WEBVTT - Bloomberg Surveillance TV: July 26, 2024

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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<v Speaker 2>with Lisa Bromwitz and Amrie Hordern. Join us each day

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<v Speaker 2>for insight from the best in markets, economics, and geopolitics

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<v Speaker 2>from our global headquarters in New York City. We are

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<v Speaker 2>live on Bloomberg Television weekday mornings from six to nine

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<v Speaker 2>am Eastern. Subscribe to the podcast on Apple, Spotify or

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<v Speaker 2>anywhere else you listen, and as always on the Bloomberg

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<v Speaker 2>Terminal and the Bloomberg Business App. Sam Stovell of CFRRO

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<v Speaker 2>has this to say. The lofty initial expectations for second

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<v Speaker 2>quarter runnings growth have caused some megacap high flyers to

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<v Speaker 2>fail to clear this elevated bar, causing investors to wonder

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<v Speaker 2>if other megacap disappointments should be anticipated. Sam joins us

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<v Speaker 2>now for more. So, Sam, let's get to the calendar.

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<v Speaker 2>Let's go through next week, Microsoft, Amazon, Meta, Apple. Do

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<v Speaker 2>you think we're set up for some disappointment here?

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<v Speaker 3>Hey, Jonathan, Well, certainly, next week, forty percent of the

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<v Speaker 3>cap weighting of the S and P five hundred tech

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<v Speaker 3>sector will be reporting earnings even though expectations are that

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<v Speaker 3>we've seen a better movement in earnings for the technology

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<v Speaker 3>sector now at about seventeen percent, up from sixteen percent

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<v Speaker 3>and change. I think yeah, investors will definitely be paying

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<v Speaker 3>a lot of attention to what is said and implied

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<v Speaker 3>with these upcoming earnings. The chip companies typically do have

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<v Speaker 3>some challenges when it comes to third quarter areas, and

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<v Speaker 3>our feeling is that, you know, while there could be

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<v Speaker 3>some stumbling, we are maintaining our overweight recommendation on tech,

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<v Speaker 3>mainly because companies will soon be looking at twenty twenty

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<v Speaker 3>six estimates and pretty much ignoring what they are hearing

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<v Speaker 3>right now in twenty twenty four.

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<v Speaker 2>Some let's take the earnings so far this week, Let's

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<v Speaker 2>pick out one name, Let's talk about the likes of

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<v Speaker 2>our and we can think about how the way the

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<v Speaker 2>market responded to what Alphabet had to say. Based on that,

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<v Speaker 2>what our investor is in the mood to reward and

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<v Speaker 2>what I invest is in the mood to punish. And

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<v Speaker 2>I think that's something really interesting that we've got to

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<v Speaker 2>try an answer an anticipation of the NINGX next week,

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<v Speaker 2>because it felt like investors were in the mood to

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<v Speaker 2>punish excess investment out of Alphabet, whatever you would call excess.

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<v Speaker 2>I want to understand how that might set us up

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<v Speaker 2>for next week, Sam, How do you think about that? Well?

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<v Speaker 3>I think what that implies is that they're really investors

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<v Speaker 3>are really only looking short term, because the investment that

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<v Speaker 3>Alphabet was making is obviously for twenty twenty five, twenty

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<v Speaker 3>twenty six, which is the cause for our optimism longer term.

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<v Speaker 3>But in the near term, investors are basically saying that

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<v Speaker 3>recently we had tech selling at a seventy eight percent

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<v Speaker 3>premium to its average twenty year PE ratio, the market

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<v Speaker 3>itself at a thirty eight percent premium, and the relative

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<v Speaker 3>strength between the cap weighted tech and equal weighted tech

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<v Speaker 3>sectors back to where we were during the dot com bubble.

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<v Speaker 3>So I think that investors are saying, if there's any

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<v Speaker 3>hint of disappointment, I'd rather sell first and ask questions later.

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<v Speaker 2>Sam.

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<v Speaker 4>I guess another way of putting this together is how

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<v Speaker 4>low is the bar right now heading into next week

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<v Speaker 4>for some of these earnings. After the sell off, we've

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<v Speaker 4>seen a true correction down about thirteen percent since the

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<v Speaker 4>July tenth record highs that we saw in the magnificent

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<v Speaker 4>seven stocks.

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<v Speaker 2>How much do you anticipate that.

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<v Speaker 4>Any additional disappointment or even just not superlative type of

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<v Speaker 4>results will provoke some pretty significant selling in addition to

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<v Speaker 4>what we've already seen.

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<v Speaker 3>Well, I'm looking at history. I would tend to say

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<v Speaker 3>that we are due for a double digit decline in

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<v Speaker 3>the order of ten to thirteen percent, primarily because of

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<v Speaker 3>the advance that we experience in the first quarter as

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<v Speaker 3>well as for the first half. And as I had

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<v Speaker 3>mentioned in terms of the valuation, however, I do think

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<v Speaker 3>it'll be contained to a correction, not the beginning of

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<v Speaker 3>a new bear market, and would probably end up representing

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<v Speaker 3>a good buying opportunity as we approach the fourth quarter

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<v Speaker 3>of this election year. Let me also mention that when

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<v Speaker 3>it comes to elections, there's the possibility of a red wave.

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<v Speaker 3>And whenever we have had waves in the past, We've

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<v Speaker 3>had three Republican waves since World War two, seven democratic

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<v Speaker 3>waves since World War two. That has added a percentage

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<v Speaker 3>and a half to the average return in the first

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<v Speaker 3>year of a new administration.

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<v Speaker 2>So let me get this right, Stam.

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<v Speaker 4>A lot of people are saying that a red wave

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<v Speaker 4>or a blue wave but in this case, a red

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<v Speaker 4>wave would actually cause inflation to go up and could

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<v Speaker 4>become a problem for the bond market. You see it

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<v Speaker 4>as the opposite that actually any kind of dominance in

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<v Speaker 4>Congress would actually lead to greater returns in equity markets.

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<v Speaker 2>Is that correct?

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<v Speaker 3>That's what has historically happened. But obviously it's going to

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<v Speaker 3>depend on what the new administration puts forth. If we

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<v Speaker 3>do see in a sense very high walls in terms

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<v Speaker 3>of tariffs and whatnot across the globe, then yes, that

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<v Speaker 3>will end up being very restrictive, would be a hurt

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<v Speaker 3>to our exports, would certainly smell or have the sniff

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<v Speaker 3>test of the Smoot Hawley tariff back in the early

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<v Speaker 3>nineteen thirties, which restricted global trade. So I don't think

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<v Speaker 3>that would be a very good thing, and I believe

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<v Speaker 3>that those who end up being in power would be

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<v Speaker 3>very much aware of that.

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<v Speaker 4>Sam. Just taking a step back, it seems like you're

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<v Speaker 4>still pretty constructive on the overall backdrop for the US economy.

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<v Speaker 4>It doesn't seem like you're sort of expecting my major

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<v Speaker 4>fall off the cliff type of moment. What would you

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<v Speaker 4>have to see to change that view? For some of

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<v Speaker 4>the growth worries to become a true growth scare for you.

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<v Speaker 3>Well, as I had mentioned, the valuations were stretched, in

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<v Speaker 3>my opinion seventy eight percent premium for tech. Now it's

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<v Speaker 3>down to about sixty four percent. So some more slight

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<v Speaker 3>downward rotation for tech I think would be encouraging. I

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<v Speaker 3>think if we get a software than expected PCE reading

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<v Speaker 3>this morning, that could also help talk the market off

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<v Speaker 3>the ledge. And because we've been seeing an improvement in

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<v Speaker 3>the rotation beneath the surface, our lowry Technical Analysis ARM

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<v Speaker 3>has been showing an encouraging amount of supply demand indicators

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<v Speaker 3>that they monitor to say that while a short term

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<v Speaker 3>pullback could certainly be in order, that they are looking

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<v Speaker 3>at that as a good buying opportunity.

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<v Speaker 2>Let's say what we get in twenty minutes? Hi Sam,

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<v Speaker 2>Thank you, sir Sam.

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<v Speaker 5>Stuff with a CF all right, it's.

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<v Speaker 2>A licens this morning. Donald Trump's campaign refusing to commit

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<v Speaker 2>so I to pay with Vice President and Kamala Harris

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<v Speaker 2>until she officially becomes the Democratic nominee, a campaign spokesperson

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<v Speaker 2>saying it would be quote inappropriate to schedule things because

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<v Speaker 2>Democrats very well could still change their minds. Harris responding

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<v Speaker 2>on social media saying, quote, what happened to any time,

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<v Speaker 2>any place? Tober Marcus of Wolf Research joins us now

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<v Speaker 2>for more, Tay, a bit of news this morning. Already

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<v Speaker 2>the elusive endorsement gets delivered by the Obamas to Kamala Harris.

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<v Speaker 2>There's a bit of a honeymoon period over the last

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<v Speaker 2>couple of days, Tobin. I'm just wondering, from your perspective,

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<v Speaker 2>how much longer that honeymoon period lasts.

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<v Speaker 5>Well.

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<v Speaker 1>I think that depends in large part on how Vice

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<v Speaker 1>President Harris continues to perform on the campaign trail. Part

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<v Speaker 1>of the reason why Democrats have been so energized and

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<v Speaker 1>unified is just the relief at being out from under

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<v Speaker 1>this Biden catastrophe that they've been living through for the

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<v Speaker 1>course of the past month. But another part of it

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<v Speaker 1>is that she's looked pretty good on the trail. You know,

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<v Speaker 1>the early paid medias look good, a couple good adds

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<v Speaker 1>up so far, and a string of you know, solid

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<v Speaker 1>performances from her, so you know, she keeps delivering good performances.

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<v Speaker 1>I think Democrats are like very ready to remain enthusiastic.

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<v Speaker 1>I think there's a sort of helpable eagerness to have

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<v Speaker 1>something to root for. But you know, obviously her her

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<v Speaker 1>twenty twenty campaign did not go flawlessly to say the least.

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<v Speaker 1>It's totally possible that we see things start to go

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<v Speaker 1>a little bit, you know, less uniformly positively. And if so,

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<v Speaker 1>then I think we'll start to see cracks on the Democratic.

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<v Speaker 2>Side, Tobin.

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<v Speaker 4>I thought that the New York Times Siena poll that

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<v Speaker 4>just came out yesterday was fascinating, not because it showed

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<v Speaker 4>that there was more of a tie between Kamala Harris

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<v Speaker 4>and Donald Trump than we've seen for months with the

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<v Speaker 4>former with President Biden, but this part is said that

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<v Speaker 4>nearly ninety percent of voters said they approved of mister

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<v Speaker 4>Biden's decision to exit the race. When have you ever, Tobin,

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<v Speaker 4>see ninety percent of voters agree on something so pivotal

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<v Speaker 4>as the sitting president stepping down from a race.

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<v Speaker 1>Yeah, that's about as high a number as you can

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<v Speaker 1>get in polls, As someone who has run a lot

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<v Speaker 1>of polls in my life, you can it's really hard

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<v Speaker 1>to come up with something that gets you a higher

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<v Speaker 1>number than the ninety. So look, I mean, I think

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<v Speaker 1>it just goes to show again how much palpable relief

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<v Speaker 1>there is at being out front of this. There were

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<v Speaker 1>differences of opinion, obviously on the Democratic side about how

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<v Speaker 1>to handle this, how much pressure to put on Biden.

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<v Speaker 1>There were certainly some people, including you know, for example,

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<v Speaker 1>the congressional Blackhawks, who were standing with Biden through much

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<v Speaker 1>of that pressure campaign to try and get him out.

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<v Speaker 1>But now that he has left, I think there's very

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<v Speaker 1>very little second testing of that. And you know, again

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<v Speaker 1>there are some people who were hoping to have another

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<v Speaker 1>candidate come out somehow, find some way to run a

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<v Speaker 1>mini primary, you know, figure out if you can get

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<v Speaker 1>one of these promising Democratic governors at the top of

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<v Speaker 1>the ticket instead of in the runner up slot where

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<v Speaker 1>they're being considered right now. But that was never really

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<v Speaker 1>an option. And with all those people immediately bowing out,

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<v Speaker 1>I think people are now backing the horse that is

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<v Speaker 1>available to.

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<v Speaker 4>Cheer for Tobin. There are a lot of people who

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<v Speaker 4>are scratching their heads at the JD. Vans pick by

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<v Speaker 4>former President Trump as the vice presidential pick, fact that

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<v Speaker 4>he is very closely to Trump when it comes to

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<v Speaker 4>some of his policies. Within the Democratic Party, how much

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<v Speaker 4>momentum is there for picking a vice presidential candidate that

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<v Speaker 4>really is more centrist even than perhaps Kamala Harris.

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<v Speaker 1>Yeah, I think that's what's going to happen. There's questions

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<v Speaker 1>about which one of the various different vice presidential hopefuls

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<v Speaker 1>she will end up going with, but you know, I

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<v Speaker 1>think common sense and the reporting about who is being

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<v Speaker 1>vetted all point in the same direction, which is that

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<v Speaker 1>she's looking for somebody who has some you know, moderate

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<v Speaker 1>record and some outside the Beltway sort of vibes to them.

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<v Speaker 1>In terms of people to round out the ticket again,

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<v Speaker 1>could be governors, could be Senatra Kelly in Arizona, who,

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<v Speaker 1>like I think, reads a little bit less Washington than

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<v Speaker 1>a Senator usually would by virtue of his experience as

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<v Speaker 1>an astronaut rather than a career politician. But one way

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<v Speaker 1>or another, I think he, you know, is looking in

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<v Speaker 1>the obvious place for the kind of person she'd want

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<v Speaker 1>to fill out the ticket at Hobe.

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<v Speaker 2>It's been interested to see the media and Democrats in

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<v Speaker 2>the last couple of days or so almost remodel trying

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<v Speaker 2>to remodel perceptions of Kamala Harris's role in this administration,

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<v Speaker 2>to separate her from the border by pointing out repeatedly

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<v Speaker 2>we might have called her the border Sar, but she

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<v Speaker 2>was never the border Sara. This was about root causes, tope.

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<v Speaker 2>And I just wonder whether you can pick and choose

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<v Speaker 2>whether as the vice president, you can say I was

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<v Speaker 2>involved in this, I had nothing to do with that.

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<v Speaker 2>Can you really do that? How much distance will there

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<v Speaker 2>be between her and the Biden legacy?

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<v Speaker 1>So you know, obviously she's going to face attacks for

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<v Speaker 1>everything that happened under the Biden administration.

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<v Speaker 2>You know, both things in.

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<v Speaker 1>Which she had some level of direct role, like again

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<v Speaker 1>the sort of disputed portfolio about what exactly was her

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<v Speaker 1>responsibility in terms of addressing the root causes of immigration,

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<v Speaker 1>but even more broadly, I mean things that happened that

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<v Speaker 1>she had nothing to do with, as she will continue

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<v Speaker 1>to vice criticism for I have no reason to think

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<v Speaker 1>that the Trump administration, for example, is going to stop

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<v Speaker 1>criticizing the doll from after NS YEA and kind opinion

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<v Speaker 1>not on her as a member of the Biden Harris administration,

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<v Speaker 1>even though nobody believed that she was the decision maker

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<v Speaker 1>on that. You know, that being said, it does seem

0:12:09.160 --> 0:12:11.120
<v Speaker 1>to be the case in some of the early kind

0:12:11.160 --> 0:12:15.479
<v Speaker 1>of pulling from Democratic pollsters that there is less baggage

0:12:15.520 --> 0:12:18.360
<v Speaker 1>with her than there was with Biden on inflation, for example,

0:12:18.559 --> 0:12:21.480
<v Speaker 1>which obviously had been one of the persistent vulnerabilities for

0:12:21.480 --> 0:12:23.800
<v Speaker 1>President Biden in addition to his age. Looks to be

0:12:23.880 --> 0:12:26.439
<v Speaker 1>the case that there's like a little bit less association

0:12:26.640 --> 0:12:29.400
<v Speaker 1>of the retrospective bitterness in the run up and price

0:12:29.640 --> 0:12:31.760
<v Speaker 1>levels just sting from the current run rate of immigration

0:12:32.200 --> 0:12:34.959
<v Speaker 1>for Harris other than Biden, you know. And again, a

0:12:34.960 --> 0:12:37.160
<v Speaker 1>lot of it comes down to her, like how effectively

0:12:37.200 --> 0:12:39.600
<v Speaker 1>can she pivot away from some of these attacks both

0:12:39.600 --> 0:12:42.840
<v Speaker 1>on the Biden record and on her past positions where

0:12:42.920 --> 0:12:46.360
<v Speaker 1>obviously Republicans are already you know, kind of criticizing her

0:12:46.360 --> 0:12:48.400
<v Speaker 1>for all the position taking that she did in twenty

0:12:48.480 --> 0:12:53.079
<v Speaker 1>nineteen and twenty twenty around banning fracking, around decriminalizing border crossings,

0:12:54.280 --> 0:12:56.000
<v Speaker 1>these various different things that she kind of signed on

0:12:56.000 --> 0:12:58.120
<v Speaker 1>to during that primary when a lot of Democrats were

0:12:58.640 --> 0:13:01.200
<v Speaker 1>racing to see who could get far this left, you know.

0:13:01.280 --> 0:13:04.200
<v Speaker 1>But again, flip flopping is a thing that happens in politics.

0:13:04.200 --> 0:13:05.960
<v Speaker 1>If she can give a compelling account at where she

0:13:05.960 --> 0:13:08.160
<v Speaker 1>stands now and what she wants to do going forward,

0:13:08.320 --> 0:13:10.560
<v Speaker 1>I think it does mitigate some of the vulnerability from

0:13:10.600 --> 0:13:11.600
<v Speaker 1>the things she said in the past.

0:13:11.760 --> 0:13:14.480
<v Speaker 2>They are the ultimate shape shifters. I expect no different

0:13:14.520 --> 0:13:16.720
<v Speaker 2>from me the side, Tybin. Thank you, sir Tobin Marcus

0:13:16.720 --> 0:13:30.280
<v Speaker 2>there of wolf free search a stick with sports. Acey

0:13:30.320 --> 0:13:33.480
<v Speaker 2>Milan meeting English Premier League club Manchester City in a

0:13:33.520 --> 0:13:37.040
<v Speaker 2>pre season friendly at Yankee Stadium tomorrow afternoon. It's the

0:13:37.120 --> 0:13:40.080
<v Speaker 2>latest push in the United States by the Italian football jats,

0:13:40.240 --> 0:13:43.120
<v Speaker 2>a market they've seen significant growth in since being bored

0:13:43.360 --> 0:13:46.120
<v Speaker 2>by New York private equity firm Redbird Capital back in

0:13:46.160 --> 0:13:48.640
<v Speaker 2>twenty twenty two. Pleased to say that joining us now

0:13:48.640 --> 0:13:52.800
<v Speaker 2>to discuss is the AC Milan CEO Georgio Ferlani. Georgie, Joe,

0:13:52.880 --> 0:13:55.600
<v Speaker 2>let's talk about this move. We've seen these friendlies before,

0:13:55.840 --> 0:13:58.640
<v Speaker 2>AC Milan on tour playing other teams from the Premier

0:13:58.720 --> 0:14:01.800
<v Speaker 2>League and elsewhere. It feels like we're getting closer to

0:14:01.800 --> 0:14:05.880
<v Speaker 2>playing a regular season game in the United States of America. Georgia,

0:14:06.000 --> 0:14:08.080
<v Speaker 2>Is that true? How close are we to an event

0:14:08.160 --> 0:14:09.000
<v Speaker 2>like that taking place?

0:14:10.120 --> 0:14:14.360
<v Speaker 6>Good morning, Thanks for having me. You're right. We do

0:14:14.480 --> 0:14:17.959
<v Speaker 6>these tours in the summer regularly to play friendlies against

0:14:17.960 --> 0:14:24.720
<v Speaker 6>other top teams. Look, there's regulatory challenges in moving abroad

0:14:24.760 --> 0:14:29.040
<v Speaker 6>and into a different market domestic league games, but we

0:14:29.160 --> 0:14:32.040
<v Speaker 6>certainly think if you really want to develop a fan

0:14:32.120 --> 0:14:35.080
<v Speaker 6>base and you really want to expand your business in

0:14:35.120 --> 0:14:37.880
<v Speaker 6>the US, this would be a critical part. So we

0:14:37.960 --> 0:14:40.960
<v Speaker 6>will be working with cityr Our League and the other

0:14:41.000 --> 0:14:42.680
<v Speaker 6>regulatory bodies to allow us.

0:14:43.880 --> 0:14:45.560
<v Speaker 2>You've mentioned the bodies you need to work with. Can

0:14:45.600 --> 0:14:47.720
<v Speaker 2>you just build on that the obstacles for something like

0:14:47.760 --> 0:14:49.880
<v Speaker 2>that to take place. Have you had a meeting with

0:14:50.000 --> 0:14:52.520
<v Speaker 2>study out the regulatory bodies about this already? Have you

0:14:52.560 --> 0:14:55.400
<v Speaker 2>taken steps to kind of push this forward? How close

0:14:55.440 --> 0:14:56.840
<v Speaker 2>are we to something like this?

0:14:57.880 --> 0:15:01.000
<v Speaker 6>We certainly have discussed it then needs to be discussed

0:15:01.000 --> 0:15:07.440
<v Speaker 6>also with WAIFA and with FIFA and the authorities here.

0:15:07.160 --> 0:15:07.800
<v Speaker 4>In the US.

0:15:08.360 --> 0:15:11.560
<v Speaker 6>There have been attempts in then also distant past to

0:15:11.680 --> 0:15:15.280
<v Speaker 6>play games. La Liga tried to but it didn't work out.

0:15:16.480 --> 0:15:19.360
<v Speaker 4>So we'll keep on important.

0:15:20.480 --> 0:15:23.640
<v Speaker 6>Just in the same way that American leagues have expanded

0:15:23.680 --> 0:15:28.320
<v Speaker 6>globally by the regular season games not just friendly outside

0:15:28.320 --> 0:15:30.800
<v Speaker 6>of America, we need to do the same the other

0:15:30.840 --> 0:15:31.240
<v Speaker 6>way around.

0:15:31.560 --> 0:15:34.760
<v Speaker 4>Georgia, I gotta say we just saw basically a mini

0:15:35.080 --> 0:15:35.880
<v Speaker 4>world Cup.

0:15:35.760 --> 0:15:37.080
<v Speaker 2>We saw the Euros.

0:15:37.160 --> 0:15:40.000
<v Speaker 4>We saw also Copa America taking place at the same time.

0:15:40.080 --> 0:15:43.480
<v Speaker 4>Pretty much everyone who I knew on the weekends was

0:15:43.560 --> 0:15:46.360
<v Speaker 4>watching some of the games as they really got into it.

0:15:46.600 --> 0:15:49.440
<v Speaker 4>The enthusiasm, though, in the United States for games that

0:15:49.480 --> 0:15:54.480
<v Speaker 4>were held here was surprisingly not very strong. We didn't

0:15:54.520 --> 0:15:57.480
<v Speaker 4>hear that much about games that were happening nearby. Have

0:15:57.560 --> 0:16:01.000
<v Speaker 4>you been disappointed by how some of these games have

0:16:01.120 --> 0:16:04.480
<v Speaker 4>rolled out at a time when there certainly is more interest,

0:16:04.640 --> 0:16:08.120
<v Speaker 4>but maybe not in the way that there isn't in

0:16:08.160 --> 0:16:09.720
<v Speaker 4>many of the other markets around the world.

0:16:11.120 --> 0:16:16.040
<v Speaker 6>Look, I think the Ugmate Test will be the World Club,

0:16:19.120 --> 0:16:22.560
<v Speaker 6>and you know that is really the top top content,

0:16:26.720 --> 0:16:31.760
<v Speaker 6>well together with top games of European continental leagues.

0:16:31.800 --> 0:16:35.440
<v Speaker 4>And Georgia, I think that we're having some trouble with

0:16:35.480 --> 0:16:38.320
<v Speaker 4>the sound. Let's just try to re establish that and

0:16:38.360 --> 0:16:40.320
<v Speaker 4>then we get you back real quick so that we

0:16:40.360 --> 0:16:42.000
<v Speaker 4>can make sure that we understand everything.

0:16:42.240 --> 0:16:44.240
<v Speaker 2>Georgia, let's come back to you. I'm happy to say

0:16:44.240 --> 0:16:45.520
<v Speaker 2>that you are just Johnny and we are still with

0:16:45.560 --> 0:16:48.440
<v Speaker 2>the acy Milan CEO, Georgio Frelani, Georgio, I know there

0:16:48.480 --> 0:16:49.920
<v Speaker 2>was a little bit of a technical connection, but I

0:16:49.920 --> 0:16:51.040
<v Speaker 2>want to come back to some of the comments we

0:16:51.080 --> 0:16:53.720
<v Speaker 2>were having around the table. It feels like ac Milan

0:16:53.760 --> 0:16:56.400
<v Speaker 2>has become more American in the last year or so

0:16:56.480 --> 0:16:59.000
<v Speaker 2>and maybe less Italian. The very fact that there wasn't

0:16:59.000 --> 0:17:01.280
<v Speaker 2>a single ac Milan on the Italian roster of the

0:17:01.320 --> 0:17:04.600
<v Speaker 2>Euros this summer. Is that a financial decision or a

0:17:04.640 --> 0:17:05.560
<v Speaker 2>sporting decision?

0:17:07.960 --> 0:17:12.200
<v Speaker 6>Very good question. We've definitely become more American. We're owned

0:17:12.200 --> 0:17:15.120
<v Speaker 6>by an American firm, which is Redbert Capital Partner, which

0:17:15.160 --> 0:17:18.439
<v Speaker 6>is a leading investor in sports media and entertainment, and

0:17:18.480 --> 0:17:22.080
<v Speaker 6>we work very closely with them. We've also become more

0:17:22.080 --> 0:17:24.320
<v Speaker 6>American on the field, so we have I think you

0:17:24.400 --> 0:17:28.760
<v Speaker 6>were saying two American players. Our decisions on who to

0:17:28.960 --> 0:17:31.720
<v Speaker 6>field are entirely sporting.

0:17:32.400 --> 0:17:32.640
<v Speaker 2>Uh.

0:17:33.040 --> 0:17:36.879
<v Speaker 6>There is in a decision on the base of, you know, what,

0:17:36.880 --> 0:17:40.000
<v Speaker 6>what passport a player has, but it's about how good

0:17:40.520 --> 0:17:44.919
<v Speaker 6>the player is. Obviously, UH, some players just by nature

0:17:45.400 --> 0:17:48.840
<v Speaker 6>of being American. In our case, we have two players,

0:17:49.040 --> 0:17:52.920
<v Speaker 6>including Christian Polovik, have a certain commercial appeal in the US,

0:17:52.960 --> 0:17:57.760
<v Speaker 6>which is certainly helpful. But we don't drive sporting decisions

0:17:57.880 --> 0:17:59.240
<v Speaker 6>by passport looks.

0:18:00.040 --> 0:18:02.320
<v Speaker 4>We were talking Georgio about how the United States is

0:18:02.359 --> 0:18:04.840
<v Speaker 4>a really expensive market that there's a lot of money here,

0:18:04.920 --> 0:18:06.440
<v Speaker 4>and so that's one reason why a lot of people

0:18:06.480 --> 0:18:08.760
<v Speaker 4>want to come here, is because they're dollars and a

0:18:08.800 --> 0:18:11.120
<v Speaker 4>lot of eyeballs to come. They are also a lot

0:18:11.119 --> 0:18:14.080
<v Speaker 4>of dollars coming from the Middle East, and you're going

0:18:14.119 --> 0:18:17.920
<v Speaker 4>to be focused off facing off with Man City, Georgio.

0:18:18.240 --> 0:18:22.240
<v Speaker 4>How open are you to tapping seemingly endless appetite in

0:18:22.240 --> 0:18:25.240
<v Speaker 4>the Middle East to own clubs in Europe.

0:18:27.160 --> 0:18:30.399
<v Speaker 6>So we have at least in a different way, which

0:18:30.440 --> 0:18:33.919
<v Speaker 6>is on the commercial side. So we've opened an office

0:18:33.920 --> 0:18:38.040
<v Speaker 6>in Dubai, were the first European football club to open

0:18:38.080 --> 0:18:41.120
<v Speaker 6>an office in Dubai. We've had a long standing fifteen

0:18:41.119 --> 0:18:46.040
<v Speaker 6>plus year relationship with Emirates the airline. We have other

0:18:47.280 --> 0:18:52.000
<v Speaker 6>commercial partners in the region, including the Kursner Group, and

0:18:52.040 --> 0:18:54.359
<v Speaker 6>so the way we've gone about it is not sort

0:18:54.400 --> 0:18:59.119
<v Speaker 6>of via let's say, equity injections, but rather via commercial partnerships.

0:19:00.000 --> 0:19:01.800
<v Speaker 2>I just want to squeeze in one final question and

0:19:01.840 --> 0:19:04.040
<v Speaker 2>I'll ask this as said as an ac Milan fan,

0:19:04.080 --> 0:19:08.360
<v Speaker 2>a lifelong fan like yourself. We both remember the ac

0:19:08.480 --> 0:19:11.560
<v Speaker 2>Milan of Capello and Saki of Barrazi and Maldini. We've

0:19:11.560 --> 0:19:14.280
<v Speaker 2>both been disappointed with the performance of the team over

0:19:14.280 --> 0:19:17.120
<v Speaker 2>the last twenty years and the trajectory that we've been on.

0:19:17.560 --> 0:19:20.480
<v Speaker 2>I remember when the club became a sealing club, and

0:19:20.520 --> 0:19:24.000
<v Speaker 2>I identify that summer when we've sold Ebra and we

0:19:24.080 --> 0:19:26.320
<v Speaker 2>sold Tiago silver to Paris Sanja Man. It felt like

0:19:26.359 --> 0:19:28.320
<v Speaker 2>that was a moment where AC Milan became a club

0:19:28.320 --> 0:19:31.600
<v Speaker 2>they needed to sell players and couldn't buy that talent anymore.

0:19:32.000 --> 0:19:34.760
<v Speaker 2>This summer we've got two big players, the left back

0:19:34.800 --> 0:19:38.480
<v Speaker 2>Theo Hernandez and we've got the goalkeeper Mike Manyan. I

0:19:38.520 --> 0:19:40.920
<v Speaker 2>want to understand whether that's two talents that you need

0:19:40.960 --> 0:19:43.760
<v Speaker 2>to monetize to fund the rest of the project or

0:19:43.760 --> 0:19:45.840
<v Speaker 2>whether AC Milan is back in a position where it

0:19:45.840 --> 0:19:48.400
<v Speaker 2>can keep world class talent. Just what is the state

0:19:48.480 --> 0:19:48.800
<v Speaker 2>of play?

0:19:50.320 --> 0:19:55.560
<v Speaker 6>Yeah, so this morning side, our ambition is to fight

0:19:55.600 --> 0:19:58.760
<v Speaker 6>for the title in Italy every year and to be

0:19:58.840 --> 0:20:02.480
<v Speaker 6>competitive and the champions. Now we do this while on

0:20:02.560 --> 0:20:06.160
<v Speaker 6>the lets the other side running a business that is sustainable.

0:20:06.400 --> 0:20:09.880
<v Speaker 6>So to give you some facts, we two years ago

0:20:10.040 --> 0:20:13.080
<v Speaker 6>was a first year in which a Cimlan was profitable.

0:20:13.160 --> 0:20:16.720
<v Speaker 6>First year in seventeen years, and last year was the

0:20:16.760 --> 0:20:18.800
<v Speaker 6>second year, and I don't think it's ever happened to

0:20:18.800 --> 0:20:21.800
<v Speaker 6>a Simlan to be profitable in two consecutive years. What

0:20:21.920 --> 0:20:26.920
<v Speaker 6>that translated into is we're not forced to sell players

0:20:27.640 --> 0:20:34.399
<v Speaker 6>because of capital shortage or cash flow issues. So you know,

0:20:34.480 --> 0:20:38.040
<v Speaker 6>I picking one word is that we don't need to

0:20:38.200 --> 0:20:41.399
<v Speaker 6>sell anyone. So as a fan, I'm telling you you

0:20:41.400 --> 0:20:42.480
<v Speaker 6>shouldn't be worried about that.

0:20:42.720 --> 0:20:44.560
<v Speaker 2>Well's the fan. It's good to hear. Georgia. Good luck

0:20:44.600 --> 0:20:47.040
<v Speaker 2>tomorrow and hopefully we can catch up soon. Georgia Falani,

0:20:47.080 --> 0:20:52.119
<v Speaker 2>the ac Milan CEO. This is the Bloomberg Seventans podcast,

0:20:52.240 --> 0:20:56.159
<v Speaker 2>bringing you the best in markets, economics, antient politics. You

0:20:56.200 --> 0:20:58.959
<v Speaker 2>can watch the show live on Bloomberg TV weekday mornings

0:20:59.000 --> 0:21:01.919
<v Speaker 2>from six am to nine am Eastern. Subscribe to the

0:21:01.960 --> 0:21:05.439
<v Speaker 2>podcast on Apple, Spotify, or anywhere else you listen, and

0:21:05.480 --> 0:21:08.560
<v Speaker 2>as always on the Bloomberg Terminal and the Bloomberg Business app.

0:21:12.520 --> 0:21:13.000
<v Speaker 3>Mm hmm