Be near. Well give you the latest reporting on that potential deal between the studios and the writers. And the fed is Holding Rates Steady, signaling it will keep rates higher for longer. Deal of the day, cisco agreeing to acquire splunk. Both companies cite what they call complementary capabilities in a. I. And security. Splunks gary steele is going to be part of ciscos executive leadership team, reporting to chair and Ceo Chuck Robbins and both gentlemen are going to join us exclusively at 9 15 this morning in about 15 minutes, jim. I think this is terrific, and i will tell you why. What cisco tried to do for a long time is have a lot of recurring revenue, and splunk is nothing but recurring revenue. Cisco has tried to be a major factor in cybersecurity. We know its incredibly important. Splunk will give them the opportunity. They had a Smaller Division that does cybersecurity. Its not been that much of a winner, frankly. In the meantime, gary steele has taken the company, and david, you remember, starboard was agitating about splunk. He came in and fixed the company in 17 months and prepared to be able to sell it. That was not what he wanted to do. He was going to come on mad money, but he has done so much in a very short period of time that i think it makes tremendous sense for cisco to strike right now. We can ask the guys, but there was, you know there were talks between these companies a year or two ago. Yes, there were. Interesting. They didnt get a deal done then. I just wonder what changed. Well obviously ask them, but do you have any sense . I think that gary steele is a deal maker. Hes a realist. They were doing terrifically. I think it was a Company Always for sale. These guys, and theyre going to be on, these are two of the most straight shooters ive ever met in business. Gary is a man of few words. You got to be careful. Gary is yes, no. How do you think hows the new microsoftazure deal . Oh, okay. Good to know going into this interview. I love them. When prove point was doing badly and he would tell you. Splunk had totally lost its way. I had a splunk tshirt and i just kind of, you know, put it aside. No dog named splunk. But in the meantime, they have had this incredibly sticky group of customers, and everybody swears by them. They have observability and terrific cybersecurity. Theyre on the edge, which is something that cisco has done, and i think were going to hear an amazing story and in the end, youre going to say, i want to buy cisco because they have the annual recurring revenue which is almost 50 , which had been chucks goal for a long time. We will enjoy we enjoy meeting both of them together, and both of them are really a match made in heaven when you try to figure out where cisco needs to go in terms of growth. Certainly one of the largest deals of the year without a doubt, and we talked about the fact that there has been some hope, some optimism when it comes to m a starting to percolate in both the fourth quarter, which were not even quite in yet, and next year. You know, i have heard this a number of times. This is the first true example of it, though, of a large deal. This is a very large deal. Certainly even for those who are considering deals that might garner significant antitrust or at least in this environment, antitrust roadblocks, im hearing that, you know, ceos are willing to consider things in a way that they might not have previously. Previously, the atvi. And importantly, jim, it is as much about, all right, we think we can win but its going to take longer and theres a willingness now to say, well, all right, 18 months is kind of the new 12 months, you know . I thought that david, the horizon more active m a environment, but obviously, this deal itself also coming back from previously at least having tried at cisco. We know that chuck was one time interested in data dog. Hes always wanted to make an acquisition in this area. I think the textbook bridge too far was amgen horizon where lina khan, i would say go so far as, some people say she made up the reason to block that deal. I would not say that. That was quizzical, to use a word that you enjoy. Yes. Yes. Do you like the flag behind my head . Oh, yeah. Look at that. Our great allies. It is funny because i just remember in 1974, they were youve got a star. I just point it out because i think people will look and realize the vietnamese are here today in celebration of the great relationship we now have. Yeah. Well, speaking of stars, you may not see your favorite stars back yet in your favorite shows. Oh, you broke some news today. It was actually yesterday. Oh, what were you doing on earlier this morning . That also. We are going to be keeping a close eye on the continued negotiations between the writers and the producers, the wga and the producers, facetoface meeting yesterday did yield significant progress and optimism on both sides. That is according to people who are close to these negotiations. Speaking with them late yesterday. And the hope is that today they can finalize a deal, that the negotiators on behalf of the writers can bring back and get approved. There is always and still obviously a possibility that will not happen, but certainly optimism as i was reporting on both sides, that and the fact they can come in today with a relatively short list of things they finally need to do. In fact, i was told there was a belief they could have gotten it done yesterday in the room. But they didnt quite get there, and the hope again is that today will be the day. For the writers to agree with the producers on a new deal that will put them back to work and then of course the question becomes what follows with the actors. Well keep an eye on it. 9 00 a. M. Pacific time is when that is going to begin in terms of, again, the facetoface negotiations. Thats very interesting, david, because this discussion with the uaw has taken a turn that is almost its just irreconcilable. Its interesting at one point the rhetoric for this was pretty heightened. And they still solved it. Yeah. What are you, a message in a bottle . Looking at this journal piece here, david . I want to get to this press release about Rupert Murdoch. Stepping down . Hes stepping down. Rupert murdoch is stepping down as chairman of both news corp. And fox. I was reading this now. Effective as of the upcoming annual meeting of shareholders in midnovember. Murdoch, again, will become chairman emeritus. Very simple statement here, obviously, Rupert Murdoch, perhaps well, i dont even think theres much question. The 92yearold murdoch is certainly seen as the most consequential Media Executive of our time. Love him or hate him. He has had an enormous impact. Fox is obviously run by his son, who spends a lot of time in australia, from what i hear, but that is run by lochland, and thompson is running news corp. , but he has been chairman of both companies. Just trying to see here, guys. Well, lochland, who has been cochair, will become sole chair. Thank you. For my entire professional life, ive been engaged daily with news and ideas and that will not change, but the time is right for me to take on different roles. You remember did you read house of morgan . Theres this moment where rupert comes in, just a total brigand, and he had everyone he outfoxed everyone, to use the metaphor. Yeah. Listen, rupert has a long history of doing that. Extending right up to the seminal deal with disney, which many people would say he got an incredible price for the fox assets that were sold to disney, and i remember when i broke that story, of course, the idea that fox would actually have been a seller, but the way people have described Rupert Murdoch to me through the years is that hes hyperrational. When he sued me, was that hyperrational . I dont know about that, jim. In the case certainly of a decision to do an aboutface and say, this is the time to sell, and you could argue that was a good decision, given imagine if fox were dealing with the same things that disney is and so many others in the content business. He chose, were going to be news and sports, and were going to sell at a huge price. Were going to sell sky. So many of the fox content assets. I enjoy him. I did have a bit of a legal battle. Fox news changed the landscape in this country and democracy forever. Well put. Wow. Well put. You statesman. It comes not long after dominion and a lot of reflection about murdochs decision to part ways with Tucker Carlson and some of the fraught questions that he has had in the business and politics of media. Davids right. Medias never been the same. And wow. The dominion case changed things too. You know how hard it is to prove malice aforethought . And they did. Big news in media. When we come back, well talk to ciscos Chuck Robbins and splunks gary steele about their 28 billion deal. Obvious a lot else to get to, Central Bank News today as the bank of england holds steady. Youve been a real rock star. Rock star . What do you know about rock stars . Billy idol . I mean wheres the skintight leather . My shoes are leather. Wheres the unnecessary zippers . That thing billy, rock star is just how doug feels when he uses workday. Thanks, rory. Ill show you rock star be a finance and hr rock star. Workday. For a changing world. Billy idol just stole your golf cart drumroll by lonis, Little League this just in got the keys to what you want and what you need something new Something Sweet moving to a different beat okay now what . can i get a get a drumroll . what . can i get a drumroll drumroll . what . can i get a can i get a drumroll please oohh thats nice yahh ya, can i get a drumroll, can i get a drum thats nice announcer the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. We have bigdeal news today, and david, you know this, this is just really the deal. This says that maybe m a is back. 28 billion deal, cisco to buy splunk. Boy, are we lucky to have the principals here. We have Chuck Robbins, the ceo, chairman of cisco. And then we have splunks ceo, gary steele. Many times, both of you guys on mad money. I want to thank you both. Congratulations thank you. And i want to start with you, chuck, in the sense that you have always told me you would like to have the annual recurring revenue be higher and really put it so people understand youre not some old Hardware Company but youre really at the cutting edge. This gets you to almost 50 . That has to be one of the drivers of this deal. Its, first of all, thanks for having us on such short notice. Were really excited about this transaction, obviously. And you know, this deal, when we close it, it will add roughly 4 billion of arr to our existing run rate of arr, so it will put us close to 30 billion if not over by the time we close it, and it will also put us over 20 billion in swoftware on an annual basis. 28. 44 billion. Thank you. Thats our current arr. Its really big. Im not i mean, i think people have to understand, when you say arr, can you please explain to the doubters about your company that where you have been going for a long time is where this is where gary fits in. Yeah. Garys done such an amazing job with this company over the last 18 months, and you know, if you think about the fact that in year one, its cash flow positive, accretive for us, and its theres minimal eps impact in the first year but its eps accretive, gross margin accretive in years two and beyond, well, gross mairgin accretive in year one. Great fit financially, great fit culturally. Gary, why sell . Why now . He just said youre doing a great job. I didnt tell him that before we did the deal. No, its its just a great opportunity for us to continue our journey. We made im really proud of all the work that splunkers have done. We have made tremendous progress, but this really accelerates us on our journey, and its a great outcome for our shareholders. Yeah but it does cap your shareholders. Oh, come on. No, hes making a decision. You guys have talked, previously, about a potential transaction . Same price. There were rumors prior to me joining, but that was before my time. Okay. So, i joined in april of 22. Weve been on this journey for 18 months, and i think this represents just a great outcome for our shareholders to be able to capitalize on this opportunity, and frankly, i think the synergies that chuck described are super exciting. Weve got so much opportunity together. It really helps us get to the journey that weve been on, so super excited. Our collective team members are pumped up. Theyre really excited about this. Our security team, our observability team, our Sales Organization and even you were talking about your sales leaders as well. Everybodys super excited about this. We think we can drive a tremendous amount of opportunity in the market. I understand that, but i always make the point when its a cash deal that your shareholders are getting what theyre getting, and you can talk about all of the great things that are going to come and that may be for your employee base, but your shareholders are moving on, many of them, in fact, probably selling today. Right, and i think but if you look at it today, if you look at the premium that were delivering for our shareholders and if you look at our historical stock price, this represents a great outcome for our shareholders. Okay. You want to any specifics you want to offer in terms of multiples as to why . I think that just looking at the our historical trading values and the premium delivered over that, while weve seen a lot of progress in our share price, we still have a long ways to go and this represents just a great outcome to deliver cash to our shareholders, and we think its just great opportunity. Now, gary, fedex reported last night, and it was a remarkable quarter, and they have tremendous cybersecurity and i also think they have great observability. How much of that is you . I think, you know, just like many of our customers, we h have were driving resilience. We underpin these Large Companies and how they think about our Security Operations as well as how they think about keeping digital resilience across applications so were really critical to the global 2000. Dont want to get too in the weeds, but chuck, you have been you have tried to own the edge, and they have graced up the edge. Can you explain what that means for software and a. I. Too . If you think about our Security Portfolio, particularly our xdr, extended detection and response, so were basically extending and helping customers respond to threats. We see more threats than most any Security Company out there, and they have the sim platform that is the backbone of Security Operation Centers in all of our customers. When you bring that together with all the insights that our customers can see coming out of their network infrastructure, out of the internet connections, out of the home offices, and then you layer a. I. On top of that, we can help customers literally move from detection and response to predictive and prevention prediction and prevention. So, we think theres a huge opportunity. I can tell you, our customers are going to see the obvious synergies here and the obvious strategic fit. Chuck, youre always great about helping viewers understand, even quarter to quarter, where we are in the Business Cycle and how the business helps frame that. What is the timing of this deal say about that . I think the timing of this deal says there are more the Cyber Threats that our customers are facing around the world and the need to actually have greater visibility into their Technology Infrastructure has never been higher. And so, coming together and creating more capability for our customers at a time where gary has made so much progress in the last 18 months in this company, and we have actually been evolving our Security Portfolio and its in a much better place today, so you bring those two together, and we think we can make substantial progress on helping our customers with all the dynamics they face today. Chuck, in the release, it says this is going to will allow organizations to enhance their digital resilience and will accelerate ciscos strategy to securely connect everything to make anything possible. You like that, dont you . I do. But i want to understand what it means. Youve explained it a bit, but tell us more. If you customers today, theyre rebuilding their entire i. T. Infrastructure to deal with multicloud environment theyre operating in. Theyre dealing with hybrid work. Theyre dealing with home office has become a branch now. Theyre rebuilding all their application. Theyre running them in a very distributed way. Youve got data distributed at the edge. You have workers everywhere. So, the threats and the dynamic nature of the Technology Architecture has changed significantly. So, what that means is that every customer needs to know more about whats going on in my Technology Infrastructure. Cyber threats, application performance, customer experience, all those things, and when you bring our the Technology Insights that we can deliver, and you combine them with the platform, the data platform, the observability cloud that these guys have, we believe we can give customers insights that they just cant get today. Go ahead, jim. Both of you have been feeling that the economy is muted. We had the fed talk yesterday about how the economy is still very, very strong. Gary, let me go to you, because you did that fantastic deal with microsoft, so you got a great overview. When you hear that the fed says, you know what, things are still pretty hot, and i look at both of you, what you say, it does seem out of sync. Is it just your industry that is seeing more macro headwinds than the other industries . I think, you know, as weve talked about in our prior earnings call, weve seen some macro impact, and its really just slowed down bigger projects, but there still is a consistency and a need to buy the capabilities that we have. I mean, were underpinning how people think about their security posture, how they protect their enterprise, and as this broad digital footprint continues to expand, people have to buy something to help them get visibility in those apps. While w