Disney Goes to War Against the FCC & People Can “Rent Now, Pay Later”

marketers tell us if this sounds familiar you invest in something that seems incredible like millions of views but then don't see any revenue instead invest in what looks good to your cfo linkedin ads generates the highest row ads of all major ad networks spend 250 on your first campaign on linkedin ads and get a 250 credit just go to linkedin.com slash mbd that's linkedin.com slash mbd terms and conditions apply good morning brew daily show i'm neil fryman and i'm kayla lopez today disney goes to war against the fcc and people are using buy now pay later for rent it's wednesday august 19th let's ride a busted cocaine drug ring at penn state might have brought us one of the best nicknames in recent memory so this week the pennsylvania ag charged 14 people including current students with running a major drug ring at two off-campus frat houses at penn state where pledges and members were made to cut and package coke in what officials described as an upper level trafficking organization for this region in pennsylvania the ring leader of the scheme agostino abatiello has been dubbed pablo pledge scabar and despite the seriousness of the allegations you have to admit that the ring leader of the scheme agostino abatiello has been dubbed pablo pledge scabar and despite the seriousness of the allegations you have to admit that this is an incredible nickname the internet had a field day with others wondering whether austin powders was an accomplice or nostril domus should have seen this coming gosh those are funny i didn't see those last two i really love that and honestly i've heard of some crazy hazing stories in my day like you know cleaning the entire house with a toothbrush while listening to hillary duff but making your pledges cut and package cocaine for your high level drug organization is pretty crazy and now a word from our sponsor rubric neil how important is the is cyber security did you get hacked again no i learned my lesson after the 11th time and that lesson was cyber security as we know it is dead the truth is the old model was built on protection safety nets recovery plans systems designs to withstand the last era and maintain the status quo the ai era demands confidence that you can secure and accelerate your business operations so nothing stops your momentum rubric can give you that confidence their platform helps you keep going by securing your data controlling your ai and protecting your identity built as one architecture not stitched together after the fact to learn more about how rubric rewrote the industry rulebook head to rubric.com slash mb that's rubrik.com slash mb we have a saying here at morning brew daily whenever you hear about bonds on this show it's usually not great news and so it is again today surging bond yields have hit historic milestones this week jacking up borrowing costs and signaling something several things might be a little rotten in the economy first the numbers then the reasons behind them this week 30 year u.s. treasury yields hit their highest level since 2007 19 years ago while french long dated yields are the highest since 2008 and germany's the highest since 2011 remember yields rise when prices fall so this jump indicates demand for sovereign bonds has fallen it's been really rough on governments which issue these bonds to fund their spending plans but now must pay a lot more in interest i promise the reasons so here goes it seems like bond yields are rising due to a mix of factors one concerns that inflation will heat up in central banks will have to raise interest rates to deteriorating government finances widening deficits and ballooning debts across many countries and three competition by corporations which are issuing bonds in record amounts wall street is divided on whether it's time to be super worried or not some say the bond market is sending a clear warning of about rampant inflation and government overspending others say we've seen a rise like this before and whether the storm perfectly fine overall though it does mean that it's going to cost more to finance anything you'd want to buy yeah first i'd like to point out that it is really scary and shocking that 2007 was 19 years ago i don't like that time is moving too quickly but i'd like to dive a little bit more into one of the factors that you mentioned which is corporate bonds so what could be causing additional pressure on yields well corporate our corporates are looking to borrow more money for surprise surprise ai as they're trying to build out ai or increase their spending and computing power they are turning to the bond market at near record levels basically they're asking the market for huge loans to help finance their investments in ai technology according to bloomberg so far this year investment grade companies have sold about 1.5 trillion with a t dollars of bonds which is up 36 percent from last year as and is on pace to be the 2020 record um so how is this impacting government bonds why does this matter at all well um bloomberg outline outlined something here called the crowding out theory this is basically the idea that when governments borrow a ton of money it actually crowds out corporations basically means companies don't have a ton of flexibility to borrow money at cheaper levels so they have to increase their yields in order to be competitive well this is actually the opposite of that it's the reverse crowding out theory this is basically saying that companies are asking investors to finance their debt and people are so interested in ai investments that they're actually selling their u.s treasuries to buy these longer dated corporate bonds that offer higher yields and it's not going to slow down anytime soon nvidia recently announced it's working to raise another 500 billion dollars for its ai investments and i'm sure other companies are doing the same yeah this is all bad news if you're the treasury secretary scott bassett or any other treasury secretary across the developed worlds where bond yields are rising because of a variety of factors including all that corporate uh debt issuance because think about paying interest on on some of your debt right maybe it's ten thousand dollars maybe it's twenty thousand dollars well the united states has a 40 trillion dollar national debt and now it's going to have to pay higher interest rates and it has been for the past couple of years that is just an astronomical bill so far this year the federal government has paid 1.2 trillion dollars uh in interest payments and that is equivalent to 3.3 percent of gdp which is the highest level in history typically over the past half century your federal the u.s federal government's interest costs is average about 2.1 percent now it's 3.3 percent and according to the cbo it's only going to rise from there up to 4.6 percent in 2036 so this is the big problem for governments when you talk about rising uh yields it's only going to rise from there up to 4.6 percent it's only going to rise from there up to 4.6 percent in 2036 it's only going to rise from there up to 4.6 percent in 2036 it's only going to rise from there up to 4.6 percent in 2036 it's only going to rise from there up to 4.6 percent in 2036 it's only going to rise from there up to 4.6 percent in 2036 it's only going to rise from there up to 4.6 percent in 2036 it's only going to rise from there up to 4.6 percent in 2036 it's only going to rise from there up to 4.6 percent in 2036 it's only going to rise from there up to 4.6 percent in 2036 it's only going to rise from there up to 4.6 percent in 2036 it's only going to rise from there up to 4.6 percent in 2036 got besent, came into office during the Trump administration aiming specifically to lower the 10-year yield. Well, now it's actually going up and that's a huge problem. Yeah. And so it sounds like obviously the U.S. government's going to be paying more, but what about you? If you are looking to buy a house anytime soon, or maybe finance a car, take out some student loans, this will impact you. All of these things, 15 and 30-year mortgages, car loans, credit card rates, typically rise and fall with treasury rates. As lenders use these rates as the floor or the guide when they're pricing their loans. And so just like treasuries, mortgage rates have increased this week. As of yesterday, they hit 6.75%. And as somebody who does not personally follow the mortgage rate market, considering owning a home for me is a pretty distant dream, I was curious, is this reasonable? Has this happened before? And the reality is, yes, this isn't the highest mortgage rates have ever been. The highest was actually in October 1981. When a 30-year fixed rate mortgage would cost you a rate of 18.63%. And the lowest was actually just a few years ago in January of 2021, when rates hit just 2.65%. So it could be better, it could be worse. Yeah. The people who bought homes in 2020 and 21 are listening to that thinking, yeah, I got a pretty good deal. All right. Moving on, after getting bullied like the ducks by Eden Hall Academy, Disney is bringing the fight back to the Trump administration. Yesterday, the company's. ABC Network sued the Federal Communications Commission for allegedly violating the First Amendment in its attempts to stifle programming because of anti-Trump comments made on ABC. In the suit, ABC wrote, again and again, the administration has attacked ABC's speech, the stories its journalists report, and the viewpoints its network programs air. Over time, those attacks have escalated into express demands that ABC be stripped of its broadcast licenses because of its speech. Stripped of its broadcast licenses. Let's talk about that crux of this battle. Back in April, the FCC launched a review process for some of ABC's broadcast station licenses two years early, which is basically unprecedented in American TV history. FCC Chairman Brendan Carr says it's because of concerns around Disney's DEI efforts, which the agency has been investigating for at least a year. However, Disney claims it's a retaliatory campaign for anti-Trump viewpoints expressed on its network from the likes of Jimmy Kimmel and the hosts of The View. New Disney CEO Josh Tomorrow, is all in on this fight. In a recent CNBC interview, he said, we're going to stand up to what we believe is journalistic and integrity, and we're not going to be told how to run that side of our business. Yeah, I mean, you talked about unprecedented moves. It's extremely rare for the FCC to actually revoke a license. The last time they did that related to a station's programming was in 1969. when the regulator took action after a Jackson, Mississippi station defended segregation on air. So what would this mean for Disney if the FCC did revoke this license? Well, Disney directly owns and operates eight local TV stations through ABC. After buying ABC 30 years ago, it includes stations in NYC, L.A., Chicago, Houston, and San Francisco. And if the FCC did revoke Disney's license, these stations would go off air. So Disney's argument is that the FCC is stifling its First Amendment rights by launching this, quote-unquote, retaliatory campaign. I thought this was really interesting in the suit, talking about what that actually means in practice. How is this pressure allegedly changing its editorial operations the way it reports the news? Well, they cited this July 16th address by President Trump about election security, which happened in primetime. Typically, ABC said we would not air this. This is just not something that we would put on in. Primetime. But in the suit, they said, quote, So they're saying that because of the threat that Brendan Carr at the FCC or President Trump would go after their broadcast license, they decided to put this on their streaming service, then in something that they would not have normally done. So they're saying, That's what Josh DeMauro is saying, the new CEO. He's like, yeah, we're literally changing our editorial operations because of what's happening at the White House, at the federal level, because we are just freaked out that we're not going to be able to have our stations anymore. Yeah, and the FCC has also launched a separate inquiry into The View, which is one of the news or talk shows on Disney's networks, based on the equal time rule, which basically says non-news shows that feature political candidates on air should also feature their opponents, for equal amounts of time, to give everyone kind of a fair shake. The View has been exempt from this rule since 2002. But if the exemption was revoked, this could make it harder for the talk show to have political candidates on the show. Meanwhile, Brendan Carr at the FCC is kind of doing a victory lap because they have put a lot of pressure on media who have expressed anti-Trump viewpoints. And a lot of them have just gone by the wayside or resigned or quit. So at the Conservative Political Action Conference last year, he said, "President Trump took on the fake news media and President Trump is winning. Look at the results so far: PBS defunded, NPR defunded, Joy Reid, gone from MSNBC, sleepy-eyed Chuck Todd, gone Jim Acosta, gone John Dickerson, gone Colbert is leaving, CBS is under new ownership, and soon enough, CNN is going to have new ownership as well." So they're looking at the media landscape and they're saying because of this campaign that we've launched, they say it's legal. A lot of these places say it's not legal and we'll figure that out. In this particular case with Disney versus the FCC, they're saying, "Look, a lot of our goals have been accomplished. All these people who don't like us are gone from the news media." Moving on, if you saw Usain Bolt break the world record for fastest 100-meter dash in 2009 and thought, "Who could possibly go any faster?" It looks like only a humanoid robot can. This week, Unitree, a Chinese robotics firm, released footage of its new humanoid robot called Superman, which the company claims can reach top speeds of 12.66 meters per second. Slightly faster than Usain Bolt's top speeds during his record-breaking 100-meter dash more than 15 years ago. It's unlikely that any of these Superman robots will make their way over to the U.S. anytime soon, though, since just a few weeks ago, the FCC cracked down on foreign-made humanoid robots, four-legged robot dogs, and some autonomous mobile robots, citing national security and cybersecurity concerns. The ban has mixed reviews. On the one hand, large U.S. robotics companies generally are pleased. Because they see Chinese manufacturers as cheaper competitors. But on the other hand, smaller startups and researchers in the U.S. argue that these affordable Chinese robots are some of the only hardware they can actually afford to experiment with. And obviously, Chinese robotics companies are not a fan of the ban either. There is some reason behind the move, though. A previous analysis found an undocumented backdoor in a Unitree robot dog that could potentially allow remote access to its camera and control systems. Neil, I saw the video of the Unitree robot dog. And I have to say, it is really unsettling to see this Terminator-esque thing kind of creeping down a track at top speeds. Yeah, I mean, it was also a calculated release ahead of Unitree's IPO this morning, which made it the first humanoid robot company to go public in mainland China. The results are in. And this IPO went absolutely gangbusters. Shares were up 542% in their trading debut. So this company went public at a -- It went up to a $9 billion valuation, and then it rose to a $59 billion valuation after trading began, making it one of the most valuable companies in China. Retail investors, which means just the regular people who are investors, me and you, were obsessed with this company. This IPO was more than 5,500 times oversubscribed. So there's so much hype for Unitree and robotics, humanoid robotics, in general in China. I remember the time we used to see robots from Boston Dynamics. That company outside of Boston. And now all we see online is videos of Chinese robots. It's really a sign of the times. Yeah. And China already dominates the humanoid robot market, accounting for roughly 90% of global shipments last year. And in the first half of 2026, Unitree, the company that just went public, shipped almost 6,000 humanoid robots, according to Smart Analytics Global. And it makes a lot of sense that the U.S. wants to kind of protect its market share, what little market share it has, because the robot market is so small. But the robotics industry could be absolutely massive. Morgan Stanley analysts predict that the market could reach $7.5 trillion by 2050, which is an incomprehensible number. They also said that about the metaverse. So I'm taking that with a grain of salt. There is a big question to be asked about what are these things going to be used for, right? We've seen humanoid robot prototypes come in. Great. This guy can do the 100-meter dash in less than eight seconds. But they have to scale commercially. They have to actually get buyers. 100 humanoid robots, I guess, is a start. But they need to be placed in factories or actually in the home. They need people to buy this for their house. And right now, the costs are pretty prohibitive. Right now, these robots from Unitree start at like $13,500 and go all the way up to $80,000, $90,000 for more industrial uses. But I think that's the big question. Yeah, it's super exciting to see robots dancing and sprinting and jumping super high. But I think the big question for all of these companies, Elon Musk at Tesla and a bunch of other American companies, which are getting walloped by China right now, is where do we find commercial uses? How do we actually make money from these robots? Up next, would you take out a loan for rent? Toby, shoo. You want me to leave? No, I want you to talk about shoes from Altra Running. They're designed to give you room for your toes for comfort, balance, and strength. Altra has more room for your toes so they can spread out and your feet can stay in a natural position. Altra does actually make shoes shaped like feet. Use promo code morningbrew10 for 10% off your first pair of Altra running shoes at altrarunning.com/morningbrew. That's A-L-T-R-A running.com/morningbrew. So Toby, after starting the workday at 5:00 a.m., how much energy do you have left at the end of the day to figure out dinner? Toby, wake up. I'm awake. I was just making my point here. Like so many busy, hardworking professionals, the decision fatigue has fully spread. They set in by dinnertime. That's why Forkful is so helpful. Forkful partners directly with chefs to create fresh, restaurant-quality meals that are delivered right to your door. There's no chopping, cooking, or cleanup involved. And there's no getting bored with Forkful Meals either. Their chefs incorporate global flavors using premium, clean ingredients. Check out their menu and get 50% off by heading to forkfulmeals.com/discount/NB50. That's forkfulmeals.com/discount/NB50. Neil, when you need new running sneakers, is an AI agent placing your order for you? You're the Gen Z one here. Wouldn't you be more likely to do that? Fair point, but it is becoming increasingly common. Agents are comparing products, evaluating inventory, and completing purchases for customers. An IDC study sponsored by WooCommerce found that open-source platforms give e-commerce brands more freedom than SaaS to optimize for agentic commerce. That can mean more sales, whether the buyer is a person or a business. Check out the study at woocommerce.com/trends. That's woocommerce.com/trends. Rent is due, and now some companies are offering to help you pay it. Buy now, pay later companies, which give users short-term financing to break up purchases into smaller amounts over time, are not just for laptops and designer clothing anymore. These fintechs are letting renters pay their landlord in smaller chunks instead of just one hefty check on the first of the month. For example. Lending app Flex gives you loans to pay for basics on top of rent, like bills, Wi-Fi, and health insurance for a small monthly fee. This company has already financed $40 billion in rent payments for 3 million tenants since it was founded in 2019. And about one-third of its customers use its services every single month, while the rest only use it occasionally. But why is this happening right now? The trend is growing as Americans struggle with high housing costs and incomes that aren't keeping up with inflation. However. Some proponents of buy-now-pay-later that rent has always been a challenge to pay, especially for those people with once-monthly paychecks, off-cycle salaries, or unpredictable income streams, and this is making it easier for those people to pay their rents reliably without as much stress about the timing of their payments. And for some, these BNPL loans mean they can avoid more expensive lending products like payday loans or high-interest-rate credit cards. Neil, regardless of the individual circumstances behind renting and installments, on the whole, it does seem like a concerning trend for the health of the American consumer. Yeah, do you remember when DoorDash launched a partnership with Klarna and people were scoffing at this concept of, you know, taking out a loan to buy a burrito? Well, people actually are. About a third, 29% of Buy Now, Pay Later users, said they've used them for short-term loans to buy groceries. That's up from 14% in 2024. 18% said they used a BNPL loan for car repairs or maintenance. 13% used it to pay rent. And then another survey, 42% of respondents who have used these kind of loans did so to pay medical or dental care. 39% to pay utility bills. So I think when this industry first launched, it was, look, you're trying to buy something pretty expensive. Maybe it was a couch or something for your home that cost in the thousands of dollars. You could divvy up the payment over four separate times. Now we're seeing people use it for just subscriptions, like not even subscriptions, just these monthly payments that you have to do to just live your life, like utilities and rent. Yeah, and maybe this is a hot take here, but it does feel like one of those things that's like, I don't know if you saw that trend that's like, what's chic if you're rich, but tacky if you're poor? I mean, the super rich has always been using leverage. They're, you know, taking advantage of debt opportunities because they're, you know, using their yacht as collateral for a massive loan. So why can't this be the same for less wealthy individuals? Well, obviously, on one hand, these super rich have actual assets that they're using that are kind of backed up. When you can't pay back your, you know, $100 million loan, there's the yacht that you can take. Whereas here, it's a little bit riskier if you're unable to pay all these loans. There's a little bit more implication here. So let's look at how this actually works. So Flex is maybe the biggest name in this business. A firm just recently got into it, but it's just doing a pilot program. Flex charges a $6 monthly fee, plus a charge of 3% of the sum that's borrowed, and a processing fee. What you do is they basically pay your rent for you at the first of the month or whenever you get it, and you pay them back in smaller installments over the course of the month. So they're basically fronting your rent payment for you and dividing it up into smaller chunks. They say this is a good deal for you because there's no late fees or compounding interest. And they say, when you look at all the credit options available to you, and you need credit, you're going to be able to pay your rent. So they're saying, look, we're not going to get into this cycle of debt with us because America runs on credit. We're actually not that bad because of no late fees or compounding interest. You're not going to get into this cycle of debt with us. And so that's what they say. I mean, another guy from another company, Split Pay, Chief Executive Andrew Borowski, said, look, in an ideal world, my product gets used less. Frankly, the social contract in this country, you work really hard so that you can buy a house that's really deteriorating. So these companies, I guess, are not necessarily proud of what they're doing, but they're saying, look, this is an necessity. People can't pay their rent in time. And we're going to step in because another factor that we haven't talked about is they need to grow their business. Affirm, Klarna, these are companies that are publicly traded. They have investors that want to see them grow. They need to expand into new business lines. So they're looking at rent, utilities, health care, some of these basic necessities that you need to pay and say, actually, that's actually a market that we can move in to grow our business. So you have to look at that side as well. Yeah. And, you know, it definitely does feel like once you get on the hamster wheel, you're not going to be able to get off. The executive director of advocacy group Protect Borrowers told the Financial Times, quote, if you don't have money to pay rent today, it's not likely you'll have money to pay rent later. And it feels like you're getting on the hamster wheel and you won't be able to get off. So, I mean, it'll take probably a few more months to actually see what the impact is of this. But I'm not super hopeful. Let's bring to the finish with some final headlines. You're never going to believe this, but hours before punishing tariffs were set to go into effect on Canada, President Trump delayed their imposition. Citing a deal that will soon be finalized at midnight this morning, the U.S. was planning to slap 50 percent tariffs on 20 billion dollars worth of Canadian goods from hockey sticks to tongue depressors. While not hugely impactful from an economic standpoint, the tariffs could have invited retaliation from Canada and escalated a political squabble between the once friendly neighbors. But 90 minutes before the deadline last night, Trump posted online that he paused the tariffs for three more days, citing a deal that would soon be agreed upon. Canada was more circumspect about an agreement. Prime Minister Mark Carney said substantial progress has been made, although there is important work still to be done. Canada is expected to impose up to 50 percent tariffs for any nation placing unfair or unequal rules on the U.S. versus other countries. And unlike more modern trade rules, the president can enact these tariffs without hearings or investigations. So it is interesting if this doesn't go through, does that set a precedent for future tariffs as well? Up next, American Airlines is joining the 21st century, bringing back seatback screens to more than 800 narrow body jets alongside other upgrades like more premium seating and extra seats. in New York. Check it out. It's called the Morning Brew Perfume. performance review. It's going to feature some of your favorite creators, including Neil and Toby. They're going to have a little time on set. And basically what it's going to be is some of our creators that you might notice from the Morning Brew socials are going to be ranking some of your favorite creators from Morning Brew. So Macy from out there, Dan Toomey from Good Work will also be there. There are still a few tickets left. So grab yours today. You can either go to the Bell House website, which is where the event is located, or check it out in the show notes. There are some really funny people who are here. So Toby and I will not be doing a comedy set. We'll be doing something else because we're going to leave the funny business to all those comedians. But I'm really excited for this, Kayla. And that is all the time we have. Thanks so much for starting your morning with us. Have a wonderful Wednesday. Kayla, your watch has ended. Thanks so much for joining me the past few days. You are free to return to just doing two jobs here. To share your thoughts on the show, I'd love to hear from you. I'd love to hear from you. I'd love to the episode or anything else. Send an email to morningbrewdailyatmorningbrew.com or DM us on Instagram at MBDailyShow. Let's roll the credits. Emily Milliron is our supervising producer. Raymond Liu is our senior producer. Our producer is Olivia Graham and our associate producer is Olivia Lake. Technical direction by Nina Miller. Hair and makeup is applying early decision to Penn State. Devin Emery is our president and our show is a production of Morning Brew. Great show today, Neil. Excited for you to run it back tomorrow. What do water bottles and a skincare brand have in common? Before you say more hydrated skin, they're both featured in Rising Stars by Amazon ads. This docu-series follows small business owners as they create their businesses and face real life challenges. From driving awareness with prime video ads to driving conversion with sponsored products, Amazon ads help them scale. Watch the full series at advertising.amazon.com slash rising dash stars.