Speaker 1: This is Bloomberg business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine.
Speaker 2: Plus gloom War, business finance, and tech news.
Speaker 1: The Bloomberg Business Week Podcast with Carol Messer and Tim
Speaker 1: Stenebeck from Bloomberg Radio.
Speaker 3: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 3: It was a shortened trading week thanks to the Good
Speaker 3: Friday holiday, and yet jam packed with lots of US
Speaker 3: economic data, including the Fed's favorite take on inflation. Check
Speaker 3: out all of the data and analysis on the Bloomberg
Speaker 3: End at Bloomberg dot com.
Speaker 4: For us, we got to take on the economy and
Speaker 4: health of the lending environment courtesy of two bank CEOs,
Speaker 4: one super small and one a large cap publicly traded company.
Speaker 3: Also this week, tons of Boeing news changes in the
Speaker 3: c suite, including CEO Dave Calhoun stepping down at the
Speaker 3: end of the year. A take on Boeing and much
Speaker 3: much more from Grace Blakely, the author of Vulture Capitalism.
Speaker 4: All that to com We begin, though, with former President
Speaker 4: Dom Trump, who was in the news this week because
Speaker 4: his first criminal trial is set to start April fifteenth
Speaker 4: in Manhattan, and his bond was slashed by more than
Speaker 4: two thirds on another lawsuit, this his New York civil
Speaker 4: fraud case that handed him a crucial financial lifeline. And
Speaker 4: then there was his fortune on paper vaulting thanks to
Speaker 4: his newly public social media company. There's a lot of
Speaker 4: news carol on the former president and current Republican frind Runner.
Speaker 4: I mean, he's pretty much locked up the nomination, not officially.
Speaker 5: But yes, safe to say.
Speaker 3: I got to say, though, what will caught our attention
Speaker 3: about all of this is that a group of very
Speaker 3: well known Wall Street in Silicon Valley folks who are
Speaker 3: either overtly or quietly embracing the GOP nominee for president
Speaker 3: and the prospect of returning to the political turbulence of
Speaker 3: the Trump era.
Speaker 4: Brad Stone wrote the story. He's the editor of Bloomberg BusinessWeek.
Speaker 4: He's also the author of several books, including a couple
Speaker 4: on Amazon, The Everything Store and Amazon Unbound. Brad's story
Speaker 4: featured in the new issue of BusinessWeek magazine. It's available
Speaker 4: on newstands, on the Bloomberg terminal and at Bloomberg dot
Speaker 4: comlash business Week I.
Speaker 6: Was calling it the revolt of the Winners and this
Speaker 6: very conspicuous support among business leaders in tech and primarily
Speaker 6: on Wall Street for former President Trump. And as Tim described,
Speaker 6: there are kind of two brands of support.
Speaker 2: There's the overt support, and.
Speaker 6: So you've got Howard Lutnik of Canter Fitzgerald and John Poulsen,
Speaker 6: the hedge fund owner holding fundraisers for Trump, Nelson Peltz,
Speaker 6: Disney Foyle who endorse Trump recently, and then the more
Speaker 6: subtle forms of support. Ken Griffin from Citadel saying on
Speaker 6: TV that Trump would be good for the capital markets,
Speaker 6: and of course Elon musk on the service formerly known
Speaker 6: as Twitter almost every single day, suggesting that he's moving
Speaker 6: in a right word direction and hasn't endorsed Trump, but
Speaker 6: it is certainly putting a lot of distance between him
Speaker 6: and the current president.
Speaker 4: And as you mentioned the piece, you know he's saying,
Speaker 4: Elon muskang he has an and you won't donate to
Speaker 4: any political candidates. But certainly a lot can happen between
Speaker 4: now and November fifth, Brad. So what happened in terms
Speaker 4: of this transformation for some of these folks over the
Speaker 4: last four years. There were quite a few after January
Speaker 4: sixth who came out and distanced themselves from the former president.
Speaker 4: What has happened in your view over the last four
Speaker 4: years or over the last year to move people back
Speaker 4: to former President Trump.
Speaker 6: Yeah, No, I mean I think look, and there are
Speaker 6: plenty of business leaders who are moving in the opposite
Speaker 6: direction and endorsing or supporting President Biden. And maybe in
Speaker 6: a future column I'll look at that.
Speaker 2: But there is this movement.
Speaker 6: Another great example is Jeff Yass by the way, from
Speaker 6: Susquehanna International, the Pennsylvania billionaire who may or may not
Speaker 6: own a portion of the company that has merged with
Speaker 6: Truth Social had given Trump a potential lifeline. He was
Speaker 6: once a never Trumper and is now certainly making some
Speaker 6: news favorable to the former president. So look, I mean,
Speaker 6: I try to diagnose what's going on here. I mean,
Speaker 6: I think there's a couple things. You know, in the
Speaker 6: in the case of Jeff Yasts, maybe this is very transactional.
Speaker 6: You know, Trump has reversed his position of TikTok Yes
Speaker 6: is a major owner of Byte Dance. I do think
Speaker 6: there's a sort of material concern here with some of
Speaker 6: these billionaires looking at at Biden's economic and taxation policies
Speaker 6: and and and the idea that Biden raised in the
Speaker 6: State of the Union to to instate a billionaire tax,
Speaker 6: to increase the corporate tax rate, to roll back the
Speaker 6: higher end of some of the Trump tax cuts. There's
Speaker 6: Biden's antitrust agenda. There's the pro labor stance, and the
Speaker 6: fact that Sean Fayne from the UAW was was a
Speaker 6: guest of the White House during the State of the
Speaker 6: Union and recognized by the President. And you know, to
Speaker 6: somebody like Elon Musk who runs a non union shop,
Speaker 6: these are existential concerns. So I think we can get
Speaker 6: into what some of the emotional reasons might be, but
Speaker 6: those are perhaps some of the rational decision making that's
Speaker 6: going on right now.
Speaker 3: And I totally get the rational side. I love when
Speaker 3: you get into kind of the more emotional side of like,
Speaker 3: these guys are disruptors and they like when things kind
Speaker 3: of get it feels like unsettling. Talk about that kind
Speaker 3: of thinking and why they may be providing support for
Speaker 3: Donald Trump.
Speaker 6: Yeah, you know, I don't want to get too far
Speaker 6: into the psychologist's office with this analysis, but I think,
Speaker 6: you know, to some extent, they feel like Biden. You know,
Speaker 6: maybe the Biden administration victimized them a little bit, ran
Speaker 6: against the one percent or the point one percent, so
Speaker 6: they don't feel recognized. I think this maybe reassessment of
Speaker 6: tech power in Wall Street power over the last decade,
Speaker 6: you know, left them feeling.
Speaker 2: A little victimized.
Speaker 6: And yeah, and then there's the sense of being contrarians,
Speaker 6: being disruptors. You know, Peter Thild made this contrarian bet
Speaker 6: in twenty sixteen, and you know, to a certain extent
Speaker 6: that backfired on him, but he got a lot of
Speaker 6: mileage out of it, and he had the ear of
Speaker 6: the president back in twenty sixteen. So perhaps some of
Speaker 6: these business leaders are billionaires, see where the political wins
Speaker 6: are shifting and want to have the ear of someone
Speaker 6: who they think, despite you know, the arguments for against,
Speaker 6: it's someone you know, who they might think has a
Speaker 6: shot of winning the next election, and so they're trying
Speaker 6: to get on that side of history. I think probably
Speaker 6: for a lot of these folks, there are different reasons.
Speaker 6: But you know, I don't think that we can dismiss
Speaker 6: the pure capitalism here and the idea that some of
Speaker 6: these folks just see a better tax regime and perhaps
Speaker 6: anti trust regime under Trump.
Speaker 4: Yeah, let's talk about the anti anti trust regime, because
Speaker 4: that is one area where President Biden has you know,
Speaker 4: been I think, in his view pretty successful at this point.
Speaker 4: That's certainly a part of it, Brad. But I do
Speaker 4: wonder to what extent, you know, how these folks did
Speaker 4: over the last four years during President Biden, because Carol
Speaker 4: and I were talking about this so a little earlier,
Speaker 4: as we were preparing for this, and we're thinking to
Speaker 4: talking with each other. Well, it's not necessarily like, you know, yes,
Speaker 4: there was some rhetoric in the State of the Union,
Speaker 4: but it's not like there were policies put in place
Speaker 4: that actually hurt these folks who you write about.
Speaker 2: Yeah, and I guess that's the question I had.
Speaker 6: You know, the markets are going to determine a lot
Speaker 6: of the financial success for some of these figures. I mean,
Speaker 6: you look at like Larry Ellison of Oracle, who has
Speaker 6: been reported to be dining with President Trump as Trump
Speaker 6: looks to improve his fundraising status, and you know, like
Speaker 6: the markets like predictability and what we do know, again,
Speaker 6: I'm trying not to be political here in my analysis,
Speaker 6: but what we do know is that you know, President
Speaker 6: Trump historically and certainly it seems on the compantrail brings
Speaker 6: an element of unpredictability.
Speaker 2: And chaos, and the markets don't like that.
Speaker 6: So I do think that, you know, some of these
Speaker 6: business leaders are trying to be opportunistic and they're embracing
Speaker 6: an agent of chaos, and it will be interesting to
Speaker 6: see where that support goes, whether it waivers as we
Speaker 6: get into the real campaign season, or people are paying
Speaker 6: attention and where the former president hasn't necessarily been as
Speaker 6: scripted as perhaps some of his handlers would like.
Speaker 3: I love this line in your story. In your reporting, Brad,
Speaker 3: you say billionaires aren't all that different from Trump's main constituency,
Speaker 3: constituency of less educated, working class white households. Both groups
Speaker 3: tend to see a conspiracy by far off elites who
Speaker 3: are out to deprive them of influence, expropriate their money,
Speaker 3: and squander America's advantage abroad. Like it's interesting to see
Speaker 3: make that connection between those two groups, But I don't know,
Speaker 3: it's just kind of very interesting and fascinating, right. We
Speaker 3: could bring a lot of therapists and psychologists on this one,
Speaker 3: but it's fascinating that connection.
Speaker 6: It's one thing that I had never seen before and
Speaker 6: don't necessarily know how to interpret which is the sort
Speaker 6: of venom that's out there. And maybe I'm paying too
Speaker 6: much attention to social media among certain elites, for other elites,
Speaker 6: for academic leaders. I mean, this was came clear in
Speaker 6: the battle against Harvard's Harvard's president by Wall Street leaders
Speaker 6: like Bill Ackman, and this idea to scramble for influence.
Speaker 6: There's a great book which I'll recommend, Carroll. I know
Speaker 6: you're a big reader, but a book called End Times
Speaker 6: by Peter Turchin, where he actually somewhat apocalyptically describes the
Speaker 6: end of regimes across centuries. And one of the telling
Speaker 6: tales of moments of instability has been when the elites
Speaker 6: start competing each other and battling for influence. So I
Speaker 6: don't know, maybe that's a little bit of a downer
Speaker 6: note to introduce, but I.
Speaker 5: Feel like sounds like a sweet movie and competitors.
Speaker 4: We're not going to end on that note. Okay, we're
Speaker 4: going to I'm going to throw Look, the election can
Speaker 4: go anyway. We have no idea how it's going to
Speaker 4: go between now and November fifth, but we do know,
Speaker 4: and we do know that money plays a big role
Speaker 4: in politics. But does the support of the folks you
Speaker 4: write about Brad any idea if it actually moves the
Speaker 4: needle when it comes to what matters, which of course
Speaker 4: is turnout and votes in these swing states well.
Speaker 6: And and fundraising obviously does matter. And I'm not an
Speaker 6: expert in this, but you know, from what I read,
Speaker 6: President Biden is out raising Trump, and I think that's
Speaker 6: one of the reasons why the Trump campaign has out
Speaker 6: been there soliciting, either soliciting donations or having conversations with
Speaker 6: folks like Larry Ellison and jeff Yass. And I don't
Speaker 6: know that any of them have necessarily stepped up. I
Speaker 6: mentioned the fundraiser that Lutnik and Paulson were holding I
Speaker 6: think beginning at next month, whether that support translates to
Speaker 6: the ballot box.
Speaker 2: I mean Trump, the Trump campaign has to be careful.
Speaker 6: Right, because you don't you don't want to necessarily turn
Speaker 6: off your broad base of supporters, working class supporters by
Speaker 6: trumpeting your billionaire support. So it's a careful line that
Speaker 6: they've got to they've got to walk right.
Speaker 3: And also in an industry, I feel like the tech
Speaker 3: world really knows how to play well with their enemies,
Speaker 3: their frenemies that they often work with. So could they
Speaker 3: just be hedging as you end the story, Brad in
Speaker 3: terms of the outcome, a really great read and a
Speaker 3: really timely read. Brad, thank you really appreciate Bradstone, of course,
Speaker 3: the editor of Bloomberg BusinessWeek.
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Speaker 4: There's a problem. We've got a plumbing problem, and Carol,
Speaker 4: it's a cost that all of us are paying for
Speaker 4: just bite an above average salary. The pace at which
Speaker 4: the US is minting new plumbers is lagging retirements. The
Speaker 4: widening plumber deficit matters for households facing hefty charges to
Speaker 4: fix a leak. I think we've probably all been there totally.
Speaker 4: That costs what and business is trying to get new
Speaker 4: buildings completed on time and on budget. In fact, the
Speaker 4: plumbing deficit costs the US economy a whopping thirty three
Speaker 4: billion dollars in twenty twenty two. That's according to one analysis.
Speaker 4: We know all of this because Bloomberg News Global economy
Speaker 4: reporter and the Current writes about it for Bloomberg Business Week.
Speaker 4: It's the far reaching consequences of the US plumbing problem.
Speaker 4: He joins us from Washington, DC and Carol and I
Speaker 4: could not get enough of this story. Love it. And
Speaker 4: it's also something that we talk about a lot because
Speaker 4: we know how much it costs to hire a plumber.
Speaker 4: What is it about the plumbing industry that's sort of
Speaker 4: emblematic of the worker shortage that we're facing here in
Speaker 4: the US.
Speaker 7: So there are some specific kind of stigma issues around plumbing.
Speaker 7: I mean, as you know, it's such an important function
Speaker 7: that goes to the heart of our daily activities and
Speaker 7: our economy. Without plumbers, we don't have clean drinking.
Speaker 8: Water, for example.
Speaker 7: But speaking to those in the profession, the teachers and
Speaker 7: the young students who are starting on their career there,
Speaker 7: they say that it just doesn't have the appeal of
Speaker 7: o our roles because it's tough physical labor. For example,
Speaker 7: I spoke to one young plimmer who gave example of
Speaker 7: having to dig a trench in the open in the
Speaker 7: middle of summer one day, having started at five am
Speaker 7: that morning. It's seen as dirty work, perception of lying
Speaker 7: on your back fixing someone's toilet. And of course the
Speaker 7: hours aren't hours can vary, but they're not seeing as
Speaker 7: especially social compared to other roles. So when you throw
Speaker 7: all that into it and consider them this conditioning of
Speaker 7: younger people over the decades that they should gravitate towards
Speaker 7: the university away from the trades, the end res of
Speaker 7: speaking to those people in the industry is that the
Speaker 7: skilled trades like plumbing just don't feature very highly on
Speaker 7: the wish list for young students these days. In school
Speaker 7: they much prefer the university education. But the pitches you
Speaker 7: can become a plumber, get a good job, I'll have
Speaker 7: much less debt.
Speaker 3: Well, how quickly can you become a plumber and electrician?
Speaker 3: Because my understanding, And we'll sometimes have someone come into
Speaker 3: our home and it's like they've got an apprentice with them.
Speaker 3: Who has to do that for I thought a substantial
Speaker 3: period of time. But set the record straight, because is
Speaker 3: that part of the problem, That is it just taking
Speaker 3: too long to train them or allow these folks to
Speaker 3: kind of go out on their own.
Speaker 8: It is. It's a process. It's a five year process.
Speaker 7: That kind of yeah, you know, rotates between the practical
Speaker 7: laboratory work and the tuition in the school and at
Speaker 7: the same time being attached to an actual licensed plumber.
Speaker 8: So over the course, for.
Speaker 7: It is five years before they get their full certification,
Speaker 7: but along the way their wages will be increasing, and
Speaker 7: as I mentioned earlier, they are not accruing the debt
Speaker 7: they would be to have to get a you know,
Speaker 7: a life skill or trade in some other part of life.
Speaker 7: The end result when you do come out of it,
Speaker 7: you couldn't get a good job, well paying and potentially
Speaker 7: for life if you want to.
Speaker 4: That's what I wanted to hit on here is we
Speaker 4: talked so much about the student loan crisis here in
Speaker 4: the US, and I mean, my jow just drops when
Speaker 4: I talk to parents about the cost of college for
Speaker 4: their kids right now. I mean, we're talking upwards of
Speaker 4: sixty to ninety thousand dollars per year for a cost
Speaker 4: of college here in the US at some schools. And
Speaker 4: you did some looking into the apprenticeship programs some schools
Speaker 4: for this stuff. Who does it have costing total for
Speaker 4: a five year program?
Speaker 7: So let me give you the example of the plumbers
Speaker 7: and gas Fitters Local five apprenticeship school. Forgive me the
Speaker 7: seeded to read it out to get the name right.
Speaker 7: I went to that school and they pay the tuition
Speaker 7: of the students. The money comes from both the unions and.
Speaker 4: There they pay the tuition. Say that again, they pay.
Speaker 7: The situation for the students for the five years, and
Speaker 7: the students need only pay fifteen hundred US dollars each
Speaker 7: over the course of the five years. But they are
Speaker 7: also required to buy a pair of boots and the
Speaker 7: measuring tape. And this is what when you know, speak
Speaker 7: to the teachers and the students out there. This is
Speaker 7: a great appeal for them. Like you mentioned, you've got
Speaker 7: this whole political debate going on about students dead, and
Speaker 7: you have the legacy of students.
Speaker 8: Trying to pay off that debt. Well, here's a walk
Speaker 8: of life where you can go in.
Speaker 7: Get a good qualification, get a good skill set that
Speaker 7: does go beyond fixing totals by the way, and then come.
Speaker 8: Out of it relatively debt free and with a good salary.
Speaker 4: So obviously the pre apprenticeship courses that you looked into
Speaker 4: are just overflowing with students right.
Speaker 8: Well, this is where this is where the rubber hits
Speaker 8: the road.
Speaker 7: So I cited an example of a brand new a
Speaker 7: pre apprenticeship program that has been put on by community
Speaker 7: college in Maryland to deliberately attract young people to become plumbers.
Speaker 7: It's a well crypt brand new laboratory. They have eighteen
Speaker 7: seats and they have three students who have enrolled. And
Speaker 7: this is what speaks to the idea of the diplomber shortage,
Speaker 7: why people just aren't necessarily being attracted to. And again
Speaker 7: you speak to the plumbers and the teachers, they say,
Speaker 7: you've got to go into middle school upwards and condition
Speaker 7: children that A it's good to have a skill. B
Speaker 7: you don't have to it's not all about university. And
Speaker 7: then see they're making the point that schools also have
Speaker 7: to have practical classes now like would work for example,
Speaker 7: allow students to do that, and then along the way
Speaker 7: they can make up their mind whether it's university or trade.
Speaker 2: You know what they need.
Speaker 4: They just need more plumbing influencers. Okay, I'm not joking.
Speaker 4: I heard I heard Paul Brennan laugh. This is not
Speaker 4: a joke. But this is like a thing on TikTok
Speaker 4: and and Instagram and stead many influencers, influencers for every trade,
Speaker 4: for woodworking, for plumbing, for cleaning cast iron. I mean, seriously,
Speaker 4: everything is out there.
Speaker 5: Having said that, I mean you think you know.
Speaker 3: I remember like a show like This Old House, like
Speaker 3: they were trying to recruit students because nobody wanted to
Speaker 3: do construction anymore. Nobody wants to do this. I mean,
Speaker 3: but I want to go back to end it. Does
Speaker 3: someone really need five years to become a plumber? If
Speaker 3: the demand is such an issue, isn't there I don't know,
Speaker 3: Like I don't know enough about it, and I certainly
Speaker 3: want if somebody comes into my house that they do
Speaker 3: it right so that all of a sudden I don't
Speaker 3: have a flood.
Speaker 5: But does it really have to take that long?
Speaker 3: Is there any move to kind of figure out how
Speaker 3: to condense the teaching so and can get people out there?
Speaker 7: I mean, look, that's of the affair question. I'm sure
Speaker 7: that that teachers will be open to that debate. But
Speaker 7: I have to say I have a newfound respect for
Speaker 7: what they do. Happen to go along, I shadowed them
Speaker 7: in the classroom, watching what they're doing. You've got the
Speaker 7: technical cyber, which is a quantitative quotient, learning those blueprints,
Speaker 7: figuring out their math for the measurements, figuring out how
Speaker 7: to get the water flowing in the right direction, the
Speaker 7: right weight, and the right pressure. There's a whole technical
Speaker 7: side to it that I guess I wasn't fully aware of.
Speaker 8: And then there's the physical side to it, and they
Speaker 8: shared the labor side to it.
Speaker 7: So it certainly would take some time before you're fully
Speaker 7: confident that you would let this person run amok in
Speaker 7: your house.
Speaker 8: I would imagine takes a.
Speaker 7: Few years at least, But you know, whether that's four
Speaker 7: or five years, I'm sure that's probably a valid point
Speaker 7: for debate. But that's where the program seems to be
Speaker 7: said at the moment.
Speaker 4: And just in the last thirty seconds, dovetail this with
Speaker 4: your most recent reporting about just the overall worker shortage
Speaker 4: in the way that the immigration in the US needs
Speaker 4: to change in order to fill these jobs.
Speaker 8: Yeah, that's right.
Speaker 7: So these companies and especially those in constructions, say they
Speaker 7: cannot get the workers. Part of that solution, as we
Speaker 7: talked about the last time, is legal immigration. But in
Speaker 7: this case, it speaks to the idea that children at school,
Speaker 7: if they're encouraged, you learn a trade instead of university
Speaker 7: could go some way towards filling some of those skills
Speaker 7: shortages as well.
Speaker 3: Yeah, and I'm sure there's like carried out construction electrician,
Speaker 3: Like there's lots of things. And Acurran thank you as always,
Speaker 3: Global Economy reporter at Bloomberg News.
Speaker 5: They're in our DC bureau. His story featured in the.
Speaker 3: Forthcoming issue of Bloomberg Business Week magazine, but you can
Speaker 3: read it now on the Bloomberg terminal. Of course, at
Speaker 3: Bloomberg dot com slash BusinessWeek.
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Speaker 1: for tale.
Speaker 3: Of two banks, one small and one that is a
Speaker 3: more than sixty one billion dollar market cap company. First up,
Speaker 3: the view from the small, family owned more than one
Speaker 3: hundred year old community bank, Citizens Bank of Edmund, which
Speaker 3: is based in Edmund, Oklahoma. There is one main branch
Speaker 3: online banking and they're working on programs to bring in the.
Speaker 4: Unbanked with more on the environment and a program that
Speaker 4: taps into her background. Jill Castilla, the president and CEO
Speaker 4: of Citizens Bank of edmund joined us in the studio.
Speaker 4: Jill also a US Army veteran who held a various
Speaker 4: posts at the Kansas City FED. We kicked things off
Speaker 4: asking her about seeing any signs of stress, and we finished.
Speaker 9: The year was zero pass jews, zero non accurls, and
Speaker 9: zero classified loans. Never in the history of our institution
Speaker 9: have we had those types of that.
Speaker 4: How would you have answered that question a year ago?
Speaker 9: I would have been concerned about, not so much the
Speaker 9: lending side, but just the uncertainty. One came to deposits
Speaker 9: because we had the regional banks, the stress that was
Speaker 9: happening there, and education to customers about what uninsured deposits were.
Speaker 9: We're at less than we're a right at five percent
Speaker 9: uninsured deposits.
Speaker 4: So meaning you know, ninety five percent of your deposits
Speaker 4: are insured by the FDS.
Speaker 9: That's exactly right, and so most banks like mine are
Speaker 9: like that. It was an education process. I really the
Speaker 9: confidence and the customers expressing us was quite high, and
Speaker 9: we were just at the front of being transparent and
Speaker 9: open and just accessible through that kind of transition.
Speaker 5: So you said, you've never seen this before, never, So
Speaker 5: how do you explain it.
Speaker 9: I mean, there's still so much money out there, and
Speaker 9: there's so much optimism, even with the difficulty of having
Speaker 9: the inflationary pressures affecting families. I mean, that's happening, you know,
Speaker 9: with small businesses. But I think that there was just
Speaker 9: such a we couldn't hire, you know, fast enough because
Speaker 9: there wasn't the labor force there, and so small businesses
Speaker 9: didn't overcorrect that optimism, and so I think it's kind
Speaker 9: of kept things in check. We're seeing some small business stress.
Speaker 9: You just can't You've got to have a good business
Speaker 9: plan and get product to be successful. We're there for
Speaker 9: a period of time. It was kind of a rational exuberance.
Speaker 5: Help me out though. When you say there's so much
Speaker 5: money out there, meaning what money for? What do you
Speaker 5: mean by that?
Speaker 9: There's a lot of investor money still out there that's
Speaker 9: either investing in real day or buying businesses. A lot
Speaker 9: of M and A activities that's still occurring for small businesses,
Speaker 9: and so you just still see investor optimism out in
Speaker 9: the marketplace. Not really thinking about the market, but really
Speaker 9: what's happening on the ground.
Speaker 4: They tell us more about the focus of your bank.
Speaker 4: It's a single branch employee owned in Edmund, Oklahoma. Who
Speaker 4: are your customers and what are the segments that you're
Speaker 4: not just active in but prominent in.
Speaker 9: Yeah, So's it's just your absolutely traditional community bank. If
Speaker 9: you watch It's Wonderful Life, we're basically George but it
Speaker 9: was so lovely against the backdrop that we've put it into.
Speaker 9: But go ahead, it is really interesting. So we have
Speaker 9: I mean, as our average deposit, our medium deposits right
Speaker 9: at twelve thousand dollars, so very has small deposits.
Speaker 5: They'll reach oil.
Speaker 9: This is a business a bit small businesses and consumers.
Speaker 9: I'm very kind of equal on the deposit side and
Speaker 9: in our lending we do traditional mortgages as well as
Speaker 9: small business loans and commercial real estate.
Speaker 4: On the mortgage side, with rates at roughly seven percent
Speaker 4: for a mortgage right now, how have you seen it
Speaker 4: slow down locally?
Speaker 9: It's come almost to a complete halt in some ways,
Speaker 9: but a lot of cash buyers still out there. There's
Speaker 9: still people moving into town that still need to buy
Speaker 9: a home. But then when are you looking at rents availability,
Speaker 9: which is increased lately. It used to be really difficult
Speaker 9: just in a year ago to get a house for rent.
Speaker 9: Now it's a little bit less expensive to do that
Speaker 9: and then more accessible.
Speaker 4: So your mortgage business is almost completely dried up.
Speaker 9: Oh yes, yeah, they'll worries about business very low.
Speaker 4: When do you think it'll at what rate do you
Speaker 4: think it'll come back?
Speaker 10: Yeah?
Speaker 2: I don't.
Speaker 9: I think whenever we're in the sixes, that really helps,
Speaker 9: you know, kind of momentum whenever you started walking sevens. Yeah,
Speaker 9: in the sixes, And but I think it's starting to normalize.
Speaker 9: I think the expectation has been like, well, we're around
Speaker 9: historic norms right now, and so I think relators are
Speaker 9: starting to accept that and consumers are as well.
Speaker 5: What's the upside of being a bank like you are?
Speaker 2: Right?
Speaker 3: That's kind of an anomaly right in a big bank
Speaker 3: kind of environment, certainly here in the New York metro.
Speaker 3: But there's upsides and downsides to everything. What's the upside?
Speaker 3: What's the downside? Or how you think about compety, especially
Speaker 3: in the digital space where you know, even someone who's
Speaker 3: got you know, an actual brick and mortar if you
Speaker 3: will that you've got to compete with the digital space
Speaker 3: as well, especially for a younger generation.
Speaker 9: Yeah, so it's such a great question. So we've been
Speaker 9: around for one hundred and twenty two years and our
Speaker 9: plans to be here for another one hundred years. And
Speaker 9: so where we are we are so accountable to our
Speaker 9: customer base and that accessibility. I sit in our lobby,
Speaker 9: so customers come straight into my office. But when now
Speaker 9: we're competing in the digital space. We just launched a
Speaker 9: digital bank for the military, and so this bank also
Speaker 9: three hundred and fifty million OAR bank. We just received
Speaker 9: our first patent for a completely remote self service bank.
Speaker 9: So we just because you're small doesn't mean you can't
Speaker 9: be disruptively innovative.
Speaker 4: Can you talk a little bit about that. Because you
Speaker 4: are a US Army veteran and a lot of your family,
Speaker 4: your husband served, your kids went to military academies and
Speaker 4: are serving. What are the unique needs from the military
Speaker 4: when it comes to financial services.
Speaker 9: Yeah, so soldiers, a new soldier like I was, whenever
Speaker 9: I list, many of them showed up unbanked, and that's
Speaker 9: still occurring, and they still are quite susceptible to predatory
Speaker 9: lending and they were so young. Yeah, so many, so
Speaker 9: many banks won't open independent checking accounts for seventeen year olds.
Speaker 9: They had to bring the third their parents in many
Speaker 9: come from situations in which there's not a lot of
Speaker 9: financial literacy and support around them. So it's really their
Speaker 9: first job and maybe their first job and their family
Speaker 9: and in a couple of generations. So it's really a
Speaker 9: great opportunity for us, we think, to be able to
Speaker 9: really meet someone where they are, provide financial literacy around that,
Speaker 9: and really understand this young hero coming to serve their country.
Speaker 9: How can we support them best to get them off
Speaker 9: our financial footing.
Speaker 5: I can agree.
Speaker 3: We have all these people who go fight to you know,
Speaker 3: around the world for you know, to defend democracy, defend freedom,
Speaker 3: and yet they're often left behind in so many different.
Speaker 4: Yeah, we talk so much about after they serve too, Carol.
Speaker 3: Healthcare, you know, financially, educationally, and then you're talking about banking.
Speaker 5: So tell us about how this platform will work and
Speaker 5: who will you open it to? Everyone?
Speaker 9: Yes, it's opening everyone at launched an audio military anybody,
Speaker 9: anybody in the end that qualifies for our bank account
Speaker 9: can open an account with us. It's a two minute
Speaker 9: account opening, and we're using alternative identification methods that typically
Speaker 9: aren't available in a digital bank. So if you have
Speaker 9: a tribal card, if you just have your military ID,
Speaker 9: sometimes you can't open accounts and most digital banks in
Speaker 9: that method. It also gives them an instant direct deposit
Speaker 9: form signed by me that they can text to their recruiter,
Speaker 9: so while they're sitting there, they can open their account
Speaker 9: and not have to worry about transportation. Many of these
Speaker 9: young people don't have cars, they don't have a banking relationship.
Speaker 9: They are having their wanting to enlist and so then
Speaker 9: they're having to leave and go and go to the bank.
Speaker 8: To do that.
Speaker 4: As you mentioned, you're more than a century old bank,
Speaker 4: traditional bank. How do you compete with the venture funded
Speaker 4: startups that are going after the same demographic.
Speaker 9: Yeah, I view them as a lot of great, healthy competition,
Speaker 9: and many of us are really great friends and when
Speaker 9: we learn from each other, and so we partner with
Speaker 9: a lot of venture funded startups that are in this business.
Speaker 9: I mean who we partnered with for our digital bank
Speaker 9: that we're in that space and so well you're.
Speaker 4: Because a lot of these are FinTechs that they can't
Speaker 4: necessarily call themselves banks, but they partner with banks. They
Speaker 4: doo yeah, financial services. So you've partnered with some of
Speaker 4: these FinTechs, I've.
Speaker 9: Partner and I mentor many of them. I mean it
Speaker 9: is we're cultivating that space because it's crucial to the
Speaker 9: longevity of a community bank that we have strong alliances
Speaker 9: with our fintech community.
Speaker 3: We're talking about Jill Cristilla, she's Citizens Bank of edmend
Speaker 3: president and CEO here in studio with us. Jill, as
Speaker 3: you said, for Roger, is the service right, it's a
Speaker 3: digital bank offering for military members. You said for those
Speaker 3: who qualify, what's I'm thinking at a seventeen year old,
Speaker 3: what's required for them to qualify? Because I do wonder
Speaker 3: how many we'll pass that qualification, how many will not.
Speaker 9: That is a very low barrier to introduce. So basically
Speaker 9: it's having a valid identification, that's it. Yeah, And we
Speaker 9: also verify kind of where they are to make sure
Speaker 9: that it's not a fraudulent account.
Speaker 4: So how do you make money on these accounts?
Speaker 3: Oh?
Speaker 5: That's you know, we have a model. If we do good,
Speaker 5: we'll do well.
Speaker 9: And so the focus has been build something that is amazing,
Speaker 9: and then the financials take care of ours itself. I mean,
Speaker 9: that's what's great about recharging for these accounts. They're free
Speaker 9: accounts and no, there's no fees associated with them. We
Speaker 9: do a roundup and a match. We have a really nice,
Speaker 9: healthy interest rate on savings account and so really the
Speaker 9: only way that you make money off of this type
Speaker 9: of account is through interchange revenue for.
Speaker 4: The transaction somebody swipes their cards.
Speaker 9: So benign. Yeah, we reimburse all foreign ATM fees. You know,
Speaker 9: there's no user costs associated with this.
Speaker 4: And where are you seeing the footprint right now of
Speaker 4: people adopting the accounts.
Speaker 9: Yes, so it's widespread. We have them overseas, We have
Speaker 9: veterans or living overseas their open accounts. I mean that
Speaker 9: we're targeting that entry level service members.
Speaker 4: Do you have more people getting these accounts? These I
Speaker 4: don't want to call what are they? They're not virtual accounts,
Speaker 4: but they're either online only accounts.
Speaker 8: Yeah.
Speaker 4: Do you have more people who have these accounts than
Speaker 4: customers who are walking through the door of the brand?
Speaker 9: We're we're opening out at the same pace, but we
Speaker 9: have much more accounts than our physical branch.
Speaker 4: So we do it, but eventually you probably have more.
Speaker 9: Yeah, I think I think it probably will. It's the
Speaker 9: ease and accessibility. Being able to get banked. We're previously
Speaker 9: going into bank is someone timidating. I remember growing up
Speaker 9: and being intimidated going into a staunchy bank and being
Speaker 9: able to reduce those barriers. It's good forever.
Speaker 4: You remember the first time.
Speaker 5: I actually remember my first book, but it was interesting.
Speaker 4: My parents brought me to open a checking account and
Speaker 4: I had to be with them, and yeah.
Speaker 5: It was like, but you did. You had your family
Speaker 5: do it right.
Speaker 4: And it was like to sit down with somebody and
Speaker 4: it was your birthday.
Speaker 3: Money or whatever or you know, holiday money, and like
Speaker 3: we started really early. It's what kind of breaks my
Speaker 3: heart is to hear you talk about these individuals who
Speaker 3: you know, when you talk about being you know, unbanked,
Speaker 3: if you will, it's often we're talking about emerging economies
Speaker 3: or something right, and they're trying to figure it out,
Speaker 3: and often technology comes.
Speaker 10: To the right.
Speaker 4: We're not talking about the US right, right, we're not.
Speaker 5: And so it kind of breaks my heart that there
Speaker 5: are folks. It's not a new story.
Speaker 3: And it shouldn't break my heart because I've heard it before,
Speaker 3: but that are just left behind individuals in the system.
Speaker 9: Well, I was economically vulnerable when I enlisted, and then
Speaker 9: a family member wrote checks on my account while I
Speaker 9: was gone and took all that money. And that was
Speaker 9: thirty years ago. I shared that story and a young
Speaker 9: lady came up to me and said that was me
Speaker 9: and she was eighteen years old and had just enlisted
Speaker 9: a year before and had to have her mom on
Speaker 9: our account when she opened the account. But the mom
Speaker 9: had a garnishment, so when the money posted in her
Speaker 9: bank account, it was taken. So this is a story
Speaker 9: that's gone on way too long, and so it's really
Speaker 9: we feel like no one else is coming. They've had
Speaker 9: a chance to come, and no one else is coming.
Speaker 9: So it's our job to fix it.
Speaker 5: How many people do you have so far?
Speaker 9: So we're right around about a thousand that we're serving
Speaker 9: right now. And so we are we really have small institutions,
Speaker 9: so we don't have like the huge digital marketing push
Speaker 9: that other digital banks do. We're not VC funded, but
Speaker 9: we are seeing just great receptivity on an organic basis.
Speaker 4: Community banks a community bank it's employee owned. We've seen
Speaker 4: so much consolidation in the last few years, I mean
Speaker 4: the last few decks gates in the space. Can you
Speaker 4: tell us that your bank will remain independent while you
Speaker 4: run it.
Speaker 9: I would not be here if there was anywhere in
Speaker 9: the cars that we were thinking about not being independent.
Speaker 9: We feel like we have we have this kind of
Speaker 9: audacious thought that we'll lead the way for everyone else
Speaker 9: and show it how, show them how it's done. We
Speaker 9: want to be here another century.
Speaker 4: Do you want to grow physical branches too?
Speaker 9: I sold our for physical branches and just to have
Speaker 9: the one. And that's why we invented this other space
Speaker 9: is because we had demand another geography. So now customers
Speaker 9: can walk on into our bank twenty four to seven
Speaker 9: in this little remote electron banking facility with their phone
Speaker 9: to posit up to ten thousand and cash withdraw to
Speaker 9: ten thousand cash, get rolled coin, deposit loose coin, and
Speaker 9: conduct their banking transactions twenty four seven integrated with our core.
Speaker 9: So it's like a small business ATM.
Speaker 4: I have seen some of the big banks start to
Speaker 4: do that also, Well, we.
Speaker 9: Have the patent, so they might eslore them a little bit.
Speaker 4: That I do the exact same thing.
Speaker 5: Just got about thirty seconds left here, Jill.
Speaker 3: I do think about the importance of community banks, right
Speaker 3: you see versus maybe you know what a big financial
Speaker 3: giant that is many miles away doesn't see well.
Speaker 9: And I think we get lumped into the big regional
Speaker 9: banks when we think about all the small ones are
Speaker 9: ones there less than the top twenty whenever there's four
Speaker 9: thousand of us less than a billion. We are here
Speaker 9: serving our communities every day. We're the ones supporting the
Speaker 9: little leagues that were in the grocery store aisles, accountable
Speaker 9: to our communities. So you don't need to worry about
Speaker 9: kind of what Wall Street's thoughts are on the bank,
Speaker 9: because you know what the bank is doing day in
Speaker 9: and day out. You see the loans that they're doing,
Speaker 9: You see if they're being responsible with their deposits, and
Speaker 9: you see how they're investing in building their communities.
Speaker 5: Great stuff. Interesting and come back and let us know
Speaker 5: how Roger's doing. It'd be interesting to see, really fascinating.
Speaker 3: Jill Cristilla, she's president CUF Citizens Bank of Edmund joining
Speaker 3: us here in our Bloomberg Interactive Brokers studio.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 3: And now to another perspective in banking. Someone who we
Speaker 3: also caught up with after the last FMC decision, Bill Demcheck,
Speaker 3: is chairman and CEO of P and C Financial Services.
Speaker 3: It is home to P and C Bank. P ANDC
Speaker 3: Financial has a more than sixty one billion dollar market cap.
Speaker 4: We talked about the one year anniversary since the collapse
Speaker 4: and the troubles of several regional banks. We're talking about
Speaker 4: Silicon Valley Bank, Signature Bank, First Republic, and why we've
Speaker 4: heard a lot of senior execs in the banking sector
Speaker 4: talk about the value of being boring.
Speaker 11: Look, I think banking is a little bit unique at
Speaker 11: the moment because we're in this uncertain period. You know,
Speaker 11: it's a function of ending regulation. You know, the impact
Speaker 11: of interest rates and when the Fed skin ease or
Speaker 11: not eyes, So it's a little bit different. I think
Speaker 11: the economy is kind of what you read about. It
Speaker 11: feels pretty healthy. It's slowing at the margin from a
Speaker 11: rapid base labor's good, you know it, At least inside
Speaker 11: of P and C. We're largely on the same age
Speaker 11: with hir Paul on his recent comments.
Speaker 4: What can you tell us about your customers right now?
Speaker 4: And I asked because we had a really interesting conversation
Speaker 4: with the President's CEO of Citizens Bank of edmund. I mean,
Speaker 4: this is a tiny bank in Oklahoma, one physical branch
Speaker 4: and they have an online business with a thousand customers,
Speaker 4: So I mean we're talking tiny. But Jill Castilla told
Speaker 4: us yesterday that she's never seen a better environment for
Speaker 4: her customers. Things are really really good right now.
Speaker 11: It's Jill's actually a good friend's She's not wrong.
Speaker 12: You know.
Speaker 11: On the corporate side, there's areas of weakness, but there's
Speaker 11: a lot of areas of strength, particularly as we kind
Speaker 11: of lean into manufacturing and on shoring. Again. The consumer, yeah,
Speaker 11: varies by income level. We've obviously seen basic wages increase
Speaker 11: a lot, particularly at the low level, but at the
Speaker 11: same time, we've seen the prices of their staple goods
Speaker 11: increase more compounded through time than and their wages have,
Speaker 11: even though in many instances wages of double.
Speaker 3: So you know it varies well, and you know we
Speaker 3: kicked off here, you know, Bill getting into you that
Speaker 3: one year essentially a little bit more than one year
Speaker 3: since Silicon Valley Bank and the collapse of it. Do
Speaker 3: you feel like we're out of that environment? And I
Speaker 3: think one thing we have learned is right that not
Speaker 3: every bank, not every regional, is the same and in
Speaker 3: terms of their exposure.
Speaker 5: But we're still kind of a little.
Speaker 3: Concerned about commercial real estate, not sure that we've gotten
Speaker 3: through that. So when it comes to concerns within some
Speaker 3: of the banking sector, do you think that we could
Speaker 3: see more troubles still depending on their exposures.
Speaker 11: At the margin, probably in smaller banks, most of which
Speaker 11: you will never have heard of. I think, first of all,
Speaker 11: as you know, I don't particularly like the term regional.
Speaker 11: It's not very descriptive of anything anymore, particularly in a
Speaker 11: digital age.
Speaker 5: But I'm not going to call you a super regional,
Speaker 5: which people call you sometimes.
Speaker 11: I don't know what to word national. But I know,
Speaker 11: I know you are in that campaign in the second
Speaker 11: but you know practically and you see the same numbers
Speaker 11: I do. Is banks get smaller, they tend to have
Speaker 11: a higher concentration of real estate. Their concentration of real
Speaker 11: estate tends to be more fixed rate, medium term in
Speaker 11: length and B and C properties, you know, so permanent
Speaker 11: financing on older B and C properties, which is kind
Speaker 11: of the area that's going to get hit the most
Speaker 11: in a higher rate environment with you know, increased office vacancies.
Speaker 11: But it's not a systemic issue, certainly for the for
Speaker 11: the banking industry, not for any of the names you
Speaker 11: will otherwise know, and we'll make our way through it.
Speaker 4: Well, let's talk more broadly, just about about real estate
Speaker 4: and talk to us a little bit about your own
Speaker 4: exposure to real estate and commercial real estate. How can
Speaker 4: you characterize that for us?
Speaker 11: You know, look, it's a small percentage of our total loans.
Speaker 11: That not a big percentage of our capital.
Speaker 8: We have, you know, plus or.
Speaker 11: Minus eight and a half billion, I guess in total
Speaker 11: what you would define his office. And that is where
Speaker 11: all the spotlight is starting to shine on multi family.
Speaker 11: But we're not seeing stress and multi family at the moment,
Speaker 11: notwithstanding you know, news that you might see out of
Speaker 11: New York and affordable in other places, generic multifamilies do
Speaker 11: and just fine. But inside of office, you know, say
Speaker 11: we have that eight and a half billion. There's there's
Speaker 11: about four and a half billion to five billion that
Speaker 11: is multi tenant, and that's where the problem is and
Speaker 11: we expect problems there and we're reserved quite a high
Speaker 11: level against it. Thus far as we've cycled through, you know,
Speaker 11: these projects that going on performing, we've actually been conservative
Speaker 11: and what we've been reserving, so we feel okay about it.
Speaker 11: We're heavily reserved today. It's gonna be you know, most
Speaker 11: of our stuff comes due over the next year, so
Speaker 11: you know, it's kind of project based. They come online,
Speaker 11: so we're gonna we're going to know the answer to
Speaker 11: this pretty quickly.
Speaker 5: I suspect interesting.
Speaker 3: Hey, listen, we also said that boring is something that
Speaker 3: you guys are tapping into. We've got a great chart
Speaker 3: that we can share with those who are watching right
Speaker 3: now that our producer Elizabeth is going to share out
Speaker 3: with everybody. But it talks about bank management, not just
Speaker 3: your own, but others using boring on calls this year,
Speaker 3: quarterly update calls and earnings calls.
Speaker 5: It is up a lot.
Speaker 3: Boring not a bad thing. And you guys have an
Speaker 3: advertising campaign that you are stressing that we do.
Speaker 11: I mean I'll make a couple of points. I think
Speaker 11: if you look back in history, I've talked about our
Speaker 11: bank and banking in general was kind of three yards
Speaker 11: in a cloud of dust. And you grow, you know,
Speaker 11: with GDP and if and if you're good at it,
Speaker 11: you can outpace that. But we are, by our very nature,
Speaker 11: as in industry, when you see outliers so that there
Speaker 11: tends to be something going on underneath that. And and
Speaker 11: when we think about you know, we use the word boring.
Speaker 11: I don't necessarily like to think of myself as an
Speaker 11: important person, But I didn't mean banking auto be I
Speaker 11: get it, but boring. You know, banking shouldn't be drama
Speaker 11: for our clients. It ought to be predictable, consistent. Stuff works.
Speaker 11: They know their money's safe. They don't have to read
Speaker 11: about us in the headlines. Right. That's who we are.
Speaker 11: That's how we define ourselves.
Speaker 8: You know.
Speaker 11: We we to the core of this company, to the
Speaker 11: very best of our ability. We try to do right
Speaker 11: by all of our constituents every day, and when we
Speaker 11: screw it up, we fix it.
Speaker 10: Bill.
Speaker 3: We're going to leave it on that note, but I
Speaker 3: hope we can get you back here real soon. Build Demchech,
Speaker 3: He's CEO at pn C Bank. Joining us from Pittsburgh.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Listen live
Speaker 1: each weekday starting at two pm Eastern on applecar Play
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Speaker 3: We are living in an era of contrasts financially, politically,
Speaker 3: socially globally. For example, here in the US, feelings of
Speaker 3: financial insecurity among Americans have reached their highest point in
Speaker 3: at least a decade. That's according to Northwestern Mutual's annual
Speaker 3: Planning and Progress Survey. At the same time, household wealth
Speaker 3: in the US increased to a record last year as
Speaker 3: investors reaped the benefits of a surging stock market and
Speaker 3: higher home values.
Speaker 4: Our next guest looks at these contrasts and at the
Speaker 4: crises that the world has dealt with in the recent past,
Speaker 4: from the Great Financial Crisis to the pandemic and more.
Speaker 4: She even has a take on Boeing, which was in
Speaker 4: the news a lot this past week as it announced
Speaker 4: a major overhaul in the Sea, including CEO Dave Calhoun
Speaker 4: stepping down by the end of the year.
Speaker 5: We're talking about journalist and author Grace Blakely, who is
Speaker 5: the author of several books, including one on the Great
Speaker 5: Financial Crisis, another on the pandemic. Her new book is
Speaker 5: Vulture Capitalism, Corporate Crimes, Backdoor Bailouts, and the Death of Freedom.
Speaker 5: She joining us from the UK and began our conversation
Speaker 5: talking about crisis and capitalism.
Speaker 13: Yeah, thank you so much for having me on the show.
Speaker 14: So, really, what I'm looking at in the book, as
Speaker 14: you say, of that, I use the lens of crises
Speaker 14: to show, really expose the way that capitalism really works.
Speaker 14: Because I think that we have this idea in our
Speaker 14: heads of the economic system in which we live as
Speaker 14: kind of meaning free markets and democracy, right, that we
Speaker 14: live in these kind of free market economies and if
Speaker 14: there are problems within the market, then it's up to
Speaker 14: the government to kind of put things right. And what
Speaker 14: I show in the book is that actually capitalism most
Speaker 14: of the time doesn't mean free markets. It means concentrated
Speaker 14: monopolistic power.
Speaker 5: I don't think we're free at r do you.
Speaker 10: I really don't know.
Speaker 14: And part of the problem is that governments don't really
Speaker 14: act as a check on corporate power. Most of the
Speaker 14: time they reinforce the power of big businesses. The big
Speaker 14: example at the moment is Boeing. So Boeing's obviously been
Speaker 14: through this horrendous time, loads of corporate scandals, massive cover
Speaker 14: ups over the issues that have been besetting its claims,
Speaker 14: and it's one of the biggest recipients of corporate welfare
Speaker 14: in the US. It gets tax subsidies, it gets tax breaks,
Speaker 14: and it's got loads of those of government contracts. It
Speaker 14: got a big bailout during the pandemic, even after the
Speaker 14: seven three seven MAX disasters.
Speaker 4: I will point out, grace that Airbus, the European rival
Speaker 4: to Boeing, it is a duopoly. I think it's fair
Speaker 4: to say also also does get some of those same
Speaker 4: that same favorable treatment. It's been the subject of wto issues.
Speaker 4: Would you say that that Airbus has the same issue
Speaker 4: that Boeing does, would you characterize it the same way issues?
Speaker 11: Definitely?
Speaker 2: Yeah, yeah, totally.
Speaker 8: So.
Speaker 14: I mean I look at this actually, how these two
Speaker 14: aerospace manufacturers have become so deeply into woven with the
Speaker 14: US state on the one hand, and the European Union
Speaker 14: and various states within that on the other hand, and
Speaker 14: Airbus has also been embroiled in corruption scandals. So, you know,
Speaker 14: these two giant firms, as you say, in this duoballistic
Speaker 14: market structure, with Boeing obviously having dealt with some serious
Speaker 14: safety failings air Bus dealing with some corruption scandals. It
Speaker 14: kind of shows that this line between states and markets
Speaker 14: isn't really as clear as we'd.
Speaker 11: Like to think.
Speaker 3: It's interesting, you know, where we are often talking about
Speaker 3: our data and data privacy and control of our own
Speaker 3: data when it comes to the social media world, whether
Speaker 3: it's TikTok, whether it's other social media companies, and how
Speaker 3: our own data, which is very valuable and has made
Speaker 3: some very large market cap companies out there and made
Speaker 3: a lot of companies, if you will, very wealthy in
Speaker 3: the process. It's interesting though, that this idea of you know,
Speaker 3: kind of taking back our economy is something that you
Speaker 3: are digging into. I mean, do you not like capitalism
Speaker 3: at all? Do you think it's all bad?
Speaker 14: Well, to be clear to your listeners, I am a socialist,
Speaker 14: so I'll put that to the early I know, I know,
Speaker 14: it's kind of a bit more of a dirty word
Speaker 14: in the US, that is in the UK. But I
Speaker 14: think even if you're not a socialist or even a progressive,
Speaker 14: my analysis is still relevant because it's something that you know, libertarians,
Speaker 14: for example, have been saying in the US for a
Speaker 14: very long time. It's that we don't have real capsism,
Speaker 14: we have chromy capitalism.
Speaker 13: Right.
Speaker 14: It's a kind of perversion of a free market system.
Speaker 14: And what I show in the book, using loads of
Speaker 14: historical examples, is actually this has kind of always been
Speaker 14: the case. So it's always been the case that big
Speaker 14: businesses have worked with and through governments basically to get
Speaker 14: their way all the way back.
Speaker 5: Think of the Robert Barry It's right, or going back yet.
Speaker 4: Further, well, Grace, I think critics might say, Okay, I
Speaker 4: understand the criticisms that you have of capitalism, but show
Speaker 4: me a better system out there. Can you show us
Speaker 4: a better system?
Speaker 10: Yeah?
Speaker 14: So the third part of my book is really dedicated
Speaker 14: to thinking about alternatives, and I actually start at the
Speaker 14: grassroots and community level, because I mean, if you think
Speaker 14: about it, logically, there's this fusion of public and private
Speaker 14: power in the economy. You can't just rely on the
Speaker 14: state to do things to kind of contain what's going
Speaker 14: on the economy. So what is the alternative. You have
Speaker 14: to build people power. You have to build power from
Speaker 14: the ground up. So that means making sure that workers
Speaker 14: are able to organize within their organizations, but also have
Speaker 14: a voice within how those organizations are run. You know,
Speaker 14: when you have more democratic processes within corporations, like you know,
Speaker 14: workers on boards in Germany, for example, they actually perform
Speaker 14: a lot better and the whole system is fairer. But
Speaker 14: I also look at a lot of examples of like
Speaker 14: communities organizing in their local area to build a kind
Speaker 14: of fairer local economy. So we've got this idea of
Speaker 14: community wealth building. There are examples of this in the UK,
Speaker 14: added the US and really like you know, downtrodden places
Speaker 14: like Detroit for example, where local groups have come together
Speaker 14: and they've built cooperatives, they've built community energy companies, they
Speaker 14: build community banks, and they've started to say, how can
Speaker 14: we make our economy work for us instead of the
Speaker 14: big businesses and actually politicians.
Speaker 3: I got to say, Grace, Tim and I are having
Speaker 3: conversations in the break about your book, and you're thinking,
Speaker 3: you said, I'm a socialist.
Speaker 5: You are a socialist.
Speaker 2: I'm not.
Speaker 3: And we're talking a lot about capitalism. And in your book,
Speaker 3: like early on in the introduction, you talk specifically about
Speaker 3: capitalism and this balance between markets and planning, and that
Speaker 3: the planning part of the equation is really important, right,
Speaker 3: how it's being executed, whose interests.
Speaker 5: It is serving?
Speaker 3: And I mean, is this where kind of capitalism has
Speaker 3: gotten into trouble? There are companies out there that are
Speaker 3: great for their workers. Provide pension still great, healthcare great,
Speaker 3: this great that, Like, where did the disconnect happen? In
Speaker 3: your view that things kind of was more in the
Speaker 3: favor maybe of owners or shareholders or senior executive versus
Speaker 3: a lot of the folks.
Speaker 5: That are actually on the line doing a lot of
Speaker 5: the work.
Speaker 14: Well, we know when this big shift happened because we
Speaker 14: saw it in the inequality statistics, in the wealth that
Speaker 14: was being froud at the top of the economy, and
Speaker 14: the size of the financial sector, in things like share
Speaker 14: buybacks and dividends. All of these things started booming in
Speaker 14: the nineteen eighties when you had this big deregulation of
Speaker 14: the economy or should I say reregulation of the economy.
Speaker 14: I think there's this sense that the changes that were
Speaker 14: brought in in the nineteen eighties, so things like privatization
Speaker 14: changing to regulation, cut, tax cuts, et cetera. There's this
Speaker 14: idea that that was about shrinking the states and boosting
Speaker 14: the power of the market, and in fact, what you
Speaker 14: saw was not the state becoming smaller. It was just
Speaker 14: the state becoming smaller for some people, generally workers, and
Speaker 14: very very big for the kind of the corporate class
Speaker 14: and the financial class as well. Obvious manifestation of this
Speaker 14: was of course the massive bailouts of the banking crisis,
Speaker 14: but you saw this all throughout the pandemic as well.
Speaker 14: I did some research just looking into the astonishing levels
Speaker 14: of actually corruption I don't think there's another word for it.
Speaker 14: That characterized some of the stimulus packages in the US
Speaker 14: and also in other parts of the world, where you
Speaker 14: had you know, government funding going to firms that were
Speaker 14: owned by congress people, and then those firms donating tons
Speaker 14: of money to the re election campaigns of those congress people.
Speaker 14: So you know, this idea that the changes that we
Speaker 14: had that led to you know, rising in equality and
Speaker 14: you know, this big shift empower in the economy.
Speaker 13: But that was all legitimate that was to be.
Speaker 3: Sure, to be sure, and to be fair, and there
Speaker 3: right during the pandemic, different from many would argue what
Speaker 3: happened in the Great Financial Crisis where the money went
Speaker 3: straight to companies versus Main Street. Right, we know a
Speaker 3: lot of people losing homes and so on and so
Speaker 3: forth weren't getting the assistance that the banks were getting
Speaker 3: and other companies were getting, if you will, during the pandemic,
Speaker 3: money did go though to main Street. We still talk
Speaker 3: about it. You know that that support has stayed with
Speaker 3: a lot of individuals and households for years coming off
Speaker 3: the pandemic. So, to be fair, individuals also got it
Speaker 3: as well.
Speaker 14: Well, yes, but a lot of that just went straight
Speaker 14: through to paying back debt so ended up with the
Speaker 14: banks or paying rent, so it ended up with landlords.
Speaker 14: And actually there's this a really interesting case study of
Speaker 14: a couple of big corporate landlords in the US that
Speaker 14: received tons of government funding throughout the pandemic and were
Speaker 14: told to kind of enforce this eviction is moralorium that
Speaker 14: was supposed to be implemented. And there's this fascinating example
Speaker 14: of this corporate landlord that I look at in the
Speaker 14: book that basically used the uncertainty around the pandemic to
Speaker 14: scare people out of rental accommodation, basically telling their tenants
Speaker 14: that the evictions moreprium wasn't being enforced and they would
Speaker 14: be kicked out if they didn't leave volunteer at the
Speaker 14: same time as receiving government funding, which I think was
Speaker 14: really to.
Speaker 4: Horrifying Chris, It's so interesting to hear you, to hear
Speaker 4: you speak, and also to seek in the book. I
Speaker 4: think politically, at least here in the US, you wouldn't
Speaker 4: necessarily be surprised to hear former President Trump bring up
Speaker 4: some of these points at Rows and indeed this idea
Speaker 4: of populism that has caught on here in the United
Speaker 4: States over the last eight years or so in response
Speaker 4: to what we saw after the Great Financial Crisis. Talk
Speaker 4: a little bit about the then diagram and the sort
Speaker 4: of the strange bedfellows one could argue with socialism and
Speaker 4: the way that you describe it, and then also with populism.
Speaker 14: This is kind of why I wrote the book, because
Speaker 14: people like Donald Trump succeed when the average person feels really,
Speaker 14: really powerless, and you see this in the UK as well.
Speaker 14: You know, extremist politicians doing well. And when you ask
Speaker 14: people why they vote for these people, it's basically them saying,
Speaker 14: I don't have any control over my life. The system
Speaker 14: is rigged, so they feel powerless, and then they project
Speaker 14: their sense of political agency onto these strong figures that
Speaker 14: say I'm going to burn the whole system down. Most
Speaker 14: of the time, those strong figures, those anti establishment figures,
Speaker 14: come very much from within the establishment, and you know,
Speaker 14: people like Trump says I'm going to drain the swamp
Speaker 14: and then goes in and delivers this massive package of
Speaker 14: tax cuts that massively benefits big corporations and big businesses
Speaker 14: and does very little actually for the average American.
Speaker 5: But this anger that bubbles up.
Speaker 14: Beneath the surface of our very unequal economies ends up
Speaker 14: feeding into the rise of the far right and the
Speaker 14: rise of a kind of extremist populist politicians. If we
Speaker 14: aren't able to identify it and provide an explanation that
Speaker 14: isn't just conspiracy theories, and you know, this is such
Speaker 14: a big thing that post pandemic. If it's like conspiracy
Speaker 14: theories about who's running the world economy, and you know,
Speaker 14: like the World's Economic Forum and the great reset and things.
Speaker 14: And I think all of that feeds into this sense
Speaker 14: of like we're powerless. We know that lots of stuff
Speaker 14: is going on up there in the plows, but we
Speaker 14: don't feel that.
Speaker 5: We can control it well.
Speaker 3: And I feel like sortays like follow the money, like
Speaker 3: whenever there's money involved. It feels like that's how the
Speaker 3: gaps in many ways can often widen grace. We unfortunately
Speaker 3: only have about a minute left here, So what's the
Speaker 3: way forward in your view? If we don't want to
Speaker 3: become socialists and continue to operate under a capitalistic society?
Speaker 5: What's the way forward in your view? And got about
Speaker 5: a minute left here? So I think the key thing
Speaker 5: here is accountability.
Speaker 14: Capitalism is supposed to have markets to enforce accountability, to
Speaker 14: make sure that corporations can't get too big, that the
Speaker 14: rich can't get too rich, because there are all these
Speaker 14: checks and balances, but we don't really have those right now.
Speaker 14: So the question is how do we enforce accountability? And
Speaker 14: that has to come through real democracy, democracy and our corporations,
Speaker 14: democracy in our communities, democracy in our governments everywhere throughout
Speaker 14: the and that's really what I want to see.
Speaker 5: But if they don't want it, how do you get it?
Speaker 5: Those are the folks in power.
Speaker 3: As I remember coming off of the pandemic and George
Speaker 3: Floyd about people who said, I don't have a seat
Speaker 3: at the table to help change things, and these were
Speaker 3: black individuals, people who don't have a seat at the table.
Speaker 5: How do you change things?
Speaker 4: Again?
Speaker 5: Just about thirty seconds forgive me.
Speaker 14: You've got to make trouble. They're not going to give
Speaker 14: power away. You have to build power from the ground up.
Speaker 14: Whether you're a unionist and you want to see at
Speaker 14: the table, you've got to organize in your workplace, if
Speaker 14: in your community you're being exploited or oppressed. Again, we've
Speaker 14: got to organize. We've got to try and build alternative
Speaker 14: structures and again not just protests, but really seeing ways
Speaker 14: that communities can come together and say we're going to
Speaker 14: change the way our economy works.
Speaker 3: I feel like another relevant conversation for our times, Grace
Speaker 3: step by again, I'd love to continue with you, guys,
Speaker 3: with you specifically rather this conversation. Grace Blakeley her new
Speaker 3: book Vulture Capitalism, corporate Crimes, backdoor bailouts, and the Death
Speaker 3: of Freedom.
Speaker 4: Really interesting stuff, right, Yeah, you're.
Speaker 5: Ready to be a socialist.
Speaker 4: I'm ready to talk more to Grece.
Speaker 10: I'm ready to.
Speaker 5: Talk more to Grace too. All right, this is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 3: Plenty ahead in our second hour of the weekend edition
Speaker 3: to Bloomberg Business Week, including how the king of sitcoms
Speaker 3: went from writing a TV show about young scientists to
Speaker 3: helping students become scientists. We'll check in with TV writer,
Speaker 3: producer and director Chuck Lori.
Speaker 5: This was fun.
Speaker 1: This was a lot of fun.
Speaker 4: Plus the sports executive turned a theme park and experiential
Speaker 4: CEO on the theme park business and playing to consumers.
Speaker 5: And a great story from his daughter about when they
Speaker 5: had to move. But you'll just have to wait and listen.
Speaker 10: All right.
Speaker 3: In pursuits, it's the opposite of quiet luxury, but with
Speaker 3: this much speed, you may not care. What's it like
Speaker 3: to drive the three hundred and forty five thousand dollar
Speaker 3: McLaren seven fifty s Spider or hang out at a
Speaker 3: Saudi Arabian oasis and archaeological site turned master plan luxury
Speaker 3: tourism outpost our Hannah Elliott did both. She stops buying
Speaker 3: just a bit.
Speaker 4: Hey, first up this hour, Carol, have you been to
Speaker 4: Lego Land of her Op?
Speaker 8: Kay?
Speaker 4: What about the London Eye, No, it's not too late.
Speaker 10: Yeah.
Speaker 4: Now, well, these are just a couple of the entertainment
Speaker 4: destinations owned by Merlin Entertainments, formerly a publicly traded company
Speaker 4: but now with owners including Blackstone and the Canadian Pension
Speaker 4: Plan Investment Board.
Speaker 3: Yeah, they've got their hands and a lot of things
Speaker 3: and a great read on what we are all up to.
Speaker 3: It is a British entertainment company parks and attractions in
Speaker 3: twenty three countries around the world, serving more than sixty
Speaker 3: million guests per year. Scott O'Neil is the CEO at
Speaker 3: Merlin Entertainments. He was also previously president of Madison Square
Speaker 3: Garden Sports, owner of the Knicks, Rangers, Liberty and more.
Speaker 3: Also the former CEO of Harris Blitzer Sports and Entertainments,
Speaker 3: which includes the Philadelphia seventy six Ers, New Jersey Devils
Speaker 3: and more. He's seen a lot in the world of sports.
Speaker 3: We began by asking about how it was to relocate
Speaker 3: to the UK.
Speaker 15: You know, I'm pretty happy moved to the UK. It's
Speaker 15: been a big adjustment.
Speaker 8: Do you like that? I do.
Speaker 10: I didn't anticipate how challenging the move would be.
Speaker 15: I've grown up in this little bubble between New York, Philly, Connecticut,
Speaker 15: New Jersey, and.
Speaker 5: What was challenging the weather or just different.
Speaker 15: I just think, well, I have my youngest is seventeen
Speaker 15: years old, So taking a seventeen year old out, I
Speaker 15: had just have to do this one quick story. Yeah
Speaker 15: is you know, we're having that heart to heart, that
Speaker 15: father daughter connect conversation, and she she holds up her
Speaker 15: finger and points in my chest.
Speaker 10: And says, dad, let me get this straight. Your career
Speaker 10: is more important than my happiness. And she turns and
Speaker 10: just walks out of the room. And I was like,
Speaker 10: but but I love you.
Speaker 2: I mean I love you.
Speaker 10: Honey By lines up. So that transition was harder than
Speaker 10: we thought.
Speaker 5: But she's happy now in London with you.
Speaker 10: She's in London with me.
Speaker 15: She won an international basketball championship, gold medal, scholar congratulations.
Speaker 15: So she's doing great. She's thriving. My wife's happy, so yes,
Speaker 15: so life ski.
Speaker 10: Yeah, you'll can you imagine?
Speaker 4: I can tell you it very much. Boom boom, She'll
Speaker 4: never forgive you. But no, okay, no, yeah, that's okay.
Speaker 4: You know, your business is all about leisure and discretionary spending,
Speaker 4: and you've got a great view around the world because
Speaker 4: you're in what more than twenty countries at this.
Speaker 10: Point, twenty three countries.
Speaker 4: So just give us an idea of how things are
Speaker 4: going when it comes to that spending and doing stuff.
Speaker 10: Yeah, well, we're pretty fortunate.
Speaker 15: For those of us who had children in COVID, it
Speaker 15: was a little close and we couldn't leave the house.
Speaker 15: And when COVID ended, we got on planes as quickly
Speaker 15: as we could. But the one thing we were searching
Speaker 15: for was connection and meaning and memories. And we moved
Speaker 15: away from the economy of things the economy of experiences,
Speaker 15: and so we have a lot of tailwinds. It is
Speaker 15: a look, it's it's we go from Malaysia, Korea, Japan,
Speaker 15: China all the way to the US and everything in between.
Speaker 10: H and so we get to see quite a bit.
Speaker 10: So whenever people are like, how's business, I'm like, so,
Speaker 10: where is it?
Speaker 2: Back?
Speaker 10: China? Is tougher than we anticipated.
Speaker 15: We anticipated even this year of recovery a little bit
Speaker 15: quicker than it than it's come.
Speaker 5: So people are doing it or is it just a
Speaker 5: fraction of what it was.
Speaker 15: It's a slower Yeah, yeah, Domestic tourism slower. Their international
Speaker 15: tourism coming out of China is a bit more than
Speaker 15: we thought. US is still fine. The US is great,
Speaker 15: and the US consumer we're wonderful people.
Speaker 4: You know, spend money.
Speaker 15: We do love to spend money, and we love experiences
Speaker 15: and memories and fun things.
Speaker 5: So does that mean we're not pre pandemic for you guys,
Speaker 5: We're over.
Speaker 15: Pre pandemic, over pre both in terms of revenue and volume.
Speaker 15: And the UK is a little schizophrenic, very good for
Speaker 15: internationals last year. This year it's a little slower. Domestics
Speaker 15: is slow and Europe slow. Now remember we had bizarre
Speaker 15: weather last year. Okay, so you know most of our
Speaker 15: peers Disney and Universal and I know you've never most
Speaker 15: people listening maybe haven't heard of Merlin Entertainments before, but
Speaker 15: we are the number two theme parks in the tracks
Speaker 15: this business indie world.
Speaker 5: Does that frustrate you that?
Speaker 3: Like if you think about so many of those names,
Speaker 3: Lego Land, like we just went through them. I mean,
Speaker 3: they're well known, kids are great, but that the recognition
Speaker 3: it's coming.
Speaker 10: Okay, it is coming like a great chain.
Speaker 4: But it doesn't even matter if these brands aren't necessarily
Speaker 4: connected to one another. People know that Madame Tusodes is
Speaker 4: owned by the same folks who on Legoland.
Speaker 10: I think it does.
Speaker 15: I think when you talk about not to be too technical,
Speaker 15: but we are a bloomberg, you know, when you talk
Speaker 15: about ibadah meeting multiple, when you think about how do
Speaker 15: you grow your multiple? One of the things that that
Speaker 15: I think matters to Disney is their brand, you know.
Speaker 15: And I think one of the things that matters to
Speaker 15: Universal are the licensed partners, the brand ip partners. And
Speaker 15: you look at ours green you know, you take you
Speaker 15: know personally, I take Legoland and Peppa and Madame Tussaus
Speaker 15: and I put them up against there, so I and
Speaker 15: and we're dragging behind them. Now, we're we're way ahead
Speaker 15: of our the US regional theme parks like the Six
Speaker 15: Flags and the Sea Worlds and the Cedar Fairs in
Speaker 15: terms of multiple, but I think we've got to we
Speaker 15: have a journey ahead of us to to map that
Speaker 15: the brand and the experience to where.
Speaker 5: We are the movie or something like like, how do
Speaker 5: you know? I'm serious, like there.
Speaker 15: Could be some content around it, right, So we have
Speaker 15: a lot of different brands and so so we have
Speaker 15: to take a portfolio approach for sure.
Speaker 5: But yeah I did no I the Mattel CEO talk
Speaker 5: about you know, it was amazing.
Speaker 10: He's amazing, amazing executive.
Speaker 5: For sure, Just like how you kind of you know,
Speaker 5: capitalize it all of that.
Speaker 15: Yeah, well, well the whole host of things. You know,
Speaker 15: I am following a founder, Sir Nick Varney. He's knighted,
Speaker 15: and I thought to myself, could that be me someday?
Speaker 5: So like when you're doing I'll say, yes, I'm taking
Speaker 5: the job.
Speaker 10: But it's sir, I somehow don't happened.
Speaker 4: Maybe she'll have to stay at school and take a
Speaker 4: test when during the ceremony that could happen. Let's not
Speaker 4: get ahead of her.
Speaker 15: So following a founder is there's so many wonderful things.
Speaker 15: And I come from a family of founders, and my
Speaker 15: brothers and sisters of all of family, companies will only
Speaker 15: sell out and out of the five of us, and
Speaker 15: and and the magic the stuff.
Speaker 10: You can't see this on the radio, but the feel
Speaker 10: of the business that you have as a founder thirty
Speaker 10: or fashion bam.
Speaker 15: So so there's so many wonderful things and they feel
Speaker 15: the business so well, and a lot of this stuff
Speaker 15: becomes intuitive and that's hard. And they have like this
Speaker 15: father or motherly like figure, you know, like a larger
Speaker 15: than life figure, and sort of come in after that
Speaker 15: their whole host of challenges.
Speaker 10: Culturally, et cetera.
Speaker 15: With leadership, but there's also usually these gaping holes of opportunity.
Speaker 15: And because the founders have such rhythm and intuitiveness in
Speaker 15: the business, you have things that I think can really
Speaker 15: underpin future success, like digitizing the business, like driving data,
Speaker 15: like dynamic pricing, like the stuff that I've my whole
Speaker 15: life have made made a business of. Come into a
Speaker 15: new business and you think, you know, my eyes are
Speaker 15: as big as saftware as I'm thinking.
Speaker 10: Okay, there's enough opportunity.
Speaker 4: When you think about the different types of products that
Speaker 4: you offer, the different attractions that you have, what's growing
Speaker 4: and what's struggling right now, Like where's the opportunity for growth?
Speaker 15: Yeah, Well, in Lego Land, that's about forty percent of
Speaker 15: our business Lego Land Resorts. There are ten of them,
Speaker 15: three in the US, Korea, Japan, Malaysia, Dubai, Germany, Denmark, London,
Speaker 15: et cetera. We're building a one in Shanghai in China
Speaker 15: as well. It's a really good business and we have
Speaker 15: to invest in making premium. It's like, sorry, but that
Speaker 15: brand is wonderful well recognition.
Speaker 10: You know, and you know Neil's who's the CEO.
Speaker 15: They're just understands the brand and how to grow it,
Speaker 15: and their partnerships are smart and they're wonderful people. They
Speaker 15: know how to do deals and drive deals and they're
Speaker 15: one of our largest investors and so so that's an
Speaker 15: unbelievable opportunity. But we have to continue to invest, invest, invest,
Speaker 15: how do you make that more premium. That's what we're
Speaker 15: finding is like there is a flight to quality. Premium
Speaker 15: is going to matter. Our resort theme parks business a
Speaker 15: lot more complicated. It's kind of like if you can
Speaker 15: imagine a six flags dropped in Europe, that's.
Speaker 8: What we have in Europe.
Speaker 15: And I'm of the school of bigger is better. So
Speaker 15: mega resorts will matter and regional ones will really struggle.
Speaker 15: And so we're on the effort of that, and then
Speaker 15: where I think there's the max growth from us. We
Speaker 15: had over twenty percent growth in this segment. We call
Speaker 15: it gateway and London is the best example. We have
Speaker 15: two what we call must see, must do We call
Speaker 15: them anchor attractions, the London Eye by the Way and
Speaker 15: Madame Tuo Sad's the original, and then we have three
Speaker 15: other attractions. One out of every four tourists into London
Speaker 15: come to one of our attractions, and forty percent of
Speaker 15: them come to at least two. So that's what I
Speaker 15: call like cluster penetration and building those in the ten
Speaker 15: most important tourist cities in the world is where I
Speaker 15: think our growth.
Speaker 10: Is going to come from.
Speaker 3: Just got a minute left, man, I wish we had
Speaker 3: ten more money too. I got to ask you, though,
Speaker 3: with your sports background, do you miss it being actively
Speaker 3: involved in like running it, you know, a team and
Speaker 3: so and so forth.
Speaker 10: There are elements I love and miss. It's mostly about
Speaker 10: the people.
Speaker 15: Yeah, you know, in terms of when you when you
Speaker 15: hit a certain level at those jobs, it becomes a
Speaker 15: different type of job. And if you compare that type
Speaker 15: of job to this one, it's not even close. I
Speaker 15: mean I've got people purpose and scale, which is what
Speaker 15: I'm looking for. I'm like learning every day. I was
Speaker 15: in that business for so long. I knew it and
Speaker 15: I want to stretch a bit.
Speaker 3: Thirty seconds left. Are you going to add to go
Speaker 3: back to your current job? Is there stuff to add
Speaker 3: to the portfolio?
Speaker 8: Oh?
Speaker 5: Yes, so acquisitions will be coming.
Speaker 8: Yes.
Speaker 15: We just bought the Orlando I yeah, in icon Park.
Speaker 15: So if you're down in Orlando swing By, it's a
Speaker 15: great respite from the difficulty sometimes of grinding through a resort.
Speaker 15: We have a Lego Land resort down there as well.
Speaker 15: But yes, more to come and that's going to be
Speaker 15: an anchor for O Orlando Cluster.
Speaker 5: Good to know, Good to know, Come back soon.
Speaker 10: Come see me at my resorts. That daughter, I will agree,
Speaker 10: she will actually love it, but it might be a
Speaker 10: longer show. Thanks guys.
Speaker 3: Scott O'Neil, thank you so much, Chief executive officer of
Speaker 3: Merlin Entertainments. Joining us right here in our Bloomberg Interactive
Speaker 3: Brokers studio.
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Speaker 10: Oh, you know, persons in a hot tense state. The
Speaker 10: nearly fourteen million.
Speaker 6: Years ago expansion started waiting, the years began to cool,
Speaker 6: theandros began to Julieandrew Calls developed tools.
Speaker 16: We build a wand there this file, Sciences to Be
Speaker 16: unravel started.
Speaker 10: Whist the team bank All.
Speaker 5: Right, everybody, you know it well.
Speaker 3: It aired for twelve seasons September of seven to May
Speaker 3: of twenty nineteen.
Speaker 5: We're talking to him about The Big Bang Theory.
Speaker 12: Yeah.
Speaker 4: Well, he's the co creator of the head television comedy
Speaker 4: The Big Bang Theory. It's about young scientists in Southern California.
Speaker 4: As if I needed to tell any of you, the
Speaker 4: world knows and now, well, he wants to help young
Speaker 4: scientists in Southern California even more than he had earlier.
Speaker 3: Yeah, he does through his family foundation. Chuck Luri, the
Speaker 3: TV writer, director, producer, is pledging twenty four point five
Speaker 3: million to the University of California, Los Angeles to help
Speaker 3: more low income students study science and technology. This adds
Speaker 3: to a program he began back in twenty fifteen, and
Speaker 3: this donation will double the number of undergraduate scholarship recipients
Speaker 3: with financial needs to eighty each year.
Speaker 5: Tim This is according to UCLA.
Speaker 8: Well.
Speaker 4: Janet Lauren is Bloomberg News higher education finance reporter. She
Speaker 4: earlier this month wrote about Lorie's latest donation. She's with
Speaker 4: us here in the Bloomberg Interactive Brokers studio. Also joining
Speaker 4: us is Chuck Laurie, who not only co created The
Speaker 4: Big Bang Theory, but also created or co created and
Speaker 4: produced Grace under Fire, Sybil Darman, and Greg two and
Speaker 4: a Half Men, just to name a few. Chuck joins
Speaker 4: us from Los Angeles. Chuck, I do want to start
Speaker 4: with you because you've done a lot of philanthropy. You've
Speaker 4: supported STEM education in public schools before this latest donation.
Speaker 4: Give us your thinking behind the importance of STEM, especially
Speaker 4: when it comes to a world where you know we're
Speaker 4: talking about AI potentially doing a lot of the work
Speaker 4: for us.
Speaker 13: Well, when this all began, AI was not part of
Speaker 13: the conversation, so I really speak to how that changes things.
Speaker 13: But my thinking early on was very simple. We had
Speaker 13: come to understand from various news reports that children here
Speaker 13: and in England because they were watching The Big Bank
Speaker 13: Theory or showing a spike of interest in stemated stem
Speaker 13: related fields at high school and college levels. And that
Speaker 13: was remarkable because that certainly wasn't the original goal for
Speaker 13: the Big Bang Theory to change the trajectory of a
Speaker 13: young person's life. It was happening.
Speaker 16: So I have to admit, as Chuck and I talked before,
Speaker 16: my family and I are huge fans of Young Sheldon.
Speaker 16: Me too, I had not watched The Big Bang Theory.
Speaker 16: We actually was introduced to the characters from Young Sheldon.
Speaker 16: So I have only maybe watched one episode of The
Speaker 16: Big Bank Theory. So all this is new to me.
Speaker 16: But I do know a lot about college financing, and
Speaker 16: one thing Chuck had said to me when we spoke
Speaker 16: earlier about the lack of finances is something he understood
Speaker 16: extremely well because he did not finish college and carried
Speaker 16: around student loans of two thousand dollars for fifteen years,
Speaker 16: So he.
Speaker 13: Understands after fifteen years two thousand was about eight or no.
Speaker 16: Wow, Yes, that's crime the principle of a crude interest,
Speaker 16: But that's a good detail that a lot of people
Speaker 16: out there thinking about college they don't think about and
Speaker 16: what I found remarkableut this program is not only does
Speaker 16: it fun college, but it gives mentorship, which is something
Speaker 16: that is hard hard to get through college without. Could
Speaker 16: you talk a little bit about why that it was
Speaker 16: important and why is it important for you to see,
Speaker 16: you know, kids college graduate college in a reasonable amount
Speaker 16: of time, such as four years, and how difficult that
Speaker 16: can be.
Speaker 13: Well, one of the original goals that I had, for
Speaker 13: better or worse, was to keep things local so that
Speaker 13: I could participate. And local for us here in Los
Speaker 13: Angeles was UCLA, and that was absolutely aided by the
Speaker 13: fact that our science consultant on the Big Bang theory,
Speaker 13: doctor David Salzburg, was a professor of physics at UCLA,
Speaker 13: and so we already had entree to the university through
Speaker 13: David and and wanting to participate and give back. It
Speaker 13: seemed it made sense to do so so by focusing
Speaker 13: on young people who were pursuing or wanted to pursue
Speaker 13: a STEM field at UCLA, and also because it was
Speaker 13: local because it was UCLA because of David. The mentorship
Speaker 13: process was also part of this. We weren't just handing
Speaker 13: out money and saying good luck. For a lot of
Speaker 13: the kids, they were the first generation in their families
Speaker 13: to get a college education, and so they're being thrown
Speaker 13: into a thrown onto a speeding train. You right out
Speaker 13: of the gate mentorship is important.
Speaker 16: Now the information about the scholarship says there's opportunities for
Speaker 16: graduate school funding. We all know how expensive medical school
Speaker 16: could be. Can you talk about was that important to
Speaker 16: you to continue students onto this trajectory?
Speaker 13: Not initially. This thing grew over a period of almost
Speaker 13: ten years now, UH, and and when we realized that
Speaker 13: the success rate we were having with the kids going
Speaker 13: through undergraduate programs UH was phenomenal. And and that's when
Speaker 13: we decided to expand the program into graduate school. And
Speaker 13: again we were initially trying to keep the graduate school
Speaker 13: in in in the UH, in the California system so
Speaker 13: that we could again stay stay close to it and participate.
Speaker 3: Well, and I'm curious to check you know, you guys
Speaker 3: really worked hard to get the science right on the show, right,
Speaker 3: I mean that was obviously a priority. Talking about David
Speaker 3: did Well talk to us about being in that environment
Speaker 3: for you and maybe how that also shaped your thinking
Speaker 3: about where you wanted to commit money towards to help others,
Speaker 3: you know, pursue potentially you know, degrees in the STEM world.
Speaker 13: It begins with the show. The show is about UH,
Speaker 13: a group of somewhat alienated, disenfranchised geniuses and UH, you know,
Speaker 13: struggling to make their way in the world, but clinging
Speaker 13: to one another as the community basically almost a family
Speaker 13: unit in the way they treated one another, both good
Speaker 13: and bad. And so it made sense from the beginning
Speaker 13: that we we we we focus on STEM UH and
Speaker 13: UH for a couple of very practical reasons. One is
Speaker 13: the likelihood that you graduate in one of these fields
Speaker 13: you can get employed. The same can't be said with
Speaker 13: a BA in H in the humanities or communication. I
Speaker 13: think I lost you guys.
Speaker 4: At our liberal arts degrees exactly.
Speaker 13: Disappointing, But those degrees don't necessarily create a U. I
Speaker 13: get I'm losing this thing here.
Speaker 4: Don't worry you, hear you? Yeah, Yeah, we got you.
Speaker 4: Don't worry hey, yeah, go ahead.
Speaker 13: So there it is.
Speaker 2: Go ahead.
Speaker 13: So I, you know, very practically, I wanted to. I
Speaker 13: wanted the program to also, you know, help help young
Speaker 13: people who are going through you know, the journey of
Speaker 13: education to end with employability. Yeah, and and uh that
Speaker 13: may have been a little bit, but it seemed it
Speaker 13: seemed like, Uh, wouldn't it be great to graduate without
Speaker 13: debt and have a job for you?
Speaker 17: Yeah?
Speaker 5: Right, yes, yes, yes, and yes right? What did you
Speaker 5: We have about a minute and a half and then
Speaker 5: we're going to take a break and then come back
Speaker 5: and do more. But what did you study?
Speaker 13: Drugs?
Speaker 5: No, I'm not sure I have a follow up. Now,
Speaker 5: what did you really academically?
Speaker 13: I may have had, It's a dim memory. I was
Speaker 13: talking about a long time ago. There was also rock
Speaker 13: and roll and girl, but it was I think I
Speaker 13: might have been a political science major. I don't know
Speaker 13: if I ever mentioned it to anybody, But yeah, no,
Speaker 13: also a degree also, as they used to say, that
Speaker 13: degree and a token could get you right on the subway.
Speaker 3: A couple of things we want to get to, but
Speaker 3: I do want to ask you about it really stung
Speaker 3: me what you said.
Speaker 5: And Jada put in.
Speaker 3: Her story where she wrote about your donation to UCLA
Speaker 3: that you carried a student learn of about two thousand
Speaker 3: for fifteen years, and you said it it grew to
Speaker 3: eight thousand. The cost of education and this idea of
Speaker 3: you know, kids coming out of school and not having
Speaker 3: any debt that's increasingly becoming a thing of the way past.
Speaker 5: I don't know any thoughts.
Speaker 3: About it as you try to help others who are
Speaker 3: pursuing education and in STEM feels and just thinking about
Speaker 3: kind of a younger generation, how we do it better,
Speaker 3: because it just feels like it's getting out of control
Speaker 3: and not getting better.
Speaker 13: I don't have an answer to that.
Speaker 8: I just know that.
Speaker 13: When State of New York caught up.
Speaker 4: With me, they didn't catch up with me.
Speaker 13: I was very young and naive, and I don't think
Speaker 13: I understood my Social Security number was a target. But
Speaker 13: you know, I spent probably eight or nine years sending
Speaker 13: the State of New York fifty dollars a month, and
Speaker 13: that's how I got out from under it. But I know,
Speaker 13: I don't have a solution for this situation other than
Speaker 13: what we're doing, which is especially you know, seeking out
Speaker 13: kids that are not only exceptionally talented in their scholastic efforts,
Speaker 13: but high financial need, backgrounds underrepresented kids, and where the
Speaker 13: money can be puts a good use in allowing them
Speaker 13: to get that STEM education and walk out of UCLA
Speaker 13: with no debt. Is that seems like a goal worth
Speaker 13: pursuing major gift.
Speaker 4: Yeah, Hey, Chuck, I want to take a step back
Speaker 4: and just ask you about your broader philanthropy, because this
Speaker 4: is just one part of it, the big bank theory,
Speaker 4: UCLA scholars. You've got the Venice Family Clinic, Chuck, Lori
Speaker 4: Rose Avenue Health and Wellness Center. You're working on some
Speaker 4: stuff when it comes to food banks and other healthcare
Speaker 4: related causes, a trust for public land as well in
Speaker 4: the greening of schoolyards. Just give us your philosophy when
Speaker 4: it comes to this type of work, this type of philanthropy,
Speaker 4: like where do you see the biggest needs?
Speaker 13: Well, it began very personally for me. I was very
Speaker 13: ill when I was a young man, desperately ill. I
Speaker 13: did not know about free clinics. I did not know
Speaker 13: where to go. I certainly had no insurance medical insurance,
Speaker 13: and I was.
Speaker 11: I was.
Speaker 13: It was a very frightening several years, and I was
Speaker 13: very fortunate that I managed to recover. But that's that
Speaker 13: stays with you. If you can't afford to see a
Speaker 13: doctor and you need a doctor, that's a fear that
Speaker 13: I don't wish on anyone. And so that the philanthropy
Speaker 13: efforts began back in the nineties for me with Venice
Speaker 13: Family Clinic, which I wish I had actually known about
Speaker 13: when I was in my early twenties, but the idea
Speaker 13: that you could see a doctor without having any money
Speaker 13: in your pocket, I thought it was something I wanted
Speaker 13: to participate in. So I've been involved with the Venice
Speaker 13: Family Clinic for I don't know twenty five twenty six years,
Speaker 13: and that's expanded to other healthcare opportunities, and so that began,
Speaker 13: and then and then the STEM. The STEM efforts, as
Speaker 13: I said before, began really by accident when we found
Speaker 13: out that inexplicably or explicably the Big Bank theory was
Speaker 13: encouraging young people to pursue STEM research STEM fields.
Speaker 10: Uh and uh.
Speaker 13: So the thought was really quite simple, maybe we can help. Yeah,
Speaker 13: I mean, the original goal in making that show is
Speaker 13: to make people laugh. It was not to change again
Speaker 13: to change the trajectory of a young man or young
Speaker 13: woman's life, but it was doing that. So as long
Speaker 13: as I was doing that, let's participate. And that's how
Speaker 13: the scholarship started.
Speaker 16: Well, Young Sheldon has really made us laugh.
Speaker 10: By the way.
Speaker 13: I love, I absolutely love that you're watching Young Sheldon
Speaker 13: and you haven't watched The Big Bank.
Speaker 4: It's a music it's like, it's like a gay but
Speaker 4: it could be away into the original show that it's
Speaker 4: spun off from.
Speaker 16: But he's a great character, and so is doctor Sturgis.
Speaker 16: I love Doctor surget.
Speaker 13: Wally Wally, Wally Sean. Yeah, we've been so blessed with
Speaker 13: some of the casting at Begley and while Sean, it's
Speaker 13: been a terrific experience and.
Speaker 16: The university president that depiction seems entirely realistic to me. Well,
Speaker 16: how did you decide to pivot into young Sheldon and
Speaker 16: you know he finished college in what three years and
Speaker 16: the idea of going to East Texas Tech, And how
Speaker 16: did that all come about? Because it is it is
Speaker 16: a sort of a realistic path or a young genius
Speaker 16: like that.
Speaker 13: Well, the backstory of Sheldon on The Big Bang Theory
Speaker 13: was that he graduated college at fourteen or thirteen or
Speaker 13: fourteen I forget exactly, and then went to cal Tech
Speaker 13: to do postgraduate work. And so we had already laid in,
Speaker 13: you know, the backstory for Sheldon's journey graduating, graduating, high
Speaker 13: school at the age of eleven, and and uh, you know,
Speaker 13: in a in an East Texas town where they simply
Speaker 13: did not have the wherewithal to deal with a genius
Speaker 13: of that of that of that size, and East Texas
Speaker 13: Tech we invented in order to in order to keep him,
Speaker 13: you know, to keep him. Look, so we can do
Speaker 13: the show and uh, and for have him ripping through
Speaker 13: that university as well on his way to cal Tech
Speaker 13: and ultimately, as we did. If you watch The Big
Speaker 13: Bank Theory, he does win a Nobel Prize in the
Speaker 13: in the final up.
Speaker 5: We definitely get it.
Speaker 3: We're gonna work Chuck on Janet because she's got it.
Speaker 3: If she likes young Sheldon, she's gonna love The Big
Speaker 3: Bang Theory.
Speaker 5: She's got it. Like the it's like they go together.
Speaker 10: It is different.
Speaker 13: And you see that the absolute genius of that castle.
Speaker 13: Jim Parsons playing Sheldon at a later age. It's we had.
Speaker 13: We had twelve years of absolute fun making that show.
Speaker 3: Just got a minute left. Do you have a favorite
Speaker 3: moment in time considering all that you've worked on and
Speaker 3: created or co created or what have you? Just got
Speaker 3: about forty five seconds left here?
Speaker 13: Wow, that's a macro question. I know.
Speaker 5: Sorry, I'm a kind of gal.
Speaker 13: It's kind of hard to pull a favorite moment. There
Speaker 13: certainly have been moments that that have stuck with me,
Speaker 13: no one of the I'm not. Rather than specifically answer
Speaker 13: that question, what I've loved about The Big Bang Theory?
Speaker 8: Uh?
Speaker 13: And I guess you know we're talking mostly about young
Speaker 13: elden is And I think why it was attractive to
Speaker 13: young people, yeah, was if you felt this enfranchised, if
Speaker 13: you felt you're around the outside looking in, which a
Speaker 13: lot of people do, and you don't have to be
Speaker 13: a mensa participant or genius to feel that way. The
Speaker 13: show represented community, represented like minded souls helping one another,
Speaker 13: and maybe that's what was at practice to kids watch it.
Speaker 3: I think that's a great way to finish up. Listen,
Speaker 3: Thank you, and it's a great thought. Thank you so much,
Speaker 3: so appreciate it. Be well, Chuck Lori, TV writer, director, producer,
Speaker 3: co creator The Big Bang Theory, and of course our
Speaker 3: Janet Lauren.
Speaker 2: Here.
Speaker 5: This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 1: live weekday afternoons from two to five pm Eastern. Listen
Speaker 1: on Apple card play and ed Bright Auto with a
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Speaker 3: All right, everybody tim to strap in, because we are
Speaker 3: going for quite a ride, figure relatively, and we're going
Speaker 3: to kind of live vicariously through Bloomberg Auto communist Hannah
Speaker 3: Elliots always do.
Speaker 4: She gets to do the coolest stuff.
Speaker 3: I want to be Hannah when I come back in
Speaker 3: another lifetime. All right, she drove the three hundred and
Speaker 3: forty five thousand McLaren seven to fifty s Spider for
Speaker 3: a day's always Yeah, three hundred and forty five Did
Speaker 3: I say it right?
Speaker 4: I mean, it's not like it matters to us.
Speaker 5: It's almost half a million dollars.
Speaker 4: That's before tax, by the way.
Speaker 5: You know what else she did?
Speaker 4: She stopt by the resort in the remote Saudi Arabian
Speaker 4: desert where Burke is in bikinis mingled. And then there is,
Speaker 4: of course, the influential YouTuber known as supercar Blondie, who's
Speaker 4: out now to sell you a car. It's a hypercar that.
Speaker 3: Is also looks a lot like Hannah. But we'll get
Speaker 3: into that in just a moment too. It's all in
Speaker 3: this week's Pursuits. Editor pursuits. Chris Rousers here in studio
Speaker 3: along with Bloomberg auto communist Hannah Elliott joining us from
Speaker 3: La Hannah, welcome, so good to have you here with
Speaker 3: that Chris.
Speaker 5: Chris. First of all, we were trying to figure out
Speaker 5: where to start because they're all really cool stories. Did
Speaker 5: you know about supercar Blondie? I always thought that was Hannah,
Speaker 5: to be quite honest with.
Speaker 18: You, Hannah, Hannah is a blondie who doesn't just focus
Speaker 18: on supercars. She focuses on all kinds of cars. But
Speaker 18: I did I know about supercar Blondie because we cover
Speaker 18: the same kind of stuff and Hannah has knows her.
Speaker 18: But she is a very very influential YouTuber who has
Speaker 18: a huge following. Get gets up to two billion views
Speaker 18: on her contents a month, and she basically test drives
Speaker 18: and talks about and goes with celebrities to experience supercars,
Speaker 18: so very very high end cars, these ones that are
Speaker 18: in the two hundred thousand millions of dollars, and she's
Speaker 18: just very influential on that field.
Speaker 4: So Hannah, come on in here and give us an
Speaker 4: idea of making the transition. Now supercar Blondie that is
Speaker 4: from a YouTuber to somebody who actually wants to sell
Speaker 4: you a very expensive car.
Speaker 12: Yeah. I think that's actually the crux of the story.
Speaker 12: That it's the big question and the big unknown, which
Speaker 12: is can somebody who has such an enormous social media
Speaker 12: platform actually translate that into selling. We know that she
Speaker 12: can get a lot of viewers, a lot of people
Speaker 12: love her and Alex Hershey is her name, and she's
Speaker 12: an Australian, is a very smart, very hard working person.
Speaker 12: So no one's doubting that. The question is will some
Speaker 12: among those two billion monthly viewers want to buy a
Speaker 12: two million dollar Lamborghini that she's going to sell. That
Speaker 12: remains to be seen if you act. Ask Alex she
Speaker 12: says absolutely. It's not that they need to reach all
Speaker 12: of the world's billionaires all at wants to try to
Speaker 12: sell them a car. But she says with that kind
Speaker 12: of platform and footprint and access, she can find the
Speaker 12: right people.
Speaker 18: So she's launching this auction site. What is it going
Speaker 18: to be called and how's it going to work?
Speaker 12: So the auction site is called xbs Cars and it's
Speaker 12: an online auction site that will kind of run like
Speaker 12: bring a trailer. It's very different because it sells only
Speaker 12: high end cars. But in terms of live auctions that
Speaker 12: run for a week or two weeks, and in terms
Speaker 12: of having people who can comment and everyone can watch
Speaker 12: the auction taking place, it's very similar.
Speaker 3: Let's bring a trailer. I'm not familiar with that, so
Speaker 3: just give us a little bit of a reference.
Speaker 4: John doesn't spend a ton of time on bring a trailer.
Speaker 5: Every one car and that's it.
Speaker 4: Okay, my dad spends a ton of time on bring
Speaker 4: a trailer.
Speaker 12: So yes, bring a trailer. We have to say, Bring
Speaker 12: a trailer is really the model that everybody's chasing. It
Speaker 12: was the first sort of breakout auction platform to prove
Speaker 12: that people will buy cars online that they have not
Speaker 12: even seen in real life, let alone driven. Bring a
Speaker 12: Trailer was started by Randy Nannenberg in two thousand and
Speaker 12: seven and it started out slowly, but last year it
Speaker 12: reported one point four billion dollars in sales, so it's
Speaker 12: doing great, and it really has been sort of the
Speaker 12: model that has proved that this sort of thing can
Speaker 12: be done. Now, no one has done it like SBX
Speaker 12: cars and tried to do it with only really expensive,
Speaker 12: really rare hypercars. But yeah, that's what Supercar Blondie is
Speaker 12: going to attempt.
Speaker 3: I love that it comes down to basically supply demand.
Speaker 3: It's as simple as that she knows where those cars are.
Speaker 3: That's a huge part of the art auction business, like
Speaker 3: she knows where all those cars are in the world.
Speaker 3: And eventually, I think for this business to work, she
Speaker 3: needs to start doing private sales where she just connects people.
Speaker 3: All right, we want to get to one story real
Speaker 3: quickly before we move on to the last one, which
Speaker 3: we're all kind of like salivating over. But I just
Speaker 3: do wonder if ultimately the three hundred and forty five
Speaker 3: thousand dollar McLaren seven to fifty Spider might ultimately end
Speaker 3: up on her website at some point you drove it,
Speaker 3: just give us a quick thought on what that was like.
Speaker 12: This is admittedly rare air, so we have to say
Speaker 12: that McLaren, of course, is one of the most prestigious
Speaker 12: names in elite motorsport. We've all followed the McLaren F
Speaker 12: one racing team. McLaren hopes that they're racing team success
Speaker 12: and notoriety will trickle down into making us want to
Speaker 12: buy cars like this seven to fifty s Spider. This
Speaker 12: is the successor to the seven twenty s Spider and
Speaker 12: looks basically the same. If you're at all familiar with it,
Speaker 12: it looks kind of like an alien. It's very swoopy,
Speaker 12: the cabin is sort of bubble shaped, and of course,
Speaker 12: like any good supercar, it's got over seven hundred horse
Speaker 12: power twin turbocharge V eight engine. It can go there
Speaker 12: to sixty and two point seven seconds. And yeah, it's
Speaker 12: a type of thing that you know, is like a Ferrari.
Speaker 12: You can put it, put it on the line against
Speaker 12: plenty of offerings from Frari and Lamborghini. To me, it's
Speaker 12: a little clinical, you know, Mercedes McLaren is known for
Speaker 12: having a bit of a clinical nature to its cars.
Speaker 12: But if you really love that sort of robotic precision,
Speaker 12: the seven to fifty s Spider is a very fun
Speaker 12: car to drive.
Speaker 4: Okay, from McLaren to Saudi Arabia, there is a connection
Speaker 4: we promise make that can for us.
Speaker 12: The connection is I did travel to Saudi Arabia to
Speaker 12: be a part of our Bloomberg Power Players conference, and
Speaker 12: this conference was located in Jetta to discuss the growth
Speaker 12: of motor sport and other sports in Saudi Arabia. Saudi
Speaker 12: Arabia has invested billions of dollars into promoting tourism and sports.
Speaker 12: And Zach Brown, the principal of the McLaren f one
Speaker 12: racing team, joined us for the conference and we were
Speaker 12: so happy to have him. And then the Saudi Arabian
Speaker 12: Grand Prix was also held that same weekend that we
Speaker 12: had our conference, and I was really happy to go
Speaker 12: and see the Grand Prix and then also spend some
Speaker 12: time in other locales in Saudi Arabia, like this hotel
Speaker 12: in Alula.
Speaker 18: So Hannah was going for the Power Players conference Wait
Speaker 18: for Work for Work she was, well, she was, and
Speaker 18: we said, Hannah, if you're going to go there, we've
Speaker 18: got to get you to check out some of these.
Speaker 18: There's amazing, like very high luxury hotels that some have
Speaker 18: already opened. Many our about to open in Saudi because this,
Speaker 18: Hannah said, they've been investing so much in tourism. And
Speaker 18: so we said, Hannah, let's go check out this Habitas
Speaker 18: hotel in Alula. Habitas as a brand which is known
Speaker 18: for kind of coming out of the burning Men culture.
Speaker 18: Their first place was in Tulum. Very free spirit hippie
Speaker 18: does not feel like it fits in Saudi Arabia, which
Speaker 18: is famously very conservative. And since Hannah was there, we
Speaker 18: did all the visa stuff. It's difficult to get into Saudi.
Speaker 18: We said, go check out this hotel. Hannah understands that
Speaker 18: Habitas vibe, so she was like trainsplanes and automobiles. But
Speaker 18: she got over there and she checked it.
Speaker 5: Out all right. So what was it like, Hannah?
Speaker 12: It was amazing. I didn't know what to expect. I
Speaker 12: had never been to the Middle East, never been to
Speaker 12: Saudi Arabia, and I had already spent several days in Jetta,
Speaker 12: which was wonderful but pretty conservative. For instance, the hotel
Speaker 12: pool where I was staying had separate hours for.
Speaker 5: Men and women.
Speaker 12: Men and women were not allowed to be at the
Speaker 12: swimming pool at this same time. So then fast forward,
Speaker 12: I flew to Medina and then drove four hours into
Speaker 12: the desert into this old region called Allula and Habitas.
Speaker 12: The pool is a mixed pool, and it was burkes
Speaker 12: and bikinis for lack of a.
Speaker 18: Better term, seriously, and men and women, which was you
Speaker 18: can't get anywhere else there.
Speaker 12: And I have to say, you know, in Saudi Arabia,
Speaker 12: alcohol is not allowed anywhere in the country, and that
Speaker 12: also does apply to this hotel. I didn't know how
Speaker 12: serious that was. I kind of felt, well, maybe if
Speaker 12: it's a private hotel and they're calling it, you know,
Speaker 12: sort of a burning man in the desert, there would
Speaker 12: be alcohol, but no alcohol at all. But I have
Speaker 12: to say that did not encroach upon the fun and
Speaker 12: freedom that Habitas Alula had.
Speaker 8: It was.
Speaker 12: It was kind of like a boho, chic, luxury hotel
Speaker 12: that you would find in the Biza.
Speaker 4: Maybe is there any question about the success moving forward
Speaker 4: of this hotel and who it attracts, Like can it
Speaker 4: pull this off in such a conservative place?
Speaker 12: That is the question. When I was there, I did
Speaker 12: not come into contact with any other Americans. It's very
Speaker 12: difficult to get to My return trip to La took
Speaker 12: thirty two hours door to door. The visas are challenging
Speaker 12: to obtain, it's grueling, and it's expensive, so those are
Speaker 12: natural prohibitive barriers to going. You know, Habitas has really
Speaker 12: positioned these hotels as opportunities to provide jobs for locals,
Speaker 12: although I have to say when I was there, most
Speaker 12: of the staff that I encountered were from African countries
Speaker 12: or from other Arab nations. They were not from Saudi Arabia.
Speaker 12: I just actually heard from the pr that they're saying
Speaker 12: twenty nine percent of their staff are local Saudis. They
Speaker 12: probably need to increase that if they want to really
Speaker 12: make an impact in the region. And again, all of
Speaker 12: this is all of this is funded and part of
Speaker 12: the Kingdom of Saudi Arabia's effort to really promote tourism.
Speaker 12: They're not short for money, so there's a lot of
Speaker 12: money being devoted to this.
Speaker 18: And was it it was mostly Saudi families that were there, right,
Speaker 18: that's cool?
Speaker 12: Yes, yes, I can't say for sure. The people there,
Speaker 12: I had a great experience. The people there were mostly Saudi's,
Speaker 12: mostly traditional dress. There were a few bikinis from what
Speaker 12: I think were Europeans from what I can tell, and
Speaker 12: maybe Australians and then and then me, but mostly Saudi
Speaker 12: families dressed traditionally having a wonderful time. There were people
Speaker 12: having birthday parties. It was it was really interesting. So
Speaker 12: I do hope that it can continue. There's certainly a
Speaker 12: lot of effort behind it. And you want to go back, Oh,
Speaker 12: I really want to go. I recommend anybody. I mean,
Speaker 12: it's mind blowing. It's the desert itself. I have to say,
Speaker 12: if we have time. It's very close to Hegra, which
Speaker 12: is kind of like Petra. If you've heard of the
Speaker 12: tombs at Petra in Jordan. Hegra is a similar site,
Speaker 12: and it's a World Heritage site, the first one ever
Speaker 12: in Saudi Arabia with these ancient tombs. It's really phenomenal
Speaker 12: to go see.
Speaker 3: Well, the pictures in the story are pretty phenomenal as
Speaker 3: well as are you so listen? Thank you so much,
Speaker 3: really appreciate it.
Speaker 4: That's Bloomberg Pursuits Auto columnist Hannah Elliott and the editor
Speaker 4: of Pursuits, Chris Rouser. Check out more from Pursuits in
Speaker 4: the entire BusinessWeek team by heading to Bloomberg dot com.
Speaker 5: We all want to go, don't we?
Speaker 8: Yeah?
Speaker 4: Yeah, sounds amazing.
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Speaker 8: Mm hmm