1 00:00:00,840 --> 00:00:04,000 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 2 00:00:04,040 --> 00:00:05,280 Speaker 1: my co host Matt Miller. 3 00:00:05,640 --> 00:00:09,600 Speaker 2: Every business day we bring you interviews from CEOs, market pros, 4 00:00:09,720 --> 00:00:13,600 Speaker 2: and Bloomberg experts, along with essential market moving news. 5 00:00:14,160 --> 00:00:17,279 Speaker 1: I'm the Bloomberg Markets Podcast on Apple Podcasts or wherever 6 00:00:17,400 --> 00:00:20,520 Speaker 1: you listen to podcasts, and at Bloomberg dot com Slash podcast. 7 00:00:20,920 --> 00:00:23,840 Speaker 1: It is earnings. We've got some more bank earnings. We 8 00:00:23,960 --> 00:00:26,680 Speaker 1: started last Friday kicking them off. We got some more 9 00:00:26,720 --> 00:00:29,040 Speaker 1: big ones this weekend. We've got some of the regional 10 00:00:29,080 --> 00:00:31,320 Speaker 1: banks as well. But of course you know you've got 11 00:00:31,880 --> 00:00:33,360 Speaker 1: some big, big banks this week, so we want to 12 00:00:33,360 --> 00:00:34,600 Speaker 1: get to the bottom of it. So we're going to 13 00:00:34,720 --> 00:00:38,239 Speaker 1: round table this discussion because we can do that at 14 00:00:38,240 --> 00:00:40,800 Speaker 1: bloombergause we have Bloomberg Intelligence, some of the smartest analysts 15 00:00:40,840 --> 00:00:43,040 Speaker 1: on Wall Street, Allison and Williams. She covers the big 16 00:00:43,040 --> 00:00:46,080 Speaker 1: banks and Herman Chan covers the regional banks. Here in 17 00:00:46,120 --> 00:00:48,159 Speaker 1: the United States. We've got them both here in our 18 00:00:48,159 --> 00:00:51,440 Speaker 1: Bloomberg Interactive Brokers studio. So Alis, let's start with you. 19 00:00:51,760 --> 00:00:53,640 Speaker 1: What was the key takeaway from Friday when we had 20 00:00:53,880 --> 00:00:57,120 Speaker 1: some of the banks kickoff? JP Morgan being the most notable. 21 00:00:57,200 --> 00:00:59,320 Speaker 1: Then this week you've got Morgan Stanley, Bank of America, 22 00:00:59,400 --> 00:01:01,800 Speaker 1: Goldman Sachs kind of what are you starting to see? 23 00:01:01,800 --> 00:01:04,120 Speaker 1: What do you expect to see from these big banks? 24 00:01:04,440 --> 00:01:09,280 Speaker 3: The key takeaway was more resilient, interesting income versus expectations, 25 00:01:09,319 --> 00:01:11,600 Speaker 3: so holding up a bit better. And I think we 26 00:01:11,959 --> 00:01:16,360 Speaker 3: had signs of that. The first quarter was strong and 27 00:01:16,600 --> 00:01:19,280 Speaker 3: it looked like the banks were being conservative with guidance, 28 00:01:19,319 --> 00:01:21,040 Speaker 3: and so they upped that guidance. So we're going to 29 00:01:21,120 --> 00:01:23,760 Speaker 3: see if the same hold shoop for a Bank of America. 30 00:01:23,880 --> 00:01:26,920 Speaker 3: Part of that is that they're growing credit card loans, 31 00:01:26,959 --> 00:01:30,040 Speaker 3: which are higher yielding, and if you look at loan growth, 32 00:01:30,240 --> 00:01:34,440 Speaker 3: that's really been the strong point that benefits big banks 33 00:01:34,480 --> 00:01:37,960 Speaker 3: like JP, Morgan City Whiles also growing that a little bit. 34 00:01:38,040 --> 00:01:41,200 Speaker 3: Bank America, we'll see, but Bank of America does have 35 00:01:41,280 --> 00:01:44,360 Speaker 3: a little bit more exposure to the commercial and industrial side, 36 00:01:45,560 --> 00:01:48,200 Speaker 3: which is weighing a little bit on Herman's side of things. 37 00:01:48,320 --> 00:01:51,040 Speaker 4: I want to bring Herman into this conversation because we're 38 00:01:51,040 --> 00:01:53,840 Speaker 4: going to have seventeen regional banks reporting this week. It 39 00:01:53,880 --> 00:01:57,240 Speaker 4: does include Usbank Corp also P and C reporting your 40 00:01:57,240 --> 00:02:00,520 Speaker 4: first earners results after the collapse of obviously first Public 41 00:02:00,880 --> 00:02:03,920 Speaker 4: and then SVB when they triggered those industry fears in 42 00:02:03,960 --> 00:02:06,080 Speaker 4: the spring. What do you think we should be expecting 43 00:02:06,120 --> 00:02:07,040 Speaker 4: from the regionals? 44 00:02:07,560 --> 00:02:11,000 Speaker 5: So the regionals are going to feel the aftershocks of 45 00:02:11,080 --> 00:02:14,919 Speaker 5: the bank failures in March and April. That really comes 46 00:02:15,040 --> 00:02:19,200 Speaker 5: in the form of deposit pricing. As deposit pricing continues 47 00:02:19,240 --> 00:02:24,119 Speaker 5: to increase, we expect the smartests contract, top line revenues 48 00:02:24,160 --> 00:02:28,200 Speaker 5: to contract because of the higher funding costs. And contrasting 49 00:02:28,240 --> 00:02:31,040 Speaker 5: to what's happening with Allison's banks, you're not seeing the 50 00:02:31,080 --> 00:02:34,200 Speaker 5: long growth versus the bigger banks because there's less exposure 51 00:02:34,240 --> 00:02:37,480 Speaker 5: to credit cards. There's more exposure to commercial real estate 52 00:02:37,600 --> 00:02:42,240 Speaker 5: and traditional business lending that and those areas are slowing 53 00:02:42,320 --> 00:02:43,280 Speaker 5: across the industry. 54 00:02:43,720 --> 00:02:46,280 Speaker 1: So Herman on the commercial real estate side, how big 55 00:02:46,280 --> 00:02:48,560 Speaker 1: of a problem is this going to be for the 56 00:02:48,600 --> 00:02:52,080 Speaker 1: regional banks around the country over the next you know, quarters, 57 00:02:52,120 --> 00:02:54,040 Speaker 1: but really a couple of years probably, Yeah. 58 00:02:53,800 --> 00:02:54,280 Speaker 6: That's right. 59 00:02:54,400 --> 00:02:58,400 Speaker 5: So I would highlight that the real main focus is 60 00:02:58,440 --> 00:03:02,040 Speaker 5: office commercial real estate. At other areas that were sort 61 00:03:02,080 --> 00:03:05,120 Speaker 5: of in the in the spotlight, like hotels and other 62 00:03:05,280 --> 00:03:09,000 Speaker 5: areas like that are performing pretty well. At this point, 63 00:03:09,760 --> 00:03:13,560 Speaker 5: but office commercial real estate is the big focus. The 64 00:03:13,600 --> 00:03:17,200 Speaker 5: good thing is that exposures are pretty manageable. We're talking 65 00:03:17,240 --> 00:03:19,480 Speaker 5: about for the regions that I cover, two to three 66 00:03:19,560 --> 00:03:23,160 Speaker 5: percent of their entire loan portfolio is situated in office CRE. 67 00:03:23,840 --> 00:03:27,120 Speaker 5: That's a fairly small portion. And we also point to 68 00:03:27,120 --> 00:03:31,120 Speaker 5: the fact that underwriting's pretty conservative, with lone deposit ratios 69 00:03:31,160 --> 00:03:35,240 Speaker 5: around lond to value ratios around sixty percent, which suggests 70 00:03:35,320 --> 00:03:40,680 Speaker 5: pretty strong cushion for potential losses down the road. So 71 00:03:40,880 --> 00:03:44,280 Speaker 5: you could see that you could see losses come, but 72 00:03:44,480 --> 00:03:47,400 Speaker 5: it'll be pretty manageable over the next several years. 73 00:03:47,840 --> 00:03:51,320 Speaker 4: So Allison, whenever we do hear from Goldman and Morgan Stanley, 74 00:03:51,400 --> 00:03:55,040 Speaker 4: how exactly will this put the investment banking slowdown into 75 00:03:55,120 --> 00:03:56,560 Speaker 4: more perspective from here? 76 00:03:57,400 --> 00:04:00,200 Speaker 3: So, obviously the business is more important for those two 77 00:04:00,280 --> 00:04:03,200 Speaker 3: banks and some of these more diversified banks that we watch. 78 00:04:04,440 --> 00:04:06,760 Speaker 3: I keep in mind that Goldman Sachs and Morgan Stanley 79 00:04:06,920 --> 00:04:11,760 Speaker 3: had really strong fixed income trading last year, especially driven 80 00:04:11,760 --> 00:04:14,160 Speaker 3: by the commodities front. So when we see some of 81 00:04:14,160 --> 00:04:18,240 Speaker 3: those declines come in, there might be some some negative headlines, 82 00:04:19,240 --> 00:04:22,200 Speaker 3: but in general we do think that you know, there 83 00:04:22,320 --> 00:04:25,200 Speaker 3: there is some support for fixed income trading normalizing in 84 00:04:25,560 --> 00:04:29,160 Speaker 3: a historically high level equity trading not so much. That's 85 00:04:29,200 --> 00:04:32,520 Speaker 3: more negative on the margin for Morgan Stanley because they 86 00:04:32,560 --> 00:04:36,640 Speaker 3: do are are more skewed to the equity side of things. 87 00:04:36,960 --> 00:04:40,120 Speaker 3: But more importantly, we'll be looking at fees. You know, 88 00:04:40,200 --> 00:04:43,160 Speaker 3: Goldman is far and away the m and a revenue leader. 89 00:04:43,240 --> 00:04:46,040 Speaker 3: There's all different kinds of rankings and such, but they 90 00:04:46,080 --> 00:04:49,040 Speaker 3: do tend to earn, you know, multiples of the next 91 00:04:49,080 --> 00:04:52,279 Speaker 3: competitor in terms of revenue just due to sort of 92 00:04:52,320 --> 00:04:56,560 Speaker 3: leading positions on certain deals and that that's been a headwind. 93 00:04:56,839 --> 00:04:59,280 Speaker 3: It's going to be a headwind for the banks. Are 94 00:04:59,320 --> 00:05:02,960 Speaker 3: they still expecting you know, optimism for twenty twenty four 95 00:05:03,800 --> 00:05:05,839 Speaker 3: these green shoots that we saw on the equity side 96 00:05:05,880 --> 00:05:09,920 Speaker 3: of things, Will that help in the quarter? And then 97 00:05:10,080 --> 00:05:13,120 Speaker 3: you know wealth and as asset management benefiting there from 98 00:05:13,120 --> 00:05:15,880 Speaker 3: some of the recent equity prices. How is that translating 99 00:05:15,920 --> 00:05:17,599 Speaker 3: for those businesses for the big banks? 100 00:05:18,040 --> 00:05:19,360 Speaker 1: Hey, Hermin, I know when we were talking to you 101 00:05:19,400 --> 00:05:21,880 Speaker 1: almost on a daily basis there a few months ago, 102 00:05:21,920 --> 00:05:23,960 Speaker 1: when we were earlier in the thick of this regional 103 00:05:24,000 --> 00:05:26,800 Speaker 1: bank you know kind of melt down a little bit 104 00:05:26,800 --> 00:05:29,400 Speaker 1: for a handful of names you've just kind of highlighted 105 00:05:29,400 --> 00:05:31,479 Speaker 1: to us. We need to focus on earnings risk for 106 00:05:31,520 --> 00:05:33,440 Speaker 1: these banks, and that's where the pressure is going to come. 107 00:05:34,800 --> 00:05:37,080 Speaker 1: Is has the earnings risk been taken out of this 108 00:05:37,120 --> 00:05:39,560 Speaker 1: group or do you think there's still more downward revisions? 109 00:05:39,760 --> 00:05:40,880 Speaker 1: Where are we net process? 110 00:05:41,960 --> 00:05:44,360 Speaker 5: There's going to be there continues to be some uncertainty 111 00:05:44,720 --> 00:05:48,560 Speaker 5: in regards to earnings. Really, it's going to be focused 112 00:05:48,600 --> 00:05:51,120 Speaker 5: on good deposit repricing. I don't think a lot of 113 00:05:51,120 --> 00:05:54,120 Speaker 5: the regionals have a firm handle on how quickly and 114 00:05:54,240 --> 00:05:59,719 Speaker 5: how fast and where that potential deposit repricing stops. We're 115 00:05:59,760 --> 00:06:03,440 Speaker 5: going to see potentially another FED rate hike. That's a 116 00:06:03,520 --> 00:06:08,839 Speaker 5: negative for deposit repricing. And look, JP Morgan just said 117 00:06:08,839 --> 00:06:12,360 Speaker 5: that deposit competition is rising, and if the biggest bank 118 00:06:12,400 --> 00:06:14,880 Speaker 5: in the United States is the posit competition is rising, 119 00:06:14,960 --> 00:06:18,280 Speaker 5: then you could expect pressure across the regionals because of that. 120 00:06:18,920 --> 00:06:20,719 Speaker 4: And I wanted to follow up on that because the 121 00:06:20,720 --> 00:06:24,600 Speaker 4: FED has pointed a tougher capital and liquidity rules, especially 122 00:06:24,600 --> 00:06:26,200 Speaker 4: for the mid sized banks. What do you think that 123 00:06:26,279 --> 00:06:26,800 Speaker 4: stake there? 124 00:06:27,120 --> 00:06:32,240 Speaker 5: Yeah, so there's going to be higher capital ratios. We 125 00:06:32,320 --> 00:06:37,279 Speaker 5: expect also higher liquidity rules, tougher liquider rules for the 126 00:06:37,320 --> 00:06:42,360 Speaker 5: regional banks. All that will serve to reduce profitability and 127 00:06:42,640 --> 00:06:45,800 Speaker 5: row's return on equities for the regionals. That we're talking 128 00:06:45,839 --> 00:06:49,720 Speaker 5: about regionals with assets above one hundred billion dollars, So 129 00:06:50,160 --> 00:06:53,120 Speaker 5: we're talking about a fairly small subgroup of regionals, but 130 00:06:53,320 --> 00:06:57,799 Speaker 5: you're going to see maybe one hundred two hundred basis 131 00:06:57,800 --> 00:07:03,000 Speaker 5: points of return just stall off the profitability spectrum across 132 00:07:03,040 --> 00:07:06,560 Speaker 5: these banks, and that that's gonna be something that the 133 00:07:07,040 --> 00:07:09,119 Speaker 5: industry is going to need to digest, and you're gonna 134 00:07:09,120 --> 00:07:12,120 Speaker 5: see some cost cuts. You could potential see M and 135 00:07:12,160 --> 00:07:14,760 Speaker 5: A down the road to absorb some of these regulatory 136 00:07:14,840 --> 00:07:18,200 Speaker 5: pressures and top line pressure. So those are things we're 137 00:07:18,240 --> 00:07:19,040 Speaker 5: expecting down the road. 138 00:07:19,720 --> 00:07:22,960 Speaker 1: Allison, real quick, thirty seconds. Goldman's acxis week. How much 139 00:07:23,000 --> 00:07:26,040 Speaker 1: pressure is the CEO, mister Solomon under at the moment. 140 00:07:26,960 --> 00:07:28,640 Speaker 3: I mean, I think to the extent that things are 141 00:07:28,680 --> 00:07:31,960 Speaker 3: related to the environment. It's the environment. So I think 142 00:07:32,000 --> 00:07:35,520 Speaker 3: investors will be watching, you know, how the market share 143 00:07:35,600 --> 00:07:38,960 Speaker 3: is holding up and how these longer term initiatives holding 144 00:07:39,080 --> 00:07:41,120 Speaker 3: have been holding up. I mean, there's been a lot 145 00:07:41,120 --> 00:07:42,880 Speaker 3: of focus over the last couple of years and the 146 00:07:42,920 --> 00:07:45,560 Speaker 3: consumer effort and sort of the wind down of some 147 00:07:45,600 --> 00:07:47,960 Speaker 3: of those initiatives. But I would keep in mind that 148 00:07:47,960 --> 00:07:50,880 Speaker 3: those were in place when he took the helm, and 149 00:07:50,960 --> 00:07:56,240 Speaker 3: so you know, it's not necessarily something he created. It's 150 00:07:56,240 --> 00:07:59,800 Speaker 3: not a reason that investors ever owned the stock, quite frankly, 151 00:08:00,360 --> 00:08:04,320 Speaker 3: but things like the alternatives business, things like what's happening 152 00:08:04,320 --> 00:08:07,880 Speaker 3: on the cost side, that is something investors are focusing on. 153 00:08:08,440 --> 00:08:09,800 Speaker 3: You know, they're going to be way out of bounds 154 00:08:09,840 --> 00:08:12,840 Speaker 3: in terms of their costs versus their target because they 155 00:08:12,840 --> 00:08:15,120 Speaker 3: have some one timers and some impairments, so it's going 156 00:08:15,200 --> 00:08:17,720 Speaker 3: to be pretty much of a mass when they report, 157 00:08:17,760 --> 00:08:19,440 Speaker 3: But people are going to be looking for, like what 158 00:08:19,560 --> 00:08:21,600 Speaker 3: is that core cost trend? 159 00:08:22,160 --> 00:08:24,120 Speaker 1: Wrote in on the train today, saw Buddy mine who's 160 00:08:24,120 --> 00:08:25,680 Speaker 1: an m and a banker. He works at an investment 161 00:08:25,720 --> 00:08:28,520 Speaker 1: bank that focuses on regional banks. His wife wants him 162 00:08:28,520 --> 00:08:32,720 Speaker 1: to retire, and he says no, because the next five 163 00:08:32,760 --> 00:08:34,599 Speaker 1: years he thinks are going to be the most lucrative 164 00:08:34,720 --> 00:08:37,719 Speaker 1: in his career. He's about sixty years old. He's to 165 00:08:37,800 --> 00:08:39,440 Speaker 1: be the most lucrative in terms of the fees of 166 00:08:39,440 --> 00:08:41,560 Speaker 1: his career of the next five years, and he wants 167 00:08:41,600 --> 00:08:43,599 Speaker 1: to be there, so boom. He thinks there's gonna be 168 00:08:43,600 --> 00:08:44,920 Speaker 1: a lot of M and A in the space. I said, 169 00:08:45,000 --> 00:08:48,640 Speaker 1: that's interesting. So anyway, Allison Williams Herman Chin, they cover 170 00:08:48,760 --> 00:08:51,240 Speaker 1: all the banks for Bloomberg Intelligence. We appreciate getting them 171 00:08:51,360 --> 00:08:52,880 Speaker 1: in office. 172 00:08:53,800 --> 00:08:57,199 Speaker 7: You're listening to the team. Ken's are Live program Bloomberg 173 00:08:57,240 --> 00:09:00,760 Speaker 7: Markets weekdays at ten am Easter and can Bloomberg the 174 00:09:00,840 --> 00:09:04,000 Speaker 7: iHeartRadio app and the Bloomberg Business app or listen on 175 00:09:04,040 --> 00:09:06,000 Speaker 7: demand wherever you get your podcasts. 176 00:09:08,160 --> 00:09:12,199 Speaker 1: Lots of earnings this week, including Netflix after the close 177 00:09:13,000 --> 00:09:15,079 Speaker 1: on Wednesday. Stock's had a great run. 178 00:09:15,120 --> 00:09:17,840 Speaker 4: It's over one hundred percent over the last twelve months. 179 00:09:17,920 --> 00:09:20,120 Speaker 1: Yeah, just amazing. It's still down about twenty five percent 180 00:09:20,120 --> 00:09:22,200 Speaker 1: from its all time high, but it's hitting a fifty 181 00:09:22,240 --> 00:09:25,560 Speaker 1: two week high today, so finding it's putting again. Keithan 182 00:09:25,600 --> 00:09:28,839 Speaker 1: Ranganathen joins us here via zoom She covers all things 183 00:09:28,960 --> 00:09:32,480 Speaker 1: media on a global scale for Bloomberg Intelligence. So let's 184 00:09:32,520 --> 00:09:35,319 Speaker 1: just start there at Getha. It's the one bright spot 185 00:09:35,360 --> 00:09:38,600 Speaker 1: I think within the media landscape that's actually doing well 186 00:09:38,600 --> 00:09:40,640 Speaker 1: from Stock respective what do you expect to hear from 187 00:09:40,720 --> 00:09:41,680 Speaker 1: our friends in Netflix. 188 00:09:42,840 --> 00:09:45,800 Speaker 6: Yeah, so absolutely things are looking pretty bright for Netflix. 189 00:09:45,880 --> 00:09:49,600 Speaker 6: I mean, with all of the attention now on streaming profitability, 190 00:09:49,679 --> 00:09:53,400 Speaker 6: this is one streamer that has really got that portion 191 00:09:53,559 --> 00:09:56,120 Speaker 6: of the equation right. So they have found, you know, 192 00:09:56,160 --> 00:09:59,760 Speaker 6: this kind of nice formula where they're balancing costs and profitability, 193 00:09:59,800 --> 00:10:01,800 Speaker 6: and so we're going to obviously see them kind of 194 00:10:02,360 --> 00:10:05,720 Speaker 6: really post I think good operating income numbers, good margin numbers. 195 00:10:05,960 --> 00:10:07,360 Speaker 6: But I think where a lot of the attention is 196 00:10:07,400 --> 00:10:09,640 Speaker 6: going to come down is to see where their most 197 00:10:09,679 --> 00:10:12,640 Speaker 6: recent initiatives whether those are bearing fruit. And what we're 198 00:10:12,679 --> 00:10:15,840 Speaker 6: talking about is an AD based year, which was introduced 199 00:10:15,920 --> 00:10:19,120 Speaker 6: late last year late last year, but more importantly, their 200 00:10:19,160 --> 00:10:24,320 Speaker 6: recent password crackdown initiative, and they've kind of implemented this 201 00:10:24,440 --> 00:10:27,440 Speaker 6: in the US, across the world in over one hundred markets, 202 00:10:27,840 --> 00:10:29,880 Speaker 6: and you know, some recent data points seem to suggest 203 00:10:29,880 --> 00:10:32,760 Speaker 6: that it's actually gone much better than expected. So we 204 00:10:32,880 --> 00:10:37,040 Speaker 6: might expect them to see to post much better subscriber editions. 205 00:10:37,120 --> 00:10:40,079 Speaker 6: Right now, consensus points for about just under two million 206 00:10:40,440 --> 00:10:44,400 Speaker 6: new subscriber ads. But you know, a bait could definitely 207 00:10:44,400 --> 00:10:45,000 Speaker 6: be expected. 208 00:10:45,240 --> 00:10:47,240 Speaker 4: And when you see a stock like this up more 209 00:10:47,280 --> 00:10:49,800 Speaker 4: than one hundred percent over the past twelve months, and 210 00:10:49,840 --> 00:10:52,600 Speaker 4: even just looking this year, to Paul's point, over fifty 211 00:10:52,600 --> 00:10:54,840 Speaker 4: percent year to date. How much does this raise the 212 00:10:54,840 --> 00:10:57,520 Speaker 4: bar this earning season when it has been on such 213 00:10:57,559 --> 00:10:57,959 Speaker 4: a tear. 214 00:10:59,320 --> 00:11:01,400 Speaker 6: It definitely does raised the bar. I mean, the whole 215 00:11:02,200 --> 00:11:05,120 Speaker 6: focus right now for all of the media landscape is 216 00:11:05,160 --> 00:11:08,040 Speaker 6: really on profits, and this is one company that has 217 00:11:08,080 --> 00:11:10,960 Speaker 6: got it right. I mean, for the longest period of time, 218 00:11:10,960 --> 00:11:13,679 Speaker 6: they were criticized for you know, huge amounts of cash 219 00:11:13,720 --> 00:11:16,280 Speaker 6: burn and then this year where you know, they've guided 220 00:11:16,360 --> 00:11:18,400 Speaker 6: to three and a half billion dollars in free cash 221 00:11:18,400 --> 00:11:22,280 Speaker 6: flow and you can expect them to even surpass that number. 222 00:11:22,280 --> 00:11:24,120 Speaker 6: We are thinking closer to four four and a half 223 00:11:24,160 --> 00:11:26,800 Speaker 6: billion dollars in free cash flow. And this is coming 224 00:11:26,840 --> 00:11:29,280 Speaker 6: at a time when other companies are kind of really 225 00:11:29,320 --> 00:11:31,679 Speaker 6: struggling to find their footing in terms of, you know, 226 00:11:32,240 --> 00:11:35,480 Speaker 6: getting to that profitability metric. We saw some pretty you know, 227 00:11:35,640 --> 00:11:39,200 Speaker 6: dismal kind of forecasts out from Bob Ayger and Disney 228 00:11:39,280 --> 00:11:42,080 Speaker 6: just in terms of you know, the linear TV business 229 00:11:42,120 --> 00:11:46,360 Speaker 6: and even streaming profitability. There's really no clear cut path. 230 00:11:46,600 --> 00:11:49,080 Speaker 6: As we have at Netflix, we just don't. We're not 231 00:11:49,240 --> 00:11:52,400 Speaker 6: seeing it at any other company. So obviously, economics in 232 00:11:52,400 --> 00:11:54,679 Speaker 6: this space are very, very challenged right now, but Netflix 233 00:11:54,720 --> 00:11:57,480 Speaker 6: definitely will set the bar higher, no doubt about it. 234 00:11:57,520 --> 00:11:57,800 Speaker 6: All Right. 235 00:11:57,840 --> 00:11:59,640 Speaker 1: So that's about the extent of the good news in 236 00:11:59,679 --> 00:12:02,640 Speaker 1: your space Netflix. The rest of it's are kind of 237 00:12:02,760 --> 00:12:06,000 Speaker 1: a little bit dire. Let's start with paramount Mission Impossible, 238 00:12:06,080 --> 00:12:08,959 Speaker 1: Tom Cruise fifty six million bucks over the weekend. I 239 00:12:09,040 --> 00:12:12,480 Speaker 1: think that was below consensus here. Kind of what's the takeaway. 240 00:12:12,559 --> 00:12:15,600 Speaker 1: Is it just a you know, title specific issue, or 241 00:12:15,600 --> 00:12:18,000 Speaker 1: is this maybe ring a little bit more broader as 242 00:12:18,040 --> 00:12:20,040 Speaker 1: it relates to what people where people want to go 243 00:12:20,040 --> 00:12:21,440 Speaker 1: in terms of theaters and things like that. 244 00:12:22,200 --> 00:12:24,319 Speaker 6: Yeah, it's been a little bit of a roller coaster, Paul, 245 00:12:24,640 --> 00:12:26,880 Speaker 6: in terms of box office performance. So I think in 246 00:12:27,000 --> 00:12:30,000 Speaker 6: general the tone has been pretty positive for about you know, 247 00:12:30,120 --> 00:12:33,520 Speaker 6: just generally we've kind of seen that comeback in terms 248 00:12:33,559 --> 00:12:36,520 Speaker 6: of box office attendance, but some of the more you know, 249 00:12:36,600 --> 00:12:40,560 Speaker 6: recent titles, they haven't necessarily performed as well as you know, 250 00:12:40,600 --> 00:12:42,600 Speaker 6: industry experts we're hoping for, whether it's you know, the 251 00:12:42,600 --> 00:12:45,720 Speaker 6: Indiana Jones movie, whether it was Elemental from Disney and 252 00:12:45,760 --> 00:12:48,720 Speaker 6: now more recently. You know, kind of this this mission impossible, 253 00:12:49,000 --> 00:12:52,199 Speaker 6: but I think you know, overall, the tone still continues 254 00:12:52,280 --> 00:12:55,160 Speaker 6: to be pretty positive. I mean, if you're comparing box 255 00:12:55,160 --> 00:12:57,920 Speaker 6: office numbers to pre pandemic, yes we're still down about 256 00:12:57,920 --> 00:13:01,280 Speaker 6: twenty to twenty five percent, but I think you know, 257 00:13:01,440 --> 00:13:05,160 Speaker 6: things you know should generally pick up. That said again, 258 00:13:05,200 --> 00:13:07,760 Speaker 6: the question being are we ever going to see it 259 00:13:07,800 --> 00:13:10,560 Speaker 6: go back to pre pandemic levels? Probably not. I mean 260 00:13:10,600 --> 00:13:14,480 Speaker 6: we have multiple things right now affecting the industry. You know, 261 00:13:14,520 --> 00:13:16,959 Speaker 6: we have a strike that's going on. We have all 262 00:13:17,000 --> 00:13:19,240 Speaker 6: of these companies that are kind of paring down in 263 00:13:19,320 --> 00:13:21,240 Speaker 6: terms of their content spending. Disney even came out and 264 00:13:21,240 --> 00:13:23,800 Speaker 6: said that they're actually taking down their studio spending. So 265 00:13:23,800 --> 00:13:25,520 Speaker 6: if you kind of put all of those together, that 266 00:13:25,520 --> 00:13:29,040 Speaker 6: doesn't necessarily bode extremely well for you know, the health 267 00:13:29,040 --> 00:13:30,319 Speaker 6: of the box office. 268 00:13:30,600 --> 00:13:33,000 Speaker 4: What about when it comes to this Barbie movie that's 269 00:13:33,000 --> 00:13:35,199 Speaker 4: coming out soon, have to ask about that and your 270 00:13:35,200 --> 00:13:37,679 Speaker 4: thoughts on it. It almost feels like it was already 271 00:13:38,000 --> 00:13:40,360 Speaker 4: widely distributed because we've been talking about it for so 272 00:13:40,480 --> 00:13:41,320 Speaker 4: many months. 273 00:13:41,880 --> 00:13:45,880 Speaker 6: I mean, I'm super excited for it, watch it. I 274 00:13:45,920 --> 00:13:48,080 Speaker 6: know we have that whole you know Barbenheimer with you know, 275 00:13:48,120 --> 00:13:50,920 Speaker 6: the Oppenheimer movie also coming out, So there's obviously a 276 00:13:50,960 --> 00:13:55,120 Speaker 6: lot of buzz. You know, it's huge promotions at CinemaCon 277 00:13:55,200 --> 00:13:57,559 Speaker 6: when I attended that earlier in April, you know, we 278 00:13:57,640 --> 00:13:59,079 Speaker 6: had all the A listers kind of come out and 279 00:13:59,120 --> 00:14:02,280 Speaker 6: promote the movie. So obviously a lot of buzz, and 280 00:14:02,320 --> 00:14:04,320 Speaker 6: I think it should do really really well for Warner. 281 00:14:04,880 --> 00:14:06,600 Speaker 1: All right, so let's go to Bob Biger. He had 282 00:14:06,640 --> 00:14:09,200 Speaker 1: a pretty extensive interview last week where he broke a 283 00:14:09,200 --> 00:14:12,600 Speaker 1: lot of new ground. I thought the biggest headline was 284 00:14:13,200 --> 00:14:16,000 Speaker 1: there's really no sacred cows at ESPN here. I mean 285 00:14:16,040 --> 00:14:18,480 Speaker 1: he was talking about, you know, maybe doing something with 286 00:14:18,559 --> 00:14:22,520 Speaker 1: the networks including ESPN, maybe spinning them off, you know, 287 00:14:22,560 --> 00:14:25,800 Speaker 1: partnering up with a third party. Wow, what do you 288 00:14:25,840 --> 00:14:27,880 Speaker 1: think they want to do with their linear TV business 289 00:14:28,280 --> 00:14:29,440 Speaker 1: including ESPN. 290 00:14:30,240 --> 00:14:32,400 Speaker 6: Yeah, there's just too much focus, Paul, as you know, 291 00:14:32,520 --> 00:14:35,160 Speaker 6: on on the linear TV business as and if you've 292 00:14:35,160 --> 00:14:37,280 Speaker 6: looked at some of the more recent court cutting data, 293 00:14:37,360 --> 00:14:40,240 Speaker 6: it's really really dire. So you know, we used to 294 00:14:40,280 --> 00:14:43,240 Speaker 6: have video subscriber declines hovering around in the four five 295 00:14:43,320 --> 00:14:46,080 Speaker 6: six percent range. Those have double right now. So we're 296 00:14:46,080 --> 00:14:48,760 Speaker 6: seeing about twelve percent declines in the in the video 297 00:14:48,760 --> 00:14:51,680 Speaker 6: subscriber pase. So obviously it does not bode well at 298 00:14:51,720 --> 00:14:54,720 Speaker 6: all for the linear networks, the linear network business, and 299 00:14:54,720 --> 00:14:57,160 Speaker 6: I think Bob Bieger was exactly referring to that. Having 300 00:14:57,200 --> 00:14:58,840 Speaker 6: said that, though, I think he's making a little bit 301 00:14:58,840 --> 00:15:02,200 Speaker 6: of a differentiation between you know, the ESPN assets, which 302 00:15:02,200 --> 00:15:04,440 Speaker 6: are still very, very valuable to Disney. So they're obviously 303 00:15:04,480 --> 00:15:07,760 Speaker 6: trying to find some kind of future path with you know, 304 00:15:07,840 --> 00:15:11,600 Speaker 6: that a big, bigger foray into the director consumer portion 305 00:15:11,720 --> 00:15:14,480 Speaker 6: of the of the ESPN business. But they are also 306 00:15:14,560 --> 00:15:17,359 Speaker 6: saying that, you know, all the rest of the networks, 307 00:15:17,360 --> 00:15:19,920 Speaker 6: So whether it's a free form, whether it's a Disney channel, 308 00:15:19,920 --> 00:15:23,440 Speaker 6: whether it's an Effects or a national geographic those are, 309 00:15:23,680 --> 00:15:26,640 Speaker 6: or even the E or even the AABC broadcast network, 310 00:15:26,680 --> 00:15:29,120 Speaker 6: all of those are non core assets, and they're really 311 00:15:29,120 --> 00:15:31,720 Speaker 6: looking to kind of offload those assets. So it's going 312 00:15:31,760 --> 00:15:33,680 Speaker 6: to be interesting. I mean, obviously the writing is on 313 00:15:33,720 --> 00:15:37,120 Speaker 6: the wall, Uh, these assets are in structural decline. The 314 00:15:37,240 --> 00:15:40,160 Speaker 6: question is, yes, it's a good thing if Disney can 315 00:15:40,160 --> 00:15:41,960 Speaker 6: actually get rid of those and get some cash back 316 00:15:42,000 --> 00:15:44,960 Speaker 6: into the business. The question is, who's really going to 317 00:15:45,000 --> 00:15:47,360 Speaker 6: buy that. I mean, is it going to be private equity, 318 00:15:47,480 --> 00:15:49,720 Speaker 6: is it going to be another media company? Just there's 319 00:15:49,800 --> 00:15:53,760 Speaker 6: just no you know, healthy future outlook for those assets. 320 00:15:53,760 --> 00:15:56,040 Speaker 6: So I think that is really the biggest question right 321 00:15:56,080 --> 00:15:57,120 Speaker 6: now investors' minds. 322 00:15:57,240 --> 00:16:00,920 Speaker 4: And Disney also extended Bobbeiger's contract by neother two years 323 00:16:00,960 --> 00:16:04,240 Speaker 4: to twenty twenty six. Shocking right now, Paul. I know 324 00:16:04,240 --> 00:16:07,200 Speaker 4: how closely Paul watches the stock Mickey Mouse, But what 325 00:16:07,240 --> 00:16:10,320 Speaker 4: does it mean when it comes to giving a long 326 00:16:10,400 --> 00:16:13,200 Speaker 4: time executive like this more time to implement his turnaround 327 00:16:13,200 --> 00:16:15,640 Speaker 4: plan and to ultimately find a successor? 328 00:16:16,800 --> 00:16:19,560 Speaker 6: Yeah, I think you know that there's there's the positives 329 00:16:19,560 --> 00:16:23,720 Speaker 6: and the negatives. The positives obviously it's it. It signals 330 00:16:23,760 --> 00:16:26,200 Speaker 6: a lot of stability for the company, especially when we 331 00:16:26,280 --> 00:16:30,040 Speaker 6: have such a turbulent kind of a media ecosystem right now. 332 00:16:30,080 --> 00:16:32,480 Speaker 6: So obviously bar Bieger knows what to do, He's not 333 00:16:32,560 --> 00:16:34,880 Speaker 6: going to be shy about doing it. And remember, we 334 00:16:34,960 --> 00:16:39,040 Speaker 6: already have some kind of you know, management upheaval with 335 00:16:39,080 --> 00:16:42,640 Speaker 6: the departure of the CFO Christine McCarthy, so kind of 336 00:16:42,720 --> 00:16:45,000 Speaker 6: not having Barbieger there would have led to kind of 337 00:16:45,040 --> 00:16:46,840 Speaker 6: two executive searchers at the same time, which would have 338 00:16:46,840 --> 00:16:48,240 Speaker 6: been a little bit difficult, I think for the company 339 00:16:48,240 --> 00:16:50,520 Speaker 6: to maneuver. So I think this kind of makes sense. 340 00:16:50,800 --> 00:16:54,120 Speaker 6: But again it brings again to light the biggest issue 341 00:16:54,120 --> 00:16:56,120 Speaker 6: for Disney, which has been the succession issue, and that 342 00:16:56,240 --> 00:16:58,920 Speaker 6: just continues to be an issue. So yeah, there's a 343 00:16:58,920 --> 00:17:00,680 Speaker 6: little bit of good and bad. But I think as 344 00:17:00,680 --> 00:17:04,440 Speaker 6: we kind of navigate this very, very tumultuous time, it's 345 00:17:04,480 --> 00:17:06,120 Speaker 6: good to have kind of a steady hand with Bob 346 00:17:06,200 --> 00:17:07,440 Speaker 6: Aiger and I. 347 00:17:07,440 --> 00:17:09,639 Speaker 1: Hear from a little Birdie that Walt Disney Company is 348 00:17:09,680 --> 00:17:12,120 Speaker 1: kind of have an investor meetium, good old fashioned bring everybody 349 00:17:12,119 --> 00:17:15,520 Speaker 1: down the Disney World or Disneyland in October and Getha, 350 00:17:15,560 --> 00:17:17,280 Speaker 1: I'm sure we'll be there and reporting back to us. 351 00:17:17,320 --> 00:17:20,040 Speaker 1: But that's where I'm sure they'd like to make some big, 352 00:17:20,040 --> 00:17:22,960 Speaker 1: big announcements, so be on the lookout for that. Keetha 353 00:17:23,000 --> 00:17:25,080 Speaker 1: Rang and Nathan, thanks so much for joining us. Githa 354 00:17:25,160 --> 00:17:29,080 Speaker 1: is our globalhead of all Media in Research and we 355 00:17:29,119 --> 00:17:31,880 Speaker 1: appreciate getting a few minutes of her time. But again, 356 00:17:31,960 --> 00:17:34,360 Speaker 1: as you know, Getha was just suggesting, it's a tough 357 00:17:34,400 --> 00:17:36,199 Speaker 1: time to be an investor in the media. Space not 358 00:17:36,800 --> 00:17:38,000 Speaker 1: there's just so much uncertainty. 359 00:17:38,000 --> 00:17:41,119 Speaker 4: There're looking at Disney stock ticker symbol dis It's flat 360 00:17:41,160 --> 00:17:42,920 Speaker 4: for the year. You look over the past five years, 361 00:17:42,960 --> 00:17:45,440 Speaker 4: down more than twenty percent in that span. 362 00:17:45,440 --> 00:17:48,320 Speaker 1: Yep, exactly. So you know the real as these companies 363 00:17:48,359 --> 00:17:52,360 Speaker 1: pivot from the traditional distribution of cable systems and satellite 364 00:17:52,359 --> 00:17:54,600 Speaker 1: systems to this new thing called streaming, there's just a 365 00:17:54,640 --> 00:17:56,639 Speaker 1: ton of uncertainty about how that will happen in the 366 00:17:57,119 --> 00:17:58,640 Speaker 1: actual profitability of that business. 367 00:17:58,840 --> 00:18:01,960 Speaker 7: You're listening to the tape. Can's are live program Bloomberg 368 00:18:02,000 --> 00:18:05,600 Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the 369 00:18:05,680 --> 00:18:08,920 Speaker 7: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 370 00:18:08,920 --> 00:18:11,760 Speaker 7: You can also listen live on Amazon Alexa from our 371 00:18:11,760 --> 00:18:16,760 Speaker 7: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 372 00:18:18,000 --> 00:18:20,800 Speaker 8: Treasury Secretary Janet Yellen, you join us now from India 373 00:18:20,800 --> 00:18:23,560 Speaker 8: where you're meeting your counterparts. It's the G twenty Finance 374 00:18:23,600 --> 00:18:26,720 Speaker 8: Ministers and Central Bank Governor's meeting. And really the cloud 375 00:18:26,760 --> 00:18:29,120 Speaker 8: around this meeting is the fresh data we got out 376 00:18:29,160 --> 00:18:33,000 Speaker 8: of China today. Beijing slowing momentum in their growth. City 377 00:18:33,119 --> 00:18:36,640 Speaker 8: is talking about the growth target being at risk. I'd 378 00:18:36,680 --> 00:18:39,560 Speaker 8: like to start Treasury Secretary with the fact of whether 379 00:18:39,600 --> 00:18:42,440 Speaker 8: you think this means there could be an increased chance 380 00:18:42,520 --> 00:18:43,480 Speaker 8: of a US recession. 381 00:18:47,240 --> 00:18:51,960 Speaker 9: Well, you're talking about the slow growth number from China, 382 00:18:52,080 --> 00:18:53,320 Speaker 9: Is that right, Anne Marie? 383 00:18:54,200 --> 00:19:00,200 Speaker 10: Yes, correct, So I think trying. 384 00:19:00,400 --> 00:19:07,160 Speaker 9: Has seen slower growth than they expected upon opening up 385 00:19:07,240 --> 00:19:14,240 Speaker 9: from COVID. Consumer spending has been relatively weak. It looks 386 00:19:14,320 --> 00:19:20,359 Speaker 9: like consumers are more focused on building back their savings buffers, 387 00:19:20,400 --> 00:19:23,800 Speaker 9: and so growth has been slow in As you know, 388 00:19:24,080 --> 00:19:28,840 Speaker 9: youth unemployment is quite high there. So I think the 389 00:19:29,000 --> 00:19:34,840 Speaker 9: Chinese are concerned about sluggish growth in their economy. 390 00:19:35,920 --> 00:19:38,600 Speaker 8: But what does this mean for US growth and global 391 00:19:38,640 --> 00:19:41,640 Speaker 8: growth overall? Is the soft landing in the United States? 392 00:19:41,640 --> 00:19:43,920 Speaker 8: So your base case scenario. 393 00:19:46,960 --> 00:19:53,040 Speaker 9: Well, many countries do depend on strong Chinese growth to 394 00:19:53,160 --> 00:19:58,080 Speaker 9: promote growth in their own economies, particularly countries in Asia, 395 00:19:58,280 --> 00:20:03,760 Speaker 9: and slow growth in China can have some negative spillovers. 396 00:20:04,640 --> 00:20:09,040 Speaker 9: For the United States, growth is slowed, but our labor 397 00:20:09,119 --> 00:20:15,080 Speaker 9: market continues to be quite strong. I don't expect a recession. 398 00:20:16,200 --> 00:20:20,200 Speaker 9: I think that we're on a good path to bringing 399 00:20:20,240 --> 00:20:25,960 Speaker 9: inflation down. The most recent inflation data, we're quite encouraging 400 00:20:26,720 --> 00:20:31,760 Speaker 9: that we're making progress on getting inflation down. But as 401 00:20:31,840 --> 00:20:36,160 Speaker 9: I'd hoped and expected, that would occur in the context 402 00:20:36,240 --> 00:20:40,320 Speaker 9: of a strong labor market, and we continue to see 403 00:20:40,359 --> 00:20:44,680 Speaker 9: that the labor market's the fact the labor market's been 404 00:20:44,720 --> 00:20:50,520 Speaker 9: so strong has encouraged more primage people to enter the 405 00:20:50,640 --> 00:20:54,480 Speaker 9: labor force into work, and that's helped take a bit 406 00:20:54,520 --> 00:20:58,560 Speaker 9: of the heat out of the labor market. The fact 407 00:20:58,640 --> 00:21:04,359 Speaker 9: that growth overall has slowed after we enjoyed a rapid recovery, 408 00:21:04,720 --> 00:21:09,679 Speaker 9: that's normal, but it's also led to some reduction in 409 00:21:10,840 --> 00:21:17,040 Speaker 9: the desire of firms to hire. Still lots of job openings, 410 00:21:17,119 --> 00:21:23,439 Speaker 9: but wage growth is moderating and inflation is subsiding. So 411 00:21:24,080 --> 00:21:26,760 Speaker 9: I think we're in a good path on the United States. 412 00:21:28,040 --> 00:21:30,520 Speaker 8: Okay, so it sounds like soft landing is your base case, 413 00:21:30,560 --> 00:21:33,320 Speaker 8: and you don't think we're going to see a recession. Yesterday, 414 00:21:33,320 --> 00:21:35,399 Speaker 8: when you were speaking to reporters, you talked about this 415 00:21:35,520 --> 00:21:39,640 Speaker 8: de escalation with China, and you rolled out lifting tariffs 416 00:21:39,680 --> 00:21:42,520 Speaker 8: as part of this de escalation with Beijing. 417 00:21:42,840 --> 00:21:44,119 Speaker 10: So what is on the table? 418 00:21:47,680 --> 00:21:51,399 Speaker 9: So you know, several years have gone by in which 419 00:21:51,440 --> 00:21:57,280 Speaker 9: we've had COVID lockdowns, especially in China and very limited 420 00:21:57,440 --> 00:22:02,360 Speaker 9: contact between senior fish in the United States and China. 421 00:22:03,040 --> 00:22:07,919 Speaker 9: And we now have a new economic team in China 422 00:22:08,640 --> 00:22:14,080 Speaker 9: that we need to establish relationships with. We need to 423 00:22:14,119 --> 00:22:18,680 Speaker 9: get our relationship back in a more stable place, put 424 00:22:18,720 --> 00:22:22,760 Speaker 9: a floor under it, and try to promote better understanding 425 00:22:23,280 --> 00:22:28,920 Speaker 9: between our countries. So I recently made a trip met 426 00:22:29,000 --> 00:22:34,920 Speaker 9: with a number of senior Chinese officials, including the new 427 00:22:35,040 --> 00:22:41,320 Speaker 9: economic team. There, we had very cantid discussions. Each side 428 00:22:41,520 --> 00:22:47,240 Speaker 9: raised a series of concerns. Chinese certainly mentioned their concern 429 00:22:47,400 --> 00:22:51,320 Speaker 9: with the tariffs that we have in place, but we 430 00:22:51,440 --> 00:22:59,240 Speaker 9: had constructive conversations, deepened our understanding and of the economic 431 00:22:59,320 --> 00:23:04,520 Speaker 9: situation and of our concerns, were able to address them 432 00:23:05,080 --> 00:23:09,800 Speaker 9: and agree that there are a broad range of global challenges, 433 00:23:10,240 --> 00:23:14,960 Speaker 9: particularly debt and climate change, that affect the entire global 434 00:23:15,000 --> 00:23:19,800 Speaker 9: economy that we need to work on jointly, and I'm 435 00:23:19,800 --> 00:23:25,200 Speaker 9: hopeful we'll be able to do that more successfully. On tariffs, 436 00:23:26,240 --> 00:23:31,600 Speaker 9: you know, we put tariffs in place on China because 437 00:23:31,680 --> 00:23:39,240 Speaker 9: we had underlying concerns about unfair trade practices, particularly those 438 00:23:39,400 --> 00:23:47,040 Speaker 9: affecting intellectual property and technology transfer, and those concerns really 439 00:23:47,119 --> 00:23:53,040 Speaker 9: have not been addressed. We're undergoing a four year required 440 00:23:53,160 --> 00:23:58,119 Speaker 9: review of tariffs, and of course China also retaliated putting 441 00:23:58,200 --> 00:24:02,719 Speaker 9: tariffs in place on us. We have to see what 442 00:24:02,840 --> 00:24:06,280 Speaker 9: comes out of the four year review, but I would 443 00:24:06,320 --> 00:24:12,239 Speaker 9: emphasize that really the underlying concerns we have have not 444 00:24:12,359 --> 00:24:15,760 Speaker 9: yet been addressed, and we need to work on that 445 00:24:15,880 --> 00:24:16,680 Speaker 9: going forward. 446 00:24:17,560 --> 00:24:20,320 Speaker 8: But when you're looking at de escalating, we're trying to 447 00:24:20,320 --> 00:24:22,160 Speaker 8: figure out what we'll be left on the table, because 448 00:24:22,200 --> 00:24:24,480 Speaker 8: what it feels right now is the administration is actually 449 00:24:24,520 --> 00:24:27,040 Speaker 8: just amping up when it comes to potential tit for 450 00:24:27,119 --> 00:24:30,959 Speaker 8: tat with Beijing. There is the outbound Executive Order that 451 00:24:31,000 --> 00:24:32,560 Speaker 8: potentially we could see as soon as the end of 452 00:24:32,680 --> 00:24:35,760 Speaker 8: July or this summer. Could that be a place pulling 453 00:24:35,760 --> 00:24:38,600 Speaker 8: a punch from the outbound Executive order, maybe making that 454 00:24:38,680 --> 00:24:40,000 Speaker 8: a little bit more toned down. 455 00:24:40,400 --> 00:24:43,080 Speaker 10: Could that be a place you could de escalate with Beijing. 456 00:24:46,520 --> 00:24:48,760 Speaker 9: Well, first of all, I want to say that what 457 00:24:48,760 --> 00:24:52,920 Speaker 9: we're doing is not tit for tet. What we're doing 458 00:24:53,280 --> 00:25:01,160 Speaker 9: is putting in place controls. They're designed to protect US 459 00:25:01,320 --> 00:25:07,960 Speaker 9: national security and in some cases to address fundamental human 460 00:25:08,080 --> 00:25:14,439 Speaker 9: rights abuses, and we do intend to protect our national 461 00:25:14,880 --> 00:25:20,440 Speaker 9: security we have export controls that play an important role 462 00:25:20,920 --> 00:25:24,480 Speaker 9: in accomplishing that. And what I try to explain to 463 00:25:24,600 --> 00:25:31,520 Speaker 9: our Chinese counterparts is that our desire is to make 464 00:25:31,600 --> 00:25:40,760 Speaker 9: these US policies clearly national security focused, transparent and narrow, 465 00:25:41,800 --> 00:25:47,880 Speaker 9: that we're not attempting to stifle economic progress in China 466 00:25:48,040 --> 00:25:53,080 Speaker 9: that we have and want to continue to have deep 467 00:25:53,160 --> 00:25:57,719 Speaker 9: economic ties. After all, this year, our trade has reached 468 00:25:57,800 --> 00:26:05,880 Speaker 9: almost seven hundred billion dollars. National security concern economic. 469 00:26:06,680 --> 00:26:09,360 Speaker 8: Madame, Secretary of the National Security concerns are so important. 470 00:26:09,400 --> 00:26:13,160 Speaker 8: Jake Sullivan called for this outbound of executive order two 471 00:26:13,240 --> 00:26:13,800 Speaker 8: years ago. 472 00:26:14,000 --> 00:26:16,200 Speaker 10: Why is it taking the administration so long? 473 00:26:19,800 --> 00:26:25,120 Speaker 9: So we are looking carefully at outbound investment controls, and 474 00:26:25,640 --> 00:26:30,240 Speaker 9: they would serve as a complement to the export controls 475 00:26:30,680 --> 00:26:35,119 Speaker 9: that we have in place to make sure that we 476 00:26:35,160 --> 00:26:39,719 Speaker 9: have covered all the channels by which technologies can be 477 00:26:39,800 --> 00:26:45,120 Speaker 9: transferred to China that we think pose national security concerns. 478 00:26:45,520 --> 00:26:49,239 Speaker 9: I explained to my Chinese counterparts that if we go 479 00:26:49,400 --> 00:26:53,800 Speaker 9: forward with these, they would indeed be narrowly targeted. They 480 00:26:53,800 --> 00:27:00,800 Speaker 9: would focus on a few sectors, in particular semiconductors, quantum computing, 481 00:27:01,320 --> 00:27:07,800 Speaker 9: and artificial intelligence, that they would contain a combination of 482 00:27:08,000 --> 00:27:15,680 Speaker 9: notification requirements and in very narrowly scoped portions of these 483 00:27:15,720 --> 00:27:22,000 Speaker 9: sectors prohibitions. But these would not be broad controls that 484 00:27:22,119 --> 00:27:28,560 Speaker 9: would affect US investment broadly in China or in my opinion, 485 00:27:29,720 --> 00:27:37,040 Speaker 9: have a fundamental impact on affecting the investment climate for China, 486 00:27:37,480 --> 00:27:40,800 Speaker 9: So these would be national security focused. 487 00:27:42,840 --> 00:27:44,320 Speaker 10: It sounds like it's already done. 488 00:27:44,440 --> 00:27:47,639 Speaker 8: Is the administration have it finished and is just waiting 489 00:27:47,640 --> 00:27:49,040 Speaker 8: for a good time to release it. 490 00:27:52,160 --> 00:27:54,080 Speaker 9: We want to make sure if we do this, that 491 00:27:54,200 --> 00:27:57,880 Speaker 9: we get it right, and we've been working on the details. 492 00:27:58,600 --> 00:28:01,600 Speaker 9: If we do go ahead, and there is a good 493 00:28:01,680 --> 00:28:06,240 Speaker 9: chance that we will, that we would put out along 494 00:28:06,320 --> 00:28:10,840 Speaker 9: with the executive Order and notice of proposed rulemaking, so 495 00:28:10,920 --> 00:28:14,640 Speaker 9: that the public would have a chance to comment on 496 00:28:14,720 --> 00:28:20,919 Speaker 9: these proposed controls and we would receive a wide range 497 00:28:20,960 --> 00:28:26,000 Speaker 9: of public input before finalizing anything that we do. 498 00:28:28,320 --> 00:28:30,480 Speaker 8: Madame Secretary, you obviously have a lot on your plate 499 00:28:30,520 --> 00:28:33,119 Speaker 8: when it comes to re engaging with China and your 500 00:28:33,160 --> 00:28:34,400 Speaker 8: discussions there. 501 00:28:34,720 --> 00:28:37,400 Speaker 10: Just off this trip from Beijing, I'm curious how. 502 00:28:37,240 --> 00:28:40,880 Speaker 8: Difficult the dialogue is going to continue to be After 503 00:28:40,920 --> 00:28:47,040 Speaker 8: the revelations about the Chinese hacking of your colleague, Secretary 504 00:28:47,080 --> 00:28:47,840 Speaker 8: Gina Ramundo. 505 00:28:51,600 --> 00:28:57,960 Speaker 9: So, I do have concerns about hacking of US government 506 00:28:58,000 --> 00:29:03,640 Speaker 9: officials or at individuals or companies, and I know the 507 00:29:03,760 --> 00:29:09,680 Speaker 9: United States has expressed those concerns. But we intend to 508 00:29:10,360 --> 00:29:17,360 Speaker 9: continue to deepen our discussions with China to increase our engagement. 509 00:29:18,240 --> 00:29:25,360 Speaker 9: It's especially important to explain what our motivation is to 510 00:29:25,440 --> 00:29:32,560 Speaker 9: avoid misunderstandings that can lead to necessary, unnecessary and dangerous escalation. 511 00:29:33,680 --> 00:29:41,920 Speaker 9: President Chi and President Biden agreed in Bali that senior officials, 512 00:29:41,960 --> 00:29:49,520 Speaker 9: including those in economics, should interact more regularly, and I 513 00:29:49,560 --> 00:29:53,440 Speaker 9: think an outcome of my trip there was that we 514 00:29:53,480 --> 00:29:57,360 Speaker 9: will have deeper, ongoing engagement at all levels. 515 00:29:58,880 --> 00:30:01,120 Speaker 10: When did you learn about the China email hacking. 516 00:30:01,160 --> 00:30:02,920 Speaker 8: I'm curious if you had a chance to maybe bring 517 00:30:03,000 --> 00:30:04,880 Speaker 8: this up on your trip to Beijing. 518 00:30:08,960 --> 00:30:12,600 Speaker 9: I believe I did not know about that in Beijing. 519 00:30:13,600 --> 00:30:16,080 Speaker 9: Wasn't one of the things that we discussed. 520 00:30:17,640 --> 00:30:20,000 Speaker 8: I also want to ask about what's happening on the ground, 521 00:30:20,120 --> 00:30:22,360 Speaker 8: something that I know is very important to you, and 522 00:30:22,400 --> 00:30:26,520 Speaker 8: this comes to debt relief of these developing countries. There 523 00:30:26,680 --> 00:30:30,480 Speaker 8: has been this push from the US administration to use 524 00:30:30,520 --> 00:30:35,280 Speaker 8: the Zambia principle for other countries like Ghana, but that's 525 00:30:35,320 --> 00:30:37,920 Speaker 8: not getting the broad support it needs in India. On 526 00:30:38,000 --> 00:30:42,240 Speaker 8: the ground amongst other G twenty finance ministers is China 527 00:30:42,280 --> 00:30:43,120 Speaker 8: the hold up here? 528 00:30:46,480 --> 00:30:52,280 Speaker 9: Well, we designed the G twenty designed something called the 529 00:30:52,320 --> 00:30:57,240 Speaker 9: Common Framework, which is a set of two principles and 530 00:30:57,840 --> 00:31:05,120 Speaker 9: processes to deal with unsustainable debt situations. And we would 531 00:31:05,200 --> 00:31:08,880 Speaker 9: like to see countries that apply to use the Common 532 00:31:09,000 --> 00:31:15,560 Speaker 9: Framework get rapid relief from their debt that they need 533 00:31:15,680 --> 00:31:19,080 Speaker 9: in order to grow and be able to attract investment 534 00:31:19,520 --> 00:31:25,720 Speaker 9: and undertake IMF programs that can help to stabilize their economies. 535 00:31:26,240 --> 00:31:27,640 Speaker 11: And the few. 536 00:31:27,520 --> 00:31:33,680 Speaker 9: Cases that have applied to use the Common Framework, including Zambia, 537 00:31:33,920 --> 00:31:38,520 Speaker 9: have taken far too long. The process has been onerous 538 00:31:38,800 --> 00:31:42,600 Speaker 9: and it's taken a very long time to get debt relief. 539 00:31:43,280 --> 00:31:47,000 Speaker 9: We are pleased that China has become China, after all, 540 00:31:47,160 --> 00:31:51,920 Speaker 9: is a major creditor of these countries. We have been 541 00:31:52,000 --> 00:31:56,200 Speaker 9: anxious to see China move more quickly and take a 542 00:31:56,240 --> 00:32:02,680 Speaker 9: more constructive attitude participate painting in these debt relief talks, 543 00:32:03,160 --> 00:32:08,920 Speaker 9: and getting agreement on Zambia was an important step. China 544 00:32:08,920 --> 00:32:13,840 Speaker 9: has also been helpful in Ghana, the case of Ghana 545 00:32:14,000 --> 00:32:19,560 Speaker 9: and Sri Lanka, and I'm hopeful that we'll be able 546 00:32:19,720 --> 00:32:24,800 Speaker 9: going forward to make more rapid progress. I should emphasize 547 00:32:25,000 --> 00:32:28,440 Speaker 9: that the debt issue is one that concerns the entire 548 00:32:28,560 --> 00:32:33,040 Speaker 9: g twinning and we are united in wanting to see 549 00:32:33,040 --> 00:32:38,680 Speaker 9: this framework work more effectively, and it is a priority 550 00:32:38,800 --> 00:32:40,000 Speaker 9: for India as well. 551 00:32:40,320 --> 00:32:40,640 Speaker 11: All Right. 552 00:32:40,640 --> 00:32:43,720 Speaker 1: That was Bloomberg's Washington correspondent and Marie Horder sitting down 553 00:32:43,760 --> 00:32:47,080 Speaker 1: with Treasury Secretary Jennet Yelling for an exclusive interview from 554 00:32:47,120 --> 00:32:50,120 Speaker 1: the G twenty summit India, talking about all things at 555 00:32:50,200 --> 00:32:52,400 Speaker 1: China and the global economy. We want to follow that 556 00:32:52,480 --> 00:32:55,120 Speaker 1: up with a discussion with Endocurrent. He's a global economy 557 00:32:55,120 --> 00:33:00,400 Speaker 1: reporter of Bloomberg News. So and fascinating discussion Anry Hordern 558 00:33:00,480 --> 00:33:02,520 Speaker 1: had this morning with Secretary Yelling here. 559 00:33:02,560 --> 00:33:02,920 Speaker 4: I mean, the. 560 00:33:04,600 --> 00:33:06,960 Speaker 1: Messaging seems to be that the US government's trying to 561 00:33:06,960 --> 00:33:08,680 Speaker 1: work with the Chinese government, but there was just a 562 00:33:08,720 --> 00:33:11,720 Speaker 1: lot of challenges out there. What did you take away 563 00:33:11,720 --> 00:33:12,520 Speaker 1: from this discussion? 564 00:33:14,120 --> 00:33:16,920 Speaker 12: Maybe some mixed messaging I think coming from the administration, 565 00:33:17,000 --> 00:33:19,719 Speaker 12: because obviously we know there's been a very hawkish rhetoric 566 00:33:19,760 --> 00:33:23,040 Speaker 12: it's all about US strategic rivalry with China. But we 567 00:33:23,080 --> 00:33:26,040 Speaker 12: had this morning mister Ellen making those making those comments 568 00:33:26,040 --> 00:33:27,880 Speaker 12: in the interview that he just played, saying, for example, 569 00:33:28,160 --> 00:33:30,680 Speaker 12: the US would go ahead with those investment restrictions on China, 570 00:33:30,720 --> 00:33:34,120 Speaker 12: but she doesn't really see it having an overall harmful effect. 571 00:33:34,120 --> 00:33:38,160 Speaker 12: It's fairly targeted, precision kind of policy, and obviously that 572 00:33:38,160 --> 00:33:43,200 Speaker 12: will stoked about over you know what exact China strategy 573 00:33:43,280 --> 00:33:45,480 Speaker 12: is administration pursuing. Are they trying to get things on 574 00:33:45,520 --> 00:33:48,400 Speaker 12: an even keel and and sort of riachual conciliation or 575 00:33:48,400 --> 00:33:50,600 Speaker 12: are they pushing ahead with sort of the Holkish side 576 00:33:50,640 --> 00:33:53,440 Speaker 12: of things. So I think there's grands for debate there 577 00:33:53,440 --> 00:33:55,720 Speaker 12: around there's some of the signals coming from that. She 578 00:33:55,800 --> 00:33:59,440 Speaker 12: also spoke though about what the Chinese economy is singing 579 00:33:59,520 --> 00:34:01,640 Speaker 12: for the rest of the global economy, and she made 580 00:34:01,640 --> 00:34:04,880 Speaker 12: some remarks during the G twenty about how China slow 581 00:34:04,920 --> 00:34:07,480 Speaker 12: down is definitely going to slow down trading partners in 582 00:34:07,520 --> 00:34:10,000 Speaker 12: the Asia region, but probably won't be enough to spill 583 00:34:10,000 --> 00:34:13,160 Speaker 12: over to the US and drag the US economy into 584 00:34:13,200 --> 00:34:16,719 Speaker 12: interior session itself. So, as I say, covering a lot 585 00:34:16,760 --> 00:34:19,120 Speaker 12: of ground, but maybe mixed signals from the Treasury Secretary 586 00:34:19,120 --> 00:34:20,240 Speaker 12: on the China policy. 587 00:34:20,600 --> 00:34:24,680 Speaker 4: Something that struck me in Paul was when Yellen was 588 00:34:24,680 --> 00:34:28,279 Speaker 4: talking about youth unemployment being so high in China. Do 589 00:34:28,320 --> 00:34:30,680 Speaker 4: you know exactly what drives that dynamic. 590 00:34:31,800 --> 00:34:34,760 Speaker 12: Yeah, it's up over twenty percent. Now, again, on paper, 591 00:34:34,760 --> 00:34:36,920 Speaker 12: that's a record, but the data doesn't actually go back 592 00:34:36,960 --> 00:34:40,000 Speaker 12: that far, and it goes back to twenty eighteen. There 593 00:34:40,000 --> 00:34:42,640 Speaker 12: are a few different things a play in China. There's 594 00:34:42,719 --> 00:34:45,560 Speaker 12: been a record amount of graduates coming on the market. 595 00:34:45,600 --> 00:34:48,279 Speaker 12: I think it's eleven nine million this year, so they're 596 00:34:48,280 --> 00:34:49,920 Speaker 12: obviously all going to be looking for work. There's a 597 00:34:49,920 --> 00:34:52,200 Speaker 12: lot of there's been a lot of change in China's 598 00:34:52,200 --> 00:34:55,600 Speaker 12: economy recent years. That big regulatory crackdown on the tech sector, 599 00:34:55,640 --> 00:34:58,120 Speaker 12: for example, took away some of the low hanging fruit 600 00:34:58,160 --> 00:35:01,080 Speaker 12: when they come to see young graduates getting work. That's 601 00:35:01,120 --> 00:35:03,160 Speaker 12: been cited as one factor, and of course then you 602 00:35:03,200 --> 00:35:05,279 Speaker 12: have this broader slow down. This was meant to be 603 00:35:05,320 --> 00:35:09,040 Speaker 12: the year of recovery in China's economy post the COVID 604 00:35:09,160 --> 00:35:13,240 Speaker 12: zero policy. Services and consumption we are meant to drive 605 00:35:13,360 --> 00:35:15,960 Speaker 12: this big ifiz in demand. Well, it looks like that's 606 00:35:16,040 --> 00:35:19,239 Speaker 12: kind of peeling around. It's been at disappointing recovery. Lots 607 00:35:19,239 --> 00:35:23,400 Speaker 12: of economists now downgrading their forecast for Chinese economy, some 608 00:35:23,440 --> 00:35:26,480 Speaker 12: people even in the warning that the China's government will 609 00:35:26,480 --> 00:35:28,839 Speaker 12: miss the growth target of around five percent is here. 610 00:35:28,920 --> 00:35:31,480 Speaker 12: So you would have to say the pressure on ute 611 00:35:31,520 --> 00:35:34,360 Speaker 12: employment is part of the mix of the broader economic 612 00:35:34,400 --> 00:35:35,200 Speaker 12: slow down there too. 613 00:35:35,640 --> 00:35:37,840 Speaker 1: So and how broad and how deep you think the 614 00:35:37,880 --> 00:35:40,520 Speaker 1: economic slowdown is likely to be in China. I know 615 00:35:40,560 --> 00:35:45,400 Speaker 1: it's tough to get reliable data and you know, but 616 00:35:46,000 --> 00:35:48,360 Speaker 1: the concern is that could have impact on the global economy. 617 00:35:49,280 --> 00:35:50,880 Speaker 12: Yeah, so this was meant to be the year that 618 00:35:50,960 --> 00:35:52,600 Speaker 12: China would spill over to the rest of the world, 619 00:35:52,640 --> 00:35:55,120 Speaker 12: as we were just talking about Chinese tourists would go 620 00:35:55,120 --> 00:35:58,520 Speaker 12: everywhere and spend money, and Chinese students and of course 621 00:35:58,600 --> 00:36:01,680 Speaker 12: Chinese demand for imports from bull commodities, everything else. But 622 00:36:01,719 --> 00:36:04,480 Speaker 12: it hasn't really played out like that. And to your point, then, 623 00:36:04,600 --> 00:36:07,719 Speaker 12: on the ground, all indications are the official data saying 624 00:36:07,760 --> 00:36:11,200 Speaker 12: there has been a material slow down there. It's disappointing 625 00:36:11,360 --> 00:36:14,400 Speaker 12: to the point now where economists are saying two things, 626 00:36:14,680 --> 00:36:18,160 Speaker 12: China is at risk of deflation. Certainly start contrast to 627 00:36:18,160 --> 00:36:20,680 Speaker 12: the US is there, and also that they may miss 628 00:36:20,719 --> 00:36:23,799 Speaker 12: the official growth target of around five percent That was 629 00:36:23,840 --> 00:36:25,960 Speaker 12: considered to be a conservative growth target when it was 630 00:36:25,960 --> 00:36:28,319 Speaker 12: said that the government could pretty easily meet it, but 631 00:36:28,360 --> 00:36:31,319 Speaker 12: now that's in danger. So of course it's difficult to 632 00:36:31,320 --> 00:36:33,840 Speaker 12: tell what's going on in China. It's such a huge economy, 633 00:36:33,840 --> 00:36:37,560 Speaker 12: and there are questions around transparency of data, but consistently 634 00:36:37,680 --> 00:36:40,160 Speaker 12: showing that the real estate sectors and the slump, the 635 00:36:40,200 --> 00:36:43,800 Speaker 12: consumer reband story isn't there. The industrial side of things 636 00:36:43,880 --> 00:36:45,960 Speaker 12: is picking up a bit of the moment, but exports 637 00:36:46,000 --> 00:36:49,160 Speaker 12: remain in adulgrum. So by all accounts, China's economy is 638 00:36:49,160 --> 00:36:51,479 Speaker 12: certainly slowing down, and it's a question of by how much. 639 00:36:52,120 --> 00:36:54,040 Speaker 1: All right, ed, I thank you so much. We appreciate that. 640 00:36:54,080 --> 00:36:56,680 Speaker 1: As always end occurrent, he is just given us kind 641 00:36:56,680 --> 00:36:58,640 Speaker 1: of an overview kind of what we're seeing here on 642 00:36:58,760 --> 00:37:00,480 Speaker 1: the US and China to try to rea set some 643 00:37:00,600 --> 00:37:03,600 Speaker 1: economic discussions here between the two countries. 644 00:37:05,160 --> 00:37:09,040 Speaker 7: You're listening to the Team Can't Live program Bloomberg Markets 645 00:37:09,040 --> 00:37:12,160 Speaker 7: weekdays at ten am Eastern on Bloomberg dot com, the 646 00:37:12,239 --> 00:37:15,360 Speaker 7: iHeartRadio app, and the Bloomberg Business App, or listen on 647 00:37:15,440 --> 00:37:17,400 Speaker 7: demand wherever you get your podcasts. 648 00:37:18,760 --> 00:37:21,360 Speaker 4: Jasmint and Paul Sweeney here in the Bloomberg Interactive Broker 649 00:37:21,480 --> 00:37:23,359 Speaker 4: Studio and for our next segment, we're going to talk 650 00:37:23,360 --> 00:37:26,800 Speaker 4: about sort of scanning for stocks here with Julie Gorty, 651 00:37:26,840 --> 00:37:31,840 Speaker 4: who's senior vice president for sustainable Investing at Impacts Asset Management, 652 00:37:31,960 --> 00:37:35,080 Speaker 4: joining us on zoom to discuss how this record heat 653 00:37:35,440 --> 00:37:39,040 Speaker 4: is affecting physical assets and which sectors and companies are 654 00:37:39,160 --> 00:37:42,000 Speaker 4: most at risk. Julie, thank you so much for joining us. 655 00:37:42,200 --> 00:37:44,560 Speaker 4: Take a step back and tell us about Impacts and 656 00:37:44,719 --> 00:37:45,279 Speaker 4: what you do. 657 00:37:46,640 --> 00:37:49,440 Speaker 11: Sure Impacts is an investor with about we have about 658 00:37:49,440 --> 00:37:53,360 Speaker 11: fifty billion dollars in assets under management. We're based in London, 659 00:37:53,400 --> 00:37:56,880 Speaker 11: but we have offices in North America and Asia, so 660 00:37:56,960 --> 00:38:00,000 Speaker 11: we're a global investment firm and what we invest in 661 00:38:00,200 --> 00:38:02,799 Speaker 11: is the transition to a sustainable economy. So everything that 662 00:38:02,840 --> 00:38:06,080 Speaker 11: we do is aimed at investing in the things that 663 00:38:06,160 --> 00:38:08,800 Speaker 11: have the long term value drivers of sustainability. 664 00:38:09,640 --> 00:38:11,719 Speaker 1: So give us examples of kind of some of the 665 00:38:12,040 --> 00:38:13,960 Speaker 1: areas that you've invested in. 666 00:38:15,800 --> 00:38:19,239 Speaker 11: So we're investing in the food and ag sector and 667 00:38:19,400 --> 00:38:22,480 Speaker 11: things that are crops that will be more resilient to 668 00:38:22,680 --> 00:38:26,279 Speaker 11: heat and to drought. In climate change, we invest in 669 00:38:26,360 --> 00:38:31,440 Speaker 11: solutions that will mitigate greenhouse gas emissions obviously wind and solar, 670 00:38:31,880 --> 00:38:36,640 Speaker 11: but also things like pumps, pipes, filtration, much more efficient 671 00:38:37,960 --> 00:38:43,400 Speaker 11: heating back, air conditioning, and space conditioning. We invest in 672 00:38:43,480 --> 00:38:47,239 Speaker 11: things that are water saving and that actually help to 673 00:38:47,280 --> 00:38:50,040 Speaker 11: purify the water, and things that avoid having to use 674 00:38:51,080 --> 00:38:53,799 Speaker 11: things that allow you to use water in situe. Right, 675 00:38:53,800 --> 00:38:55,920 Speaker 11: if you have to pump your water fifty miles from 676 00:38:55,960 --> 00:38:59,040 Speaker 11: a reservoir and then back to the wastewater treatment plant, 677 00:38:59,040 --> 00:39:02,640 Speaker 11: well water weighs about nine pounds a gallon and it 678 00:39:02,760 --> 00:39:05,440 Speaker 11: takes a lot of energy to pump it. So anything 679 00:39:05,480 --> 00:39:08,080 Speaker 11: you can do to retreat your water and we use 680 00:39:08,120 --> 00:39:10,000 Speaker 11: it in situ is going to save you both in 681 00:39:10,080 --> 00:39:13,960 Speaker 11: terms of water and climate. So ideas like that, chemicals 682 00:39:14,000 --> 00:39:16,160 Speaker 11: that are less polluting, and stuff like that in. 683 00:39:16,080 --> 00:39:20,680 Speaker 4: Relation to these physical assets. What is physical climate risk 684 00:39:20,800 --> 00:39:23,160 Speaker 4: so important in particular when you want to look at 685 00:39:23,160 --> 00:39:26,200 Speaker 4: more industries in this stock market too. 686 00:39:27,000 --> 00:39:31,080 Speaker 11: Yeah, So when we think about climate risk, in the past, 687 00:39:31,120 --> 00:39:34,280 Speaker 11: we've tended to think about the big emitter, so energy 688 00:39:34,320 --> 00:39:38,640 Speaker 11: stocks and utilities and things like that, but everybody is 689 00:39:38,719 --> 00:39:41,760 Speaker 11: vulnerable to physical risk. You can be a non emitter, 690 00:39:42,120 --> 00:39:44,640 Speaker 11: but if you're on a coastline that's vulnerable to a hurricane, 691 00:39:44,680 --> 00:39:47,440 Speaker 11: you can still get effected by climate change. And increasingly 692 00:39:48,080 --> 00:39:51,719 Speaker 11: that's happened. We've seen disruptions in air travel. We've seen 693 00:39:51,760 --> 00:39:55,759 Speaker 11: outdoor work become much more dangerous. There are people, there's 694 00:39:55,800 --> 00:39:59,440 Speaker 11: a high rising mortality rate, and it absolutely affects productivity 695 00:39:59,440 --> 00:40:02,799 Speaker 11: of both p people and other organisms that have to 696 00:40:02,840 --> 00:40:07,759 Speaker 11: work outside in high heat. You see vulnerability of whole economies. 697 00:40:07,840 --> 00:40:12,720 Speaker 11: Local economies do things like hurricanes and severe weather, coastal storms, 698 00:40:12,719 --> 00:40:15,800 Speaker 11: sea level rise, all that stuff can have a major 699 00:40:15,840 --> 00:40:18,439 Speaker 11: economic impact. Right now, it's having impacts that are running 700 00:40:18,480 --> 00:40:22,600 Speaker 11: in the hundreds of billions of dollars of insured losses annually. 701 00:40:22,640 --> 00:40:24,880 Speaker 11: And that's just the insured losses, so double that if 702 00:40:24,920 --> 00:40:26,920 Speaker 11: you want to, or you know, could be even higher 703 00:40:27,400 --> 00:40:29,799 Speaker 11: if we count uninsured losses. And that's going nowhere. But 704 00:40:29,920 --> 00:40:32,960 Speaker 11: up as long as our emissions are rising, physical risk 705 00:40:33,080 --> 00:40:35,360 Speaker 11: is rising can affect anybody. 706 00:40:35,520 --> 00:40:40,880 Speaker 4: You talked about energy, What other specific sectors, industry groups 707 00:40:40,920 --> 00:40:43,000 Speaker 4: do you think the stock market is most vulnerable to 708 00:40:43,280 --> 00:40:45,439 Speaker 4: when you're talking about physical climate risk? 709 00:40:46,560 --> 00:40:50,000 Speaker 11: Okay, so agriculture obviously anything in the food value chain. 710 00:40:51,719 --> 00:40:54,840 Speaker 11: There are also a lot of electric rids that are vulnerable. 711 00:40:54,880 --> 00:40:57,120 Speaker 11: That's not energy production, but it's sort of getting the 712 00:40:57,239 --> 00:41:01,239 Speaker 11: energy to households. We've seen rolling blackouts and California. You know, 713 00:41:01,280 --> 00:41:06,000 Speaker 11: we saw the Texas grid freeze basically go out because 714 00:41:06,040 --> 00:41:08,959 Speaker 11: of that. But you know, we can all can also 715 00:41:08,960 --> 00:41:11,600 Speaker 11: affect transportation. So we saw, you know, like if it 716 00:41:11,640 --> 00:41:16,680 Speaker 11: gets hot enough, the asphalt buckles and rails expand, so 717 00:41:17,480 --> 00:41:20,399 Speaker 11: things like air travel get disrupted by the storms as 718 00:41:20,400 --> 00:41:24,200 Speaker 11: well as just by what's happening on the asphalt in airports. 719 00:41:24,840 --> 00:41:28,239 Speaker 11: So anyone who ships their goods, you know, it could 720 00:41:28,239 --> 00:41:31,480 Speaker 11: be vulnerable to disruptions and transportation. We were just having 721 00:41:31,560 --> 00:41:35,080 Speaker 11: a call this morning with a really big semiconductor company 722 00:41:35,080 --> 00:41:37,759 Speaker 11: that ships most of their stuff by air. So air 723 00:41:37,760 --> 00:41:41,000 Speaker 11: disruptions can matter a great deal to the semiconductor supply chain. 724 00:41:41,080 --> 00:41:42,759 Speaker 11: Do you want to know what that disruption looks like? 725 00:41:42,800 --> 00:41:46,239 Speaker 11: Look at what happened during COVID, So, Julie, it. 726 00:41:46,200 --> 00:41:48,319 Speaker 1: Just feels like, you know, climate change has become such 727 00:41:48,360 --> 00:41:50,520 Speaker 1: a political issue here in US. I don't know how 728 00:41:50,520 --> 00:41:52,840 Speaker 1: it is around the world. Here in other parts of 729 00:41:52,840 --> 00:41:56,640 Speaker 1: the world. Do you encounter that with your investing with 730 00:41:56,719 --> 00:41:59,440 Speaker 1: companies you look at with your discussions of all the 731 00:41:59,520 --> 00:42:02,200 Speaker 1: stakehold out there, and if so, how do you deal 732 00:42:02,239 --> 00:42:02,520 Speaker 1: with it. 733 00:42:04,840 --> 00:42:08,960 Speaker 11: So the backlash in the US, primarily, I would say, 734 00:42:09,080 --> 00:42:12,719 Speaker 11: is primarily political. When we talk to firms about it, 735 00:42:12,760 --> 00:42:15,560 Speaker 11: when we talk to them about physical risks or transition risks, 736 00:42:15,600 --> 00:42:19,680 Speaker 11: they get it. Whatever the political discourse is, it doesn't 737 00:42:19,680 --> 00:42:23,160 Speaker 11: affect the facts. Really, it can affect policy, but the 738 00:42:23,200 --> 00:42:25,399 Speaker 11: fact that physical risk is happening is going to happen, 739 00:42:25,440 --> 00:42:28,640 Speaker 11: whether people believe it or not. So they get it. 740 00:42:28,760 --> 00:42:30,440 Speaker 11: When we talk to the firms in the s and P. 741 00:42:30,520 --> 00:42:33,919 Speaker 11: Five hundred about physical risk, the firms that had thought 742 00:42:33,920 --> 00:42:38,120 Speaker 11: about it understood that it was the impacts could be severe, unexpected. 743 00:42:38,760 --> 00:42:41,200 Speaker 11: Making decisions in a crisis, like if you have a 744 00:42:41,440 --> 00:42:45,160 Speaker 11: hotel full of passengers stranded in the Bahamas by a hurricane, 745 00:42:45,560 --> 00:42:47,440 Speaker 11: you have to do something to get them out if 746 00:42:47,480 --> 00:42:50,040 Speaker 11: you're the hotel company, so otherwise they're never going to 747 00:42:50,040 --> 00:42:53,120 Speaker 11: stay at one of your hotels again. So our discussions 748 00:42:53,120 --> 00:42:56,280 Speaker 11: with companies are usually pretty productive. They understand the importance 749 00:42:56,320 --> 00:42:59,319 Speaker 11: of climate risk, they understand the importance of doing something 750 00:42:59,400 --> 00:43:01,480 Speaker 11: about it. And so do our shareholders. 751 00:43:02,400 --> 00:43:05,839 Speaker 4: What do companies need to disclose when it comes to 752 00:43:05,880 --> 00:43:10,400 Speaker 4: these key assets and where the value chain dependencies end 753 00:43:10,480 --> 00:43:11,360 Speaker 4: up being located. 754 00:43:12,440 --> 00:43:15,719 Speaker 11: What a good question, That's exactly what we ask them. 755 00:43:16,239 --> 00:43:18,960 Speaker 11: So the first thing we need to know is investors, 756 00:43:19,000 --> 00:43:21,520 Speaker 11: what we're pricing is where the puck is going, not 757 00:43:21,600 --> 00:43:24,000 Speaker 11: where it is right, So we need to know what 758 00:43:24,200 --> 00:43:27,520 Speaker 11: assets are going to be vulnerable to physical risks, and 759 00:43:27,560 --> 00:43:30,960 Speaker 11: since physical risk, how much physical risk you face and 760 00:43:30,960 --> 00:43:32,759 Speaker 11: what type depends on where you are. The first thing 761 00:43:32,760 --> 00:43:35,480 Speaker 11: we need to know is where are your assets? It's 762 00:43:35,480 --> 00:43:37,520 Speaker 11: a where are your manufacturing plants? Where are your big 763 00:43:37,560 --> 00:43:42,640 Speaker 11: distribution centers, what courts do your primary shipping? Does your 764 00:43:42,640 --> 00:43:46,400 Speaker 11: primary shipping go through? Where are your key supply chain dependency? 765 00:43:46,520 --> 00:43:50,279 Speaker 11: So I'll just give you a quick example. Biggest semiconductor 766 00:43:50,320 --> 00:43:53,960 Speaker 11: manufacturer in the world is TSMC. A couple of years ago, 767 00:43:54,080 --> 00:43:57,280 Speaker 11: the drought in Taiwan was so severe that they almost 768 00:43:57,280 --> 00:43:59,000 Speaker 11: had to close down their planet. It takes a lot 769 00:43:59,040 --> 00:44:02,080 Speaker 11: of water to make semtors. Very little which ends up 770 00:44:02,120 --> 00:44:04,320 Speaker 11: in the semiconductor, but it takes a lot to make one. 771 00:44:04,800 --> 00:44:07,440 Speaker 11: The government was considering even seating clouds to try to 772 00:44:07,480 --> 00:44:11,120 Speaker 11: make it rain. Luckily the drought ended first, but that 773 00:44:11,160 --> 00:44:15,680 Speaker 11: could have been really a disaster for them. So the 774 00:44:15,719 --> 00:44:18,360 Speaker 11: first thing we need to know is where are you 775 00:44:18,360 --> 00:44:20,480 Speaker 11: you know, and where are the keynodes in your supply 776 00:44:20,560 --> 00:44:26,120 Speaker 11: chain so that we can assess your vulnerability. We can 777 00:44:26,200 --> 00:44:28,600 Speaker 11: run the climate models, and we do, but we need 778 00:44:28,600 --> 00:44:31,879 Speaker 11: to know whether what they're going to affect in terms 779 00:44:31,920 --> 00:44:34,440 Speaker 11: of companies' assets and dependencies. The next thing we need 780 00:44:34,480 --> 00:44:36,040 Speaker 11: to know is what you're doing about it. So do 781 00:44:36,080 --> 00:44:38,879 Speaker 11: you recognize what these risks are, and if so, what 782 00:44:39,440 --> 00:44:43,319 Speaker 11: measures have you taken to avoid being vulnerable during an 783 00:44:43,440 --> 00:44:46,960 Speaker 11: event a hurricane, of flood, of wildfire, a drought and 784 00:44:47,080 --> 00:44:50,560 Speaker 11: outage in the grid, something like that. Then if we 785 00:44:50,600 --> 00:44:53,040 Speaker 11: have that kind of information, then we can, you know, 786 00:44:53,080 --> 00:44:54,960 Speaker 11: do our own magic and figure out what the how 787 00:44:54,960 --> 00:44:57,920 Speaker 11: to price that risk. But we don't even have physical 788 00:44:57,960 --> 00:44:59,400 Speaker 11: location information right now. 789 00:45:00,080 --> 00:45:01,440 Speaker 1: That's kind of where I wanted to go, Julie, And 790 00:45:01,480 --> 00:45:04,600 Speaker 1: we can about thirty seconds left data we're bloomberg here 791 00:45:04,640 --> 00:45:06,880 Speaker 1: where Data company? Is there adequate data for you to 792 00:45:06,960 --> 00:45:08,600 Speaker 1: really do your job and assess the risk. 793 00:45:10,040 --> 00:45:10,160 Speaker 13: Now? 794 00:45:10,360 --> 00:45:12,600 Speaker 11: And we can get information on where the risks are 795 00:45:12,640 --> 00:45:14,759 Speaker 11: and we know some of the company location, so we 796 00:45:14,840 --> 00:45:17,439 Speaker 11: can do assessments, but in order to do a really 797 00:45:17,480 --> 00:45:19,520 Speaker 11: good job, we'd need to have much better data on 798 00:45:19,600 --> 00:45:24,239 Speaker 11: location and on companies management and recognition of physicalness and 799 00:45:24,280 --> 00:45:25,000 Speaker 11: how they're adapted. 800 00:45:25,920 --> 00:45:28,680 Speaker 1: Julie, thanks so much for joining us. Fascinating discussion and 801 00:45:28,760 --> 00:45:33,239 Speaker 1: growing field. Of course, Julie Gorte, Senior Vice president for 802 00:45:33,360 --> 00:45:37,440 Speaker 1: Sustainable Investing Impacts asset Management, kind of going to a 803 00:45:37,560 --> 00:45:39,160 Speaker 1: risk here as part of that, I guess a broader 804 00:45:39,239 --> 00:45:43,280 Speaker 1: EESG is discussion, which again is Julia was just mentioning 805 00:45:43,320 --> 00:45:47,440 Speaker 1: has become highly politicized here in the US, much more 806 00:45:47,520 --> 00:45:50,120 Speaker 1: so than in other parts of the world, and making 807 00:45:50,480 --> 00:45:52,520 Speaker 1: you folks that are focusing on that their job a 808 00:45:52,560 --> 00:45:53,400 Speaker 1: little bit more difficult. 809 00:45:53,719 --> 00:45:56,840 Speaker 7: You're listening to the tape kens our live program Bloomberg 810 00:45:56,920 --> 00:46:00,799 Speaker 7: Markets weekdays at ten am Eastern on Bloomberg, the tune 811 00:46:00,840 --> 00:46:03,759 Speaker 7: in app, Bloomberg dot Com, and the Bloomberg Business App. 812 00:46:03,840 --> 00:46:06,640 Speaker 7: You can also listen live on Amazon Alexa from our 813 00:46:06,680 --> 00:46:11,720 Speaker 7: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 814 00:46:12,280 --> 00:46:14,799 Speaker 1: All right, let's talk about the business of sports, and 815 00:46:14,840 --> 00:46:17,799 Speaker 1: this is a good one. The Fenway Sports Group, you 816 00:46:17,880 --> 00:46:19,440 Speaker 1: know them, they own the Boston Red. 817 00:46:19,320 --> 00:46:21,520 Speaker 4: Sox, Pittsburgh Penguins. 818 00:46:21,000 --> 00:46:25,360 Speaker 1: Pittsburgh Penguins, and then Liverpool Football Club plus some other businesses. 819 00:46:25,360 --> 00:46:28,399 Speaker 1: And I'm a Yankee fan full disclosure, but Yankee fans 820 00:46:28,440 --> 00:46:29,839 Speaker 1: have a lot of respect for Boston. We know how 821 00:46:29,840 --> 00:46:31,680 Speaker 1: good they are because we have to play them like 822 00:46:31,760 --> 00:46:33,799 Speaker 1: seventeen times every year. Let's talk about the business there. 823 00:46:33,880 --> 00:46:37,840 Speaker 1: Julie Swinehart joins us. She's a CFO and EVP of 824 00:46:37,920 --> 00:46:41,320 Speaker 1: Fenway Sports Groups. Joins us via zoom. Julie, thanks so 825 00:46:41,400 --> 00:46:42,000 Speaker 1: much for joining us. 826 00:46:42,000 --> 00:46:42,160 Speaker 7: Share. 827 00:46:42,160 --> 00:46:44,080 Speaker 1: I want to talk to you about the real businesses sports, 828 00:46:44,120 --> 00:46:45,840 Speaker 1: and the part of it that I know well is 829 00:46:45,880 --> 00:46:48,920 Speaker 1: the regional sports networks that support some of these regional 830 00:46:48,920 --> 00:46:52,840 Speaker 1: sports like Major League Baseball, like NHL hockey. The regional 831 00:46:52,880 --> 00:46:56,239 Speaker 1: sports network business is in a world of hurt. The 832 00:46:56,280 --> 00:47:00,000 Speaker 1: biggest one just filed for bankruptcy. Revenues are down jamatic 833 00:47:00,280 --> 00:47:03,120 Speaker 1: because everybody's cutting the cord. How do you guys deal 834 00:47:03,160 --> 00:47:06,839 Speaker 1: with it at the new England Sports Network and how 835 00:47:06,840 --> 00:47:08,400 Speaker 1: are you kind of dealing with those changes? 836 00:47:09,280 --> 00:47:11,480 Speaker 13: Well, thanks for the question. First and foremost, thanks for 837 00:47:11,520 --> 00:47:13,799 Speaker 13: having me today. It's great to speak with both of you. 838 00:47:14,760 --> 00:47:17,919 Speaker 13: Regional sports networks are in a time of change, I'd 839 00:47:17,920 --> 00:47:22,440 Speaker 13: say for sure right now, New England Sports Network. You know, 840 00:47:22,719 --> 00:47:29,840 Speaker 13: our ownership team supported them and you know, really encourage 841 00:47:29,840 --> 00:47:31,880 Speaker 13: them to get ahead of try to get ahead of 842 00:47:31,960 --> 00:47:35,080 Speaker 13: what's happening as you described in the marketplace. So we 843 00:47:35,080 --> 00:47:38,120 Speaker 13: were I believe, the first to market with a direct 844 00:47:38,120 --> 00:47:42,279 Speaker 13: to consumer product which launched just about twelve months ago. 845 00:47:42,320 --> 00:47:44,840 Speaker 13: And so that's one way that Nessen is trying to 846 00:47:44,840 --> 00:47:48,480 Speaker 13: stay ahead and stay relevant and successful. And I think 847 00:47:48,880 --> 00:47:52,880 Speaker 13: there's been a lot of early wins with DTC, a 848 00:47:52,920 --> 00:47:56,319 Speaker 13: lot of learning as well, but more to come there 849 00:47:56,360 --> 00:47:58,560 Speaker 13: and I think that's one way that we can try 850 00:47:58,560 --> 00:48:00,439 Speaker 13: to combat some of the headwinds out there that are 851 00:48:00,680 --> 00:48:02,560 Speaker 13: that are just part of the landscape. 852 00:48:02,920 --> 00:48:06,560 Speaker 4: So what does it take to fund a winning sports team? 853 00:48:06,600 --> 00:48:07,840 Speaker 4: Where does the revenue come from? 854 00:48:09,320 --> 00:48:09,720 Speaker 8: Uh? 855 00:48:09,760 --> 00:48:11,040 Speaker 13: Well, I don't I don't know how NERD do you 856 00:48:11,080 --> 00:48:14,200 Speaker 13: want me to get with revenue renues? But you know, 857 00:48:14,280 --> 00:48:16,880 Speaker 13: coming in and I've been here just about a year, Uh, 858 00:48:17,520 --> 00:48:20,080 Speaker 13: there's been a lot of learning, but a lot of 859 00:48:20,120 --> 00:48:22,759 Speaker 13: aha moments for me. And there's more similarities across the 860 00:48:22,760 --> 00:48:25,920 Speaker 13: different teams in terms of the revenue structure than I 861 00:48:26,000 --> 00:48:29,120 Speaker 13: guess what I would have originally expected. But uh, there's 862 00:48:29,120 --> 00:48:33,680 Speaker 13: the obvious, you know, media revenue sources, there's sponsorship, partnership, 863 00:48:33,760 --> 00:48:37,400 Speaker 13: advertising revenue, depending on which entity we're speaking about, and 864 00:48:37,440 --> 00:48:40,960 Speaker 13: then also game day or match day sales, so fans 865 00:48:41,000 --> 00:48:46,200 Speaker 13: coming to the venues and spending money on concessions and whatnot. 866 00:48:46,280 --> 00:48:48,160 Speaker 13: So but each of the teams have a little bit 867 00:48:48,160 --> 00:48:50,799 Speaker 13: of a different makeup across the revenue. And really what 868 00:48:50,960 --> 00:48:53,720 Speaker 13: keeps it all going is, as I think is probably 869 00:48:53,719 --> 00:48:57,960 Speaker 13: pretty intuitive, is the excitement around winning. And we are 870 00:48:57,960 --> 00:49:00,600 Speaker 13: here to win championships. And I think we've done and strated, 871 00:49:01,440 --> 00:49:03,319 Speaker 13: you know, with John Henry and Tom Werner and Mike 872 00:49:03,360 --> 00:49:06,959 Speaker 13: Gordon and what they've built here a really winning track 873 00:49:07,040 --> 00:49:09,160 Speaker 13: record that allows us to do all those things. 874 00:49:09,719 --> 00:49:11,920 Speaker 1: Talk to us about the Liverpool Football Club at the 875 00:49:11,920 --> 00:49:16,600 Speaker 1: English Premier League. It's such a global business, a global brand, 876 00:49:16,680 --> 00:49:20,040 Speaker 1: a global game. Talk to us about kind of your 877 00:49:20,040 --> 00:49:21,799 Speaker 1: experience owning this. I think you guys have owned this 878 00:49:21,840 --> 00:49:23,560 Speaker 1: club for almost a decade. 879 00:49:23,200 --> 00:49:26,960 Speaker 13: Now, yeah, a little over a decade, and you know, 880 00:49:27,000 --> 00:49:31,239 Speaker 13: I think the investment over time, you know, we take 881 00:49:31,400 --> 00:49:33,279 Speaker 13: I should start with we take a long view on 882 00:49:33,360 --> 00:49:37,719 Speaker 13: all of our investments and a very intentional approach in 883 00:49:37,800 --> 00:49:40,600 Speaker 13: terms of trying to elevate and make make the teams 884 00:49:40,640 --> 00:49:45,440 Speaker 13: more successful, make them better. Liverpool does have a global 885 00:49:45,480 --> 00:49:49,799 Speaker 13: reach and they're one of our many important assets, so 886 00:49:49,880 --> 00:49:52,080 Speaker 13: it comes with just the right amount of support from 887 00:49:52,400 --> 00:49:56,319 Speaker 13: from the FSG entity, always listening to the supporters and 888 00:49:56,360 --> 00:49:58,719 Speaker 13: the fans and trying to get input there from what 889 00:49:58,760 --> 00:50:02,399 Speaker 13: they're looking for, what's important to them. And I'm learning, 890 00:50:02,480 --> 00:50:06,000 Speaker 13: especially with that team, the fan base is really integral 891 00:50:06,040 --> 00:50:07,279 Speaker 13: like it is for all of our teams, but in 892 00:50:07,280 --> 00:50:09,359 Speaker 13: a little bit of a different way over there, and 893 00:50:09,400 --> 00:50:12,360 Speaker 13: we've demonstrated again a lot of success and we're always 894 00:50:12,440 --> 00:50:15,040 Speaker 13: trying to think of ways to keep that going, whether 895 00:50:15,040 --> 00:50:21,080 Speaker 13: it be with players or data or nutrition. It's those 896 00:50:21,320 --> 00:50:24,799 Speaker 13: micro advantages and sports in any of these sports teams 897 00:50:24,800 --> 00:50:29,279 Speaker 13: that we own that really can be what really makes 898 00:50:29,280 --> 00:50:32,120 Speaker 13: the difference between a mediocre team and a championship team. 899 00:50:32,640 --> 00:50:34,719 Speaker 4: Paul, I knew with your experience as an analysts you're 900 00:50:34,719 --> 00:50:37,560 Speaker 4: really focused when it comes to those media contracts on 901 00:50:37,960 --> 00:50:40,040 Speaker 4: when it comes to local and national right. 902 00:50:40,280 --> 00:50:43,160 Speaker 1: Yeah, absolutely, I mean I think the one of the 903 00:50:43,160 --> 00:50:45,360 Speaker 1: big issues actually one of the things it's interesting Julie, 904 00:50:45,400 --> 00:50:47,200 Speaker 1: I mean, I'm just looking at your the assets you 905 00:50:47,200 --> 00:50:50,759 Speaker 1: guys do have here. Is there room for growth in 906 00:50:50,840 --> 00:50:54,640 Speaker 1: other sports? Which you think about the NBA or maybe 907 00:50:54,719 --> 00:50:57,319 Speaker 1: take a huge leap and think about the NFL. How 908 00:50:57,360 --> 00:50:59,640 Speaker 1: do you is there other sports that you guys are 909 00:50:59,640 --> 00:51:00,000 Speaker 1: looking at. 910 00:51:01,080 --> 00:51:05,000 Speaker 13: I think we're definitely in growth mode. We did only recently, 911 00:51:05,080 --> 00:51:09,360 Speaker 13: pretty recently acquire the majority of the Pittsburgh Penguins, so 912 00:51:09,400 --> 00:51:13,399 Speaker 13: we're still, you know, on onboarding and bringing them into 913 00:51:13,400 --> 00:51:16,000 Speaker 13: the family. Although it's been a it's been a nice transition, 914 00:51:16,080 --> 00:51:18,279 Speaker 13: I think for everyone involved there. So you know, our 915 00:51:18,680 --> 00:51:22,640 Speaker 13: I think you know, our aspirations are limitless, whether it 916 00:51:22,680 --> 00:51:26,280 Speaker 13: be a major league such as those of you described, 917 00:51:26,400 --> 00:51:29,520 Speaker 13: or something new and different like tomorrow Golf League. We 918 00:51:29,600 --> 00:51:33,560 Speaker 13: recently announced that we are owners of the second team 919 00:51:33,840 --> 00:51:36,480 Speaker 13: in that sixth i think initially six team league. So 920 00:51:36,520 --> 00:51:40,200 Speaker 13: we've got the Boston New England team in our in 921 00:51:40,239 --> 00:51:42,799 Speaker 13: our FSG family as that league is getting started and 922 00:51:42,800 --> 00:51:45,120 Speaker 13: building out, and that's a really exciting opportunity to So 923 00:51:45,440 --> 00:51:48,160 Speaker 13: they're not all going to be those large scale opportunities, 924 00:51:48,200 --> 00:51:51,120 Speaker 13: but hopefully in time will continue to grow in in 925 00:51:51,160 --> 00:51:52,120 Speaker 13: bigger ways as well. 926 00:51:52,360 --> 00:51:54,960 Speaker 1: All Right, So for all the Red Sox fans out there, 927 00:51:55,800 --> 00:51:57,560 Speaker 1: the Red Sox are tied I believe with the Yankees 928 00:51:57,560 --> 00:51:59,839 Speaker 1: as of today for last place in the American League. 929 00:52:00,080 --> 00:52:02,480 Speaker 1: State is the most competitive division in all of Major 930 00:52:02,520 --> 00:52:05,959 Speaker 1: League Baseballutely, what do you guys do here? It's mid July. 931 00:52:06,400 --> 00:52:07,640 Speaker 1: What do you guys do here? You come up to 932 00:52:07,640 --> 00:52:10,680 Speaker 1: the trade deadline? How aggressive is the Red Sox can be? 933 00:52:10,719 --> 00:52:11,880 Speaker 1: Are they can be buyers or sellers? 934 00:52:11,920 --> 00:52:12,120 Speaker 7: Here? 935 00:52:12,760 --> 00:52:13,080 Speaker 6: Ah? 936 00:52:13,960 --> 00:52:17,160 Speaker 13: Question of the morning. I can't share a whole lot there, 937 00:52:17,160 --> 00:52:19,040 Speaker 13: but I will say there's a lot of excitement around 938 00:52:19,080 --> 00:52:22,040 Speaker 13: how the team's been performing, especially as of late, and 939 00:52:22,160 --> 00:52:25,439 Speaker 13: I think the second half of the season. Time will tell, 940 00:52:25,520 --> 00:52:28,400 Speaker 13: but I hold a lot of optimism for the Red Sox. 941 00:52:28,520 --> 00:52:31,560 Speaker 1: All Right, So Fenway, real quick, thirty seconds. I love Fenway. 942 00:52:31,560 --> 00:52:34,640 Speaker 1: It's iconic. Everybody loves Fenway. Any changes coming to Fenway. 943 00:52:36,160 --> 00:52:39,759 Speaker 13: There's always something going on, whether it be a new 944 00:52:40,920 --> 00:52:44,160 Speaker 13: I think we just we had pickleball here recently. There's 945 00:52:44,239 --> 00:52:46,600 Speaker 13: concerts coming up, some things like that are new. But 946 00:52:46,640 --> 00:52:52,560 Speaker 13: also we recently received some key approvals for some real 947 00:52:52,680 --> 00:52:55,800 Speaker 13: estate expansion around the park, so we're partnering with WS 948 00:52:55,840 --> 00:52:59,960 Speaker 13: Development here in Boston to overtime add about two million 949 00:53:00,040 --> 00:53:03,360 Speaker 13: square feed of mixed use to really just continue to 950 00:53:03,480 --> 00:53:08,319 Speaker 13: elevate Funway Park, make it even more welcoming to more 951 00:53:08,360 --> 00:53:11,760 Speaker 13: people and very focused on pedestrians, and we're really excited 952 00:53:11,760 --> 00:53:14,080 Speaker 13: that that project seems to be moving along great. 953 00:53:14,320 --> 00:53:16,920 Speaker 1: Julie Swineheart, thanks so much for joining us. Juliu Swinheart's 954 00:53:16,920 --> 00:53:20,720 Speaker 1: CFO and executive vice president for the Fenway Sports groups 955 00:53:21,520 --> 00:53:22,720 Speaker 1: the Dreaded Red Sox. 956 00:53:24,960 --> 00:53:28,080 Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can 957 00:53:28,080 --> 00:53:31,880 Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever 958 00:53:31,960 --> 00:53:35,680 Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter 959 00:53:35,880 --> 00:53:39,160 Speaker 2: at Matt Miller nineteen seventy three and on Fall Sweeney. 960 00:53:39,160 --> 00:53:41,799 Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you 961 00:53:41,800 --> 00:53:45,200 Speaker 1: can always catch us worldwide at Bloomberg Radio