The 94.5%: Moderna’s Covid Vaccine with CEO Stephane Bancel

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This is Squawk Pod. I'm CNBC producer Katie Kramer. Today on our podcast, more light at the end of the tunnel. Moderna's COVID-19 vaccine proved to be 94.5% effective in a clinical trial. CEO Stéphane Bancel.

I think with our vaccine and the other vaccine, that's, that's a good hope that we should be able in Q1 to get people at high risk vaccinated in the U.S.

And what this news means for American business with former Citigroup Chairman Dick Parsons.

New Yorkers and indeed Americans are social folks. So I don't have a doubt that we'll come back from this thing when we finally get past the virus.

Plus, Parsons, former CEO of Time Warner, says the pandemic may have changed the game for sports fans, but not too much.

Believe me, television is not going away tomorrow.

It's Monday, November 16th, 2020. Squawk Pod begins now. Right now.

Good morning, everybody. Happy Monday and welcome to Squawk Box here on CNBC. I'm Becky Quick along with Joe Kernan. Andrew is off today.

We continue to monitor the spread of COVID and the impact on life, business, and the economy. The U.S. now has hit 11 million cases, a million cases recorded in just the last week. More than a dozen states broke daily records during the weekend, and multiple governors have issued new restrictions as we near the Thanksgiving holiday. In Washington State, indoor dining is closing starting today. Illinois began a 30-day stay-at-home order. Michigan is partially shutting down restaurants, bars, and schools. And in New York City, Mayor de Blasio announced schools would remain open today, but once again said a positivity rate of 3%, which we're coming up to from below We'll see, but that would trigger another shutdown. I just, you know, the young people, they're sidling up to each other and talking and everything else, and they probably aren't as at risk. So, but then I can, you know, you can do the contact tracing to a nursing home somehow. You can get there from wherever big crowds are, weddings, whatever people are doing where there's a lot of people. Maybe no one there is more— they probably are too, though. They should be worried about mortal risk, but you definitely can connect the dots to a mortal risk somewhere else. That's, that's the whole key.

Look, it's reached community spread in a lot of places right now. I have a good friend who found out she was COVID positive just over the weekend. She's got it. And I think her husband definitely has it. It's spreading. And they've been very safe. They've tried to stay in. It's, it's reached community spread in a lot of places. And that's really concerning, especially when you have the prospect of these great vaccines or medications, things that could help with all of these things. You have the prospect of it, but it's not here yet. And the market might be able to look through that, but it is going to be a very difficult several months that we're still going to be facing all of this. And it's not an easy solution. I don't know what governors do. I don't know what governments do in terms of shutting down or what they choose to shut down and what they choose to keep open.

I read this in the Journal today. It's like the pandemic's disruptions have accelerated U.S. consumers' embrace of digital commerce.

Yeah.

Thank you. It's like, what do they do? It's the weekend and okay, let's see, this guy's— this guy, this lady, Harriet Torrey, doesn't have anything to do. How about writing this story again for the thousandth time? How do you make that a new story? How do you put that on the front page?

Well, I'll tell you how you can come up with a new storyline on that. I haven't seen that story, but I will tell you that the CDC has come out I haven't looked at— read the story, but the CDC has come out and said that some of the risky things are going to include people shopping around Thanksgiving and then the Christmas holidays. But they are very concerned about people being out in the stores, because every time you're out in the stores, you raise the potential for being able to pick up on this. So—

Right.

There's that. There's the idea that stores are now starting to limit and count the number of people that are coming in again. Walmart hadn't been doing that in months. They are now starting to count the number of people coming in the doors again. Because when you reach community spread levels like that, even simple things like going to the grocery store can be pretty risky.

A recent survey by McKinsey found that 3 out of 4 people have tried a new shopping method. That's due to the coronavirus.

Okay, I'm not going to try and defend that. I wouldn't have gone with the McKinsey study as a reason for front page news.

Well, no, but it's a second story. I mean, I think sending I would— maybe I would have led with 4 guys who got on a spaceship that, like, Elon Musk designed and said, okay, let's go. It's like, what? Um, thank God it worked, and good luck. And, you know, and it's, you know, I, I reading that it's from Kennedy Space Center, NASA's involved. It's just a private, um, you know, involvement with NASA involved going up to the space station.

Sure.

It's— I'm amazed we've got to that point. I mean, you do look at The way, you know, a lot of Elon Musk technology, I guess you can trust it. It's just maybe I wouldn't be sitting on top of that, you know, maybe at this point.

You're a nervous Nelly. So am I. We've admitted that.

We're not going to be the first ones to sign up. I mean, it just— this is not— I mean, I fly. I don't worry about planes or even, you know, not necessarily jets, but— huh?

But neither one of us is going to be one of the guys signing up to do this project.

Andrew talks a good game.

Next, Moderna CEO Stephane Bancel shares the good news of a 94.5% effective coronavirus vaccine.

The first agreement that we reached with the U.S. government was for an order of 100 million doses. So we anticipate to be able to ship up to 20 million of those 100 million before the end of the year.

That news and what it all means, next. After this.

Fall flavors are calling at Whole Foods Market, and during the Spice Up Fall event, so are the savings. Find yellow tag sales throughout the event on proteins like bone-in beef short ribs and beef stew meat with no antibiotics ever. Plus, save on Gouda and organic Honeycrisp apples. Shop with Prime at wfm.com and score free delivery on your first order over $25. Terms apply. Spice up fall at Whole Foods Market.

With the Discover Cash Back Card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5% cash back at different categories each quarter on up to $1,500 in purchases. That's 5% cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to discover. Terms apply. See discover.com/5 for details.

See something on the rack that caught your eye? The one you're not sure how to wear, or where, or with what? We've all been there. The good news? Someone here already knows exactly what to do with it. Just ask. You have a stylist at Maurice's. This is Squawk Pod from CNBC. It's Monday, and another major player in the race for a coronavirus vaccine came out with big news this morning. Moderna, the Cambridge, Massachusetts-based biotech that uses messenger RNA genetic material to develop an immune response, announced preliminary results from the 3rd phase of its clinical trial. Moderna's vaccine candidate showed greater than 94% effectiveness in preventing COVID. You may remember just last week Pfizer announced that company's candidate showed 90% efficacy. Your flu shot Typically just 50 or 60. So Moderna CEO Stephane Bancel joined Squawk Box this morning to discuss what he calls a game changer. This vaccine could be ready for distribution, about 20 million doses in the U.S., by the end of this year, 2020. And here's something interesting. It looks like it might be stable between 36 and 45 degrees Fahrenheit, the temperature of your refrigerator or a pharmacist's. A very positive picture. Stephane Bancel spoke with Joe Kernan, Becky Quick, and CNBC senior health and science reporter Meg Tirrell. Here's Meg.

Stephane, thanks for being with us this morning. Another historic day, 94.5% efficacy for your vaccine. Help us understand what this means, the second vaccine to show such high efficacy for getting us through this pandemic.

I think it's great news. We are all excited last week when we heard the good news about the Pfizer vaccine. And I think with the data that we are presenting this morning, it's just hope that we should be able to get those vaccines soon into the marketplace to help vaccinate people at high risk to stop the pandemic.

Well, you also disclosed some more data. The severe disease— you saw 11 cases of severe COVID-19 in your trial, and there were zero among people who got the vaccine. So tell us what that means. I mean, this could really keep people out of the hospital, potentially prevent, you know, this severe disease and even potentially potentially death, although it's probably too early to say that, right?

Yes. And I think this is actually the data that excites me the most, Meg. Of course, we are delighted that the vaccine has close to 95% efficacy. But as you said, what we all want is if somebody gets infected, that they don't get severe disease. And that's the great news we had yesterday when the independent NIH-led Data Safety Monitoring Board shared with us all those data. Yesterday, early in the afternoon, that was the news that we were most excited about. Is if this can hold with a bigger number? I want to remind everybody, this is a first interim ninety-five case. The full study will be complete at one hundred fifty-one. So we have to wait a few more days. It's going to come pretty soon, given the quick pace of cases that we are all observing in our studies. So so we are we are really excited about what this could mean. for patients. And we're working very closely with Operation Warp Speed to get this in the hands of Americans as soon as, of course, the FDA has the ability in the coming weeks to review the file and the EUA.

One of the other really important things that experts are looking at here is the impact on different age groups, people of different backgrounds who have underlying conditions. And you did have some more data there. Tell us what the data that you have seen suggests about how well this vaccine works for older people, for example?

Yes, and I don't have that data yet, Meg. As you know, those are interim data. What we have is basically what we put in a press release, as we have done in the past months. We wanted to be extremely transparent, so everything that I've learned yesterday you are seeing this morning. But I think because of a number of cases at 11 for severe, this was a number that starts to be kind of meaningful. As you might remember, in the FDA guidelines for EUA, They said they wanted to see at least 5 severe cases. So we're very happy to already be at 11. So as we get more data, I think around the time we file the EUA in the coming weeks, we will share those descriptions by demographic.

And of course, everybody is going to want these vaccines at more than 90% efficacy. There's not going to be enough at the beginning. Tell us about your supply, 20 million doses in the US this year, more next year. What is the pace that we in the US and countries around the world will start to be able to get this vaccine?

So you might remember the first agreement that we reached with the US government was for an order of $100 million. So we anticipate to be able to ship up to $20 million of those $100 million before the end of the year. So we are making product, as you know, every day and stockpiling it. And assuming we get the green light from the FDA, I would say sometime in December, I'm sure General Kerner from Operation Warp Speed will be ready with the trucks to load the product. And to distribute it in the U.S. via the CDC guidelines. And then every week we'll be making more and more product. And once the product is approved, basically every time we have a lot that is approved by the quality control unit of Moderna as meeting specification, it will be shipped right away. We know that every day is going to matter. And we anticipate those 100 million doses to be shipped to the U.S. government in the first quarter. And that's what is really exciting. So I think with our vaccine and the other vaccine, that's, that's a good hope that we should be able in Q1 to get people at high risk vaccinated in the US if they desire so.

Stephane, it's great news for just the platform, for the proof of concept, for using the nucleic acids, a small amount, and to generate that type of immunity. I just couldn't help But thinking about— so you get the vaccine, you get— the antibodies come, but you could still be infected. The way you'd tell that you were infected, you couldn't test for the spike protein because you've already made antibodies for that. So what do you do? Check for the PCR. You use PCR to check the nucleic acids that are present from the coronavirus, but at a very low level because the antibodies are already attacking it, right? But you can detect trace levels of it in people and see that the antibodies are taking care of it.

Yes. So you raise a very good question, Joe. We are going to monitor— it's part of our protocol— infection and try to see, does the vaccine reduce or prevent infection, which would be, you know, of course, a big win. And so what we're going to do, because as you say, once we vaccinate people, they will have antibodies to the spike. As this we've shown and we published in the New England this summer. So what we're going to look at is antibodies of other proteins that are in the virus but are not in the vaccine. That is how we're going to be able to see If people got infected by the real virus or not.

Yeah, I had to try to figure that out, how that would work, since you're— okay, let me ask you another question. So, there are some that thought maybe if you use the other vector that some of the other companies are using, that the adenovirus itself is helpful in generating immunity, maybe mediated a different way, maybe with T cells or with an adjuvant. At 94%, it doesn't look like you need any— it looks like this is fine for the type of immunity that you're looking for. It seems just as good. Is that— can you make that statement?

I think so, Joe. And one of the things that we've worked really hard— because this is not an overnight success, as you know, we have been at this for 10 years now, of a lot of investments and focusing on the science. And what we've realized over the years is if we're able to make a very pure mRNA, and make a lot of copies of the antigen of a protein of a virus in the human body, then we can get a very strong immune response like we are seeing today. And this is not the first time, you know. You know, we have had the same results with our Zika vaccine, with our CMV for cytomegalovirus. So this is actually the 10th vaccine that Moderna has put in the clinic. And so we're starting to see the power of the platform. And now with this validation In 2021, we're going to invest even more heavily in our vaccine business. There's a lot of viruses that do not have vaccines that hurt humans today. And we want to really scale up that business and to really leverage the beauty of mRNA because mRNA is an information molecule.

Stephane, on the COVID vaccine, some of the exciting news I think you're announcing today is just what it takes with refrigeration, because that's been a concern. We talked about that with the Pfizer vaccine, that it has to be kept at 80 below zero. Explain what this means, how you can actually get out and distribute this, and what the shelf life is for this vaccine if it's not kept at those very low levels.

Yes. And we've worked really hard for around 4 years to invest in science and process development in how we make the product to be able to get to those temperatures. So what we have now is 6 months at -20 Celsius, which is a temperature that the distributors are used to because they are approved products at those temperatures. It's not deep freezing. It's just like a regular freezer like you have at home, -20 Celsius. But then the big news of this morning is we got actually on Friday new stability data that show in a regular fridge at 2 to 8 Celsius, like the fridge you have at home, like the fridge that are present in pharmacies and doctors' offices for things like insulin, we can store the product up to 30 days. Which was a big challenge before. We had 7 days, now 30 days. And then when you want to administer the vaccine, you can keep it 12 hours at room temperature. And the other piece that I think is a big differentiator of our product is we do not need dilution on site. So when you take the vial out of a regular fridge, you don't need to dilute the product, which is going to be simplifying everything for the nurse and the doctors, speeding up the process because we have to vaccinate literally Hundreds of millions of people.

Hey, Stephane, you know, thinking about this vaccine coming to the US, you said 100 million doses in the first quarter and then next year 500 million to a billion you hope to manufacture for the whole year. How are you thinking about distributing this around the world? How will you make decisions about which governments come first? And are we facing a situation that public health experts have been warning about since this pandemic began, that rich countries are going to get vaccinated and protected first and poor countries will have to wait longer?

Yes, that's a complicated one, Megan. So what we've done first is we set up a US supply chain and outside the US supply chain. And this is based out of Geneva with our partner Lonza. And the product is formulated in Spain at our partner Rovi. What we have seen indeed is governments from around the world already placing orders. You're right, it's mostly so far high-income and middle-income countries. We have been for now several months in discussion with COVAX. As you know, the facilities set up by GAVI, CEPI, and the WHO to provide tier pricing. We made proposals to them. Discussions are ongoing, and I hope we're going to find a way to provide our vaccine so it's accessible in low-income, middle-income, and high-income countries.

Stephane, one of the benefits is, is it's easier to manufacture this, but it's still— we still wish you could make a billion copies tomorrow, obviously. With other techniques, with DNA or whatever we're talking about, it's almost like Moore's Law. We've seen how quickly the time has shrunk to sequence and to produce and everything else. What are you working on that would allow much quicker production, or have you already hit the limit of how quickly you can manufacture these little stretches of messenger RNA?

Yes, a great question, Drew. I think we still have room for improvement. As you recall, it took us 42 days earlier this year to go from a sequence published online to shipping clinical-grade, human-grade product to VNIH, to Dr. Fauci's team. We are able to shorten that cycle time by investing in science, investing in robotics, And so I think we should be able to keep taking that time down. The reason that we are not able to make $1 billion right away is this is our first commercial product. And so we did not have like the older technologies manufacturing capacity already built. We had to build everything this year. The good news for the next outbreak, because there's going to be more, is that we will be ready with manufacturing capacity. And I also want to engage with governments to see how we can do more work to get prepared, because I think if we had invested more collectively as a public-private partnership before this virus appeared, I think we could have saved 3 to 6 months to getting this type of phase 3 data.

So vaccines are great, but what about therapeutics? And it's not— may not be perfect the way that, you know, the way that this is delivered. But what's on the horizon for what you might try to do, whether it's a genetic deficiency that you could correct with this technology? What— this would seem like the tip of the iceberg, and you could really tackle some of the scourges of disease that we humans still are subject to. What's next?

Yes, so that's a great question. So we have a few exciting areas that we're working on. You know, we have a product in phase 2 now with AstraZeneca. Where we inject our mRNA coding for VEGF into people's heart after a heart attack. And the idea here is that if you survive a heart attack, your heart is going to be damaged, your heart muscle. So you're going to have heart failure. And so the question is, can you inject mRNA in one intervention to have basically your stem cell make new blood vessels in your heart muscle? The phase 1 data look very encouraging. There was no safety issue. We showed that we can increase blood flow in the arms of diabetic patients. The data in pigs, which is, as you know, in cardiology, is a good translation from animal model to human, was also very nice, published in Nature by the AstraZeneca team. So that's one that I'm quite excited about. The Phase 2 is ongoing. We wait for the data. The other piece is what you said, Joe, is rare genetic disease. We have now 5 programs in rare genetic disease, mostly targeting the liver right now. And the next frontier we're working on, and I hope we're going to be in the clinic early next year, is autoimmune disease. We're able to code mRNA that gets into immune cells to make inside those cells on the membrane of those cells on the outside, which you cannot do using recombinant or small molecule, to make a protein of interest to basically help patients with autoimmune disease. As you know, we're also working with Vertex to get mRNA into the lung. And recently we announced our second partnership with Vertex to use actually messenger RNA to code for gene editing. And we're going to start this on cystic fibrosis with our colleagues at Vertex.

Wow. Stephane, we'll definitely have you back to talk more about that at another time too, because that sounds incredibly interesting. But let me ask you more about the COVID vaccine right now. I see in the release that you put out today that the COVID cases, the 95 COVID cases, included 15 older adults who are age 65 and plus. And 20 participants coming from diverse communities, including Hispanic or Latinx, Black or African Americans, Asian Americans, one multiracial. And that's good news, because there's so many questions about what this would mean for different people with different genetic backgrounds. I guess my question is one that I'm a little bit of a broken record on. I have a child who is particularly exposed to this, could have some serious problems with this. And I just wonder— I know that kids, in general, are not a huge issue. A huge concern. When will you have testing that kind of moves to other groups that haven't been covered like this, including younger children?

It's a great question, Becky. So, as typically done in vaccines, because you give those products to healthy people in clinical trials, it is usual practice to wait for the adult data, both safety and efficacy, to assess with the FDA, is it worth going into teenagers first and then younger children? So we're going to start very soon in teenagers. And so of course, we'll let you know when this starts, but definitely this year. And then so that's 12 to 17. And then we're also going to go down into toddlers. We're of course going to have to go to a lower dose and try a lower dose than what we gave to adults. And we have to start very slowly and to basically age de-escalate. So to go from, let's say, you know, people in their 5 to 8 years old, I mean, go down slowly. Because as you can imagine, given the difference in weight from children and also immune system, we have to be very, very careful because safety is priority number one. But we are very committed to get also a vaccine working in teenagers first and then toddlers.

Stephane, it's Meg again. You know, thinking about what it's going to be like for folks to take this vaccine, it's 2 shots, 4 weeks apart. It is a very high dose of the vaccine. Any plans to look at a single shot for efficacy or perhaps that sort of next generation version to increase supply and increase compliance?

Yes. So there's a few things we're going to be looking at, Meg. No decision has been made, so I won't comment on specific details. But when you look at this type of efficacy, as you know, in the study, if you look back to the protocol, we actually looked at cases after one dose. So as we get all that data, because as you know, as a company, we were blinded to the data until yesterday, as we're going to look at the data and engage in the discussion with the DSMB, and the FDA. We're going to think about, you know, is there a strategy, to your point, to go single dose, maybe at least in the younger population that has a stronger immune system? Is it to go to a lower dose? As you recall, I told you in the spring that we spent a lot of time with the team hesitating between 50 micrograms and 100 micrograms. Those were the 2 doses in the Phase 2 study. And the reason we picked 100 micrograms is it was well tolerated. And we wanted to give ourselves and future users of our vaccine the highest chance for efficacy. In this industry, efficacy is always priority number one. And getting to this type of level of 95%, especially as you said, in the severe disease, is what is really exciting for us. We think this vaccine can have a serious impact on this pandemic. And so we're going to look at other possibilities. To save those is by playing with a number of those or the dose itself in terms of mass. But that's for, for the weeks to come.

All right. Stephane Bancel, thanks for being with us this morning. A huge day. We really appreciate you being here.

Thank you so much for having us.

Hey, Joe, just one thing to point out. The Dow right now up by 510 points. It did get a little bit of a boost. I think you saw Moderna shares were up 16 or 17%. Not the same sort of spike that we saw last week with Pfizer. But that's of course because the market's already run so much the last week. But if the Dow were to open up or close up by 520 points, it'd be sitting at Dow 30,000.

Wow.

Yep.

9,919. All right. We will— we shall see. We shall see whether the good news is now out. There's, there's something to that sometimes, at least with the way stock markets work. I mean, you know, we're reporting those COVID numbers at the same time we're hitting new highs. So it's obviously playing forward a lot of the positive news that we're seeing. I couldn't help think with Stephane and actually with Pfizer, I just couldn't help think about, you know, Stephane got so much grief about selling it, selling at $75. Remember, it's almost $100. Right, it's about $100 now. All the people that write in on Twitter and all the You know, but whatever. And Pfizer, when Bortle was selling, I mentioned this to you last week, almost every analyst has a buy on Pfizer. So he's selling it, you know, he's selling at 40. How does he know? How does he know? That's, that's probably selling it not at a great price. So, you know, we hear all this stuff.

Well, Moderna, like Stephane talked about this, it was 10 years they've been working on the platform. That's a lot of time waiting to see if something succeeds.

I was thinking how great it is to be alive. How great it is to be alive at a point where, oh my God, they rationally took this, sequenced it, fixed, put something in. And if it works, I mean, this would not have happened. Obviously, so many of the horrible scourges— that's the second time I use the word scourge— but in human history, we know so much and we're just very, very fortunate. And I'm thankful.

Next on Squawk Pod, Dick Parsons, former chairman of Citigroup, Former CEO of Time Warner. He'll cover a lot of ground— what this vaccine news means for American business, what digital media means for sports fans, and what the election of 2020 means for the future of this country.

Democracy only works if the bulk of the people believe and have confidence in the system. And so calling into question the validity of something as fundamental as our voting structure is Potentially disastrous.

Fall flavors are calling at Whole Foods Market, and during the Spice Up Fall event, so are the savings. Find yellow tag sales throughout the event on proteins like bone-in beef short ribs and beef stew meat with no antibiotics ever. Plus, save on Gouda and organic Honeycrisp apples. Shop with Prime at wfm.com and score free delivery on your first order over $25. Terms apply. Spice up fall at Whole Foods Market.

With the Discover Cash Back Card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5% cash back at different categories each quarter on up to $1,500 in purchases. That's 5% cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to discover. Terms apply. See discover.com/5 for details.

Welcome back to Squawk Pod.

Good morning and welcome to Squawk Box here on CNBC. I'm Joe Kern along with Becky Quick. Andrew is off today. And news that Moderna's COVID-19 vaccine was 94.5% effective in a clinical trial, causing U.S. equity futures to jump. The Dow looking like it'll get very close to 30,000.

Thanks, Joe. That makes two Very strong vaccines after Pfizer's was shown to be 90% plus effective in a trial of its own. Joining us to talk about what this means for the country and for business is Dick Parsons. He's senior advisor at Providence Equity Partners. It's a private equity firm that specializes in media, communications, and information companies. He's also, of course, the former chairman of Citigroup. And, and Dick, it's really good to see you. How are you doing?

Well, I'm doing well. How are you, Beck?

I'm doing well too. I'm glad to hear this news today about Moderna. That makes 2 vaccines that look incredibly promising with, with great efficacy, much better than we had anticipated. And I just wonder what you think this brings us to as we continue to see the COVID case climb, but we do see these effective measures that are going to really help us down the road.

Well, I, I think it brings us to a point of positivity because, you know, this The virus is getting— its impact is getting worse and worse all the time. People think it's going to kind of peak, I guess, around between Thanksgiving and Christmas. But this suggests that there's, you know, there's an end. There is a light at the end of the tunnel. There's an end to this.

American business has struggled. But, you know, as always, there's been a lot of ingenuity and there's been ways that businesses have very rapidly tried to change the way they do business and make sure that they can operate in this environment. Where do you think businesses stand right now? And I'll ask you specifically about media because of your focus on media. Where is media going to go? Where are viewers going to go? How much of this has changed during the pandemic, how we do things? How much of that will change and go back after?

Well, let me, let me touch first on the ingenuity part. You know, I live in Lower Manhattan, down in Tribeca, and to see the way in which small small business owners like the restaurateurs have, have come up with innovative and creative ways of working around the limitations that the virus has imposed. It's been impressive. I mean, New Yorkers and indeed Americans are resourceful, resourceful folks. So I don't have a doubt that we'll come back from this thing when we finally get past the virus. But it has been tough, particularly at the bottom of the pyramid.

Right.

For the people who have the jobs that serve other folks. They've been impacted the most. In terms of the media, though, I think what this has done is it's just introduced a lot of things, all things digital, I'll put it that way, to the consuming public at a much faster rate than otherwise would have happened. I hear from CEO after CEO that, boy, we thought it would take It would have taken 3 years, 5 years for us to, you know, get fully kind of baked into the way people consume media. And it's happened in 6 months, because, you know, this virus has kept us all home, and people are now finding out that you can get a lot of— almost everything, you know, on a streaming basis into your house, including your workmates.

So, what does that mean for the traditional media companies, like Time Warner, your old company? What does that mean in terms of where the profitability lies?

Well, as you know, Time Warner is now part of AT&T. And what AT&T has done is they've sort of turned the ship completely into the wind of streaming. I mean, they've collapsed the discrete parts of the business we had, which were, you know, sort of television, movies, appointment viewing. And they put it all on HBO Max and it's now a big streaming service. So I think what it means for the big guys at least is aggregating the content that they have and trying to create compelling streaming services that they can monetize.

You know, Dick, you, you've touched on so many different things through your career. I think of the time that you spent with the NBA and just looking at what it has meant for sports viewing on television right now, how that's been under pressure. Do you think that's because people aren't going to watch sports the same way? Or do you think that's just because we've seen so many sporting events that have been condensed and kind of crunched into one place? So there's a lot more competition.

Well, you know, I think sports was, is, and will be going forward the compelling form of content. And as soon as people can get back to, you know, the sort of arenas full way of viewing it will go there. But, you know, I watched a couple of games yesterday. Television has kind of made the adjustment. NBA, NFL, they're sort of back in the swing. You're not going to see sports go away. And it's, it's going to continue, I think, to be the most compelling content out there. And what the digital world will do will be kind of presented on an You know, as I want to watch it and in the increments I want to watch it basis. You know, a lot of these these millennials and and the younger Gen Z, I guess they call. They don't want to sit and watch a three-hour football game or three-hour baseball game. They just want to see the highlights. And so what you'll see on the digital side is services that enable you just to sort of click in and check in just when you know last five minutes of a game or. When LeBron throws down a big dunk or something like that. That's what you'll see happening in the sports arena, I believe.

But that presents a really big problem for the traditional television models that have been based on, we're going to pay a lot of money for these sports rights, because we'll have a big audience, and then we can sell a lot of advertising through that. Does that model still exist?

Well, yeah, the model still exists. I mean, television— Believe me, television is not going away tomorrow. But, you know, the trick will be to see what the revenue share is going to be between all of these sub-licensors who want to take just a piece of it, and the big licensors who have the entire show to sort of separate out. So, you know, I think you're going to see both models exist for some time. It's just that one of the things the pandemic has done is it's accelerated the influence and arrival, if you will, of the digital model. But advertising, advertising isn't going to go away. People are still going to want to, you know, build their brands and put their products in front of folks. through the televised media. And I think, you know, in my view, analog TV, you know, it's not going away. It's kind of like—

Yeah, I saw—

When television came along, you know, it didn't kill radio. It just caused radio to morph into a different form of presenting its content. TV is going to morph into a somewhat different form, but it's not going away.

I saw an article, I think just last week, that said Nielsen is now looking at ways to do targeted advertising, which has kind of been the holy grail that digital has been able to do, deliver directly to people who want only your project. If there's a way to kind of measure that in Nielsen, if there's a way to deliver that in television, is that a game changer?

Well, you know, we were working on— as you know, I've been out of Time Warner for over 10 years. We were working on that 10 years before I left, you know, sort of addressable advertising. And, you know, it is a way of making sort of analog TV more kind of acceptable and compelling. And so, yes, I think the answer to your question is yes, it is a way of kind of keeping the old model rolling, but with the modification that you can address Dick, you're a statesman, and you talk to lots of people in the business community.

I just wonder what you think about what's happening with the election right now, still being contested. I guess it's almost 2 weeks after the election and the transition period that's taking place. Is this a problem at this point or not?

Well, I definitely think it's a problem. I definitely think it's a problem because, you know, democracy is based on the principle that the majority of the people You and I had some interesting conversations back in the financial crisis where I was making the point that the banking system— bear with me on this— you know, can only function if people have confidence in the banks, right? You have to believe, you know, if I give them their money, I can get it back when I want. Well, the same is true about democracy. Democracy only works if the bulk of the people believe and have confidence in the system, that their votes count. That the institutions that they rely on work. And so calling into question the validity of something as fundamental as our voting structure is potentially disastrous, right, to our democracy. So I, you know, one would hope, I think everybody hopes that this gets resolved quickly. And, you know, as I thought about it, I thought this is an opportunity for this president President Trump really to shape and define his legacy in a way that it hasn't been shaped or defined heretofore. You know, if you think way back, remember, I'm old, so I remember JFK. And when, you know, here's some, what is it, 50 years later, almost 60, he's still remembered more in people's minds for that inaugural speech he gave when he became president than anything else. You know, ask not what your country can do for you, ask what you can do for your country, all of that sort of rhetoric. This is an opportunity for this president to really define, you know, what it was that he thought America needed to happen to make it great, what he did and what his legacy is, and go out on a high note instead of as a sort of, you know, petulant little fellow who just can't stand to lose. I hope that he takes the former. I hope that he takes the high road and uses this occasion to really, you know, build confidence in the American system, build confidence in American institutions, and frame his legacy in his words as opposed to someone else's.

Hey, Dick, thank you. It's good talking to you, and we hope to see you again soon.

Always a pleasure, Joe. And you and I had a chance to say hey, but hey.

Hey, Dick. It is good to see you. I was going to talk about the Senate and some other things. I know you're probably— gridlock's not great, but there's worse things in the world, I guess, right? If that's what happened.

Well, there are worse things, and we'd like to see us not go down any of those roads.

All right. Great.

Good to see you. We'll see.

See you again soon.

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