easy way, cost Disney shareholders 3% of the market cap in an asset that’s worth only 5% of the market cap, so now you get Wall Street saying, so just shut it down. Like, you already destroyed 3% of the value because you made an unthoughtful comment. So that’s one thing. They should be careful what they say, because Wall Street will react. People will sell the Walt Disney shares because of a comment made in a business that’s inconsequential to the Disney empire.

Scott Wallsten: So we think of it as cheap talk, but it’s not so cheap.

Tom Lenard: But I think it wasn’t part of the reaction that people thought that, you know, some people would boycott the theme parks and stuff like that, or?

Laura Martin: Maybe. They have the right to, but that isn’t affected by Brendan Carr’s statement. He made a statement, the stock fell 3%. So that’s one difference of that’s one of the implications of the different timeframes.

Tom Lenard: What’s the mechanism by which the stock fell 3%?

Laura Martin: People sold shares.

Tom Lenard: But why did they sell shares? Because some part of the business would be hurt.

Laura Martin: Yeah, the broadcast license, right?

Tom Lenard: Maybe the rest, too. Maybe the stuff like the theme parks. People have people express, you know, that I don’t know, I’m just raising that as a question. It’s not just the broadcast stuff may not be so completely separable from the rest of it.

Laura Martin: No, it’s completely separable, because all that stuff that all the comedians say all the time is in the Disney stock price. If you don’t like what comedians say, you already weren’t going to the theme parks. Or, if you think Disney’s too woke because they had that big fight with Florida, they already weren’t going to the parks for that. So, if you see a comment that basically threatens the licenses of ABC, and now the stock falls 3%, that’s the new piece of information. The fact that comedians are offensive, no new information in that. If they weren’t offensive, they wouldn’t be funny, that is their role, to be the court jester to power.

Tom Lenard: But you can be offensive and not funny.

Laura Martin: True, but that isn’t a comedian doing his job, then.

Scott Wallsten: That is true. So, you had a second point, too, and I’m sorry I interrupted.

Laura Martin: Yeah, so timeframes are different, and then I think the second thing is I think one of the reasons that the American economy is 5% of the global population and 25% of GDP is we have this constant pushing and pulling between big idea people in Washington, D.C. They think big thoughts, they’re attorneys, so they’re very articulate, they have a point of view, and this tussle over ideas is sitting in DC. Let’s call it the Brain Trust.

That is not Wall Street. Like, we’re plenty smart, but we’re about practical. I give you a dollar of capital, what do you give me back? And if we don’t like what you’re doing, we sell your shares. We drive up your cost of capital, because we drive down your share price. So we have this practical juxtaposition pitted against a world of ideas. And I think the combination of those two things is what makes America so much more productive on a per capita basis than the rest of the world. We don’t run amok with ideas, and we don’t run amok with practicality. So, I would say that’s a big difference, that we need each other.

We don’t understand why people just keep talking and not doing anything. I get the push and pull and the tug of war going on, but I do think it makes America great.

Tom Lenard: I think saying Washington is a place of big ideas is a little I’m not sure. Yeah, we’d like to think that, but I don’t know. There’s more big ideas than, you know certainly in Silicon Valley and related places than in Washington, I think, but

Laura Martin: I had a girlfriend from business school tell me, Laura, when did you stop asking why and start asking how? And that is the difference. I think Washington, D.C. says, why? Why should we do this? Why shouldn’t it be a different way? Let’s talk about it, let’s change something. And Wall Street says, how? Given the rules, how do I make money? That’s its question all the time. How do I make money, given the environment, given the rules, whatever’s happening in the context? We don’t ask why. We ask how to make money. Very simple.

Scott Wallsten: Wall Street’s objective function is a lot easier to describe how to make money.

Laura Martin: And it sticks to its knitting.

Tom Lenard: I don’t even know what the question is, but, you know, being a good CEO of a big company seems to be well, do you agree? That seems to be a scarce commodity. It’s a scarce talent. It’s a scarce there are not that many people somewhat surprisingly, maybe not surprisingly, it’s there are not that many people who are good at it. I mean, do you agree with that?

Laura Martin: 100%, I agree with that. And it’s getting harder because you’re putting hundreds of billions of dollars a year at risk to generative AI, or like Apple, you’re not doing that. And one of those is going to be the wrong call. Either Apple’s doing it wrong, or Amazon’s doing it wrong and Google’s doing it wrong. One of them will be wrong. The market’s betting right now that Apple’s on the wrong side of that trade, but you know what? Maybe Tim Cook will come out the smart guy in the room, and everybody else will look dumb, because they wasted money, because it’s going to turn out that DeepSeek is correct, and really, you could have built a large language model for $50 million or something. So, yeah, it’s hard, and it’s getting harder owing to technological disruption.

Tom Lenard: Right. So is Elon Musk worth a trillion dollars, or whatever?

Laura Martin: I think he is. Boy, talk about moving fast and breaking things. Only America turns out, okay, fill in the blank, Steve Jobs, Elon Musk, Mark Zuckerberg, these are all names of entrepreneurs that have changed the world.

Tom Lenard: Agreed.

Laura Martin: Billion people a day.

Tom Lenard: Of course, Elon Musk was an immigrant, and so

Scott Wallsten: Which is an important point, actually, because we want people.

Laura Martin: But also, I think America has, different from Europe, I think we have a disdain for authority and a mistrust of systems that gets so, I think that’s one of the reasons, and we their funding mechanisms are second to none, they’re awesome, and so we fund people like that.

Tom Lenard: But I think it’s also interesting, I mean, it seemed to me obvious from the beginning that while Elon Musk is a great entrepreneur and maybe a great CEO, he was not I don’t think worked when you’re trying to reform government.

Laura Martin: Yeah, I think fair. Look, he’s a genius guy, maybe, to my point. Let’s say corporate America is different from Wall Street, which has liquidity, which is different from DC. It makes no sense to me that a person excellent at one of those ecosystems would be good at any of the other ecosystems. They’re just their success metrics are too different, I would argue. So look, I don’t know if he helped or hurt, but it’s an interesting idea.

One of the competitive advantages of America is that we never use the excuse because we’ve always done it that way. Rest of world does that. You need somebody, like Trump’s saying, let’s go to six-month reporting, so that all of the financial system is up in arms against why that’s a bad idea, but none of us are allowed to use the argument because we’ve always done it that way. We never use we don’t even see that as a valid argument.

So we can’t use our competitive advantage unless somebody is saying outrageous things, like I am today, let’s shut down ABC. No one’s ever said that before. So the point is that America’s willing to engage in these comments, and not use the excuse, well, we’re not going to do that, we’ve never done that before. That means it creates a dialogue and lets us flesh out why we’re doing things a certain way, and whether there actually is a best way 30 years after it was invented. I think Elon Musk does that best in class.

Tom Lenard: Yep.

Scott Wallsten: Alright. Okay. Laura, thanks so much.

Laura Martin: Alright, talk to you soon. Take care.

Tom Lenard: Alright, bye. Bye-bye.