Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller.
Speaker 2: Every business day we bring you interviews from CEOs, market pros,
Speaker 2: and Bloomberg experts, along with essential market moving news.
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Speaker 1: It is earnings. We've got some more bank earnings. We
Speaker 1: started last Friday kicking them off. We got some more
Speaker 1: big ones this weekend. We've got some of the regional
Speaker 1: banks as well. But of course you know you've got
Speaker 1: some big, big banks this week, so we want to
Speaker 1: get to the bottom of it. So we're going to
Speaker 1: round table this discussion because we can do that at
Speaker 1: bloombergause we have Bloomberg Intelligence, some of the smartest analysts
Speaker 1: on Wall Street, Allison and Williams. She covers the big
Speaker 1: banks and Herman Chan covers the regional banks. Here in
Speaker 1: the United States. We've got them both here in our
Speaker 1: Bloomberg Interactive Brokers studio. So Alis, let's start with you.
Speaker 1: What was the key takeaway from Friday when we had
Speaker 1: some of the banks kickoff? JP Morgan being the most notable.
Speaker 1: Then this week you've got Morgan Stanley, Bank of America,
Speaker 1: Goldman Sachs kind of what are you starting to see?
Speaker 1: What do you expect to see from these big banks?
Speaker 3: The key takeaway was more resilient, interesting income versus expectations,
Speaker 3: so holding up a bit better. And I think we
Speaker 3: had signs of that. The first quarter was strong and
Speaker 3: it looked like the banks were being conservative with guidance,
Speaker 3: and so they upped that guidance. So we're going to
Speaker 3: see if the same hold shoop for a Bank of America.
Speaker 3: Part of that is that they're growing credit card loans,
Speaker 3: which are higher yielding, and if you look at loan growth,
Speaker 3: that's really been the strong point that benefits big banks
Speaker 3: like JP, Morgan City Whiles also growing that a little bit.
Speaker 3: Bank America, we'll see, but Bank of America does have
Speaker 3: a little bit more exposure to the commercial and industrial side,
Speaker 3: which is weighing a little bit on Herman's side of things.
Speaker 4: I want to bring Herman into this conversation because we're
Speaker 4: going to have seventeen regional banks reporting this week. It
Speaker 4: does include Usbank Corp also P and C reporting your
Speaker 4: first earners results after the collapse of obviously first Public
Speaker 4: and then SVB when they triggered those industry fears in
Speaker 4: the spring. What do you think we should be expecting
Speaker 4: from the regionals?
Speaker 5: So the regionals are going to feel the aftershocks of
Speaker 5: the bank failures in March and April. That really comes
Speaker 5: in the form of deposit pricing. As deposit pricing continues
Speaker 5: to increase, we expect the smartests contract, top line revenues
Speaker 5: to contract because of the higher funding costs. And contrasting
Speaker 5: to what's happening with Allison's banks, you're not seeing the
Speaker 5: long growth versus the bigger banks because there's less exposure
Speaker 5: to credit cards. There's more exposure to commercial real estate
Speaker 5: and traditional business lending that and those areas are slowing
Speaker 5: across the industry.
Speaker 1: So Herman on the commercial real estate side, how big
Speaker 1: of a problem is this going to be for the
Speaker 1: regional banks around the country over the next you know, quarters,
Speaker 1: but really a couple of years probably, Yeah.
Speaker 6: That's right.
Speaker 5: So I would highlight that the real main focus is
Speaker 5: office commercial real estate. At other areas that were sort
Speaker 5: of in the in the spotlight, like hotels and other
Speaker 5: areas like that are performing pretty well. At this point,
Speaker 5: but office commercial real estate is the big focus. The
Speaker 5: good thing is that exposures are pretty manageable. We're talking
Speaker 5: about for the regions that I cover, two to three
Speaker 5: percent of their entire loan portfolio is situated in office CRE.
Speaker 5: That's a fairly small portion. And we also point to
Speaker 5: the fact that underwriting's pretty conservative, with lone deposit ratios
Speaker 5: around lond to value ratios around sixty percent, which suggests
Speaker 5: pretty strong cushion for potential losses down the road. So
Speaker 5: you could see that you could see losses come, but
Speaker 5: it'll be pretty manageable over the next several years.
Speaker 4: So Allison, whenever we do hear from Goldman and Morgan Stanley,
Speaker 4: how exactly will this put the investment banking slowdown into
Speaker 4: more perspective from here?
Speaker 3: So, obviously the business is more important for those two
Speaker 3: banks and some of these more diversified banks that we watch.
Speaker 3: I keep in mind that Goldman Sachs and Morgan Stanley
Speaker 3: had really strong fixed income trading last year, especially driven
Speaker 3: by the commodities front. So when we see some of
Speaker 3: those declines come in, there might be some some negative headlines,
Speaker 3: but in general we do think that you know, there
Speaker 3: there is some support for fixed income trading normalizing in
Speaker 3: a historically high level equity trading not so much. That's
Speaker 3: more negative on the margin for Morgan Stanley because they
Speaker 3: do are are more skewed to the equity side of things.
Speaker 3: But more importantly, we'll be looking at fees. You know,
Speaker 3: Goldman is far and away the m and a revenue leader.
Speaker 3: There's all different kinds of rankings and such, but they
Speaker 3: do tend to earn, you know, multiples of the next
Speaker 3: competitor in terms of revenue just due to sort of
Speaker 3: leading positions on certain deals and that that's been a headwind.
Speaker 3: It's going to be a headwind for the banks. Are
Speaker 3: they still expecting you know, optimism for twenty twenty four
Speaker 3: these green shoots that we saw on the equity side
Speaker 3: of things, Will that help in the quarter? And then
Speaker 3: you know wealth and as asset management benefiting there from
Speaker 3: some of the recent equity prices. How is that translating
Speaker 3: for those businesses for the big banks?
Speaker 1: Hey, Hermin, I know when we were talking to you
Speaker 1: almost on a daily basis there a few months ago,
Speaker 1: when we were earlier in the thick of this regional
Speaker 1: bank you know kind of melt down a little bit
Speaker 1: for a handful of names you've just kind of highlighted
Speaker 1: to us. We need to focus on earnings risk for
Speaker 1: these banks, and that's where the pressure is going to come.
Speaker 1: Is has the earnings risk been taken out of this
Speaker 1: group or do you think there's still more downward revisions?
Speaker 1: Where are we net process?
Speaker 5: There's going to be there continues to be some uncertainty
Speaker 5: in regards to earnings. Really, it's going to be focused
Speaker 5: on good deposit repricing. I don't think a lot of
Speaker 5: the regionals have a firm handle on how quickly and
Speaker 5: how fast and where that potential deposit repricing stops. We're
Speaker 5: going to see potentially another FED rate hike. That's a
Speaker 5: negative for deposit repricing. And look, JP Morgan just said
Speaker 5: that deposit competition is rising, and if the biggest bank
Speaker 5: in the United States is the posit competition is rising,
Speaker 5: then you could expect pressure across the regionals because of that.
Speaker 4: And I wanted to follow up on that because the
Speaker 4: FED has pointed a tougher capital and liquidity rules, especially
Speaker 4: for the mid sized banks. What do you think that
Speaker 4: stake there?
Speaker 5: Yeah, so there's going to be higher capital ratios. We
Speaker 5: expect also higher liquidity rules, tougher liquider rules for the
Speaker 5: regional banks. All that will serve to reduce profitability and
Speaker 5: row's return on equities for the regionals. That we're talking
Speaker 5: about regionals with assets above one hundred billion dollars, So
Speaker 5: we're talking about a fairly small subgroup of regionals, but
Speaker 5: you're going to see maybe one hundred two hundred basis
Speaker 5: points of return just stall off the profitability spectrum across
Speaker 5: these banks, and that that's gonna be something that the
Speaker 5: industry is going to need to digest, and you're gonna
Speaker 5: see some cost cuts. You could potential see M and
Speaker 5: A down the road to absorb some of these regulatory
Speaker 5: pressures and top line pressure. So those are things we're
Speaker 5: expecting down the road.
Speaker 1: Allison, real quick, thirty seconds. Goldman's acxis week. How much
Speaker 1: pressure is the CEO, mister Solomon under at the moment.
Speaker 3: I mean, I think to the extent that things are
Speaker 3: related to the environment. It's the environment. So I think
Speaker 3: investors will be watching, you know, how the market share
Speaker 3: is holding up and how these longer term initiatives holding
Speaker 3: have been holding up. I mean, there's been a lot
Speaker 3: of focus over the last couple of years and the
Speaker 3: consumer effort and sort of the wind down of some
Speaker 3: of those initiatives. But I would keep in mind that
Speaker 3: those were in place when he took the helm, and
Speaker 3: so you know, it's not necessarily something he created. It's
Speaker 3: not a reason that investors ever owned the stock, quite frankly,
Speaker 3: but things like the alternatives business, things like what's happening
Speaker 3: on the cost side, that is something investors are focusing on.
Speaker 3: You know, they're going to be way out of bounds
Speaker 3: in terms of their costs versus their target because they
Speaker 3: have some one timers and some impairments, so it's going
Speaker 3: to be pretty much of a mass when they report,
Speaker 3: But people are going to be looking for, like what
Speaker 3: is that core cost trend?
Speaker 1: Wrote in on the train today, saw Buddy mine who's
Speaker 1: an m and a banker. He works at an investment
Speaker 1: bank that focuses on regional banks. His wife wants him
Speaker 1: to retire, and he says no, because the next five
Speaker 1: years he thinks are going to be the most lucrative
Speaker 1: in his career. He's about sixty years old. He's to
Speaker 1: be the most lucrative in terms of the fees of
Speaker 1: his career of the next five years, and he wants
Speaker 1: to be there, so boom. He thinks there's gonna be
Speaker 1: a lot of M and A in the space. I said,
Speaker 1: that's interesting. So anyway, Allison Williams Herman Chin, they cover
Speaker 1: all the banks for Bloomberg Intelligence. We appreciate getting them
Speaker 1: in office.
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Speaker 1: Lots of earnings this week, including Netflix after the close
Speaker 1: on Wednesday. Stock's had a great run.
Speaker 4: It's over one hundred percent over the last twelve months.
Speaker 1: Yeah, just amazing. It's still down about twenty five percent
Speaker 1: from its all time high, but it's hitting a fifty
Speaker 1: two week high today, so finding it's putting again. Keithan
Speaker 1: Ranganathen joins us here via zoom She covers all things
Speaker 1: media on a global scale for Bloomberg Intelligence. So let's
Speaker 1: just start there at Getha. It's the one bright spot
Speaker 1: I think within the media landscape that's actually doing well
Speaker 1: from Stock respective what do you expect to hear from
Speaker 1: our friends in Netflix.
Speaker 6: Yeah, so absolutely things are looking pretty bright for Netflix.
Speaker 6: I mean, with all of the attention now on streaming profitability,
Speaker 6: this is one streamer that has really got that portion
Speaker 6: of the equation right. So they have found, you know,
Speaker 6: this kind of nice formula where they're balancing costs and profitability,
Speaker 6: and so we're going to obviously see them kind of
Speaker 6: really post I think good operating income numbers, good margin numbers.
Speaker 6: But I think where a lot of the attention is
Speaker 6: going to come down is to see where their most
Speaker 6: recent initiatives whether those are bearing fruit. And what we're
Speaker 6: talking about is an AD based year, which was introduced
Speaker 6: late last year late last year, but more importantly, their
Speaker 6: recent password crackdown initiative, and they've kind of implemented this
Speaker 6: in the US, across the world in over one hundred markets,
Speaker 6: and you know, some recent data points seem to suggest
Speaker 6: that it's actually gone much better than expected. So we
Speaker 6: might expect them to see to post much better subscriber editions.
Speaker 6: Right now, consensus points for about just under two million
Speaker 6: new subscriber ads. But you know, a bait could definitely
Speaker 6: be expected.
Speaker 4: And when you see a stock like this up more
Speaker 4: than one hundred percent over the past twelve months, and
Speaker 4: even just looking this year, to Paul's point, over fifty
Speaker 4: percent year to date. How much does this raise the
Speaker 4: bar this earning season when it has been on such
Speaker 4: a tear.
Speaker 6: It definitely does raised the bar. I mean, the whole
Speaker 6: focus right now for all of the media landscape is
Speaker 6: really on profits, and this is one company that has
Speaker 6: got it right. I mean, for the longest period of time,
Speaker 6: they were criticized for you know, huge amounts of cash
Speaker 6: burn and then this year where you know, they've guided
Speaker 6: to three and a half billion dollars in free cash
Speaker 6: flow and you can expect them to even surpass that number.
Speaker 6: We are thinking closer to four four and a half
Speaker 6: billion dollars in free cash flow. And this is coming
Speaker 6: at a time when other companies are kind of really
Speaker 6: struggling to find their footing in terms of, you know,
Speaker 6: getting to that profitability metric. We saw some pretty you know,
Speaker 6: dismal kind of forecasts out from Bob Ayger and Disney
Speaker 6: just in terms of you know, the linear TV business
Speaker 6: and even streaming profitability. There's really no clear cut path.
Speaker 6: As we have at Netflix, we just don't. We're not
Speaker 6: seeing it at any other company. So obviously, economics in
Speaker 6: this space are very, very challenged right now, but Netflix
Speaker 6: definitely will set the bar higher, no doubt about it.
Speaker 6: All Right.
Speaker 1: So that's about the extent of the good news in
Speaker 1: your space Netflix. The rest of it's are kind of
Speaker 1: a little bit dire. Let's start with paramount Mission Impossible,
Speaker 1: Tom Cruise fifty six million bucks over the weekend. I
Speaker 1: think that was below consensus here. Kind of what's the takeaway.
Speaker 1: Is it just a you know, title specific issue, or
Speaker 1: is this maybe ring a little bit more broader as
Speaker 1: it relates to what people where people want to go
Speaker 1: in terms of theaters and things like that.
Speaker 6: Yeah, it's been a little bit of a roller coaster, Paul,
Speaker 6: in terms of box office performance. So I think in
Speaker 6: general the tone has been pretty positive for about you know,
Speaker 6: just generally we've kind of seen that comeback in terms
Speaker 6: of box office attendance, but some of the more you know,
Speaker 6: recent titles, they haven't necessarily performed as well as you know,
Speaker 6: industry experts we're hoping for, whether it's you know, the
Speaker 6: Indiana Jones movie, whether it was Elemental from Disney and
Speaker 6: now more recently. You know, kind of this this mission impossible,
Speaker 6: but I think you know, overall, the tone still continues
Speaker 6: to be pretty positive. I mean, if you're comparing box
Speaker 6: office numbers to pre pandemic, yes we're still down about
Speaker 6: twenty to twenty five percent, but I think you know,
Speaker 6: things you know should generally pick up. That said again,
Speaker 6: the question being are we ever going to see it
Speaker 6: go back to pre pandemic levels? Probably not. I mean
Speaker 6: we have multiple things right now affecting the industry. You know,
Speaker 6: we have a strike that's going on. We have all
Speaker 6: of these companies that are kind of paring down in
Speaker 6: terms of their content spending. Disney even came out and
Speaker 6: said that they're actually taking down their studio spending. So
Speaker 6: if you kind of put all of those together, that
Speaker 6: doesn't necessarily bode extremely well for you know, the health
Speaker 6: of the box office.
Speaker 4: What about when it comes to this Barbie movie that's
Speaker 4: coming out soon, have to ask about that and your
Speaker 4: thoughts on it. It almost feels like it was already
Speaker 4: widely distributed because we've been talking about it for so
Speaker 4: many months.
Speaker 6: I mean, I'm super excited for it, watch it. I
Speaker 6: know we have that whole you know Barbenheimer with you know,
Speaker 6: the Oppenheimer movie also coming out, So there's obviously a
Speaker 6: lot of buzz. You know, it's huge promotions at CinemaCon
Speaker 6: when I attended that earlier in April, you know, we
Speaker 6: had all the A listers kind of come out and
Speaker 6: promote the movie. So obviously a lot of buzz, and
Speaker 6: I think it should do really really well for Warner.
Speaker 1: All right, so let's go to Bob Biger. He had
Speaker 1: a pretty extensive interview last week where he broke a
Speaker 1: lot of new ground. I thought the biggest headline was
Speaker 1: there's really no sacred cows at ESPN here. I mean
Speaker 1: he was talking about, you know, maybe doing something with
Speaker 1: the networks including ESPN, maybe spinning them off, you know,
Speaker 1: partnering up with a third party. Wow, what do you
Speaker 1: think they want to do with their linear TV business
Speaker 1: including ESPN.
Speaker 6: Yeah, there's just too much focus, Paul, as you know,
Speaker 6: on on the linear TV business as and if you've
Speaker 6: looked at some of the more recent court cutting data,
Speaker 6: it's really really dire. So you know, we used to
Speaker 6: have video subscriber declines hovering around in the four five
Speaker 6: six percent range. Those have double right now. So we're
Speaker 6: seeing about twelve percent declines in the in the video
Speaker 6: subscriber pase. So obviously it does not bode well at
Speaker 6: all for the linear networks, the linear network business, and
Speaker 6: I think Bob Bieger was exactly referring to that. Having
Speaker 6: said that, though, I think he's making a little bit
Speaker 6: of a differentiation between you know, the ESPN assets, which
Speaker 6: are still very, very valuable to Disney. So they're obviously
Speaker 6: trying to find some kind of future path with you know,
Speaker 6: that a big, bigger foray into the director consumer portion
Speaker 6: of the of the ESPN business. But they are also
Speaker 6: saying that, you know, all the rest of the networks,
Speaker 6: So whether it's a free form, whether it's a Disney channel,
Speaker 6: whether it's an Effects or a national geographic those are,
Speaker 6: or even the E or even the AABC broadcast network,
Speaker 6: all of those are non core assets, and they're really
Speaker 6: looking to kind of offload those assets. So it's going
Speaker 6: to be interesting. I mean, obviously the writing is on
Speaker 6: the wall, Uh, these assets are in structural decline. The
Speaker 6: question is, yes, it's a good thing if Disney can
Speaker 6: actually get rid of those and get some cash back
Speaker 6: into the business. The question is, who's really going to
Speaker 6: buy that. I mean, is it going to be private equity,
Speaker 6: is it going to be another media company? Just there's
Speaker 6: just no you know, healthy future outlook for those assets.
Speaker 6: So I think that is really the biggest question right
Speaker 6: now investors' minds.
Speaker 4: And Disney also extended Bobbeiger's contract by neother two years
Speaker 4: to twenty twenty six. Shocking right now, Paul. I know
Speaker 4: how closely Paul watches the stock Mickey Mouse, But what
Speaker 4: does it mean when it comes to giving a long
Speaker 4: time executive like this more time to implement his turnaround
Speaker 4: plan and to ultimately find a successor?
Speaker 6: Yeah, I think you know that there's there's the positives
Speaker 6: and the negatives. The positives obviously it's it. It signals
Speaker 6: a lot of stability for the company, especially when we
Speaker 6: have such a turbulent kind of a media ecosystem right now.
Speaker 6: So obviously bar Bieger knows what to do, He's not
Speaker 6: going to be shy about doing it. And remember, we
Speaker 6: already have some kind of you know, management upheaval with
Speaker 6: the departure of the CFO Christine McCarthy, so kind of
Speaker 6: not having Barbieger there would have led to kind of
Speaker 6: two executive searchers at the same time, which would have
Speaker 6: been a little bit difficult, I think for the company
Speaker 6: to maneuver. So I think this kind of makes sense.
Speaker 6: But again it brings again to light the biggest issue
Speaker 6: for Disney, which has been the succession issue, and that
Speaker 6: just continues to be an issue. So yeah, there's a
Speaker 6: little bit of good and bad. But I think as
Speaker 6: we kind of navigate this very, very tumultuous time, it's
Speaker 6: good to have kind of a steady hand with Bob
Speaker 6: Aiger and I.
Speaker 1: Hear from a little Birdie that Walt Disney Company is
Speaker 1: kind of have an investor meetium, good old fashioned bring everybody
Speaker 1: down the Disney World or Disneyland in October and Getha,
Speaker 1: I'm sure we'll be there and reporting back to us.
Speaker 1: But that's where I'm sure they'd like to make some big,
Speaker 1: big announcements, so be on the lookout for that. Keetha
Speaker 1: Rang and Nathan, thanks so much for joining us. Githa
Speaker 1: is our globalhead of all Media in Research and we
Speaker 1: appreciate getting a few minutes of her time. But again,
Speaker 1: as you know, Getha was just suggesting, it's a tough
Speaker 1: time to be an investor in the media. Space not
Speaker 1: there's just so much uncertainty.
Speaker 4: There're looking at Disney stock ticker symbol dis It's flat
Speaker 4: for the year. You look over the past five years,
Speaker 4: down more than twenty percent in that span.
Speaker 1: Yep, exactly. So you know the real as these companies
Speaker 1: pivot from the traditional distribution of cable systems and satellite
Speaker 1: systems to this new thing called streaming, there's just a
Speaker 1: ton of uncertainty about how that will happen in the
Speaker 1: actual profitability of that business.
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Speaker 8: Treasury Secretary Janet Yellen, you join us now from India
Speaker 8: where you're meeting your counterparts. It's the G twenty Finance
Speaker 8: Ministers and Central Bank Governor's meeting. And really the cloud
Speaker 8: around this meeting is the fresh data we got out
Speaker 8: of China today. Beijing slowing momentum in their growth. City
Speaker 8: is talking about the growth target being at risk. I'd
Speaker 8: like to start Treasury Secretary with the fact of whether
Speaker 8: you think this means there could be an increased chance
Speaker 8: of a US recession.
Speaker 9: Well, you're talking about the slow growth number from China,
Speaker 9: Is that right, Anne Marie?
Speaker 10: Yes, correct, So I think trying.
Speaker 9: Has seen slower growth than they expected upon opening up
Speaker 9: from COVID. Consumer spending has been relatively weak. It looks
Speaker 9: like consumers are more focused on building back their savings buffers,
Speaker 9: and so growth has been slow in As you know,
Speaker 9: youth unemployment is quite high there. So I think the
Speaker 9: Chinese are concerned about sluggish growth in their economy.
Speaker 8: But what does this mean for US growth and global
Speaker 8: growth overall? Is the soft landing in the United States?
Speaker 8: So your base case scenario.
Speaker 9: Well, many countries do depend on strong Chinese growth to
Speaker 9: promote growth in their own economies, particularly countries in Asia,
Speaker 9: and slow growth in China can have some negative spillovers.
Speaker 9: For the United States, growth is slowed, but our labor
Speaker 9: market continues to be quite strong. I don't expect a recession.
Speaker 9: I think that we're on a good path to bringing
Speaker 9: inflation down. The most recent inflation data, we're quite encouraging
Speaker 9: that we're making progress on getting inflation down. But as
Speaker 9: I'd hoped and expected, that would occur in the context
Speaker 9: of a strong labor market, and we continue to see
Speaker 9: that the labor market's the fact the labor market's been
Speaker 9: so strong has encouraged more primage people to enter the
Speaker 9: labor force into work, and that's helped take a bit
Speaker 9: of the heat out of the labor market. The fact
Speaker 9: that growth overall has slowed after we enjoyed a rapid recovery,
Speaker 9: that's normal, but it's also led to some reduction in
Speaker 9: the desire of firms to hire. Still lots of job openings,
Speaker 9: but wage growth is moderating and inflation is subsiding. So
Speaker 9: I think we're in a good path on the United States.
Speaker 8: Okay, so it sounds like soft landing is your base case,
Speaker 8: and you don't think we're going to see a recession. Yesterday,
Speaker 8: when you were speaking to reporters, you talked about this
Speaker 8: de escalation with China, and you rolled out lifting tariffs
Speaker 8: as part of this de escalation with Beijing.
Speaker 10: So what is on the table?
Speaker 9: So you know, several years have gone by in which
Speaker 9: we've had COVID lockdowns, especially in China and very limited
Speaker 9: contact between senior fish in the United States and China.
Speaker 9: And we now have a new economic team in China
Speaker 9: that we need to establish relationships with. We need to
Speaker 9: get our relationship back in a more stable place, put
Speaker 9: a floor under it, and try to promote better understanding
Speaker 9: between our countries. So I recently made a trip met
Speaker 9: with a number of senior Chinese officials, including the new
Speaker 9: economic team. There, we had very cantid discussions. Each side
Speaker 9: raised a series of concerns. Chinese certainly mentioned their concern
Speaker 9: with the tariffs that we have in place, but we
Speaker 9: had constructive conversations, deepened our understanding and of the economic
Speaker 9: situation and of our concerns, were able to address them
Speaker 9: and agree that there are a broad range of global challenges,
Speaker 9: particularly debt and climate change, that affect the entire global
Speaker 9: economy that we need to work on jointly, and I'm
Speaker 9: hopeful we'll be able to do that more successfully. On tariffs,
Speaker 9: you know, we put tariffs in place on China because
Speaker 9: we had underlying concerns about unfair trade practices, particularly those
Speaker 9: affecting intellectual property and technology transfer, and those concerns really
Speaker 9: have not been addressed. We're undergoing a four year required
Speaker 9: review of tariffs, and of course China also retaliated putting
Speaker 9: tariffs in place on us. We have to see what
Speaker 9: comes out of the four year review, but I would
Speaker 9: emphasize that really the underlying concerns we have have not
Speaker 9: yet been addressed, and we need to work on that
Speaker 9: going forward.
Speaker 8: But when you're looking at de escalating, we're trying to
Speaker 8: figure out what we'll be left on the table, because
Speaker 8: what it feels right now is the administration is actually
Speaker 8: just amping up when it comes to potential tit for
Speaker 8: tat with Beijing. There is the outbound Executive Order that
Speaker 8: potentially we could see as soon as the end of
Speaker 8: July or this summer. Could that be a place pulling
Speaker 8: a punch from the outbound Executive order, maybe making that
Speaker 8: a little bit more toned down.
Speaker 10: Could that be a place you could de escalate with Beijing.
Speaker 9: Well, first of all, I want to say that what
Speaker 9: we're doing is not tit for tet. What we're doing
Speaker 9: is putting in place controls. They're designed to protect US
Speaker 9: national security and in some cases to address fundamental human
Speaker 9: rights abuses, and we do intend to protect our national
Speaker 9: security we have export controls that play an important role
Speaker 9: in accomplishing that. And what I try to explain to
Speaker 9: our Chinese counterparts is that our desire is to make
Speaker 9: these US policies clearly national security focused, transparent and narrow,
Speaker 9: that we're not attempting to stifle economic progress in China
Speaker 9: that we have and want to continue to have deep
Speaker 9: economic ties. After all, this year, our trade has reached
Speaker 9: almost seven hundred billion dollars. National security concern economic.
Speaker 8: Madame, Secretary of the National Security concerns are so important.
Speaker 8: Jake Sullivan called for this outbound of executive order two
Speaker 8: years ago.
Speaker 10: Why is it taking the administration so long?
Speaker 9: So we are looking carefully at outbound investment controls, and
Speaker 9: they would serve as a complement to the export controls
Speaker 9: that we have in place to make sure that we
Speaker 9: have covered all the channels by which technologies can be
Speaker 9: transferred to China that we think pose national security concerns.
Speaker 9: I explained to my Chinese counterparts that if we go
Speaker 9: forward with these, they would indeed be narrowly targeted. They
Speaker 9: would focus on a few sectors, in particular semiconductors, quantum computing,
Speaker 9: and artificial intelligence, that they would contain a combination of
Speaker 9: notification requirements and in very narrowly scoped portions of these
Speaker 9: sectors prohibitions. But these would not be broad controls that
Speaker 9: would affect US investment broadly in China or in my opinion,
Speaker 9: have a fundamental impact on affecting the investment climate for China,
Speaker 9: So these would be national security focused.
Speaker 10: It sounds like it's already done.
Speaker 8: Is the administration have it finished and is just waiting
Speaker 8: for a good time to release it.
Speaker 9: We want to make sure if we do this, that
Speaker 9: we get it right, and we've been working on the details.
Speaker 9: If we do go ahead, and there is a good
Speaker 9: chance that we will, that we would put out along
Speaker 9: with the executive Order and notice of proposed rulemaking, so
Speaker 9: that the public would have a chance to comment on
Speaker 9: these proposed controls and we would receive a wide range
Speaker 9: of public input before finalizing anything that we do.
Speaker 8: Madame Secretary, you obviously have a lot on your plate
Speaker 8: when it comes to re engaging with China and your
Speaker 8: discussions there.
Speaker 10: Just off this trip from Beijing, I'm curious how.
Speaker 8: Difficult the dialogue is going to continue to be After
Speaker 8: the revelations about the Chinese hacking of your colleague, Secretary
Speaker 8: Gina Ramundo.
Speaker 9: So, I do have concerns about hacking of US government
Speaker 9: officials or at individuals or companies, and I know the
Speaker 9: United States has expressed those concerns. But we intend to
Speaker 9: continue to deepen our discussions with China to increase our engagement.
Speaker 9: It's especially important to explain what our motivation is to
Speaker 9: avoid misunderstandings that can lead to necessary, unnecessary and dangerous escalation.
Speaker 9: President Chi and President Biden agreed in Bali that senior officials,
Speaker 9: including those in economics, should interact more regularly, and I
Speaker 9: think an outcome of my trip there was that we
Speaker 9: will have deeper, ongoing engagement at all levels.
Speaker 10: When did you learn about the China email hacking.
Speaker 8: I'm curious if you had a chance to maybe bring
Speaker 8: this up on your trip to Beijing.
Speaker 9: I believe I did not know about that in Beijing.
Speaker 9: Wasn't one of the things that we discussed.
Speaker 8: I also want to ask about what's happening on the ground,
Speaker 8: something that I know is very important to you, and
Speaker 8: this comes to debt relief of these developing countries. There
Speaker 8: has been this push from the US administration to use
Speaker 8: the Zambia principle for other countries like Ghana, but that's
Speaker 8: not getting the broad support it needs in India. On
Speaker 8: the ground amongst other G twenty finance ministers is China
Speaker 8: the hold up here?
Speaker 9: Well, we designed the G twenty designed something called the
Speaker 9: Common Framework, which is a set of two principles and
Speaker 9: processes to deal with unsustainable debt situations. And we would
Speaker 9: like to see countries that apply to use the Common
Speaker 9: Framework get rapid relief from their debt that they need
Speaker 9: in order to grow and be able to attract investment
Speaker 9: and undertake IMF programs that can help to stabilize their economies.
Speaker 11: And the few.
Speaker 9: Cases that have applied to use the Common Framework, including Zambia,
Speaker 9: have taken far too long. The process has been onerous
Speaker 9: and it's taken a very long time to get debt relief.
Speaker 9: We are pleased that China has become China, after all,
Speaker 9: is a major creditor of these countries. We have been
Speaker 9: anxious to see China move more quickly and take a
Speaker 9: more constructive attitude participate painting in these debt relief talks,
Speaker 9: and getting agreement on Zambia was an important step. China
Speaker 9: has also been helpful in Ghana, the case of Ghana
Speaker 9: and Sri Lanka, and I'm hopeful that we'll be able
Speaker 9: going forward to make more rapid progress. I should emphasize
Speaker 9: that the debt issue is one that concerns the entire
Speaker 9: g twinning and we are united in wanting to see
Speaker 9: this framework work more effectively, and it is a priority
Speaker 9: for India as well.
Speaker 11: All Right.
Speaker 1: That was Bloomberg's Washington correspondent and Marie Horder sitting down
Speaker 1: with Treasury Secretary Jennet Yelling for an exclusive interview from
Speaker 1: the G twenty summit India, talking about all things at
Speaker 1: China and the global economy. We want to follow that
Speaker 1: up with a discussion with Endocurrent. He's a global economy
Speaker 1: reporter of Bloomberg News. So and fascinating discussion Anry Hordern
Speaker 1: had this morning with Secretary Yelling here.
Speaker 4: I mean, the.
Speaker 1: Messaging seems to be that the US government's trying to
Speaker 1: work with the Chinese government, but there was just a
Speaker 1: lot of challenges out there. What did you take away
Speaker 1: from this discussion?
Speaker 12: Maybe some mixed messaging I think coming from the administration,
Speaker 12: because obviously we know there's been a very hawkish rhetoric
Speaker 12: it's all about US strategic rivalry with China. But we
Speaker 12: had this morning mister Ellen making those making those comments
Speaker 12: in the interview that he just played, saying, for example,
Speaker 12: the US would go ahead with those investment restrictions on China,
Speaker 12: but she doesn't really see it having an overall harmful effect.
Speaker 12: It's fairly targeted, precision kind of policy, and obviously that
Speaker 12: will stoked about over you know what exact China strategy
Speaker 12: is administration pursuing. Are they trying to get things on
Speaker 12: an even keel and and sort of riachual conciliation or
Speaker 12: are they pushing ahead with sort of the Holkish side
Speaker 12: of things. So I think there's grands for debate there
Speaker 12: around there's some of the signals coming from that. She
Speaker 12: also spoke though about what the Chinese economy is singing
Speaker 12: for the rest of the global economy, and she made
Speaker 12: some remarks during the G twenty about how China slow
Speaker 12: down is definitely going to slow down trading partners in
Speaker 12: the Asia region, but probably won't be enough to spill
Speaker 12: over to the US and drag the US economy into
Speaker 12: interior session itself. So, as I say, covering a lot
Speaker 12: of ground, but maybe mixed signals from the Treasury Secretary
Speaker 12: on the China policy.
Speaker 4: Something that struck me in Paul was when Yellen was
Speaker 4: talking about youth unemployment being so high in China. Do
Speaker 4: you know exactly what drives that dynamic.
Speaker 12: Yeah, it's up over twenty percent. Now, again, on paper,
Speaker 12: that's a record, but the data doesn't actually go back
Speaker 12: that far, and it goes back to twenty eighteen. There
Speaker 12: are a few different things a play in China. There's
Speaker 12: been a record amount of graduates coming on the market.
Speaker 12: I think it's eleven nine million this year, so they're
Speaker 12: obviously all going to be looking for work. There's a
Speaker 12: lot of there's been a lot of change in China's
Speaker 12: economy recent years. That big regulatory crackdown on the tech sector,
Speaker 12: for example, took away some of the low hanging fruit
Speaker 12: when they come to see young graduates getting work. That's
Speaker 12: been cited as one factor, and of course then you
Speaker 12: have this broader slow down. This was meant to be
Speaker 12: the year of recovery in China's economy post the COVID
Speaker 12: zero policy. Services and consumption we are meant to drive
Speaker 12: this big ifiz in demand. Well, it looks like that's
Speaker 12: kind of peeling around. It's been at disappointing recovery. Lots
Speaker 12: of economists now downgrading their forecast for Chinese economy, some
Speaker 12: people even in the warning that the China's government will
Speaker 12: miss the growth target of around five percent is here.
Speaker 12: So you would have to say the pressure on ute
Speaker 12: employment is part of the mix of the broader economic
Speaker 12: slow down there too.
Speaker 1: So and how broad and how deep you think the
Speaker 1: economic slowdown is likely to be in China. I know
Speaker 1: it's tough to get reliable data and you know, but
Speaker 1: the concern is that could have impact on the global economy.
Speaker 12: Yeah, so this was meant to be the year that
Speaker 12: China would spill over to the rest of the world,
Speaker 12: as we were just talking about Chinese tourists would go
Speaker 12: everywhere and spend money, and Chinese students and of course
Speaker 12: Chinese demand for imports from bull commodities, everything else. But
Speaker 12: it hasn't really played out like that. And to your point, then,
Speaker 12: on the ground, all indications are the official data saying
Speaker 12: there has been a material slow down there. It's disappointing
Speaker 12: to the point now where economists are saying two things,
Speaker 12: China is at risk of deflation. Certainly start contrast to
Speaker 12: the US is there, and also that they may miss
Speaker 12: the official growth target of around five percent That was
Speaker 12: considered to be a conservative growth target when it was
Speaker 12: said that the government could pretty easily meet it, but
Speaker 12: now that's in danger. So of course it's difficult to
Speaker 12: tell what's going on in China. It's such a huge economy,
Speaker 12: and there are questions around transparency of data, but consistently
Speaker 12: showing that the real estate sectors and the slump, the
Speaker 12: consumer reband story isn't there. The industrial side of things
Speaker 12: is picking up a bit of the moment, but exports
Speaker 12: remain in adulgrum. So by all accounts, China's economy is
Speaker 12: certainly slowing down, and it's a question of by how much.
Speaker 1: All right, ed, I thank you so much. We appreciate that.
Speaker 1: As always end occurrent, he is just given us kind
Speaker 1: of an overview kind of what we're seeing here on
Speaker 1: the US and China to try to rea set some
Speaker 1: economic discussions here between the two countries.
Speaker 7: You're listening to the Team Can't Live program Bloomberg Markets
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Speaker 4: Jasmint and Paul Sweeney here in the Bloomberg Interactive Broker
Speaker 4: Studio and for our next segment, we're going to talk
Speaker 4: about sort of scanning for stocks here with Julie Gorty,
Speaker 4: who's senior vice president for sustainable Investing at Impacts Asset Management,
Speaker 4: joining us on zoom to discuss how this record heat
Speaker 4: is affecting physical assets and which sectors and companies are
Speaker 4: most at risk. Julie, thank you so much for joining us.
Speaker 4: Take a step back and tell us about Impacts and
Speaker 4: what you do.
Speaker 11: Sure Impacts is an investor with about we have about
Speaker 11: fifty billion dollars in assets under management. We're based in London,
Speaker 11: but we have offices in North America and Asia, so
Speaker 11: we're a global investment firm and what we invest in
Speaker 11: is the transition to a sustainable economy. So everything that
Speaker 11: we do is aimed at investing in the things that
Speaker 11: have the long term value drivers of sustainability.
Speaker 1: So give us examples of kind of some of the
Speaker 1: areas that you've invested in.
Speaker 11: So we're investing in the food and ag sector and
Speaker 11: things that are crops that will be more resilient to
Speaker 11: heat and to drought. In climate change, we invest in
Speaker 11: solutions that will mitigate greenhouse gas emissions obviously wind and solar,
Speaker 11: but also things like pumps, pipes, filtration, much more efficient
Speaker 11: heating back, air conditioning, and space conditioning. We invest in
Speaker 11: things that are water saving and that actually help to
Speaker 11: purify the water, and things that avoid having to use
Speaker 11: things that allow you to use water in situe. Right,
Speaker 11: if you have to pump your water fifty miles from
Speaker 11: a reservoir and then back to the wastewater treatment plant,
Speaker 11: well water weighs about nine pounds a gallon and it
Speaker 11: takes a lot of energy to pump it. So anything
Speaker 11: you can do to retreat your water and we use
Speaker 11: it in situ is going to save you both in
Speaker 11: terms of water and climate. So ideas like that, chemicals
Speaker 11: that are less polluting, and stuff like that in.
Speaker 4: Relation to these physical assets. What is physical climate risk
Speaker 4: so important in particular when you want to look at
Speaker 4: more industries in this stock market too.
Speaker 11: Yeah, So when we think about climate risk, in the past,
Speaker 11: we've tended to think about the big emitter, so energy
Speaker 11: stocks and utilities and things like that, but everybody is
Speaker 11: vulnerable to physical risk. You can be a non emitter,
Speaker 11: but if you're on a coastline that's vulnerable to a hurricane,
Speaker 11: you can still get effected by climate change. And increasingly
Speaker 11: that's happened. We've seen disruptions in air travel. We've seen
Speaker 11: outdoor work become much more dangerous. There are people, there's
Speaker 11: a high rising mortality rate, and it absolutely affects productivity
Speaker 11: of both p people and other organisms that have to
Speaker 11: work outside in high heat. You see vulnerability of whole economies.
Speaker 11: Local economies do things like hurricanes and severe weather, coastal storms,
Speaker 11: sea level rise, all that stuff can have a major
Speaker 11: economic impact. Right now, it's having impacts that are running
Speaker 11: in the hundreds of billions of dollars of insured losses annually.
Speaker 11: And that's just the insured losses, so double that if
Speaker 11: you want to, or you know, could be even higher
Speaker 11: if we count uninsured losses. And that's going nowhere. But
Speaker 11: up as long as our emissions are rising, physical risk
Speaker 11: is rising can affect anybody.
Speaker 4: You talked about energy, What other specific sectors, industry groups
Speaker 4: do you think the stock market is most vulnerable to
Speaker 4: when you're talking about physical climate risk?
Speaker 11: Okay, so agriculture obviously anything in the food value chain.
Speaker 11: There are also a lot of electric rids that are vulnerable.
Speaker 11: That's not energy production, but it's sort of getting the
Speaker 11: energy to households. We've seen rolling blackouts and California. You know,
Speaker 11: we saw the Texas grid freeze basically go out because
Speaker 11: of that. But you know, we can all can also
Speaker 11: affect transportation. So we saw, you know, like if it
Speaker 11: gets hot enough, the asphalt buckles and rails expand, so
Speaker 11: things like air travel get disrupted by the storms as
Speaker 11: well as just by what's happening on the asphalt in airports.
Speaker 11: So anyone who ships their goods, you know, it could
Speaker 11: be vulnerable to disruptions and transportation. We were just having
Speaker 11: a call this morning with a really big semiconductor company
Speaker 11: that ships most of their stuff by air. So air
Speaker 11: disruptions can matter a great deal to the semiconductor supply chain.
Speaker 11: Do you want to know what that disruption looks like?
Speaker 11: Look at what happened during COVID, So, Julie, it.
Speaker 1: Just feels like, you know, climate change has become such
Speaker 1: a political issue here in US. I don't know how
Speaker 1: it is around the world. Here in other parts of
Speaker 1: the world. Do you encounter that with your investing with
Speaker 1: companies you look at with your discussions of all the
Speaker 1: stakehold out there, and if so, how do you deal
Speaker 1: with it.
Speaker 11: So the backlash in the US, primarily, I would say,
Speaker 11: is primarily political. When we talk to firms about it,
Speaker 11: when we talk to them about physical risks or transition risks,
Speaker 11: they get it. Whatever the political discourse is, it doesn't
Speaker 11: affect the facts. Really, it can affect policy, but the
Speaker 11: fact that physical risk is happening is going to happen,
Speaker 11: whether people believe it or not. So they get it.
Speaker 11: When we talk to the firms in the s and P.
Speaker 11: Five hundred about physical risk, the firms that had thought
Speaker 11: about it understood that it was the impacts could be severe, unexpected.
Speaker 11: Making decisions in a crisis, like if you have a
Speaker 11: hotel full of passengers stranded in the Bahamas by a hurricane,
Speaker 11: you have to do something to get them out if
Speaker 11: you're the hotel company, so otherwise they're never going to
Speaker 11: stay at one of your hotels again. So our discussions
Speaker 11: with companies are usually pretty productive. They understand the importance
Speaker 11: of climate risk, they understand the importance of doing something
Speaker 11: about it. And so do our shareholders.
Speaker 4: What do companies need to disclose when it comes to
Speaker 4: these key assets and where the value chain dependencies end
Speaker 4: up being located.
Speaker 11: What a good question, That's exactly what we ask them.
Speaker 11: So the first thing we need to know is investors,
Speaker 11: what we're pricing is where the puck is going, not
Speaker 11: where it is right, So we need to know what
Speaker 11: assets are going to be vulnerable to physical risks, and
Speaker 11: since physical risk, how much physical risk you face and
Speaker 11: what type depends on where you are. The first thing
Speaker 11: we need to know is where are your assets? It's
Speaker 11: a where are your manufacturing plants? Where are your big
Speaker 11: distribution centers, what courts do your primary shipping? Does your
Speaker 11: primary shipping go through? Where are your key supply chain dependency?
Speaker 11: So I'll just give you a quick example. Biggest semiconductor
Speaker 11: manufacturer in the world is TSMC. A couple of years ago,
Speaker 11: the drought in Taiwan was so severe that they almost
Speaker 11: had to close down their planet. It takes a lot
Speaker 11: of water to make semtors. Very little which ends up
Speaker 11: in the semiconductor, but it takes a lot to make one.
Speaker 11: The government was considering even seating clouds to try to
Speaker 11: make it rain. Luckily the drought ended first, but that
Speaker 11: could have been really a disaster for them. So the
Speaker 11: first thing we need to know is where are you
Speaker 11: you know, and where are the keynodes in your supply
Speaker 11: chain so that we can assess your vulnerability. We can
Speaker 11: run the climate models, and we do, but we need
Speaker 11: to know whether what they're going to affect in terms
Speaker 11: of companies' assets and dependencies. The next thing we need
Speaker 11: to know is what you're doing about it. So do
Speaker 11: you recognize what these risks are, and if so, what
Speaker 11: measures have you taken to avoid being vulnerable during an
Speaker 11: event a hurricane, of flood, of wildfire, a drought and
Speaker 11: outage in the grid, something like that. Then if we
Speaker 11: have that kind of information, then we can, you know,
Speaker 11: do our own magic and figure out what the how
Speaker 11: to price that risk. But we don't even have physical
Speaker 11: location information right now.
Speaker 1: That's kind of where I wanted to go, Julie, And
Speaker 1: we can about thirty seconds left data we're bloomberg here
Speaker 1: where Data company? Is there adequate data for you to
Speaker 1: really do your job and assess the risk.
Speaker 13: Now?
Speaker 11: And we can get information on where the risks are
Speaker 11: and we know some of the company location, so we
Speaker 11: can do assessments, but in order to do a really
Speaker 11: good job, we'd need to have much better data on
Speaker 11: location and on companies management and recognition of physicalness and
Speaker 11: how they're adapted.
Speaker 1: Julie, thanks so much for joining us. Fascinating discussion and
Speaker 1: growing field. Of course, Julie Gorte, Senior Vice president for
Speaker 1: Sustainable Investing Impacts asset Management, kind of going to a
Speaker 1: risk here as part of that, I guess a broader
Speaker 1: EESG is discussion, which again is Julia was just mentioning
Speaker 1: has become highly politicized here in the US, much more
Speaker 1: so than in other parts of the world, and making
Speaker 1: you folks that are focusing on that their job a
Speaker 1: little bit more difficult.
Speaker 7: You're listening to the tape kens our live program Bloomberg
Speaker 7: Markets weekdays at ten am Eastern on Bloomberg, the tune
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Speaker 7: flagship New York station. Just say Alexa play Bloomberg eleven thirty.
Speaker 1: All right, let's talk about the business of sports, and
Speaker 1: this is a good one. The Fenway Sports Group, you
Speaker 1: know them, they own the Boston Red.
Speaker 4: Sox, Pittsburgh Penguins.
Speaker 1: Pittsburgh Penguins, and then Liverpool Football Club plus some other businesses.
Speaker 1: And I'm a Yankee fan full disclosure, but Yankee fans
Speaker 1: have a lot of respect for Boston. We know how
Speaker 1: good they are because we have to play them like
Speaker 1: seventeen times every year. Let's talk about the business there.
Speaker 1: Julie Swinehart joins us. She's a CFO and EVP of
Speaker 1: Fenway Sports Groups. Joins us via zoom. Julie, thanks so
Speaker 1: much for joining us.
Speaker 7: Share.
Speaker 1: I want to talk to you about the real businesses sports,
Speaker 1: and the part of it that I know well is
Speaker 1: the regional sports networks that support some of these regional
Speaker 1: sports like Major League Baseball, like NHL hockey. The regional
Speaker 1: sports network business is in a world of hurt. The
Speaker 1: biggest one just filed for bankruptcy. Revenues are down jamatic
Speaker 1: because everybody's cutting the cord. How do you guys deal
Speaker 1: with it at the new England Sports Network and how
Speaker 1: are you kind of dealing with those changes?
Speaker 13: Well, thanks for the question. First and foremost, thanks for
Speaker 13: having me today. It's great to speak with both of you.
Speaker 13: Regional sports networks are in a time of change, I'd
Speaker 13: say for sure right now, New England Sports Network. You know,
Speaker 13: our ownership team supported them and you know, really encourage
Speaker 13: them to get ahead of try to get ahead of
Speaker 13: what's happening as you described in the marketplace. So we
Speaker 13: were I believe, the first to market with a direct
Speaker 13: to consumer product which launched just about twelve months ago.
Speaker 13: And so that's one way that Nessen is trying to
Speaker 13: stay ahead and stay relevant and successful. And I think
Speaker 13: there's been a lot of early wins with DTC, a
Speaker 13: lot of learning as well, but more to come there
Speaker 13: and I think that's one way that we can try
Speaker 13: to combat some of the headwinds out there that are
Speaker 13: that are just part of the landscape.
Speaker 4: So what does it take to fund a winning sports team?
Speaker 4: Where does the revenue come from?
Speaker 8: Uh?
Speaker 13: Well, I don't I don't know how NERD do you
Speaker 13: want me to get with revenue renues? But you know,
Speaker 13: coming in and I've been here just about a year, Uh,
Speaker 13: there's been a lot of learning, but a lot of
Speaker 13: aha moments for me. And there's more similarities across the
Speaker 13: different teams in terms of the revenue structure than I
Speaker 13: guess what I would have originally expected. But uh, there's
Speaker 13: the obvious, you know, media revenue sources, there's sponsorship, partnership,
Speaker 13: advertising revenue, depending on which entity we're speaking about, and
Speaker 13: then also game day or match day sales, so fans
Speaker 13: coming to the venues and spending money on concessions and whatnot.
Speaker 13: So but each of the teams have a little bit
Speaker 13: of a different makeup across the revenue. And really what
Speaker 13: keeps it all going is, as I think is probably
Speaker 13: pretty intuitive, is the excitement around winning. And we are
Speaker 13: here to win championships. And I think we've done and strated,
Speaker 13: you know, with John Henry and Tom Werner and Mike
Speaker 13: Gordon and what they've built here a really winning track
Speaker 13: record that allows us to do all those things.
Speaker 1: Talk to us about the Liverpool Football Club at the
Speaker 1: English Premier League. It's such a global business, a global brand,
Speaker 1: a global game. Talk to us about kind of your
Speaker 1: experience owning this. I think you guys have owned this
Speaker 1: club for almost a decade.
Speaker 13: Now, yeah, a little over a decade, and you know,
Speaker 13: I think the investment over time, you know, we take
Speaker 13: I should start with we take a long view on
Speaker 13: all of our investments and a very intentional approach in
Speaker 13: terms of trying to elevate and make make the teams
Speaker 13: more successful, make them better. Liverpool does have a global
Speaker 13: reach and they're one of our many important assets, so
Speaker 13: it comes with just the right amount of support from
Speaker 13: from the FSG entity, always listening to the supporters and
Speaker 13: the fans and trying to get input there from what
Speaker 13: they're looking for, what's important to them. And I'm learning,
Speaker 13: especially with that team, the fan base is really integral
Speaker 13: like it is for all of our teams, but in
Speaker 13: a little bit of a different way over there, and
Speaker 13: we've demonstrated again a lot of success and we're always
Speaker 13: trying to think of ways to keep that going, whether
Speaker 13: it be with players or data or nutrition. It's those
Speaker 13: micro advantages and sports in any of these sports teams
Speaker 13: that we own that really can be what really makes
Speaker 13: the difference between a mediocre team and a championship team.
Speaker 4: Paul, I knew with your experience as an analysts you're
Speaker 4: really focused when it comes to those media contracts on
Speaker 4: when it comes to local and national right.
Speaker 1: Yeah, absolutely, I mean I think the one of the
Speaker 1: big issues actually one of the things it's interesting Julie,
Speaker 1: I mean, I'm just looking at your the assets you
Speaker 1: guys do have here. Is there room for growth in
Speaker 1: other sports? Which you think about the NBA or maybe
Speaker 1: take a huge leap and think about the NFL. How
Speaker 1: do you is there other sports that you guys are
Speaker 1: looking at.
Speaker 13: I think we're definitely in growth mode. We did only recently,
Speaker 13: pretty recently acquire the majority of the Pittsburgh Penguins, so
Speaker 13: we're still, you know, on onboarding and bringing them into
Speaker 13: the family. Although it's been a it's been a nice transition,
Speaker 13: I think for everyone involved there. So you know, our
Speaker 13: I think you know, our aspirations are limitless, whether it
Speaker 13: be a major league such as those of you described,
Speaker 13: or something new and different like tomorrow Golf League. We
Speaker 13: recently announced that we are owners of the second team
Speaker 13: in that sixth i think initially six team league. So
Speaker 13: we've got the Boston New England team in our in
Speaker 13: our FSG family as that league is getting started and
Speaker 13: building out, and that's a really exciting opportunity to So
Speaker 13: they're not all going to be those large scale opportunities,
Speaker 13: but hopefully in time will continue to grow in in
Speaker 13: bigger ways as well.
Speaker 1: All Right, So for all the Red Sox fans out there,
Speaker 1: the Red Sox are tied I believe with the Yankees
Speaker 1: as of today for last place in the American League.
Speaker 1: State is the most competitive division in all of Major
Speaker 1: League Baseballutely, what do you guys do here? It's mid July.
Speaker 1: What do you guys do here? You come up to
Speaker 1: the trade deadline? How aggressive is the Red Sox can be?
Speaker 1: Are they can be buyers or sellers?
Speaker 7: Here?
Speaker 6: Ah?
Speaker 13: Question of the morning. I can't share a whole lot there,
Speaker 13: but I will say there's a lot of excitement around
Speaker 13: how the team's been performing, especially as of late, and
Speaker 13: I think the second half of the season. Time will tell,
Speaker 13: but I hold a lot of optimism for the Red Sox.
Speaker 1: All Right, So Fenway, real quick, thirty seconds. I love Fenway.
Speaker 1: It's iconic. Everybody loves Fenway. Any changes coming to Fenway.
Speaker 13: There's always something going on, whether it be a new
Speaker 13: I think we just we had pickleball here recently. There's
Speaker 13: concerts coming up, some things like that are new. But
Speaker 13: also we recently received some key approvals for some real
Speaker 13: estate expansion around the park, so we're partnering with WS
Speaker 13: Development here in Boston to overtime add about two million
Speaker 13: square feed of mixed use to really just continue to
Speaker 13: elevate Funway Park, make it even more welcoming to more
Speaker 13: people and very focused on pedestrians, and we're really excited
Speaker 13: that that project seems to be moving along great.
Speaker 1: Julie Swineheart, thanks so much for joining us. Juliu Swinheart's
Speaker 1: CFO and executive vice president for the Fenway Sports groups
Speaker 1: the Dreaded Red Sox.
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever
Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
Speaker 2: at Matt Miller nineteen seventy three and on Fall Sweeney.
Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you
Speaker 1: can always catch us worldwide at Bloomberg Radio