WEBVTT - Bloomberg Businessweek Weekend - May 30th, 2020 0:00:02.200 --> 0:00:06.480 This is Bloomberg Business Week from Bloomberg Radio. Hi, I'm 0:00:06.559 --> 0:00:08.840 Jason Kelley and I'm Carol Masser. Welcome to the weekend 0:00:08.960 --> 0:00:11.760 edition of Bloomberg Business Week. So Jason here, it is 0:00:11.800 --> 0:00:15.200 Week eleven, a short and trading week. Nothing quiet though 0:00:15.240 --> 0:00:18.040 about the news flow, and that included things like heightened 0:00:18.040 --> 0:00:20.960 tensions between the US and China. We're going to talk 0:00:20.960 --> 0:00:22.800 about that a little bit later on. We've got more 0:00:22.840 --> 0:00:26.040 companies getting back to work or trying to figure out 0:00:26.040 --> 0:00:28.600 exactly what the plans are doing. And then we had 0:00:28.720 --> 0:00:31.920 some headlines maybe green shoots, perhaps U S State's jobless 0:00:32.000 --> 0:00:34.800 roles they shrank for the first time during the virus pandemic, 0:00:34.840 --> 0:00:37.920 but nonetheless we still have more than forty million Americans 0:00:38.080 --> 0:00:40.519 have filed for those benefits in the past two and 0:00:40.520 --> 0:00:44.120 a half months. So this contradictory as people try to 0:00:44.320 --> 0:00:48.960 continually look forward, well, and it was a week where 0:00:49.080 --> 0:00:52.080 industry by industry, we started to get a picture of 0:00:52.159 --> 0:00:55.200 where we go from here. We try over the course 0:00:55.240 --> 0:00:56.920 of the week to talk to lots of different people 0:00:57.120 --> 0:01:00.760 and lots of different businesses, be at the financial industry, 0:01:00.840 --> 0:01:03.560 and we spoke with Margaret Keene over at synchrony about 0:01:03.600 --> 0:01:07.320 what she's seeing there, of course, a massive credit card issuer. 0:01:07.680 --> 0:01:10.880 We talked to Nancy Spielberg. She's a director, she understands 0:01:10.880 --> 0:01:14.240 where film is going from here and salt Con Uh 0:01:14.400 --> 0:01:17.320 frequent guest on this show, someone we talked to a 0:01:17.400 --> 0:01:22.440 lot and listen, no industry, no business, no experience has 0:01:22.480 --> 0:01:26.959 been disrupted in many ways more than learning. So all 0:01:27.000 --> 0:01:29.800 that straight ahead. Yeah, absolutely, and let's not forget to 0:01:29.920 --> 0:01:31.840 WHAWE was in the news once again, so we caught 0:01:31.880 --> 0:01:35.480 up with Huawei USA's chief security officer, Andy Purdy, and 0:01:35.480 --> 0:01:38.319 then we also heard about the private aviation industry. Interesting. 0:01:38.319 --> 0:01:40.480 Of course it's shut down like everything else, but they're 0:01:40.520 --> 0:01:44.200 starting to see some new trends and new demands. So 0:01:44.280 --> 0:01:47.640 Andrew Collins UH, the CEO and president of Sentient Jet, 0:01:47.680 --> 0:01:50.080 stop by as well. First up, though, we had to 0:01:50.120 --> 0:01:52.920 talk about where we are in the virus. That's right. 0:01:52.920 --> 0:01:54.800 We caught up with Dr Joe and Robert. She's the 0:01:54.840 --> 0:01:58.440 chief quality officer at Providence St. Joseph Health and this 0:01:58.560 --> 0:02:02.040 has been a go two source for us. Fair to say, 0:02:02.040 --> 0:02:04.160 we've talked to a lot of their senior doctors and 0:02:04.200 --> 0:02:06.520 senior officials because they have been on the front lines 0:02:06.680 --> 0:02:10.079 since the very beginning. The first recorded case of the 0:02:10.200 --> 0:02:13.080 virus in the United States. It was at their hospital. 0:02:13.600 --> 0:02:16.440 She helped frame where we are now and where we 0:02:16.520 --> 0:02:19.040 may be going as far as where I think we 0:02:19.120 --> 0:02:21.760 are with the spread of the pandemic UM, and I 0:02:21.760 --> 0:02:25.200 think by and large most of our country has done 0:02:25.240 --> 0:02:30.160 really well in physical distancing and masking and other other areas. 0:02:30.200 --> 0:02:33.200 I think we all know the challenges bringing our country 0:02:33.240 --> 0:02:36.720 together around this UM. I think we in healthcare are 0:02:36.760 --> 0:02:39.400 looking too early to mid June to see what the 0:02:39.440 --> 0:02:42.480 effects are of the opening up that we really saw 0:02:43.040 --> 0:02:47.480 this Memorial Day, because everything that we do today will 0:02:47.480 --> 0:02:50.520 show up two or three weeks later in our hospitals 0:02:50.880 --> 0:02:54.000 when people get sick and start coming in, and we're 0:02:54.000 --> 0:02:58.920 watching that closely, day by day. And so Dr roberts 0:02:58.880 --> 0:03:01.920 is care All said at the top, you know, you 0:03:01.960 --> 0:03:05.359 guys were the first to see cases here in the 0:03:05.480 --> 0:03:08.440 United States. What have you learned about treatment? What have 0:03:08.520 --> 0:03:12.720 you learned about this disease that may be useful to 0:03:13.440 --> 0:03:16.440 those of us who aren't, who weren't on the front 0:03:16.520 --> 0:03:20.400 end as much. Yeah, I think what we're seeing in 0:03:20.480 --> 0:03:24.800 the mass media is born out with us locally as well. 0:03:25.400 --> 0:03:28.840 We just this morning I had a discussion of the 0:03:28.960 --> 0:03:32.960 use of rim disavere, as you know, that's being released 0:03:33.240 --> 0:03:37.160 more and more through Gilead and UM. We believe we 0:03:37.200 --> 0:03:39.520 have enough doses on hand to treat all of our 0:03:39.520 --> 0:03:43.360 patients that we currently have. It's not a magic bullet. 0:03:43.720 --> 0:03:47.240 It doesn't preclude any of the things that we all 0:03:47.280 --> 0:03:51.320 need to do around masking and social distancing, but it 0:03:51.400 --> 0:03:54.280 does seem to at least lower the length of stay 0:03:54.320 --> 0:03:58.120 in our hospitals, and we are expecting more reports out soon. 0:03:58.240 --> 0:04:02.440 Hopefully that rim disavere will actually improve the mortality rates 0:04:02.880 --> 0:04:05.960 and decrease the number of deaths. But it's just one 0:04:06.080 --> 0:04:09.320 piece of a bigger story that continues to evolve week 0:04:09.360 --> 0:04:12.480 by week. And how soon will we really know the 0:04:12.960 --> 0:04:16.520 efficacy of ramdesevie. Is it weeks? Is it months? Like? 0:04:16.640 --> 0:04:20.760 What's the timeline there? I think, like I said, I 0:04:20.760 --> 0:04:25.479 think every week we see more science being released, more 0:04:25.520 --> 0:04:28.200 studies being completed. I think within the next two to 0:04:28.279 --> 0:04:32.400 three weeks we'll see more of the story around reseevere 0:04:32.720 --> 0:04:35.560 as well as other agents that are in the pipeline. 0:04:35.960 --> 0:04:41.400 Is a second wave a given? Yes, it is. I 0:04:41.440 --> 0:04:45.240 think there's we believe, there's no doubt that a second 0:04:45.240 --> 0:04:47.920 wave will come. We don't know when it will come, 0:04:48.760 --> 0:04:51.800 we don't know how big it will be, UM, but 0:04:51.839 --> 0:04:55.560 we we are certainly putting together plans inside of Providence 0:04:56.160 --> 0:04:59.680 to try to detect the second wave early and to 0:05:00.040 --> 0:05:03.480 here for it. As you know, in the nineteen eighteen 0:05:03.800 --> 0:05:06.520 flu pandemic, it was the second wave that was the 0:05:06.600 --> 0:05:10.000 big killer. Five times as many people died in the 0:05:10.040 --> 0:05:12.920 second wave as in the first wave. And so we're 0:05:12.920 --> 0:05:15.640 not out of the woods yet. We're in a breathing 0:05:15.720 --> 0:05:18.360 space where we can all get ready for the next wave. 0:05:18.680 --> 0:05:21.440 So what's the science behind that that a second wave 0:05:21.480 --> 0:05:24.440 is more deadly and would that necessarily be the case 0:05:25.200 --> 0:05:28.720 with this virus? Would We don't know. We are we're 0:05:28.720 --> 0:05:31.599 in a position of not knowing what the second wave 0:05:31.640 --> 0:05:35.080 will look like. UM. I wouldn't say why. I don't 0:05:35.080 --> 0:05:37.680 think any of us expect the second wave will be worse, 0:05:38.240 --> 0:05:41.720 but we have to prepare as if it could be worse. 0:05:42.240 --> 0:05:44.640 And that's Dr Joean Roberts to Quality officer over at 0:05:44.640 --> 0:05:49.120 Providence St. Joseph's Health and Carol, I really felt this way, 0:05:49.120 --> 0:05:51.400 and you and I were communicating via in some message 0:05:51.480 --> 0:05:53.719 right after we got done with this interview. This was 0:05:53.800 --> 0:05:57.239 the interview I needed this week to really understand where 0:05:57.279 --> 0:06:00.919 we are and where we're going. A reality check to 0:06:01.080 --> 0:06:05.599 some extent, some optimism, but certainly some realism too. Yeah. Absolutely, 0:06:05.600 --> 0:06:07.200 she took us to the steps. You need testing, you 0:06:07.240 --> 0:06:09.440 need therapies, and then ultimately need a vaccine. And one 0:06:09.440 --> 0:06:11.120 of the things that stayed with me, Jason is when 0:06:11.160 --> 0:06:13.120 we asked her, is a second wave a given? And 0:06:13.160 --> 0:06:16.000 she simply said, yes, I don't know when and don't 0:06:16.000 --> 0:06:18.200 know how big. And that explains some of the nervousness 0:06:18.240 --> 0:06:21.159 that continues to stay, certainly in our society, in the 0:06:21.240 --> 0:06:23.680 markets and in the business community at large. But I 0:06:23.720 --> 0:06:25.839 do always feel like I get everything that's going on 0:06:25.920 --> 0:06:27.880 when it comes to the virus. When she sits down 0:06:28.040 --> 0:06:31.400 and talks to us, we get it explained absolutely, and 0:06:31.480 --> 0:06:35.279 the optimism clearly is around our preparedness when it comes 0:06:35.279 --> 0:06:38.440 back around again. Coming up our conversation with Margaret Keene, 0:06:38.440 --> 0:06:40.880 she's the CEO of Synchrony Financial, really has some great 0:06:40.880 --> 0:06:44.279 insight on what consumers are up to. This is Bloomberg. 0:06:49.440 --> 0:06:53.480 This is Bloomberg Business Week from Bloomberg Radio. Hello, I'm 0:06:53.560 --> 0:06:56.000 Carol Masser and I'm Jason Kelly. Today we're bringing you 0:06:56.080 --> 0:06:58.680 some of the most important, we hope informative conversations we 0:06:58.760 --> 0:07:02.080 had on our daily Bloomberg Business Week radio show. And 0:07:02.080 --> 0:07:04.200 now let's get to our conversation with Margaret kench Is, 0:07:04.200 --> 0:07:07.720 the CEO of Synchrony Financial. I'd say going into the pandemic, 0:07:08.160 --> 0:07:11.000 the consumer was very strong. We were we were doing 0:07:11.040 --> 0:07:14.640 really well, sales were strong, payments were coming in. The 0:07:14.680 --> 0:07:18.000 consumer is really acting very responsibly, and we felt like 0:07:18.080 --> 0:07:20.760 we were going to have, you know, a great year. 0:07:21.400 --> 0:07:24.680 Um then the pandemic came along and obviously, you know, 0:07:24.720 --> 0:07:27.760 the initial onset of that really shut down most of 0:07:27.800 --> 0:07:31.440 the retail landscape. And you know, we saw our sales 0:07:31.480 --> 0:07:35.120 and we said this in our earnings down averaging about 0:07:35.240 --> 0:07:40.040 thirty two to thirty four percent UM. What we've seen 0:07:40.080 --> 0:07:43.800 since then, though, is definitely a bit of a comeback. 0:07:44.280 --> 0:07:47.720 Our sales are down there ten uh so certainly the 0:07:47.800 --> 0:07:53.000 consumer is um back out and shopping, and uh, you know, 0:07:53.040 --> 0:07:55.360 we're seeing it across the US. So it isn't even 0:07:55.400 --> 0:07:58.520 just in the states that I would say are completely open. 0:07:58.760 --> 0:08:02.920 It's it's as off the board. Well that's you know, 0:08:02.920 --> 0:08:05.320 we're going to pay closest attention to that. Yeah, I mean, 0:08:05.320 --> 0:08:07.880 because you know, it's interesting. We've been having so many conversations, 0:08:08.040 --> 0:08:10.000 certainly here at Bloomberg, you know that it feels like 0:08:10.040 --> 0:08:13.120 to some extent we're flying blind when it comes to 0:08:13.200 --> 0:08:17.160 the economy. We know the past data points looking backwards 0:08:17.200 --> 0:08:19.240 are not going to be good. We get that, right, 0:08:19.520 --> 0:08:22.880 but we are wondering about what kind of a bounce 0:08:22.920 --> 0:08:25.720 back do we get on the other side. So you're 0:08:25.760 --> 0:08:28.520 saying consumers are coming back, I mean, what kind of 0:08:28.560 --> 0:08:31.040 indications are you know, what are they spending? And and 0:08:31.480 --> 0:08:34.080 you said it's up about ten percent or what can 0:08:34.120 --> 0:08:37.559 you tell us in terms of well, it's down from 0:08:37.559 --> 0:08:40.319 where it was at the beginning, so we dropped ourselves. 0:08:40.440 --> 0:08:44.560 We're at about they dropped all thirty two is then 0:08:44.880 --> 0:08:47.800 they come back. Now they're down ten percent from what 0:08:47.840 --> 0:08:52.480 they were free pandemic, So that's a pretty big swing. Um. 0:08:52.559 --> 0:08:55.160 What I would say is, um, you know, it's the 0:08:55.280 --> 0:08:58.600 things we're reading about. You know, for instance, power sports, 0:08:58.800 --> 0:09:02.240 we're not big in power works, but how how sport 0:09:02.360 --> 0:09:05.440 sales are up a hundred percent, so people are buying 0:09:05.559 --> 0:09:08.480 things that they can play with at home us. And 0:09:08.520 --> 0:09:11.320 we're seeing things related to the home be very strong, 0:09:11.720 --> 0:09:16.160 whether that um home furnishings or or things that people 0:09:16.200 --> 0:09:18.280 are doing to fix up their home. So we're certainly 0:09:18.280 --> 0:09:22.760 seeing strengths there. Um. You know, we were talking about bicycles. 0:09:22.760 --> 0:09:27.120 Adult bicycles. You can't really get sold out. So it's 0:09:27.160 --> 0:09:29.720 really been I think what's happening with the conservative a 0:09:29.760 --> 0:09:32.360 couple of things. We we believe One is people have 0:09:32.440 --> 0:09:35.520 given up vacations. They're staying at home and finding stay 0:09:35.520 --> 0:09:37.319 at home so they're fixing up their homes and doing 0:09:37.360 --> 0:09:40.840 activities around the house with their children and their families. 0:09:41.240 --> 0:09:44.040 I think, uh, you know, we think that's a positive 0:09:44.120 --> 0:09:47.040 and and I think that's where consumers are spending. Obviously, 0:09:47.640 --> 0:09:50.280 you know, we have very strong online partners. We're definitely 0:09:50.280 --> 0:09:54.880 seeing online being a big part of that process as well. Um. 0:09:54.920 --> 0:09:57.320 But I you know, honestly, I think we're we're we're 0:09:57.720 --> 0:10:01.480 probably um, we're probably a bit more positive than we 0:10:01.520 --> 0:10:03.280 thought we were going to be at this point when 0:10:03.280 --> 0:10:06.120 we first started out here. Yeah, talk take a lot 0:10:06.120 --> 0:10:08.079 of stimulus out there, and that's something we've got to 0:10:08.120 --> 0:10:10.920 pay attention to. There's still a lot of stimulus, and 0:10:10.960 --> 0:10:13.120 I think what we've been saying is we've got to 0:10:13.160 --> 0:10:16.640 make it through this summer. See when that stimulus runs out, 0:10:16.679 --> 0:10:19.040 and then where do we where do we stand? And 0:10:19.559 --> 0:10:22.000 we probably want to have a good read until sir quarter. 0:10:23.000 --> 0:10:25.960 And So Margaret, when you think about the retail environment, 0:10:25.960 --> 0:10:28.800 obviously so many things have been shut down. You've had 0:10:28.880 --> 0:10:32.079 well known brands UH go bankrupt and you know, some 0:10:32.200 --> 0:10:35.880 may restructure, some may never come back. What's the net 0:10:35.920 --> 0:10:40.120 effect of that for basically sort of the world at large, 0:10:40.160 --> 0:10:43.680 but also for your business this shift to online where 0:10:43.679 --> 0:10:45.960 I know you're very active as well, But break that 0:10:46.000 --> 0:10:48.920 down for us if you can sure you know, I 0:10:48.920 --> 0:10:51.720 would say, look, retail has been going through a transformation 0:10:51.760 --> 0:10:54.480 requite a while. I think the pandemic and the fact 0:10:54.559 --> 0:10:57.840 that people have to shut their doors just accelerated some 0:10:57.960 --> 0:11:00.839 of what was going to happen over time. So we're 0:11:00.880 --> 0:11:03.280 seeing that, you know, in some of our partners as 0:11:03.320 --> 0:11:05.839 well as many other retailers that are not our partners. 0:11:05.880 --> 0:11:08.000 And I think what's happening is you're seeing retailers who 0:11:08.040 --> 0:11:12.040 are strong becoming even stronger. And I think that will continue. Um, 0:11:12.080 --> 0:11:13.960 you know, I do believe that there's been a lot 0:11:14.000 --> 0:11:17.560 of view that retail is dead. I do not believe 0:11:17.600 --> 0:11:20.240 retailer is dead. I think people like to shop. I 0:11:20.280 --> 0:11:22.520 think we will over retail, and I think the strong 0:11:22.559 --> 0:11:25.760 retailers will certainly survive this and probably be stronger in 0:11:25.760 --> 0:11:29.160 the end. I do think retail has to have a 0:11:29.200 --> 0:11:31.520 digital strategy as well. They need to be able to 0:11:32.160 --> 0:11:35.120 be where that customer is shopping. And I think from 0:11:35.120 --> 0:11:39.319 a customer behavior perspective, we certainly have seen a continued 0:11:39.360 --> 0:11:43.280 shift and an acceleration of people shopping digitally, and I 0:11:43.320 --> 0:11:45.280 think that will continue. So I think there are certain 0:11:45.320 --> 0:11:48.000 things that people may have never thought of buying online before, 0:11:48.040 --> 0:11:50.640 but of buying online and have not been comfortable with 0:11:50.720 --> 0:11:53.960 that through this process, and that's going to shift consumer behavior. 0:11:54.000 --> 0:11:57.199 I think going forward, what do you think people will 0:11:57.200 --> 0:12:00.280 still shop? People will still shop. Yeah, I agree. I 0:12:00.280 --> 0:12:02.959 think it's a social thing to some extent, and people 0:12:03.080 --> 0:12:06.800 enjoy actually going out and feeling merchandise. And I think, 0:12:06.880 --> 0:12:08.559 you know, maybe in New York it's going to take 0:12:08.679 --> 0:12:10.600 a little while to come back, but you know, until 0:12:10.600 --> 0:12:13.240 people feel safe safer. What are you seeing in terms 0:12:13.240 --> 0:12:17.120 of delinquencies and people's ability to actually pay their credit cards. 0:12:18.280 --> 0:12:20.240 So this is this is probably one of the more 0:12:20.320 --> 0:12:22.480 interesting things that we're trying to figure out. You know, 0:12:22.520 --> 0:12:27.680 constomers are paying that credit card. So about of the 0:12:27.720 --> 0:12:31.719 customers who initially put themselves into a deferred payment status 0:12:32.040 --> 0:12:34.480 have actually come out of that and are paying their accounts. 0:12:35.080 --> 0:12:38.520 So we actually are seeing good payments right now, which 0:12:38.559 --> 0:12:41.679 is another thing that I think has us a little 0:12:41.679 --> 0:12:44.600 bit a pause to understand. Why is that now? Is 0:12:44.640 --> 0:12:47.480 it the stimulus? Is it the fact that people aren't 0:12:47.520 --> 0:12:50.439 spending money elsewhere on discretionaries, so they're paying their credit 0:12:50.440 --> 0:12:53.920 cards and their their obligations. Um, you know, we have 0:12:53.960 --> 0:12:56.000 a lot of people who are receiving benefits, so is 0:12:56.040 --> 0:12:58.520 that helping. Probably all these things are helping, you know. 0:12:58.559 --> 0:13:00.640 The other is a big one is you know, people 0:13:00.679 --> 0:13:03.200 aren't driving, so gas privates are down even if they 0:13:03.200 --> 0:13:06.440 are driving, so there's extra dollars there. So right now, 0:13:07.400 --> 0:13:11.840 our our our performance in our books is good. We're 0:13:12.040 --> 0:13:15.120 very cautious on this though, because we still believe that, 0:13:15.760 --> 0:13:17.520 you know, we got to see how people come out 0:13:17.559 --> 0:13:20.840 of this after the stimulus runs out, and more importantly, 0:13:21.480 --> 0:13:24.640 what is the job market look like? How many people 0:13:24.679 --> 0:13:28.319 are still at work. I think we're still very clauseous 0:13:28.320 --> 0:13:31.520 on this particular area. And that's Margaret Keen, the CEO 0:13:31.520 --> 0:13:34.960 of Synchrony Financial. And as we said going into the conversation, Carol, 0:13:35.040 --> 0:13:37.840 you know, this is a company that really has an 0:13:37.920 --> 0:13:41.600 intimate window into how consumers are feeling, but also how 0:13:41.640 --> 0:13:44.360 retailers are faring. Amid all of this, we've seen a 0:13:44.480 --> 0:13:50.040 raft of bankruptcies, we've seen demand really EBB, and you 0:13:50.160 --> 0:13:53.480 do wonder what the window looks like going forward, right, 0:13:53.480 --> 0:13:55.960 and if stores more stores shut down and people don't 0:13:56.000 --> 0:13:58.160 have to use their cards and more things are done online, 0:13:58.160 --> 0:14:00.400 you do wonder what will be ultimately long term the 0:14:00.400 --> 0:14:03.480 impact on a company like Synchrony Financial. You're listening to 0:14:03.480 --> 0:14:06.240 Bloomberg this week, coming up a conversation on managing the 0:14:06.280 --> 0:14:10.640 wealth of athletes with Joe McClean, managing partner at Intersect Capital. 0:14:10.880 --> 0:14:21.320 This is Bloomberg. This is Bloomberg Business Week from Bloomberg Radio. 0:14:22.040 --> 0:14:23.640 So Jason will bring you some of the most important 0:14:23.680 --> 0:14:26.000 and informative conversations we had throughout the week on our 0:14:26.080 --> 0:14:28.400 daily radio show. And of course all of this happening 0:14:28.440 --> 0:14:31.560 in real time as news was happening around us. And 0:14:31.640 --> 0:14:35.560 that included conversations about the sports world, which we know 0:14:35.760 --> 0:14:39.560 it's very tricky getting that back to normal. Absolutely. Joe McClean, 0:14:39.600 --> 0:14:42.400 he's the managing partner over at Intersect Capital, and you 0:14:42.400 --> 0:14:44.560 hear Intersect Capital and you think, all right, what does 0:14:44.560 --> 0:14:47.280 this have to do with sports? A lot actually, because 0:14:47.680 --> 0:14:51.120 he is advising athletes on their money from the time 0:14:51.120 --> 0:14:54.040 that they signed their first contract. He has an amazing 0:14:54.040 --> 0:14:57.880 sort of roster of folks, but also a very methodical 0:14:57.960 --> 0:15:00.280 plan on how they should be thinking about their money. 0:15:00.480 --> 0:15:04.840 And in a world without sports, that's even trickier. Basketball is. 0:15:05.720 --> 0:15:08.120 I'm not as optimistic, although if you talk to the players, 0:15:08.160 --> 0:15:11.640 they're very optimistic. They have the best relationship with their commissioner, 0:15:11.680 --> 0:15:14.680 frankly um And and the commission has been very candid 0:15:15.400 --> 0:15:17.800 um but I know he's also been very cautious. You know, 0:15:18.480 --> 0:15:21.040 we have some players that are still sitting Americans that 0:15:21.080 --> 0:15:23.280 are sitting in China waiting for that league to start. 0:15:23.680 --> 0:15:26.520 And they've been there now for months. They've quarantined for 0:15:26.560 --> 0:15:28.920 two weeks, They've now been there for over two months. 0:15:29.200 --> 0:15:32.040 Every players in one city and they're still not ready 0:15:32.080 --> 0:15:35.520 to go. So I'm not saying China is a leading 0:15:35.560 --> 0:15:38.080 indicator of what the NBA can do in the States, 0:15:38.240 --> 0:15:40.800 but there's still no movement there, and it's tough to 0:15:40.800 --> 0:15:42.800 say that they'll be moving in the States until I 0:15:42.840 --> 0:15:46.320 see some positive momentum there. What about other sports? All right, 0:15:46.360 --> 0:15:48.320 so we talked about golf, you think first, you're not 0:15:48.360 --> 0:15:55.000 as optimistic about basketball. What else? So baseball, you know, 0:15:55.040 --> 0:15:58.240 they're they're installed with with the conversations they're trying to have, 0:15:58.440 --> 0:16:00.280 you know, it's they've already come out ob see this 0:16:00.360 --> 0:16:04.800 going to be a reduced schedule, um, which means reduced salaries. Um. 0:16:04.840 --> 0:16:08.480 They're still also fighting for some of the details like um, 0:16:08.520 --> 0:16:10.440 you know, in baseball, you really want to get your 0:16:10.440 --> 0:16:13.480 service time under your belt each year, and if they 0:16:13.480 --> 0:16:15.520 don't play a certain amount of games, they may not 0:16:15.600 --> 0:16:18.160 qualified for that. So the players want to make sure 0:16:18.280 --> 0:16:21.600 that all their rights are protected, um. Not just not 0:16:21.720 --> 0:16:24.640 just that it's safe to play, but that's also they're 0:16:24.680 --> 0:16:27.960 not giving in on anything they wouldn't give in a 0:16:28.000 --> 0:16:31.080 regular season. So I think baseball has has a good 0:16:31.120 --> 0:16:34.760 opportunity to come back, but it's not surely nothing in 0:16:34.800 --> 0:16:37.840 the summer, and and football, I think it's the same. 0:16:37.920 --> 0:16:40.360 You know, they've until each state starts opening up and 0:16:40.360 --> 0:16:43.520 giving um, you know, the players the opportunity to even train, 0:16:44.040 --> 0:16:46.840 let alone play. Um, I still don't see any in 0:16:46.880 --> 0:16:48.880 the summer there they they're they've already been told they 0:16:48.880 --> 0:16:54.160 can't take physicals until mid mid June, late June. So, um, 0:16:54.200 --> 0:16:56.280 it's gonna be a long way, long long wait for 0:16:56.320 --> 0:16:58.680 all of us. Well, so let's talk about baseball if 0:16:58.680 --> 0:17:00.680 we can for a second, because the economics there, I 0:17:00.680 --> 0:17:03.080 think are really interesting and this really plays, I think 0:17:03.160 --> 0:17:05.879 into a lot of what you talk about with with 0:17:05.960 --> 0:17:09.720 your clients. Um. And you know, I had a chance 0:17:09.720 --> 0:17:11.480 to catch up earlier in the week with Rachel Luba, 0:17:11.880 --> 0:17:15.320 who is the agent to Trevor Bauer, as you know, 0:17:15.640 --> 0:17:17.359 and you know, one of the things she said was 0:17:17.400 --> 0:17:20.520 that they are so far apart in in part because 0:17:20.960 --> 0:17:25.000 there's it feels like a fundamental disagreement on the economics 0:17:25.040 --> 0:17:28.280 and sort of who should kind of bear the burden 0:17:28.320 --> 0:17:30.680 of this? And I do wonder for someone who is 0:17:30.720 --> 0:17:35.520 advising UH baseball players and others about their their wealth, 0:17:35.680 --> 0:17:38.159 what you make of this argument between the owners and 0:17:38.200 --> 0:17:45.199 the players. Well, in my estimation, baseball has their players 0:17:45.240 --> 0:17:48.639 Association has always had one of the strongest, strongest teams 0:17:48.680 --> 0:17:51.639 in place for the players, um and and that has 0:17:51.720 --> 0:17:56.240 led to some incredible economics on behalf of the players. However, 0:17:56.400 --> 0:17:59.680 you know the problem now is there's some some athletes 0:17:59.720 --> 0:18:03.159 making million dollars a year and they're already seeing a 0:18:03.200 --> 0:18:06.120 ten million dollar pay cut. Nobody's feeling sorry for them, 0:18:06.200 --> 0:18:10.400 but um, there's gonna be a point where they've got 0:18:10.400 --> 0:18:13.439 to have some compromises where in the past they haven't UM. 0:18:13.520 --> 0:18:15.440 And then every once in a while the owners want 0:18:15.480 --> 0:18:18.040 to take out, you know, for a spin, the whole 0:18:18.080 --> 0:18:21.919 idea of of salary caps um, which obviously in baseball 0:18:21.960 --> 0:18:25.440 don't exist, they do exist in and other sports UM 0:18:25.520 --> 0:18:28.760 that the players have always fought against. So there's going 0:18:28.800 --> 0:18:31.399 to be a compromise, I think because they know how 0:18:31.440 --> 0:18:34.480 important it is to get the game out. Because in fairness, 0:18:34.480 --> 0:18:38.200 the television has been strong, um, but but the popularity 0:18:38.200 --> 0:18:40.280 hasn't been there. So you don't want them to go 0:18:40.320 --> 0:18:43.560 away for entire season, um, I don't think, because you'll 0:18:43.560 --> 0:18:45.960 lose a lot of momentum. And that's Joe mcclaim, managing 0:18:45.960 --> 0:18:48.720 partner at Interset Capital Love catching up with him because 0:18:48.720 --> 0:18:52.240 he does represent athletes across the spectrum. So many professional 0:18:52.240 --> 0:18:55.480 athletes on the sidelines, as it were, right now, really 0:18:55.520 --> 0:18:58.320 on the sidelines, not the ones they're used to, trying 0:18:58.359 --> 0:19:00.359 to get back to work, trying to figure out not 0:19:00.440 --> 0:19:05.280 just their health and safety, but their financial worth right now, Carol, 0:19:05.320 --> 0:19:06.840 I gotta say, Jason, one of the things that stuck 0:19:06.880 --> 0:19:08.560 with me was what he said about his players, that 0:19:08.640 --> 0:19:11.280 they were realizing all the cause and effect that they 0:19:11.320 --> 0:19:14.080 have on so many others by them not playing, you know, 0:19:14.160 --> 0:19:16.800 seeing that whole sports infrastructure that's impacted. And he said 0:19:16.800 --> 0:19:19.000 that some of them were giving up their income to 0:19:19.119 --> 0:19:22.120 help out some of those other folks that were also 0:19:22.160 --> 0:19:24.400 put out of work as a result of the virus. 0:19:24.440 --> 0:19:26.760 So I really that really just kind of stayed with me. 0:19:27.080 --> 0:19:29.320 All Right, you're listening to Bloomberg Business Week. Coming up, 0:19:29.359 --> 0:19:32.520 we talk online learning with sal Khan of Khan Academy. 0:19:32.960 --> 0:19:35.200 He has seen a surge as more than a billion 0:19:35.280 --> 0:19:38.760 children worldwide have been impacted by school closures because of 0:19:38.800 --> 0:19:42.440 COVID nineteen one. Interesting to hear from him what's temporary 0:19:42.440 --> 0:19:44.639 and what may be permanent in a world that we 0:19:44.720 --> 0:19:59.240 know is utterly changed. This is Bloomberg, This is Bloomberg 0:19:59.280 --> 0:20:03.320 Business Week from Bloomberg Radio. Well, today we're being you 0:20:03.359 --> 0:20:06.080 some of the most important and informative conversations Carol and 0:20:06.080 --> 0:20:09.160 I had this week on our daily Bloomberg Business Week 0:20:09.320 --> 0:20:11.719 radio show. And Jason, of course, we last caught up 0:20:11.840 --> 0:20:14.520 with him, meaning salth Cohn, when we were at the 0:20:14.520 --> 0:20:16.920 Harvard Business School. We were doing a live remote TV 0:20:17.000 --> 0:20:20.200 and radio. He has Harvard be School class of two 0:20:20.200 --> 0:20:23.479 thousand three. He's also, of course the founder of Khan Academy. 0:20:23.520 --> 0:20:26.080 It's a nonprofit that set out to provide a great 0:20:26.200 --> 0:20:28.919 education to all students around the world, and we know 0:20:29.119 --> 0:20:32.359 so many students have been impacted, understandably so because of 0:20:32.359 --> 0:20:35.200 the virus. So to catch up with him, find out 0:20:35.240 --> 0:20:37.879 what they've been doing to help those kids who are 0:20:37.880 --> 0:20:40.520 now at home learning from home, and also to find 0:20:40.520 --> 0:20:43.280 out how much of this stays with us longer term. 0:20:43.400 --> 0:20:45.760 We started seeing our traffic pick up in Asia even 0:20:45.760 --> 0:20:48.600 in January and February because of closures there, But then 0:20:48.720 --> 0:20:50.680 in March when you had the closures in the US 0:20:50.760 --> 0:20:53.119 and frankly the rest of the world. We've seen our 0:20:53.160 --> 0:20:55.640 traffic depending on the week, the two hundred fifty percent 0:20:55.720 --> 0:20:58.840 three percent of normal Uh, you know, we we were 0:20:58.880 --> 0:21:02.160 serving twenty millions students per month pre COVID. We're seeing 0:21:02.200 --> 0:21:04.159 the absolutely number of students go up about sixty year, 0:21:04.200 --> 0:21:07.679 seventy percent, and they're spending sixty s a more time 0:21:07.680 --> 0:21:10.919 per student. So on a daily basis, we had about 0:21:10.960 --> 0:21:14.000 thirty million minutes of learning per day and now we're 0:21:14.000 --> 0:21:16.680 seeing closer to eighty or nine million minutes of learning 0:21:16.720 --> 0:21:22.439 per day. Wow. Wow, that is remarkable. And what have 0:21:22.480 --> 0:21:25.439 you learned from looking at that? Are there's certain things 0:21:25.760 --> 0:21:28.520 that that people are especially focused on. I mean, I 0:21:28.560 --> 0:21:30.479 know most students, I mean they're having to do all 0:21:30.520 --> 0:21:33.600 their learning online. But but I wonder how as you go, 0:21:33.800 --> 0:21:35.679 as you go down into the data, what is it 0:21:35.720 --> 0:21:38.480 showing you. Yeah, you know, it's it's essentially everyone doubling 0:21:38.520 --> 0:21:40.960 down on what they were already doing on kind academy before, 0:21:41.520 --> 0:21:44.399 even before the crisis, about half of our usage was 0:21:44.440 --> 0:21:46.920 what we call teacher directed usage. This is teachers using 0:21:46.960 --> 0:21:49.120 it in a more formal way in their classroom, and 0:21:49.320 --> 0:21:51.840 it seems like that continues to be the case. We 0:21:51.920 --> 0:21:55.840 are most known for our depth and math where stas videos, 0:21:55.880 --> 0:21:58.399 but exercise was starting in even pre k all the 0:21:58.400 --> 0:22:01.480 way through college and so there's still a lot of 0:22:01.720 --> 0:22:03.520 heavy emphasis there, but we're seeing a lot of usage 0:22:03.520 --> 0:22:06.280 of our science content, English and language arts are early 0:22:06.359 --> 0:22:09.399 learning app with kind Academy kids, and some of our 0:22:09.440 --> 0:22:11.480 standardized test prep. We we have a partnership with a 0:22:11.520 --> 0:22:15.960 college board around the set as well. So we're what 0:22:16.040 --> 0:22:17.480 do you think is going to happen with that? Because 0:22:17.520 --> 0:22:20.640 you are increasingly seeing because of the virus, schools back 0:22:20.680 --> 0:22:22.680 off of students having to have those tests. But I 0:22:22.720 --> 0:22:25.199 do feel like there's been a trend away from that. 0:22:25.240 --> 0:22:28.040 Do you think that will ultimately pick up momentum oh 0:22:28.080 --> 0:22:33.000 around the whole testing optional or even not using the Yeah, yeah, 0:22:33.000 --> 0:22:35.720 it's it's it's an interesting phenomenon. And I've been talking 0:22:35.760 --> 0:22:38.000 to folks in the state here in California. I see 0:22:38.040 --> 0:22:40.679 both sides of the issue. People don't want people to 0:22:40.720 --> 0:22:44.159 index too heavily on one test. It causes anxiety. Not 0:22:44.280 --> 0:22:46.800 every student performs equally on you know, they're not an 0:22:46.800 --> 0:22:50.480 equal test taker. With that said, it's pretty clear that 0:22:51.280 --> 0:22:54.480 things like these standardized tests, in conjunction with other data 0:22:54.520 --> 0:22:58.320 points like grades and recommendations, do correlate pretty high with 0:22:59.040 --> 0:23:02.760 college readiness. And so when you take some of those 0:23:02.800 --> 0:23:04.639 things out, you do have to ask, well, what is 0:23:04.680 --> 0:23:07.040 going to replace it? A lot of people forget the history. 0:23:07.080 --> 0:23:10.600 The reason why the set was even created was because 0:23:10.840 --> 0:23:13.440 the hundred years ago it was so unequal. You have 0:23:13.480 --> 0:23:15.560 to essentially go to a famous school to get into 0:23:15.600 --> 0:23:18.320 a famous school. Uh. And then the SAT emerged and 0:23:18.320 --> 0:23:20.720 that then it became more of a meritocracy. So it 0:23:20.720 --> 0:23:24.560 has to be replaced with something else. One possibility is 0:23:25.080 --> 0:23:28.480 maybe things like Mastery on con Academy could be viewed 0:23:28.520 --> 0:23:31.280 as another of and I wouldn't use it viewed as 0:23:31.280 --> 0:23:33.480 a replacement, but it could be viewed as another way 0:23:33.480 --> 0:23:37.360 to understand student's readiness. And what's appealing about that. It's 0:23:37.359 --> 0:23:39.760 not just based on how you perform on one Saturday morning. 0:23:40.040 --> 0:23:42.160 You can always improve it, and just by the virtue 0:23:42.160 --> 0:23:45.320 of working on it, you're learning more. Talking about sort 0:23:45.359 --> 0:23:48.640 of the inequalities that the S A T and other 0:23:48.680 --> 0:23:52.720 standardized tests were meant to combat, and obviously that is 0:23:52.760 --> 0:23:55.600 a debate that will rage on for however long those 0:23:55.600 --> 0:23:58.720 tests exist. One of the other inequalities, it feels like 0:23:58.840 --> 0:24:02.679 this pandemic has laid there is around technology, and I 0:24:02.760 --> 0:24:06.040 wonder what you make of that and what you've learned 0:24:06.160 --> 0:24:08.680 and what we all should be taking away from this 0:24:08.800 --> 0:24:12.359 in terms of what sort of access students of all 0:24:12.440 --> 0:24:17.119 shapes and sizes and socioeconomic status need in order to 0:24:17.280 --> 0:24:20.639 really learn. Yeah, and I don't think I'm telling anything 0:24:20.680 --> 0:24:23.359 that's surprising to folks, But as we give to this 0:24:23.400 --> 0:24:25.600 COVID crisis, not just to keep learning on a platform 0:24:25.600 --> 0:24:28.560 like Academy, but frankly, let's just stay connected with franks, 0:24:28.600 --> 0:24:30.760 to stay conected with friends and family. It's it's been 0:24:30.760 --> 0:24:33.400 a lifeline for for most of us, and in many 0:24:33.520 --> 0:24:36.560 parts of the country, there's the population that does not 0:24:36.720 --> 0:24:40.560 have devices at home or reasonable internet access at home, 0:24:40.720 --> 0:24:42.960 and so that frankly has always been a problem. People 0:24:42.960 --> 0:24:45.159 have talked about the digital bide, and now with this 0:24:45.200 --> 0:24:48.440 whole state at home order and schools having to close physically, 0:24:48.600 --> 0:24:52.160 it's become that much worse. The silver lining, if there 0:24:52.280 --> 0:24:55.920 is one, is that, because it's become so urgent, you're 0:24:55.960 --> 0:25:00.159 seeing government, school districts, corporations take action like they were 0:25:00.200 --> 0:25:03.720 taken before. New York City public schools they distributed almost 0:25:03.720 --> 0:25:06.400 three thousand laptops in a matter of weeks. They got 0:25:06.560 --> 0:25:10.000 the local telecom carriers to get free internet access. Miami 0:25:10.080 --> 0:25:13.600 Dade did something similar in Las Vegas, Los Angeles. So 0:25:13.840 --> 0:25:16.640 one silver lining is because it's such a urgent need, 0:25:16.960 --> 0:25:19.480 a lot of the digital divide hopefully will get closed 0:25:19.480 --> 0:25:21.520 because there's a lot more motivation to do it. But 0:25:21.520 --> 0:25:24.320 obviously you need that access if you're able to tap 0:25:24.359 --> 0:25:27.920 into everything else like kon, Academy or anything else. Yeah, 0:25:27.960 --> 0:25:29.520 that's a good point because that's the thing we're trying 0:25:29.520 --> 0:25:31.280 to figure out to sell is you know how much 0:25:31.320 --> 0:25:33.720 stays with us? So I love to hear those stories, 0:25:34.160 --> 0:25:37.560 you know about free WiFi and the equipment being you know, 0:25:37.840 --> 0:25:40.520 distributed to those who didn't have it. How much of 0:25:40.520 --> 0:25:42.400 it do you think stays with us on the other 0:25:42.440 --> 0:25:46.320 side of it. I think it's gotta stay. I can't 0:25:46.359 --> 0:25:48.600 imagine a world where they've done it and then they 0:25:48.600 --> 0:25:50.760 have to take it back. You know. The heavy lifting, 0:25:50.760 --> 0:25:53.399 frankly has already been done. And every school district that 0:25:53.440 --> 0:25:55.960 we've always talked about, you know, we've always talked about 0:25:55.960 --> 0:25:58.760 the value of personalized learning, about students being able to 0:25:58.800 --> 0:26:01.000 learn in a way that's not bow by time or space, 0:26:01.119 --> 0:26:03.880 and and teachers will be able to understand data when 0:26:03.960 --> 0:26:06.399 kids are doing homework and things like that, and everyone 0:26:06.400 --> 0:26:08.399 intellectually agrees with it, But then they would say, but 0:26:08.640 --> 0:26:11.040 there's ten percent of the kids who don't have interactent homes. 0:26:11.080 --> 0:26:14.040 So we can't do this innovation for the entire classroom. 0:26:14.359 --> 0:26:16.880 And so now that there's been a will and a desire, 0:26:17.359 --> 0:26:20.480 uh and and an action taken to close the digital divide, 0:26:20.480 --> 0:26:23.480 I can't imagine that we'll go back on that. So, 0:26:23.480 --> 0:26:26.239 sal as you think about a world in which we are, 0:26:27.280 --> 0:26:30.280 you know, remain concerned about health and safety, and we're 0:26:30.280 --> 0:26:34.719 rethinking what school looks like. We know that there's some 0:26:34.760 --> 0:26:37.679 amount of online learning we can do. We think about 0:26:38.440 --> 0:26:41.600 hybrid situations where you know, maybe you have some kids 0:26:41.600 --> 0:26:45.240 in the classrooms, some kids remote learning. What's feasible I mean, 0:26:45.280 --> 0:26:47.520 knowing this world as well as you do, what is 0:26:47.560 --> 0:26:52.440 a feasible way that we can really integrate technology into 0:26:52.600 --> 0:26:54.560 some sort of you know, for lack of better terms, 0:26:54.600 --> 0:26:58.840 sort of hybrid solution. Yeah, it's pretty cure that this 0:26:58.960 --> 0:27:01.040 coming back to school's going to have to be hybrid 0:27:01.040 --> 0:27:03.119 in some way, shape or form. There's going to be 0:27:03.200 --> 0:27:06.040 kids whose families don't steel comfortable sending them. They might 0:27:06.320 --> 0:27:08.359 have health issues. That are family member. Might you know, 0:27:08.359 --> 0:27:10.680 they might have a senior their grandparents lives with them. 0:27:11.359 --> 0:27:14.600 And so I think school districts are and and colleges 0:27:14.600 --> 0:27:16.520 are really trying to figure out how do you do 0:27:16.560 --> 0:27:19.160 this in the world where some kids might be there, 0:27:19.160 --> 0:27:21.360 but then there's half the kids who are watching from home. 0:27:21.880 --> 0:27:24.520 So the reality is they're going they will have to 0:27:24.680 --> 0:27:27.679 lean more on what you can call asynchronous tools like 0:27:28.040 --> 0:27:30.240 academy where kids can learn at their own time and pace, 0:27:30.320 --> 0:27:33.680 and then teachers can monitor and then leverage video conferencing, 0:27:33.680 --> 0:27:37.560 whether room or Google meets or whatever. More uh, even 0:27:37.600 --> 0:27:39.439 when they are live with the students, because they're going 0:27:39.480 --> 0:27:41.960 to have some subset of the kids who aren't there, 0:27:42.359 --> 0:27:44.680 and when you when you lean more on these types 0:27:44.720 --> 0:27:46.720 of tools, you know, I've been I'm talking to a 0:27:46.760 --> 0:27:49.080 lot of teachers about this. It's always been the case 0:27:49.160 --> 0:27:52.520 that a lecture can be a little bit not engaging 0:27:52.560 --> 0:27:54.000 for a lot of students. And it's even more so 0:27:54.040 --> 0:27:55.919 if you're doing a video conference with your lecturing the 0:27:55.920 --> 0:27:58.080 whole time, that might as well be a video And 0:27:58.160 --> 0:28:00.239 so this is really pushing teachers in school to think 0:28:00.240 --> 0:28:02.280 about how do we make it much more interactive how 0:28:02.280 --> 0:28:04.200 do we pull those kids who are watching from home 0:28:04.520 --> 0:28:08.520 into the conversation and have them interact. So what role 0:28:08.600 --> 0:28:12.280 do you think online learning virtual learning will have ultimately 0:28:12.359 --> 0:28:15.200 on higher education. I know people already get degrees, but 0:28:15.280 --> 0:28:19.480 I'm thinking about those institutions where, you know, part of 0:28:19.520 --> 0:28:21.959 the experience, a big part of it is being on 0:28:22.040 --> 0:28:26.600 campus somewhere among other students. And I do wonder, especially 0:28:26.640 --> 0:28:30.320 as higher education has gotten so expensive, you know, whether 0:28:30.400 --> 0:28:32.720 or not there might be some kind of mix going 0:28:32.760 --> 0:28:36.679 on in the future. That's what I think too. I 0:28:36.680 --> 0:28:39.600 think this crisis has been a forced on bundling of 0:28:39.640 --> 0:28:43.200 what higher education offers. It offers essentially three things. It 0:28:43.240 --> 0:28:46.320 offers an education like you will learn of this set 0:28:46.320 --> 0:28:49.760 of skills. It offers socialization, being able to hang out 0:28:49.760 --> 0:28:51.840 in the plot and throw the frisbee, or go to 0:28:51.880 --> 0:28:54.040 parties on weekends, or hang out in the dorm and 0:28:54.280 --> 0:28:57.240 talk about your your life dreams with folks that you've 0:28:57.320 --> 0:29:00.240 you've met. And then it does credentially. And I think 0:29:01.680 --> 0:29:03.480 we've talked about in the past that this is the 0:29:03.520 --> 0:29:06.280 direction that we might go in anywhere regardless. But you're 0:29:06.320 --> 0:29:09.560 seeing record numbers of kids are deferring, you know, even 0:29:09.560 --> 0:29:12.640 to very prestigious universities because they're like, well, I really 0:29:12.760 --> 0:29:14.720 wanted to pay that tuition because I wanted to hang 0:29:14.720 --> 0:29:16.960 out with kids in the quad and have that experience. 0:29:17.440 --> 0:29:19.240 And and they're realizing that they can get some of 0:29:19.240 --> 0:29:22.600 the learning just find virtually on you know, virtual community 0:29:22.600 --> 0:29:25.320 college or on a mook or some other type of platform. 0:29:25.400 --> 0:29:27.520 So I think it's going to be really interesting. My 0:29:27.600 --> 0:29:30.400 gut sense is education as a whole. You might see 0:29:30.400 --> 0:29:32.920 a little bit of an unbundling where there will always 0:29:32.960 --> 0:29:36.760 be certain pieces that are happening on video conferencing virtually, 0:29:36.880 --> 0:29:40.360 especially for older students, college A students or adult learners, 0:29:40.600 --> 0:29:43.440 and then for those who want that in person experience, 0:29:43.480 --> 0:29:45.720 there's waste for them to get it. That's how can 0:29:45.840 --> 0:29:48.000 the founder of con Academy, and he s this is 0:29:48.000 --> 0:29:50.800 one of the world I feel like education and healthcare 0:29:51.080 --> 0:29:54.160 they have been slow to innovate. And I do think 0:29:54.480 --> 0:29:57.040 the impact of the world being shut down by the virus, 0:29:57.480 --> 0:29:59.280 we're going to see some big changes. And I do 0:29:59.360 --> 0:30:01.720 think that in foods, online learning well, and I dare 0:30:01.720 --> 0:30:03.680 say not to be overly glib, but you know, it's 0:30:03.680 --> 0:30:05.400 one thing to get a kick in the butt. This 0:30:05.480 --> 0:30:07.400 is a kick in the teeth in many ways for 0:30:07.720 --> 0:30:11.040 the world of education. And you do wonder the college 0:30:11.080 --> 0:30:13.880 presidents that you and I have talked to, the parents 0:30:13.960 --> 0:30:16.000 that we are that we talked to all the time. 0:30:16.040 --> 0:30:20.040 Everyone's thinking about it from K through college, how learning 0:30:20.320 --> 0:30:22.800 will be different. And that wraps up the first hour 0:30:22.880 --> 0:30:25.360 of the weekend edition of Bloomberg Business Week from Bloomberg Radio. 0:30:25.400 --> 0:30:27.640 I'm Jason Kelly and I'm Carol Mass are plenty coming 0:30:27.680 --> 0:30:29.240 up in our next hour, We're gonna hear about the 0:30:29.280 --> 0:30:33.920 future of digital fitness with Jason LeRose of Equinox Media. Man, 0:30:33.960 --> 0:30:37.680 they've been pivoting two more digital offerings of fitness for 0:30:37.720 --> 0:30:40.479 all of those who are at home well. And also, 0:30:40.720 --> 0:30:43.200 if you want to get out, you might not feel 0:30:43.240 --> 0:30:45.320 like getting on a commercial flight, and maybe you have 0:30:45.400 --> 0:30:47.880 the means to get on a private jet. Andrew Collins, 0:30:47.880 --> 0:30:50.959 he's the CEO of Cynthia Jets, certainly seeing a boost 0:30:50.960 --> 0:30:53.600 in his business and thinking about how it may be 0:30:53.760 --> 0:30:57.560 different going forward. And Nancy Spielberg Carol, Yeah, it's an 0:30:57.560 --> 0:30:59.760 interview we were really looking forward to. Yes, folks, you 0:30:59.800 --> 0:31:02.520 re ignize the name. It's the little sister of Steven. 0:31:03.080 --> 0:31:06.040 I gotta say, just talking about their growing up, what 0:31:06.120 --> 0:31:09.960 their parents did to really foster creativity and she and 0:31:10.000 --> 0:31:12.640 her siblings was really wonderful and also just getting her 0:31:12.680 --> 0:31:15.840 thoughts about how do we make films going forward. So 0:31:15.920 --> 0:31:19.600 a really wonderful conversation all that I had. This is Bloomberg. 0:31:24.480 --> 0:31:29.400 This is Bloomberg Business Week from Bloomberg Radio. Hello, I'm 0:31:29.440 --> 0:31:32.200 Carol Masser and I'm Jason Kelly. Today, well, we're bringing 0:31:32.200 --> 0:31:33.920 you some of the most important and we hope in 0:31:33.960 --> 0:31:37.560 formative conversations we had on our daily Bloomberg Business Week 0:31:37.720 --> 0:31:39.880 radio show. And just some of the conversations we had 0:31:39.920 --> 0:31:43.520 was with the Sentient Jet president CEO Andrew Collins. Now, understandably, 0:31:43.560 --> 0:31:46.400 demand just dropped off as soon as the world shut down, 0:31:46.480 --> 0:31:49.600 but now what they're seeing is demand come back and 0:31:49.680 --> 0:31:52.960 people who now view private aviation as a necessity rather 0:31:53.000 --> 0:31:55.920 than as a luxury. That's right. I love talking about 0:31:55.920 --> 0:31:58.480 flying private. Also, we always love talking about fitness and 0:31:58.520 --> 0:32:01.000 the movies. We heard about the fitting aside from Jason 0:32:01.080 --> 0:32:05.240 Rose over at Equinox and the movies from Nancy Spielberg. 0:32:05.320 --> 0:32:08.320 Yet you recognize the last name, Yeah, absolutely, and we 0:32:08.400 --> 0:32:10.680 know Jason that Whahwei was in the news once again 0:32:10.720 --> 0:32:14.240 this week at Canadian judge ruling that the company's CFO 0:32:14.400 --> 0:32:17.400 will have to stay under house arrest as our extradition 0:32:17.440 --> 0:32:21.080 hearing is continue. There's also, let's not forget the backdrop 0:32:21.280 --> 0:32:25.080 of once again increased tension between the United States and 0:32:25.160 --> 0:32:29.480 China over many many different matters, including China really stepping 0:32:29.560 --> 0:32:33.520 up its uh moves to really control Hong Kong. So 0:32:33.560 --> 0:32:35.680 with all that happening, Jason, we got a chance to 0:32:35.720 --> 0:32:40.160 catch up with Hahwei Technologies, usays Chief security Officer Andy 0:32:40.200 --> 0:32:45.440 Purty Well. The effort against Miss Mong, our chief financial officer, 0:32:45.560 --> 0:32:48.160 is part of the overall effort for the last couple 0:32:48.200 --> 0:32:50.880 of years by the US government to carpet bomb WAWE 0:32:51.680 --> 0:32:54.880 out of existence, and in terms of the impact on 0:32:55.000 --> 0:32:59.080 the company, the decision involving Miss Mong and the process 0:32:59.080 --> 0:33:03.560 for extraditional take quite a number of months, if not years, 0:33:04.280 --> 0:33:07.320 before there might be a actual trial in the Eastern 0:33:07.400 --> 0:33:09.240 District of New York. And we have great confidence in 0:33:09.240 --> 0:33:13.120 the legal systems of Canada and the US, so we 0:33:13.280 --> 0:33:15.600 feel like I shall be vindicated in the end. But 0:33:15.720 --> 0:33:19.640 right now, this this campaign against Wawei, the recent ramping 0:33:19.720 --> 0:33:24.040 up of pressure on American company's ability to sell to WAWI, 0:33:24.080 --> 0:33:26.960 even through international companies, is going to have a tremendous 0:33:27.000 --> 0:33:30.840 negative impact on American jobs. You know, it's interesting, you 0:33:30.880 --> 0:33:33.560 know that this is going on amid a week or 0:33:33.640 --> 0:33:37.800 two where we are seeing once again heightened tensions UH 0:33:37.840 --> 0:33:40.680 and back and forth between the head of the United States, 0:33:40.720 --> 0:33:43.959 President Trump and of course Chinese President Jen Ping. And 0:33:45.160 --> 0:33:47.520 what how do you see this? Uh? You know, you've 0:33:47.560 --> 0:33:50.080 got to run your business amid kind of all of 0:33:50.120 --> 0:33:52.240 this fury, and we're trying to figure out is that 0:33:52.320 --> 0:33:55.400 rhetoric or is it going to turn into actions that 0:33:55.520 --> 0:34:00.200 ultimately impact both China and the United States. Well, there's 0:34:00.200 --> 0:34:03.960 certainly been an impact on our company. The impact US 0:34:03.960 --> 0:34:06.800 about twelve million dollars last year, and we haven't been 0:34:06.800 --> 0:34:08.839 able to estimate what the impact would be this year. 0:34:08.880 --> 0:34:11.520 Of course, it's it's complicated by the U added factor 0:34:11.600 --> 0:34:14.759 of the pandemic, But you look at the overall situation, 0:34:14.800 --> 0:34:17.640 the geopolitical situation between China and the US is what 0:34:17.680 --> 0:34:21.160 we're talking about, and that's exacerbated now by the US 0:34:21.200 --> 0:34:25.800 presidential campaign. So the the the competition among President Trump 0:34:25.880 --> 0:34:30.719 and UH. A former Vice President Biden to out maneuver 0:34:30.840 --> 0:34:33.960 the other in terms of anti China rhetoric, kind of 0:34:33.960 --> 0:34:37.319 a new red scare kind of thing. UM indicates that 0:34:37.520 --> 0:34:40.279 this battle is going to go on at least through 0:34:40.320 --> 0:34:44.160 the election. And there doesn't seem to be rational discussion 0:34:44.160 --> 0:34:45.920 and people don't seem to care about the fact that 0:34:45.960 --> 0:34:47.960 American jobs are going to be lost as a result. 0:34:49.239 --> 0:34:52.600 And can you quantify, you know, the jobs piece of this. 0:34:53.120 --> 0:34:55.839 I understand that obviously things are complicated, but in terms 0:34:55.880 --> 0:34:58.040 of the pandemic, and it remains to be seen what 0:34:58.160 --> 0:35:01.400 the total economic impact is is. But help us understand. 0:35:01.480 --> 0:35:05.480 You know, you guys have several offices around the country here, 0:35:05.480 --> 0:35:08.320 what is it? Men? And and maybe help us understand 0:35:08.360 --> 0:35:11.279 sort of the one two punches that were of this 0:35:11.400 --> 0:35:15.719 action and this UH confrontation between the United States and 0:35:15.880 --> 0:35:19.160 China as well as the pandemic. It synthesized that for 0:35:19.239 --> 0:35:21.799 us if you can andy well in terms of within 0:35:21.840 --> 0:35:23.719 the US, we have two issues. We have the issue 0:35:23.760 --> 0:35:27.160 of whether or not Huawei can sell to American companies 0:35:27.560 --> 0:35:31.000 and right now we're serving parts of rural America. UH. 0:35:31.040 --> 0:35:33.440 And the other issue is the ability of American companies 0:35:33.560 --> 0:35:36.640 nearly three want to be able to sell to Wali. 0:35:36.719 --> 0:35:40.239 So in terms of our global revenues, which last year 0:35:40.320 --> 0:35:43.920 or despite all this, we're up about. Um, you know, 0:35:43.960 --> 0:35:48.759 we were impacted about twelve billion dollars. But the uh, 0:35:49.280 --> 0:35:53.680 the the annual amount that we procure from American companies 0:35:54.640 --> 0:35:58.080 is not just to serve our customers in America, it's 0:35:58.080 --> 0:36:00.359 our global market. At its height, we had a thirty 0:36:00.480 --> 0:36:03.839 or thirty two percent of all Walwi global components came 0:36:03.880 --> 0:36:07.440 from American companies and they're primarily in the semiconductor industry. 0:36:07.480 --> 0:36:09.600 And you can see in the last couple of months, Uh, 0:36:09.719 --> 0:36:11.320 they can speak for it a lot better than that 0:36:11.480 --> 0:36:16.840 I can that American UM semiconductor companies and their association's 0:36:16.880 --> 0:36:20.799 trade associations have basically been saying, look, the limitations on 0:36:20.840 --> 0:36:24.040 the ability of American companies to sell a Walway's averaging 0:36:24.040 --> 0:36:27.320 about twelve billion a year. That is estimated to be 0:36:27.320 --> 0:36:31.080 between forty and fifty thousand direct jobs, not to count 0:36:31.080 --> 0:36:33.680 the indirect jobs. And so the fact is, well, you know, 0:36:33.719 --> 0:36:36.880 we're fighting for our survival. Um, We're gonna be okay, 0:36:37.440 --> 0:36:39.480 and we would like to continue to buy from Amritan 0:36:39.520 --> 0:36:41.920 companies and buy as an American want to be able 0:36:41.960 --> 0:36:45.160 to see those jobs continue. If we have to, will 0:36:45.160 --> 0:36:47.160 go elsewhere, and then we won't come back and those 0:36:47.200 --> 0:36:50.560 American jobs will go away, and and that's not going 0:36:50.600 --> 0:36:53.239 to help America and the long term, it's not gonna 0:36:53.320 --> 0:36:55.239 hurt Walwi and that the strategy you talked about the 0:36:55.280 --> 0:36:58.080 bigger picture. The strategy is that the US wants to 0:36:58.160 --> 0:37:01.800 hurt walwih to hurt China because they are afraid of 0:37:01.840 --> 0:37:04.799 the rise of China economically and militarily. So so that's 0:37:04.880 --> 0:37:07.040 really at the heart of it. And so instead of 0:37:07.080 --> 0:37:12.279 promoting greater innovation technology by America, they're trying to hurt 0:37:12.280 --> 0:37:15.239 Wally and that's not going to help America visa the 0:37:15.360 --> 0:37:18.200 China in terms of a long term competition, which is 0:37:18.200 --> 0:37:21.880 which is very important. That's Wawei Technologies USA Chief security 0:37:21.880 --> 0:37:24.520 Officer Andy Purty and Jason We've talked to him several 0:37:24.560 --> 0:37:27.280 times over the last couple of years, and at many 0:37:27.320 --> 0:37:30.560 times it was with the backdrop of increased tensions between 0:37:30.560 --> 0:37:32.800 the United States and China. And here we were again, 0:37:33.120 --> 0:37:36.279 well in this company in many ways, and technology and 0:37:36.320 --> 0:37:41.520 intellectual property and national security, they all collide. They all 0:37:41.600 --> 0:37:44.640 sit at this nexus, and it's such an important thing 0:37:44.680 --> 0:37:48.240 to understand as we try to find a way forward 0:37:48.400 --> 0:37:51.319 with China. All right, you're listening to Bloomberg Business Week. 0:37:51.360 --> 0:37:54.320 Coming up, Jason LeRose of Equinox Media on the pivot 0:37:54.360 --> 0:37:57.640 to digital fitness and now how the virus is changing 0:37:57.760 --> 0:38:00.000 all of us when it comes to our overall health. 0:38:00.280 --> 0:38:09.520 This is Bloomberg. This is Bloomberg Business Week from Bloomberg Radio. 0:38:10.560 --> 0:38:13.319 We're bringing you some of the most important and informative conversations. 0:38:13.360 --> 0:38:16.360 Interesting conversations we had throughout the week on our daily 0:38:16.480 --> 0:38:19.799 radio show. There were so many, Jason, absolutely, and we 0:38:19.880 --> 0:38:23.040 love talking about fitness for sure. We also know that 0:38:23.040 --> 0:38:27.719 that business has changed dramatically. Boutiques are closed, big box 0:38:27.760 --> 0:38:30.080 gyms are closed for the most part as well. So 0:38:30.320 --> 0:38:32.680 how are people working out? Well, they're doing it, as 0:38:32.719 --> 0:38:35.480 they say on the line. We caught up with Jason LeRose. 0:38:35.560 --> 0:38:38.680 He's the CEO of Equinox Media. They've got a new 0:38:38.719 --> 0:38:42.600 app and they're learning a lot about their customers. What's interesting, though, 0:38:42.640 --> 0:38:45.000 is we started on this journey, you know, more than 0:38:45.040 --> 0:38:47.280 a year ago, and we started on the journey because 0:38:47.320 --> 0:38:51.439 we knew the squeezing fitness in doesn't always work into 0:38:51.440 --> 0:38:53.719 a busy schedule. We knew that there were lots of 0:38:53.760 --> 0:38:58.000 reasons that our members, particularly Equinox, couldn't always make it 0:38:58.040 --> 0:39:00.359 to a club. Um, while we had a on list 0:39:00.400 --> 0:39:02.800 and we were talking with them, we we never anticipated 0:39:03.080 --> 0:39:05.960 a year ago that the list would include pandemic. So 0:39:06.000 --> 0:39:08.799 now we're seeing, you know, more demand than ever for 0:39:08.880 --> 0:39:12.480 people trying to continue their fitness regimens while they're you know, 0:39:12.520 --> 0:39:15.279 while they're at home, and we've been been rolling out 0:39:15.280 --> 0:39:18.080 really quickly to try to meet those demands because you know, 0:39:18.120 --> 0:39:21.080 our members certainly have been been raised in their hand 0:39:21.160 --> 0:39:23.279 looking for looking for an opportunity to keep it going. 0:39:23.480 --> 0:39:26.160 Tell us about what you guys were doing pre COVID 0:39:26.239 --> 0:39:29.359 nineteen and what you are doing now, I'm sure. So 0:39:29.800 --> 0:39:33.200 the vision here has always been to build something that's 0:39:33.280 --> 0:39:37.200 multi brand, it's multimodality, and something that's in real life 0:39:37.200 --> 0:39:40.640 and on demand altogether. Um, we believe that there there 0:39:40.719 --> 0:39:42.560 was space for it, and there wasn't anyone who was 0:39:42.600 --> 0:39:45.640 able to deliver that in the marketplace. So what we 0:39:45.680 --> 0:39:47.680 had done is, you know, partnered with some of the 0:39:47.800 --> 0:39:51.080 very best brands in the fitness space, like Soul Cycle, 0:39:51.160 --> 0:39:55.040 like Equinox, to bring great experiences on demand. You know, 0:39:55.120 --> 0:39:57.440 it's it's great to find those experiences when you make 0:39:57.480 --> 0:40:00.560 it in real life. What's challenging sometimes is then when 0:40:00.560 --> 0:40:03.319 you when you get home, sometimes that content can be 0:40:04.080 --> 0:40:08.200 a little little more underwhelming. And so we worked really hard, uh, 0:40:08.239 --> 0:40:10.319 you know, to build our own production facility and to 0:40:10.440 --> 0:40:13.200 bring the best of those brands in real life to 0:40:13.280 --> 0:40:16.879 an on demand experience that continues to be true. Um. 0:40:16.920 --> 0:40:19.879 You know, we spent a year building it, building the technology, 0:40:19.920 --> 0:40:23.960 building the television studio, building the library. What's changed is really, 0:40:24.160 --> 0:40:26.160 you know, the pandemic has put us in a position 0:40:26.200 --> 0:40:29.799 where we've needed to support our members faster, and so 0:40:29.920 --> 0:40:32.759 we've worked really hard to get out to a much 0:40:32.880 --> 0:40:36.439 larger audience faster than we anticipated. And and while we 0:40:36.440 --> 0:40:38.760 we've always been talking with our members, it's been interesting 0:40:38.800 --> 0:40:41.160 to see how their workouts have changed in this kind 0:40:41.160 --> 0:40:43.440 of a world versus you know, a time when there 0:40:43.440 --> 0:40:45.759 was a little bit more freedom. So how had their 0:40:45.800 --> 0:40:48.520 workouts changed? And I do wonder because you can see 0:40:48.840 --> 0:40:51.359 kind of what they're using, how long they're using it for. 0:40:51.480 --> 0:40:54.640 Are their patterns emerging, Jason in terms of what they 0:40:54.719 --> 0:40:59.080 like more or less or in greater quantities during this 0:40:59.160 --> 0:41:03.680 time than may be they would like during a non pandemic. Yeah, 0:41:03.719 --> 0:41:06.399 you know, there really have been some interesting things I think, 0:41:06.600 --> 0:41:08.400 you know. The first one that stood out for me, 0:41:08.440 --> 0:41:10.240 and this is, you know, this has been a personal 0:41:10.280 --> 0:41:12.399 part of the journey as well, is is how big 0:41:12.440 --> 0:41:17.520 meditation has been, uh, you know, the mental uh side 0:41:17.560 --> 0:41:20.520 of this, um, you know, just the need for mindfulness 0:41:20.840 --> 0:41:23.640 has probably been been brought to the forefront for many 0:41:23.680 --> 0:41:27.120 of us. And so we're seeing amazing completion rates on 0:41:27.160 --> 0:41:30.400 our meditation classes overall, and it's been super popular and 0:41:30.400 --> 0:41:32.520 and even for me, it's become part of my regimen, 0:41:32.640 --> 0:41:35.279 so you know, that's been a piece of it. The 0:41:35.360 --> 0:41:37.799 second thing is we're seeing a lot more body weight 0:41:37.880 --> 0:41:41.000 exercises than we anticipated. Of course, you know, we we 0:41:41.080 --> 0:41:43.120 thought we would be in a world where our members 0:41:43.160 --> 0:41:46.279 would be, you know, using access that they have to 0:41:46.320 --> 0:41:49.920 the clubs along with brus to to provide a complimentary 0:41:49.960 --> 0:41:52.680 experience when they're when they're in their apartments or their 0:41:52.719 --> 0:41:54.840 homes and they may not have as much access to equipment. 0:41:54.840 --> 0:41:58.000 We're seeing more more and more body weight in there. Um. 0:41:58.239 --> 0:42:01.640 But it's interesting for us also seeing how many double workouts. 0:42:01.640 --> 0:42:05.480 We've seen you know, people putting shorter time frames together, 0:42:05.560 --> 0:42:08.160 maybe a twenty minute workout together with a forty five 0:42:08.200 --> 0:42:11.520 minute workout and just going back to back, which um, 0:42:11.719 --> 0:42:14.440 you know, we we didn't necessarily anticipate, but watching some 0:42:14.520 --> 0:42:17.800 of that that behavior has been, uh, has been cool. 0:42:18.000 --> 0:42:20.759 And then lastly, you know, running has probably shocked us. 0:42:20.800 --> 0:42:23.960 Of course, running is a huge modality and people excited 0:42:24.000 --> 0:42:26.800 about it. Um, you know, we started Precision Run is 0:42:26.840 --> 0:42:30.040 a wonderful brand with the studio down on twenty one Street. 0:42:30.360 --> 0:42:33.840 That's a treadmill based, science backed running running class and 0:42:33.840 --> 0:42:37.080 it's a really cool place. Um, people have been dying 0:42:37.080 --> 0:42:40.080 for outdoor runs. You know, left access to treadmills, and 0:42:40.120 --> 0:42:41.719 people just want to get out if they're in a 0:42:41.760 --> 0:42:44.200 place where they can do that safely. And so our 0:42:44.280 --> 0:42:47.520 outdoor runs, as we've been testing, those have been incredibly 0:42:47.560 --> 0:42:50.040 strong and and so all those things have been just 0:42:50.120 --> 0:42:52.640 a little different in this world than we anticipated up front. 0:42:52.680 --> 0:42:55.120 You know, Jason, I am curious how many of the 0:42:55.120 --> 0:42:59.960 people that you think are actively engaging with you online 0:43:00.120 --> 0:43:03.279 right now stay there as they come back also to 0:43:03.680 --> 0:43:07.160 physical locations, Well, Carol, I definitely agree. Is going to 0:43:07.239 --> 0:43:09.520 be both you know, digital and physical world. And I 0:43:09.600 --> 0:43:14.280 certainly believe that pre pandemic, we had of the members 0:43:14.280 --> 0:43:17.759 at Equinox who had some form of digital fitness app 0:43:17.800 --> 0:43:20.480 on their phones already, so they were living in a 0:43:20.560 --> 0:43:23.240 digital and physical world, and they were using that digital 0:43:23.280 --> 0:43:25.680 to augment the times that they couldn't make it to 0:43:25.719 --> 0:43:27.879 a claub or to a studio or something else. So 0:43:28.160 --> 0:43:31.279 I think that will remain. What I hope is is 0:43:31.320 --> 0:43:34.799 that this newfound focus or maybe maybe continued focus on 0:43:35.239 --> 0:43:38.200 health and well being means that we'll all get into 0:43:38.200 --> 0:43:40.879 some healthier habits over this time and that those things 0:43:40.880 --> 0:43:42.919 will stay with us. But certainly we saw that mix 0:43:42.960 --> 0:43:46.080 of of physical and digital beforehand we expected to continue. 0:43:46.400 --> 0:43:48.160 You know, Jason, I wanted to ask you sort of 0:43:48.200 --> 0:43:51.960 about this mega trend toward a healthier life, because before 0:43:51.960 --> 0:43:55.040 you got into this gig uh, you ran a big 0:43:55.120 --> 0:43:58.000 chunk of under armour as president of North America, and 0:43:58.160 --> 0:44:00.160 you know that was a place where you guys, we're 0:44:00.160 --> 0:44:02.520 also thinking about sort of the physical and the digital 0:44:03.320 --> 0:44:05.719 map my run you sort of integrating all of that 0:44:05.880 --> 0:44:10.080 in and and I do wonder whether this is a 0:44:10.120 --> 0:44:13.759 trend in your estimation that was happening, and that this 0:44:13.840 --> 0:44:19.000 epidemic or pandemic has sort of accelerated, has it changed it? 0:44:19.080 --> 0:44:21.400 Like what what? What are the sort of contours because 0:44:21.440 --> 0:44:23.319 this is something you've been watching for a couple of 0:44:23.320 --> 0:44:26.320 decades now, Yeah, I mean, look, I think it's definitely 0:44:26.360 --> 0:44:29.120 an accelerant. I don't think that there's much question that 0:44:29.600 --> 0:44:31.759 this is changing all of us a bit in terms 0:44:31.840 --> 0:44:35.160 of what our our overall habits look like. But the 0:44:35.200 --> 0:44:38.440 need for time has been going on for a lot 0:44:38.480 --> 0:44:40.799 longer than the last couple of months. You know, we've 0:44:40.840 --> 0:44:44.160 all we've all struggled for that currency no matter what. 0:44:44.320 --> 0:44:47.319 And what we find is the more healthy you want 0:44:47.320 --> 0:44:50.040 to be, the busier you maybe also and so time 0:44:50.360 --> 0:44:53.400 it becomes even harder to find, and investing it in 0:44:53.480 --> 0:44:56.640 these things, um, you know, from a digital standpoint just 0:44:56.680 --> 0:44:59.000 gives you a little bit more freedom for those days 0:44:59.000 --> 0:45:02.359 that worked novel or a sick child or or you know, 0:45:02.440 --> 0:45:04.520 just a long day or whatever it might be gets 0:45:04.520 --> 0:45:06.920 in the way. And so we we always have seen 0:45:07.480 --> 0:45:10.640 digital being you know, uh an and solution and not 0:45:10.760 --> 0:45:13.960 an OAR solution. Um. But but we've we've watched how 0:45:14.000 --> 0:45:15.880 that's progressed, and I think for us, you know, we 0:45:15.960 --> 0:45:17.759 certainly happened to be at a moment where we can 0:45:17.840 --> 0:45:20.680 help more of our members and writers than we thought, uh, 0:45:20.840 --> 0:45:22.960 you know, in Mayo of two thousand and twenty. So 0:45:23.239 --> 0:45:25.719 we're fortunate for that. And that's Jason LeRose, CEO of 0:45:25.719 --> 0:45:28.640 Equinox Media Carol and we both love fitness. We love 0:45:28.680 --> 0:45:32.680 catching up with entrepreneurs and managers in this space. We 0:45:32.719 --> 0:45:35.640 know the world of fitness has changed dramatically. I think 0:45:35.640 --> 0:45:38.040 the big question which Jason really spoke to is what 0:45:38.120 --> 0:45:39.880 does it look like going forward now that we have 0:45:40.040 --> 0:45:43.600 this new channel of source, this new way of working 0:45:43.600 --> 0:45:45.600 out well, and he answered it right. He said he 0:45:45.680 --> 0:45:48.520 expects digital as an and solution rather than an or. 0:45:48.600 --> 0:45:50.200 And I do wonder about that. I love going to 0:45:50.239 --> 0:45:52.360 studios to work out, but I also have loved the 0:45:52.360 --> 0:45:55.759 convenience of being able to open up something online and 0:45:55.800 --> 0:45:57.880 just do it, you know, in my home, and it 0:45:58.000 --> 0:46:00.880 be so convenient. So we'll see how much that sticks around. 0:46:01.040 --> 0:46:03.239 All right, you're listening to Bloomberg Business. We're coming up 0:46:03.320 --> 0:46:07.040 how the coronavirus is transforming the world of private aviation, 0:46:07.280 --> 0:46:17.319 calling all private jets. This is Bloomberg, this is Bloomberg 0:46:17.360 --> 0:46:20.840 Business Week from Bloomberg Radio. Today, we're bringing some of 0:46:20.840 --> 0:46:23.840 the most important, we hope informative conversations we had on 0:46:23.880 --> 0:46:27.200 our daily Bloomberg Business Week radio show. And one of 0:46:27.200 --> 0:46:30.520 those conversations Jason was with Andrew Collins. He's the presidency 0:46:30.600 --> 0:46:34.799 of sentiate Jet, and you know, they understandably initially saw 0:46:34.920 --> 0:46:38.040 drops in service and demand, but now it is back 0:46:38.120 --> 0:46:42.200 and it's got some interesting new trend lines we are seeing, uh, 0:46:42.360 --> 0:46:45.760 you know, from a business standpoint, you know, I think 0:46:45.920 --> 0:46:48.960 a very interesting time. We saw the reaction to the 0:46:49.000 --> 0:46:51.880 pandemic in late March, where we saw a lot of 0:46:51.880 --> 0:46:56.560 our flying volume drop. Uh initially, and I can tell 0:46:56.560 --> 0:46:59.839 you that walking into April, it originally looked like we 0:46:59.840 --> 0:47:02.560 were probably about ten per of what our volume projects 0:47:02.600 --> 0:47:04.960 to be and so that would have been about a 0:47:05.000 --> 0:47:07.240 hundred legs, and I mean it was an absolute low point. 0:47:07.640 --> 0:47:11.279 But rapidly we started to see people that started to 0:47:11.320 --> 0:47:14.480 think about private jets a little bit different. And honestly, 0:47:14.520 --> 0:47:17.680 I'm seeing people behave you know, usually this is more 0:47:17.719 --> 0:47:22.320 about a lifestyle or business productivity tool, but it's almost 0:47:22.320 --> 0:47:25.920 migrated over to a utility during this time. And uh, 0:47:26.160 --> 0:47:29.120 what we're seeing are people that want to control their environment. 0:47:29.239 --> 0:47:32.160 They want to control how many touch points you know, 0:47:32.200 --> 0:47:35.359 they're exposed to. And so because of that, we're seeing 0:47:35.400 --> 0:47:38.120 a lot of new entrants, and our volume has come 0:47:38.160 --> 0:47:41.879 back gangbusters in May. And you know, I could tell 0:47:41.920 --> 0:47:44.799 you it's a reaction to the pandemic, but I tend 0:47:44.840 --> 0:47:48.280 to think that we're probably going to see a whole 0:47:48.320 --> 0:47:51.440 set of new entrants to flying privately based on this, 0:47:52.560 --> 0:47:55.560 And so andrews you as you think about this, and 0:47:55.600 --> 0:47:59.240 you put it in the context of previous crises, both 0:47:59.320 --> 0:48:03.840 financial and and otherwise, And obviously nine eleven is the 0:48:03.840 --> 0:48:06.880 comparison that so many people make in terms of the 0:48:07.440 --> 0:48:11.239 scope of this, and obviously two very different tragedies in 0:48:11.280 --> 0:48:14.319 a way. But obviously that was probably the last time 0:48:14.360 --> 0:48:17.560 we saw travel just effectively go away for some period 0:48:17.600 --> 0:48:21.960 of time, although shorter uh in duration than you know, 0:48:22.040 --> 0:48:25.840 how do you think about the future of travel overall? It, 0:48:26.040 --> 0:48:30.879 especially the future of air travel. So I think that 0:48:31.480 --> 0:48:35.600 air travel has changed forever. Um. I think that the 0:48:35.640 --> 0:48:39.439 way that we think about commercial airlines, you know, last year, 0:48:39.480 --> 0:48:41.520 I think two and a half million people a day 0:48:41.560 --> 0:48:44.080 would process to the t s A and commercial airlines 0:48:44.440 --> 0:48:47.319 in April it was somewhere around nine hundred thousand. So 0:48:48.000 --> 0:48:50.520 it's an industry that's been impacted, and I'm sure you've 0:48:50.520 --> 0:48:52.920 talked about it so much, and it's one that is 0:48:52.960 --> 0:48:56.480 so capital intensive that it feels like it's a tough 0:48:56.560 --> 0:49:01.120 model to pursue moving forward. I think really truly this 0:49:01.200 --> 0:49:04.960 notion of control, this notion of a limited environment. I 0:49:05.000 --> 0:49:07.600 don't know that that's the long term, but I certainly 0:49:07.920 --> 0:49:12.160 see in the you know, the next twelve to eighteen months, UM, 0:49:12.800 --> 0:49:17.040 really a focus on making sure people are are at 0:49:17.080 --> 0:49:20.680 their least kind of exposed to crowds. UM. As far 0:49:20.719 --> 0:49:24.040 as the crisis goes, you mentioned nine eleven. Nine eleven 0:49:24.120 --> 0:49:26.759 is actually when our business started to really, uh to 0:49:27.200 --> 0:49:31.600 kind of shine unfortunately UM from the incident. But commercial 0:49:31.640 --> 0:49:33.880 was only down for a little bit. It was also 0:49:33.960 --> 0:49:37.400 here for the financial crisis, and in the financial crisis 0:49:37.800 --> 0:49:41.360 a lot of the segment disappeared. This is very different 0:49:41.560 --> 0:49:43.920 in private. You know, not only did you have a 0:49:44.000 --> 0:49:47.440 high capital overhang coming in and a robust stock market, 0:49:47.760 --> 0:49:50.799 but we were in Q one seeing record flying. So 0:49:50.920 --> 0:49:54.200 I think the exposure was significant. And I would just 0:49:54.239 --> 0:49:57.680 simply say that as I watch kind of this, this 0:49:57.760 --> 0:50:01.719 whole volume increase in our business. It just tells me 0:50:02.120 --> 0:50:06.759 that people are probably going to consider private, whether that's aviation, 0:50:06.800 --> 0:50:10.560 whether that's a villa, whether that's some form of you know, 0:50:10.800 --> 0:50:13.879 a limited exposure environment. I think that's where we are 0:50:13.920 --> 0:50:15.760 for a little bit. Well that's thought. I was curious 0:50:15.760 --> 0:50:17.640 when you talk about the new entrance. Is it folks 0:50:17.640 --> 0:50:19.440 who are trying to go on vacation because they need 0:50:19.440 --> 0:50:22.400 a break? Uh? Is it folks who need to go 0:50:22.600 --> 0:50:25.000 is it business folks? Who is it that that's coming up? 0:50:25.040 --> 0:50:26.800 And we've just got about forty five seconds here and 0:50:26.800 --> 0:50:29.280 then we'll come back and talk some more, no problem. 0:50:29.320 --> 0:50:33.160 Probably about three thousand flying hours this month, if not more, 0:50:33.680 --> 0:50:36.520 and about three quarters of it is personal, whether it's 0:50:36.520 --> 0:50:39.520 shelter to shelter, or it's just change of scenery. But 0:50:39.560 --> 0:50:41.359 I think some of it's reactive and some of it 0:50:41.440 --> 0:50:44.280 is people that are moving on a personal level. Business 0:50:44.320 --> 0:50:46.600 is slowly coming back, but not nearly where we would 0:50:46.640 --> 0:50:50.320 normally see it. That's Sentient Jet President CEO Andrew Collins. 0:50:50.480 --> 0:50:52.880 And you know what's interesting, I thought Jason one of 0:50:52.880 --> 0:50:55.640 the things he said and he talked to about how 0:50:55.719 --> 0:50:58.560 they are different from you know, the big major airlines, 0:50:58.600 --> 0:51:01.759 and he said commercial airlines have something like seven touch points, right, 0:51:01.800 --> 0:51:04.080 so they need to think about how many people are 0:51:04.120 --> 0:51:08.479 involved and what that means for passenger safety. He says 0:51:08.480 --> 0:51:10.879 they've got about twenty or thirty touch points. So he goes, 0:51:10.920 --> 0:51:13.360 we already have a big advantage to start from a 0:51:13.640 --> 0:51:16.440 much better point when it comes to reopening and getting 0:51:16.440 --> 0:51:19.799 people back flying well. And you do wonder, right if 0:51:20.320 --> 0:51:22.480 especially and this is at the high end, of course, 0:51:22.520 --> 0:51:25.600 but if people are traveling less, do their budgets get 0:51:25.640 --> 0:51:28.480 a little bigger per trip? And certainly for businesses and 0:51:28.560 --> 0:51:31.759 maybe even for personal travel, is this something that people 0:51:31.840 --> 0:51:34.520 start to spend more on. You're listening to Bloomberg this week. 0:51:34.560 --> 0:51:38.480 Coming up filmmaker at Nancy Spielberg. Yep, she's Steven's little sister. 0:51:38.840 --> 0:51:41.040 She tells us about the impact of the virus on 0:51:41.120 --> 0:51:44.200 Hollywood and like our big brother, she's a storyteller at heart. 0:51:44.400 --> 0:51:57.080 This is Bloomberg. This is Bloomberg Business Week from Bloomberg Radio. 0:51:57.600 --> 0:51:59.160 Today we're bringing you some of the most important, we 0:51:59.200 --> 0:52:03.000 hope informative reversations we had on our daily Bloomberg Business 0:52:03.000 --> 0:52:06.239 Week radio show and one of those conversations, Jason was 0:52:06.239 --> 0:52:10.120 with Andrew Collins, he's the presidency of sentiate Jet, and 0:52:10.400 --> 0:52:14.360 you know, they understandably initially saw drops in service and demand, 0:52:14.400 --> 0:52:17.040 but now it is back and it's got some interesting 0:52:17.080 --> 0:52:20.480 new trend lines we are seeing, uh, you know, from 0:52:20.480 --> 0:52:24.760 a business standpoint, you know, I think a very interesting time. 0:52:24.800 --> 0:52:28.160 We saw the reaction to the pandemic in late March, 0:52:28.239 --> 0:52:30.800 where we saw a lot of our flying volume drop. 0:52:31.600 --> 0:52:35.600 Uh initially, and I can tell you that walking into April, 0:52:36.280 --> 0:52:38.880 it originally looked like we were probably about ten percent 0:52:38.960 --> 0:52:41.920 of what our volume projects to be and so that 0:52:41.920 --> 0:52:43.600 would have been about a hundred legs, and I mean 0:52:43.600 --> 0:52:46.920 it was an absolute low point. But rapidly we started 0:52:46.960 --> 0:52:49.919 to see people that started to think about private jets 0:52:49.920 --> 0:52:53.360 a little bit different. And honestly, I'm seeing people behave 0:52:54.000 --> 0:52:57.040 you know, usually this is more about a lifestyle or 0:52:57.160 --> 0:53:00.920 business productivity tool, but it's almost migrated over to a 0:53:01.040 --> 0:53:04.600 utility during this time. And uh, what we're seeing are 0:53:04.640 --> 0:53:07.279 people that want to control their environment. They want to 0:53:07.320 --> 0:53:10.799 control how many touch points you know, they're exposed to. 0:53:11.520 --> 0:53:13.440 And so because of that, we're seeing a lot of 0:53:13.480 --> 0:53:17.920 new entrants and our volume has come back gangbusters in May, 0:53:18.000 --> 0:53:20.320 and you know, I could tell you it's a reaction 0:53:20.360 --> 0:53:23.879 to the pandemic, but I tend to think that we're 0:53:23.920 --> 0:53:27.040 probably going to see a whole set of new entrants 0:53:27.200 --> 0:53:31.920 to flying privately based on this, And so andrews you 0:53:32.000 --> 0:53:33.719 as you think about this, and you put it in 0:53:33.760 --> 0:53:39.920 the context of previous crises, both financial and and otherwise. 0:53:40.000 --> 0:53:42.439 And obviously nine eleven is the comparison that so many 0:53:42.480 --> 0:53:46.000 people make in terms of the scope of this, and 0:53:46.000 --> 0:53:49.880 obviously two very different tragedies in a way. But obviously 0:53:49.960 --> 0:53:53.000 that was probably the last time we saw travel just 0:53:53.239 --> 0:53:56.520 effectively go away for some period of time, although shorter 0:53:57.040 --> 0:54:00.960 uh in duration than you know, how you think about 0:54:01.000 --> 0:54:05.000 the future of travel overall, it especially the future of 0:54:05.239 --> 0:54:11.680 air travel. So I think that air travel has changed forever. Um. 0:54:12.480 --> 0:54:15.840 I think that the way that we think about commercial airlines. 0:54:15.880 --> 0:54:18.000 You know, last year, I think two and a half 0:54:18.080 --> 0:54:20.440 million people a day with process to the T s 0:54:20.520 --> 0:54:23.319 A and commercial airlines. In April it was somewhere around 0:54:23.360 --> 0:54:27.440 nine hundred thousand. So it's in the industry that's been impacted. 0:54:27.520 --> 0:54:29.839 And I'm sure you've talked about it so much, and 0:54:29.880 --> 0:54:32.960 it's one that is so capital intensive that it feels 0:54:33.000 --> 0:54:37.080 like it's a tough model to pursue moving forward. I 0:54:37.080 --> 0:54:40.880 think really truly this notion of control, this notion of 0:54:40.920 --> 0:54:44.279 a limited environment. I don't know that that's the long term, 0:54:44.400 --> 0:54:47.120 but I certainly see in the you know, the next 0:54:47.120 --> 0:54:52.600 twelve to eighteen months, UM, really a focus on making 0:54:52.600 --> 0:54:56.320 sure people are are at their least kind of exposed 0:54:56.360 --> 0:54:59.680 to crowds. UM. As far as the crisis goes, you 0:54:59.800 --> 0:55:02.480 met Sho nine eleven. Nine eleven is actually when our 0:55:02.480 --> 0:55:06.240 business started to really uh to kind of shine unfortunately 0:55:06.840 --> 0:55:09.920 UM from the incident, but commercial was only down for 0:55:09.960 --> 0:55:13.240 a little bit. I was also here for the financial crisis, 0:55:13.719 --> 0:55:17.400 and in the financial crisis a lot of the segment disappeared. 0:55:17.760 --> 0:55:21.160 This is very different in private. You know, not only 0:55:21.160 --> 0:55:23.719 did you have a high capital overhang coming in and 0:55:23.760 --> 0:55:26.520 a robust stock market, but we were in Q one 0:55:26.600 --> 0:55:31.279 seeing record flying. So I think the exposure was significant. 0:55:31.320 --> 0:55:34.320 And I would just simply say that as I watch 0:55:34.520 --> 0:55:38.200 kind of this this whole volume increase in our business, 0:55:38.280 --> 0:55:41.840 it just tells me that people are probably going to 0:55:41.880 --> 0:55:46.280 consider private, whether that's aviation, whether that's a villa, whether 0:55:46.320 --> 0:55:50.360 that's some form of you know, a limited exposure environment. 0:55:50.440 --> 0:55:52.600 I think that's where we are for a little bit. Well, 0:55:52.600 --> 0:55:54.120 that's what I was curious when you talk about the 0:55:54.120 --> 0:55:55.920 new entrance. Is it folks who are trying to go 0:55:55.960 --> 0:55:58.520 on vacation because they need a break? Uh? Is it 0:55:58.560 --> 0:56:01.319 folks who need to go? Is it business folks? Who 0:56:01.400 --> 0:56:03.160 is it that that's coming up? And we've just got 0:56:03.160 --> 0:56:05.000 about forty five seconds here and then we'll come back 0:56:05.000 --> 0:56:08.080 and talk some more, no problem. Probably about three thousand 0:56:08.160 --> 0:56:12.399 flying hours this month, it's not more, and about three 0:56:12.480 --> 0:56:14.960 quarters of it is personal, whether it's shelter to shelter 0:56:15.520 --> 0:56:17.560 or it's just change of scenery. But I think some 0:56:17.680 --> 0:56:20.200 of it's reactive and some of it is people that 0:56:20.239 --> 0:56:23.000 are moving on a personal level. Business is slowly coming back, 0:56:23.040 --> 0:56:25.520 but not nearly where we would normally see it. That's 0:56:25.520 --> 0:56:29.360 Sentient Jet president CEO Andrew Collins. And you know what's interesting, 0:56:29.400 --> 0:56:31.400 I thought Jason one of the things he said, and 0:56:31.440 --> 0:56:34.920 he talked to about how they are different from you know, 0:56:34.960 --> 0:56:37.400 the big major airlines, and he said, commercial airlines have 0:56:37.480 --> 0:56:39.920 something like seven hundred touch points, right, so they need 0:56:39.960 --> 0:56:42.840 to think about how many people are involved and what 0:56:42.960 --> 0:56:46.680 that means for passenger safety. He says, they've got about 0:56:46.680 --> 0:56:49.080 twenty or thirty touch points. So he goes, we already 0:56:49.080 --> 0:56:51.800 have a big advantage to start from a much better 0:56:51.920 --> 0:56:54.719 point when it comes to reopening and getting people back 0:56:54.719 --> 0:56:58.440 flying well. And you do wonder, right if especially and 0:56:58.520 --> 0:57:00.480 this is at the high end of cores, but if 0:57:00.520 --> 0:57:03.560 people are traveling less, do their budgets get a little 0:57:03.560 --> 0:57:06.800 bigger per trip? And certainly for businesses and maybe even 0:57:07.120 --> 0:57:09.799 for personal travel, is this something that people start to 0:57:09.840 --> 0:57:12.319 spend more on. You're listening to Bloomberg this week, coming 0:57:12.360 --> 0:57:16.120 up filmmaker at Nancy Spielberg. Yep, she's Steven's little sister. 0:57:16.440 --> 0:57:19.240 She tells us about the impact of the virus on Hollywood, 0:57:19.320 --> 0:57:21.840 and like our big brother, she's a storyteller at heart. 0:57:22.000 --> 0:57:23.000 This is Bloomberg