WEBVTT - Earnings, Disney, Janet Yellen, and Fenway Sports Group 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:05.280 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moving news. 0:00:14.160 --> 0:00:17.279 I'm the Bloomberg Markets Podcast on Apple Podcasts or wherever 0:00:17.400 --> 0:00:20.520 you listen to podcasts, and at Bloomberg dot com Slash podcast. 0:00:20.920 --> 0:00:23.840 It is earnings. We've got some more bank earnings. We 0:00:23.960 --> 0:00:26.680 started last Friday kicking them off. We got some more 0:00:26.720 --> 0:00:29.040 big ones this weekend. We've got some of the regional 0:00:29.080 --> 0:00:31.320 banks as well. But of course you know you've got 0:00:31.880 --> 0:00:33.360 some big, big banks this week, so we want to 0:00:33.360 --> 0:00:34.600 get to the bottom of it. So we're going to 0:00:34.720 --> 0:00:38.239 round table this discussion because we can do that at 0:00:38.240 --> 0:00:40.800 bloombergause we have Bloomberg Intelligence, some of the smartest analysts 0:00:40.840 --> 0:00:43.040 on Wall Street, Allison and Williams. She covers the big 0:00:43.040 --> 0:00:46.080 banks and Herman Chan covers the regional banks. Here in 0:00:46.120 --> 0:00:48.159 the United States. We've got them both here in our 0:00:48.159 --> 0:00:51.440 Bloomberg Interactive Brokers studio. So Alis, let's start with you. 0:00:51.760 --> 0:00:53.640 What was the key takeaway from Friday when we had 0:00:53.880 --> 0:00:57.120 some of the banks kickoff? JP Morgan being the most notable. 0:00:57.200 --> 0:00:59.320 Then this week you've got Morgan Stanley, Bank of America, 0:00:59.400 --> 0:01:01.800 Goldman Sachs kind of what are you starting to see? 0:01:01.800 --> 0:01:04.120 What do you expect to see from these big banks? 0:01:04.440 --> 0:01:09.280 The key takeaway was more resilient, interesting income versus expectations, 0:01:09.319 --> 0:01:11.600 so holding up a bit better. And I think we 0:01:11.959 --> 0:01:16.360 had signs of that. The first quarter was strong and 0:01:16.600 --> 0:01:19.280 it looked like the banks were being conservative with guidance, 0:01:19.319 --> 0:01:21.040 and so they upped that guidance. So we're going to 0:01:21.120 --> 0:01:23.760 see if the same hold shoop for a Bank of America. 0:01:23.880 --> 0:01:26.920 Part of that is that they're growing credit card loans, 0:01:26.959 --> 0:01:30.040 which are higher yielding, and if you look at loan growth, 0:01:30.240 --> 0:01:34.440 that's really been the strong point that benefits big banks 0:01:34.480 --> 0:01:37.960 like JP, Morgan City Whiles also growing that a little bit. 0:01:38.040 --> 0:01:41.200 Bank America, we'll see, but Bank of America does have 0:01:41.280 --> 0:01:44.360 a little bit more exposure to the commercial and industrial side, 0:01:45.560 --> 0:01:48.200 which is weighing a little bit on Herman's side of things. 0:01:48.320 --> 0:01:51.040 I want to bring Herman into this conversation because we're 0:01:51.040 --> 0:01:53.840 going to have seventeen regional banks reporting this week. It 0:01:53.880 --> 0:01:57.240 does include Usbank Corp also P and C reporting your 0:01:57.240 --> 0:02:00.520 first earners results after the collapse of obviously first Public 0:02:00.880 --> 0:02:03.920 and then SVB when they triggered those industry fears in 0:02:03.960 --> 0:02:06.080 the spring. What do you think we should be expecting 0:02:06.120 --> 0:02:07.040 from the regionals? 0:02:07.560 --> 0:02:11.000 So the regionals are going to feel the aftershocks of 0:02:11.080 --> 0:02:14.919 the bank failures in March and April. That really comes 0:02:15.040 --> 0:02:19.200 in the form of deposit pricing. As deposit pricing continues 0:02:19.240 --> 0:02:24.119 to increase, we expect the smartests contract, top line revenues 0:02:24.160 --> 0:02:28.200 to contract because of the higher funding costs. And contrasting 0:02:28.240 --> 0:02:31.040 to what's happening with Allison's banks, you're not seeing the 0:02:31.080 --> 0:02:34.200 long growth versus the bigger banks because there's less exposure 0:02:34.240 --> 0:02:37.480 to credit cards. There's more exposure to commercial real estate 0:02:37.600 --> 0:02:42.240 and traditional business lending that and those areas are slowing 0:02:42.320 --> 0:02:43.280 across the industry. 0:02:43.720 --> 0:02:46.280 So Herman on the commercial real estate side, how big 0:02:46.280 --> 0:02:48.560 of a problem is this going to be for the 0:02:48.600 --> 0:02:52.080 regional banks around the country over the next you know, quarters, 0:02:52.120 --> 0:02:54.040 but really a couple of years probably, Yeah. 0:02:53.800 --> 0:02:54.280 That's right. 0:02:54.400 --> 0:02:58.400 So I would highlight that the real main focus is 0:02:58.440 --> 0:03:02.040 office commercial real estate. At other areas that were sort 0:03:02.080 --> 0:03:05.120 of in the in the spotlight, like hotels and other 0:03:05.280 --> 0:03:09.000 areas like that are performing pretty well. At this point, 0:03:09.760 --> 0:03:13.560 but office commercial real estate is the big focus. The 0:03:13.600 --> 0:03:17.200 good thing is that exposures are pretty manageable. We're talking 0:03:17.240 --> 0:03:19.480 about for the regions that I cover, two to three 0:03:19.560 --> 0:03:23.160 percent of their entire loan portfolio is situated in office CRE. 0:03:23.840 --> 0:03:27.120 That's a fairly small portion. And we also point to 0:03:27.120 --> 0:03:31.120 the fact that underwriting's pretty conservative, with lone deposit ratios 0:03:31.160 --> 0:03:35.240 around lond to value ratios around sixty percent, which suggests 0:03:35.320 --> 0:03:40.680 pretty strong cushion for potential losses down the road. So 0:03:40.880 --> 0:03:44.280 you could see that you could see losses come, but 0:03:44.480 --> 0:03:47.400 it'll be pretty manageable over the next several years. 0:03:47.840 --> 0:03:51.320 So Allison, whenever we do hear from Goldman and Morgan Stanley, 0:03:51.400 --> 0:03:55.040 how exactly will this put the investment banking slowdown into 0:03:55.120 --> 0:03:56.560 more perspective from here? 0:03:57.400 --> 0:04:00.200 So, obviously the business is more important for those two 0:04:00.280 --> 0:04:03.200 banks and some of these more diversified banks that we watch. 0:04:04.440 --> 0:04:06.760 I keep in mind that Goldman Sachs and Morgan Stanley 0:04:06.920 --> 0:04:11.760 had really strong fixed income trading last year, especially driven 0:04:11.760 --> 0:04:14.160 by the commodities front. So when we see some of 0:04:14.160 --> 0:04:18.240 those declines come in, there might be some some negative headlines, 0:04:19.240 --> 0:04:22.200 but in general we do think that you know, there 0:04:22.320 --> 0:04:25.200 there is some support for fixed income trading normalizing in 0:04:25.560 --> 0:04:29.160 a historically high level equity trading not so much. That's 0:04:29.200 --> 0:04:32.520 more negative on the margin for Morgan Stanley because they 0:04:32.560 --> 0:04:36.640 do are are more skewed to the equity side of things. 0:04:36.960 --> 0:04:40.120 But more importantly, we'll be looking at fees. You know, 0:04:40.200 --> 0:04:43.160 Goldman is far and away the m and a revenue leader. 0:04:43.240 --> 0:04:46.040 There's all different kinds of rankings and such, but they 0:04:46.080 --> 0:04:49.040 do tend to earn, you know, multiples of the next 0:04:49.080 --> 0:04:52.279 competitor in terms of revenue just due to sort of 0:04:52.320 --> 0:04:56.560 leading positions on certain deals and that that's been a headwind. 0:04:56.839 --> 0:04:59.280 It's going to be a headwind for the banks. Are 0:04:59.320 --> 0:05:02.960 they still expecting you know, optimism for twenty twenty four 0:05:03.800 --> 0:05:05.839 these green shoots that we saw on the equity side 0:05:05.880 --> 0:05:09.920 of things, Will that help in the quarter? And then 0:05:10.080 --> 0:05:13.120 you know wealth and as asset management benefiting there from 0:05:13.120 --> 0:05:15.880 some of the recent equity prices. How is that translating 0:05:15.920 --> 0:05:17.599 for those businesses for the big banks? 0:05:18.040 --> 0:05:19.360 Hey, Hermin, I know when we were talking to you 0:05:19.400 --> 0:05:21.880 almost on a daily basis there a few months ago, 0:05:21.920 --> 0:05:23.960 when we were earlier in the thick of this regional 0:05:24.000 --> 0:05:26.800 bank you know kind of melt down a little bit 0:05:26.800 --> 0:05:29.400 for a handful of names you've just kind of highlighted 0:05:29.400 --> 0:05:31.479 to us. We need to focus on earnings risk for 0:05:31.520 --> 0:05:33.440 these banks, and that's where the pressure is going to come. 0:05:34.800 --> 0:05:37.080 Is has the earnings risk been taken out of this 0:05:37.120 --> 0:05:39.560 group or do you think there's still more downward revisions? 0:05:39.760 --> 0:05:40.880 Where are we net process? 0:05:41.960 --> 0:05:44.360 There's going to be there continues to be some uncertainty 0:05:44.720 --> 0:05:48.560 in regards to earnings. Really, it's going to be focused 0:05:48.600 --> 0:05:51.120 on good deposit repricing. I don't think a lot of 0:05:51.120 --> 0:05:54.120 the regionals have a firm handle on how quickly and 0:05:54.240 --> 0:05:59.719 how fast and where that potential deposit repricing stops. We're 0:05:59.760 --> 0:06:03.440 going to see potentially another FED rate hike. That's a 0:06:03.520 --> 0:06:08.839 negative for deposit repricing. And look, JP Morgan just said 0:06:08.839 --> 0:06:12.360 that deposit competition is rising, and if the biggest bank 0:06:12.400 --> 0:06:14.880 in the United States is the posit competition is rising, 0:06:14.960 --> 0:06:18.280 then you could expect pressure across the regionals because of that. 0:06:18.920 --> 0:06:20.719 And I wanted to follow up on that because the 0:06:20.720 --> 0:06:24.600 FED has pointed a tougher capital and liquidity rules, especially 0:06:24.600 --> 0:06:26.200 for the mid sized banks. What do you think that 0:06:26.279 --> 0:06:26.800 stake there? 0:06:27.120 --> 0:06:32.240 Yeah, so there's going to be higher capital ratios. We 0:06:32.320 --> 0:06:37.279 expect also higher liquidity rules, tougher liquider rules for the 0:06:37.320 --> 0:06:42.360 regional banks. All that will serve to reduce profitability and 0:06:42.640 --> 0:06:45.800 row's return on equities for the regionals. That we're talking 0:06:45.839 --> 0:06:49.720 about regionals with assets above one hundred billion dollars, So 0:06:50.160 --> 0:06:53.120 we're talking about a fairly small subgroup of regionals, but 0:06:53.320 --> 0:06:57.799 you're going to see maybe one hundred two hundred basis 0:06:57.800 --> 0:07:03.000 points of return just stall off the profitability spectrum across 0:07:03.040 --> 0:07:06.560 these banks, and that that's gonna be something that the 0:07:07.040 --> 0:07:09.119 industry is going to need to digest, and you're gonna 0:07:09.120 --> 0:07:12.120 see some cost cuts. You could potential see M and 0:07:12.160 --> 0:07:14.760 A down the road to absorb some of these regulatory 0:07:14.840 --> 0:07:18.200 pressures and top line pressure. So those are things we're 0:07:18.240 --> 0:07:19.040 expecting down the road. 0:07:19.720 --> 0:07:22.960 Allison, real quick, thirty seconds. Goldman's acxis week. How much 0:07:23.000 --> 0:07:26.040 pressure is the CEO, mister Solomon under at the moment. 0:07:26.960 --> 0:07:28.640 I mean, I think to the extent that things are 0:07:28.680 --> 0:07:31.960 related to the environment. It's the environment. So I think 0:07:32.000 --> 0:07:35.520 investors will be watching, you know, how the market share 0:07:35.600 --> 0:07:38.960 is holding up and how these longer term initiatives holding 0:07:39.080 --> 0:07:41.120 have been holding up. I mean, there's been a lot 0:07:41.120 --> 0:07:42.880 of focus over the last couple of years and the 0:07:42.920 --> 0:07:45.560 consumer effort and sort of the wind down of some 0:07:45.600 --> 0:07:47.960 of those initiatives. But I would keep in mind that 0:07:47.960 --> 0:07:50.880 those were in place when he took the helm, and 0:07:50.960 --> 0:07:56.240 so you know, it's not necessarily something he created. It's 0:07:56.240 --> 0:07:59.800 not a reason that investors ever owned the stock, quite frankly, 0:08:00.360 --> 0:08:04.320 but things like the alternatives business, things like what's happening 0:08:04.320 --> 0:08:07.880 on the cost side, that is something investors are focusing on. 0:08:08.440 --> 0:08:09.800 You know, they're going to be way out of bounds 0:08:09.840 --> 0:08:12.840 in terms of their costs versus their target because they 0:08:12.840 --> 0:08:15.120 have some one timers and some impairments, so it's going 0:08:15.200 --> 0:08:17.720 to be pretty much of a mass when they report, 0:08:17.760 --> 0:08:19.440 But people are going to be looking for, like what 0:08:19.560 --> 0:08:21.600 is that core cost trend? 0:08:22.160 --> 0:08:24.120 Wrote in on the train today, saw Buddy mine who's 0:08:24.120 --> 0:08:25.680 an m and a banker. He works at an investment 0:08:25.720 --> 0:08:28.520 bank that focuses on regional banks. His wife wants him 0:08:28.520 --> 0:08:32.720 to retire, and he says no, because the next five 0:08:32.760 --> 0:08:34.599 years he thinks are going to be the most lucrative 0:08:34.720 --> 0:08:37.719 in his career. He's about sixty years old. He's to 0:08:37.800 --> 0:08:39.440 be the most lucrative in terms of the fees of 0:08:39.440 --> 0:08:41.560 his career of the next five years, and he wants 0:08:41.600 --> 0:08:43.599 to be there, so boom. He thinks there's gonna be 0:08:43.600 --> 0:08:44.920 a lot of M and A in the space. I said, 0:08:45.000 --> 0:08:48.640 that's interesting. So anyway, Allison Williams Herman Chin, they cover 0:08:48.760 --> 0:08:51.240 all the banks for Bloomberg Intelligence. We appreciate getting them 0:08:51.360 --> 0:08:52.880 in office. 0:08:53.800 --> 0:08:57.199 You're listening to the team. Ken's are Live program Bloomberg 0:08:57.240 --> 0:09:00.760 Markets weekdays at ten am Easter and can Bloomberg the 0:09:00.840 --> 0:09:04.000 iHeartRadio app and the Bloomberg Business app or listen on 0:09:04.040 --> 0:09:06.000 demand wherever you get your podcasts. 0:09:08.160 --> 0:09:12.199 Lots of earnings this week, including Netflix after the close 0:09:13.000 --> 0:09:15.079 on Wednesday. Stock's had a great run. 0:09:15.120 --> 0:09:17.840 It's over one hundred percent over the last twelve months. 0:09:17.920 --> 0:09:20.120 Yeah, just amazing. It's still down about twenty five percent 0:09:20.120 --> 0:09:22.200 from its all time high, but it's hitting a fifty 0:09:22.240 --> 0:09:25.560 two week high today, so finding it's putting again. Keithan 0:09:25.600 --> 0:09:28.839 Ranganathen joins us here via zoom She covers all things 0:09:28.960 --> 0:09:32.480 media on a global scale for Bloomberg Intelligence. So let's 0:09:32.520 --> 0:09:35.319 just start there at Getha. It's the one bright spot 0:09:35.360 --> 0:09:38.600 I think within the media landscape that's actually doing well 0:09:38.600 --> 0:09:40.640 from Stock respective what do you expect to hear from 0:09:40.720 --> 0:09:41.680 our friends in Netflix. 0:09:42.840 --> 0:09:45.800 Yeah, so absolutely things are looking pretty bright for Netflix. 0:09:45.880 --> 0:09:49.600 I mean, with all of the attention now on streaming profitability, 0:09:49.679 --> 0:09:53.400 this is one streamer that has really got that portion 0:09:53.559 --> 0:09:56.120 of the equation right. So they have found, you know, 0:09:56.160 --> 0:09:59.760 this kind of nice formula where they're balancing costs and profitability, 0:09:59.800 --> 0:10:01.800 and so we're going to obviously see them kind of 0:10:02.360 --> 0:10:05.720 really post I think good operating income numbers, good margin numbers. 0:10:05.960 --> 0:10:07.360 But I think where a lot of the attention is 0:10:07.400 --> 0:10:09.640 going to come down is to see where their most 0:10:09.679 --> 0:10:12.640 recent initiatives whether those are bearing fruit. And what we're 0:10:12.679 --> 0:10:15.840 talking about is an AD based year, which was introduced 0:10:15.920 --> 0:10:19.120 late last year late last year, but more importantly, their 0:10:19.160 --> 0:10:24.320 recent password crackdown initiative, and they've kind of implemented this 0:10:24.440 --> 0:10:27.440 in the US, across the world in over one hundred markets, 0:10:27.840 --> 0:10:29.880 and you know, some recent data points seem to suggest 0:10:29.880 --> 0:10:32.760 that it's actually gone much better than expected. So we 0:10:32.880 --> 0:10:37.040 might expect them to see to post much better subscriber editions. 0:10:37.120 --> 0:10:40.079 Right now, consensus points for about just under two million 0:10:40.440 --> 0:10:44.400 new subscriber ads. But you know, a bait could definitely 0:10:44.400 --> 0:10:45.000 be expected. 0:10:45.240 --> 0:10:47.240 And when you see a stock like this up more 0:10:47.280 --> 0:10:49.800 than one hundred percent over the past twelve months, and 0:10:49.840 --> 0:10:52.600 even just looking this year, to Paul's point, over fifty 0:10:52.600 --> 0:10:54.840 percent year to date. How much does this raise the 0:10:54.840 --> 0:10:57.520 bar this earning season when it has been on such 0:10:57.559 --> 0:10:57.959 a tear. 0:10:59.320 --> 0:11:01.400 It definitely does raised the bar. I mean, the whole 0:11:02.200 --> 0:11:05.120 focus right now for all of the media landscape is 0:11:05.160 --> 0:11:08.040 really on profits, and this is one company that has 0:11:08.080 --> 0:11:10.960 got it right. I mean, for the longest period of time, 0:11:10.960 --> 0:11:13.679 they were criticized for you know, huge amounts of cash 0:11:13.720 --> 0:11:16.280 burn and then this year where you know, they've guided 0:11:16.360 --> 0:11:18.400 to three and a half billion dollars in free cash 0:11:18.400 --> 0:11:22.280 flow and you can expect them to even surpass that number. 0:11:22.280 --> 0:11:24.120 We are thinking closer to four four and a half 0:11:24.160 --> 0:11:26.800 billion dollars in free cash flow. And this is coming 0:11:26.840 --> 0:11:29.280 at a time when other companies are kind of really 0:11:29.320 --> 0:11:31.679 struggling to find their footing in terms of, you know, 0:11:32.240 --> 0:11:35.480 getting to that profitability metric. We saw some pretty you know, 0:11:35.640 --> 0:11:39.200 dismal kind of forecasts out from Bob Ayger and Disney 0:11:39.280 --> 0:11:42.080 just in terms of you know, the linear TV business 0:11:42.120 --> 0:11:46.360 and even streaming profitability. There's really no clear cut path. 0:11:46.600 --> 0:11:49.080 As we have at Netflix, we just don't. We're not 0:11:49.240 --> 0:11:52.400 seeing it at any other company. So obviously, economics in 0:11:52.400 --> 0:11:54.679 this space are very, very challenged right now, but Netflix 0:11:54.720 --> 0:11:57.480 definitely will set the bar higher, no doubt about it. 0:11:57.520 --> 0:11:57.800 All Right. 0:11:57.840 --> 0:11:59.640 So that's about the extent of the good news in 0:11:59.679 --> 0:12:02.640 your space Netflix. The rest of it's are kind of 0:12:02.760 --> 0:12:06.000 a little bit dire. Let's start with paramount Mission Impossible, 0:12:06.080 --> 0:12:08.959 Tom Cruise fifty six million bucks over the weekend. I 0:12:09.040 --> 0:12:12.480 think that was below consensus here. Kind of what's the takeaway. 0:12:12.559 --> 0:12:15.600 Is it just a you know, title specific issue, or 0:12:15.600 --> 0:12:18.000 is this maybe ring a little bit more broader as 0:12:18.040 --> 0:12:20.040 it relates to what people where people want to go 0:12:20.040 --> 0:12:21.440 in terms of theaters and things like that. 0:12:22.200 --> 0:12:24.319 Yeah, it's been a little bit of a roller coaster, Paul, 0:12:24.640 --> 0:12:26.880 in terms of box office performance. So I think in 0:12:27.000 --> 0:12:30.000 general the tone has been pretty positive for about you know, 0:12:30.120 --> 0:12:33.520 just generally we've kind of seen that comeback in terms 0:12:33.559 --> 0:12:36.520 of box office attendance, but some of the more you know, 0:12:36.600 --> 0:12:40.560 recent titles, they haven't necessarily performed as well as you know, 0:12:40.600 --> 0:12:42.600 industry experts we're hoping for, whether it's you know, the 0:12:42.600 --> 0:12:45.720 Indiana Jones movie, whether it was Elemental from Disney and 0:12:45.760 --> 0:12:48.720 now more recently. You know, kind of this this mission impossible, 0:12:49.000 --> 0:12:52.199 but I think you know, overall, the tone still continues 0:12:52.280 --> 0:12:55.160 to be pretty positive. I mean, if you're comparing box 0:12:55.160 --> 0:12:57.920 office numbers to pre pandemic, yes we're still down about 0:12:57.920 --> 0:13:01.280 twenty to twenty five percent, but I think you know, 0:13:01.440 --> 0:13:05.160 things you know should generally pick up. That said again, 0:13:05.200 --> 0:13:07.760 the question being are we ever going to see it 0:13:07.800 --> 0:13:10.560 go back to pre pandemic levels? Probably not. I mean 0:13:10.600 --> 0:13:14.480 we have multiple things right now affecting the industry. You know, 0:13:14.520 --> 0:13:16.959 we have a strike that's going on. We have all 0:13:17.000 --> 0:13:19.240 of these companies that are kind of paring down in 0:13:19.320 --> 0:13:21.240 terms of their content spending. Disney even came out and 0:13:21.240 --> 0:13:23.800 said that they're actually taking down their studio spending. So 0:13:23.800 --> 0:13:25.520 if you kind of put all of those together, that 0:13:25.520 --> 0:13:29.040 doesn't necessarily bode extremely well for you know, the health 0:13:29.040 --> 0:13:30.319 of the box office. 0:13:30.600 --> 0:13:33.000 What about when it comes to this Barbie movie that's 0:13:33.000 --> 0:13:35.199 coming out soon, have to ask about that and your 0:13:35.200 --> 0:13:37.679 thoughts on it. It almost feels like it was already 0:13:38.000 --> 0:13:40.360 widely distributed because we've been talking about it for so 0:13:40.480 --> 0:13:41.320 many months. 0:13:41.880 --> 0:13:45.880 I mean, I'm super excited for it, watch it. I 0:13:45.920 --> 0:13:48.080 know we have that whole you know Barbenheimer with you know, 0:13:48.120 --> 0:13:50.920 the Oppenheimer movie also coming out, So there's obviously a 0:13:50.960 --> 0:13:55.120 lot of buzz. You know, it's huge promotions at CinemaCon 0:13:55.200 --> 0:13:57.559 when I attended that earlier in April, you know, we 0:13:57.640 --> 0:13:59.079 had all the A listers kind of come out and 0:13:59.120 --> 0:14:02.280 promote the movie. So obviously a lot of buzz, and 0:14:02.320 --> 0:14:04.320 I think it should do really really well for Warner. 0:14:04.880 --> 0:14:06.600 All right, so let's go to Bob Biger. He had 0:14:06.640 --> 0:14:09.200 a pretty extensive interview last week where he broke a 0:14:09.200 --> 0:14:12.600 lot of new ground. I thought the biggest headline was 0:14:13.200 --> 0:14:16.000 there's really no sacred cows at ESPN here. I mean 0:14:16.040 --> 0:14:18.480 he was talking about, you know, maybe doing something with 0:14:18.559 --> 0:14:22.520 the networks including ESPN, maybe spinning them off, you know, 0:14:22.560 --> 0:14:25.800 partnering up with a third party. Wow, what do you 0:14:25.840 --> 0:14:27.880 think they want to do with their linear TV business 0:14:28.280 --> 0:14:29.440 including ESPN. 0:14:30.240 --> 0:14:32.400 Yeah, there's just too much focus, Paul, as you know, 0:14:32.520 --> 0:14:35.160 on on the linear TV business as and if you've 0:14:35.160 --> 0:14:37.280 looked at some of the more recent court cutting data, 0:14:37.360 --> 0:14:40.240 it's really really dire. So you know, we used to 0:14:40.280 --> 0:14:43.240 have video subscriber declines hovering around in the four five 0:14:43.320 --> 0:14:46.080 six percent range. Those have double right now. So we're 0:14:46.080 --> 0:14:48.760 seeing about twelve percent declines in the in the video 0:14:48.760 --> 0:14:51.680 subscriber pase. So obviously it does not bode well at 0:14:51.720 --> 0:14:54.720 all for the linear networks, the linear network business, and 0:14:54.720 --> 0:14:57.160 I think Bob Bieger was exactly referring to that. Having 0:14:57.200 --> 0:14:58.840 said that, though, I think he's making a little bit 0:14:58.840 --> 0:15:02.200 of a differentiation between you know, the ESPN assets, which 0:15:02.200 --> 0:15:04.440 are still very, very valuable to Disney. So they're obviously 0:15:04.480 --> 0:15:07.760 trying to find some kind of future path with you know, 0:15:07.840 --> 0:15:11.600 that a big, bigger foray into the director consumer portion 0:15:11.720 --> 0:15:14.480 of the of the ESPN business. But they are also 0:15:14.560 --> 0:15:17.359 saying that, you know, all the rest of the networks, 0:15:17.360 --> 0:15:19.920 So whether it's a free form, whether it's a Disney channel, 0:15:19.920 --> 0:15:23.440 whether it's an Effects or a national geographic those are, 0:15:23.680 --> 0:15:26.640 or even the E or even the AABC broadcast network, 0:15:26.680 --> 0:15:29.120 all of those are non core assets, and they're really 0:15:29.120 --> 0:15:31.720 looking to kind of offload those assets. So it's going 0:15:31.760 --> 0:15:33.680 to be interesting. I mean, obviously the writing is on 0:15:33.720 --> 0:15:37.120 the wall, Uh, these assets are in structural decline. The 0:15:37.240 --> 0:15:40.160 question is, yes, it's a good thing if Disney can 0:15:40.160 --> 0:15:41.960 actually get rid of those and get some cash back 0:15:42.000 --> 0:15:44.960 into the business. The question is, who's really going to 0:15:45.000 --> 0:15:47.360 buy that. I mean, is it going to be private equity, 0:15:47.480 --> 0:15:49.720 is it going to be another media company? Just there's 0:15:49.800 --> 0:15:53.760 just no you know, healthy future outlook for those assets. 0:15:53.760 --> 0:15:56.040 So I think that is really the biggest question right 0:15:56.080 --> 0:15:57.120 now investors' minds. 0:15:57.240 --> 0:16:00.920 And Disney also extended Bobbeiger's contract by neother two years 0:16:00.960 --> 0:16:04.240 to twenty twenty six. Shocking right now, Paul. I know 0:16:04.240 --> 0:16:07.200 how closely Paul watches the stock Mickey Mouse, But what 0:16:07.240 --> 0:16:10.320 does it mean when it comes to giving a long 0:16:10.400 --> 0:16:13.200 time executive like this more time to implement his turnaround 0:16:13.200 --> 0:16:15.640 plan and to ultimately find a successor? 0:16:16.800 --> 0:16:19.560 Yeah, I think you know that there's there's the positives 0:16:19.560 --> 0:16:23.720 and the negatives. The positives obviously it's it. It signals 0:16:23.760 --> 0:16:26.200 a lot of stability for the company, especially when we 0:16:26.280 --> 0:16:30.040 have such a turbulent kind of a media ecosystem right now. 0:16:30.080 --> 0:16:32.480 So obviously bar Bieger knows what to do, He's not 0:16:32.560 --> 0:16:34.880 going to be shy about doing it. And remember, we 0:16:34.960 --> 0:16:39.040 already have some kind of you know, management upheaval with 0:16:39.080 --> 0:16:42.640 the departure of the CFO Christine McCarthy, so kind of 0:16:42.720 --> 0:16:45.000 not having Barbieger there would have led to kind of 0:16:45.040 --> 0:16:46.840 two executive searchers at the same time, which would have 0:16:46.840 --> 0:16:48.240 been a little bit difficult, I think for the company 0:16:48.240 --> 0:16:50.520 to maneuver. So I think this kind of makes sense. 0:16:50.800 --> 0:16:54.120 But again it brings again to light the biggest issue 0:16:54.120 --> 0:16:56.120 for Disney, which has been the succession issue, and that 0:16:56.240 --> 0:16:58.920 just continues to be an issue. So yeah, there's a 0:16:58.920 --> 0:17:00.680 little bit of good and bad. But I think as 0:17:00.680 --> 0:17:04.440 we kind of navigate this very, very tumultuous time, it's 0:17:04.480 --> 0:17:06.120 good to have kind of a steady hand with Bob 0:17:06.200 --> 0:17:07.440 Aiger and I. 0:17:07.440 --> 0:17:09.639 Hear from a little Birdie that Walt Disney Company is 0:17:09.680 --> 0:17:12.120 kind of have an investor meetium, good old fashioned bring everybody 0:17:12.119 --> 0:17:15.520 down the Disney World or Disneyland in October and Getha, 0:17:15.560 --> 0:17:17.280 I'm sure we'll be there and reporting back to us. 0:17:17.320 --> 0:17:20.040 But that's where I'm sure they'd like to make some big, 0:17:20.040 --> 0:17:22.960 big announcements, so be on the lookout for that. Keetha 0:17:23.000 --> 0:17:25.080 Rang and Nathan, thanks so much for joining us. Githa 0:17:25.160 --> 0:17:29.080 is our globalhead of all Media in Research and we 0:17:29.119 --> 0:17:31.880 appreciate getting a few minutes of her time. But again, 0:17:31.960 --> 0:17:34.360 as you know, Getha was just suggesting, it's a tough 0:17:34.400 --> 0:17:36.199 time to be an investor in the media. Space not 0:17:36.800 --> 0:17:38.000 there's just so much uncertainty. 0:17:38.000 --> 0:17:41.119 There're looking at Disney stock ticker symbol dis It's flat 0:17:41.160 --> 0:17:42.920 for the year. You look over the past five years, 0:17:42.960 --> 0:17:45.440 down more than twenty percent in that span. 0:17:45.440 --> 0:17:48.320 Yep, exactly. So you know the real as these companies 0:17:48.359 --> 0:17:52.360 pivot from the traditional distribution of cable systems and satellite 0:17:52.359 --> 0:17:54.600 systems to this new thing called streaming, there's just a 0:17:54.640 --> 0:17:56.639 ton of uncertainty about how that will happen in the 0:17:57.119 --> 0:17:58.640 actual profitability of that business. 0:17:58.840 --> 0:18:01.960 You're listening to the tape. Can's are live program Bloomberg 0:18:02.000 --> 0:18:05.600 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:18:05.680 --> 0:18:08.920 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:18:08.920 --> 0:18:11.760 You can also listen live on Amazon Alexa from our 0:18:11.760 --> 0:18:16.760 flagship New York station. Just say Alexa play Bloomberg eleven thirty. 0:18:18.000 --> 0:18:20.800 Treasury Secretary Janet Yellen, you join us now from India 0:18:20.800 --> 0:18:23.560 where you're meeting your counterparts. It's the G twenty Finance 0:18:23.600 --> 0:18:26.720 Ministers and Central Bank Governor's meeting. And really the cloud 0:18:26.760 --> 0:18:29.120 around this meeting is the fresh data we got out 0:18:29.160 --> 0:18:33.000 of China today. Beijing slowing momentum in their growth. City 0:18:33.119 --> 0:18:36.640 is talking about the growth target being at risk. I'd 0:18:36.680 --> 0:18:39.560 like to start Treasury Secretary with the fact of whether 0:18:39.600 --> 0:18:42.440 you think this means there could be an increased chance 0:18:42.520 --> 0:18:43.480 of a US recession. 0:18:47.240 --> 0:18:51.960 Well, you're talking about the slow growth number from China, 0:18:52.080 --> 0:18:53.320 Is that right, Anne Marie? 0:18:54.200 --> 0:19:00.200 Yes, correct, So I think trying. 0:19:00.400 --> 0:19:07.160 Has seen slower growth than they expected upon opening up 0:19:07.240 --> 0:19:14.240 from COVID. Consumer spending has been relatively weak. It looks 0:19:14.320 --> 0:19:20.359 like consumers are more focused on building back their savings buffers, 0:19:20.400 --> 0:19:23.800 and so growth has been slow in As you know, 0:19:24.080 --> 0:19:28.840 youth unemployment is quite high there. So I think the 0:19:29.000 --> 0:19:34.840 Chinese are concerned about sluggish growth in their economy. 0:19:35.920 --> 0:19:38.600 But what does this mean for US growth and global 0:19:38.640 --> 0:19:41.640 growth overall? Is the soft landing in the United States? 0:19:41.640 --> 0:19:43.920 So your base case scenario. 0:19:46.960 --> 0:19:53.040 Well, many countries do depend on strong Chinese growth to 0:19:53.160 --> 0:19:58.080 promote growth in their own economies, particularly countries in Asia, 0:19:58.280 --> 0:20:03.760 and slow growth in China can have some negative spillovers. 0:20:04.640 --> 0:20:09.040 For the United States, growth is slowed, but our labor 0:20:09.119 --> 0:20:15.080 market continues to be quite strong. I don't expect a recession. 0:20:16.200 --> 0:20:20.200 I think that we're on a good path to bringing 0:20:20.240 --> 0:20:25.960 inflation down. The most recent inflation data, we're quite encouraging 0:20:26.720 --> 0:20:31.760 that we're making progress on getting inflation down. But as 0:20:31.840 --> 0:20:36.160 I'd hoped and expected, that would occur in the context 0:20:36.240 --> 0:20:40.320 of a strong labor market, and we continue to see 0:20:40.359 --> 0:20:44.680 that the labor market's the fact the labor market's been 0:20:44.720 --> 0:20:50.520 so strong has encouraged more primage people to enter the 0:20:50.640 --> 0:20:54.480 labor force into work, and that's helped take a bit 0:20:54.520 --> 0:20:58.560 of the heat out of the labor market. The fact 0:20:58.640 --> 0:21:04.359 that growth overall has slowed after we enjoyed a rapid recovery, 0:21:04.720 --> 0:21:09.679 that's normal, but it's also led to some reduction in 0:21:10.840 --> 0:21:17.040 the desire of firms to hire. Still lots of job openings, 0:21:17.119 --> 0:21:23.439 but wage growth is moderating and inflation is subsiding. So 0:21:24.080 --> 0:21:26.760 I think we're in a good path on the United States. 0:21:28.040 --> 0:21:30.520 Okay, so it sounds like soft landing is your base case, 0:21:30.560 --> 0:21:33.320 and you don't think we're going to see a recession. Yesterday, 0:21:33.320 --> 0:21:35.399 when you were speaking to reporters, you talked about this 0:21:35.520 --> 0:21:39.640 de escalation with China, and you rolled out lifting tariffs 0:21:39.680 --> 0:21:42.520 as part of this de escalation with Beijing. 0:21:42.840 --> 0:21:44.119 So what is on the table? 0:21:47.680 --> 0:21:51.399 So you know, several years have gone by in which 0:21:51.440 --> 0:21:57.280 we've had COVID lockdowns, especially in China and very limited 0:21:57.440 --> 0:22:02.360 contact between senior fish in the United States and China. 0:22:03.040 --> 0:22:07.919 And we now have a new economic team in China 0:22:08.640 --> 0:22:14.080 that we need to establish relationships with. We need to 0:22:14.119 --> 0:22:18.680 get our relationship back in a more stable place, put 0:22:18.720 --> 0:22:22.760 a floor under it, and try to promote better understanding 0:22:23.280 --> 0:22:28.920 between our countries. So I recently made a trip met 0:22:29.000 --> 0:22:34.920 with a number of senior Chinese officials, including the new 0:22:35.040 --> 0:22:41.320 economic team. There, we had very cantid discussions. Each side 0:22:41.520 --> 0:22:47.240 raised a series of concerns. Chinese certainly mentioned their concern 0:22:47.400 --> 0:22:51.320 with the tariffs that we have in place, but we 0:22:51.440 --> 0:22:59.240 had constructive conversations, deepened our understanding and of the economic 0:22:59.320 --> 0:23:04.520 situation and of our concerns, were able to address them 0:23:05.080 --> 0:23:09.800 and agree that there are a broad range of global challenges, 0:23:10.240 --> 0:23:14.960 particularly debt and climate change, that affect the entire global 0:23:15.000 --> 0:23:19.800 economy that we need to work on jointly, and I'm 0:23:19.800 --> 0:23:25.200 hopeful we'll be able to do that more successfully. On tariffs, 0:23:26.240 --> 0:23:31.600 you know, we put tariffs in place on China because 0:23:31.680 --> 0:23:39.240 we had underlying concerns about unfair trade practices, particularly those 0:23:39.400 --> 0:23:47.040 affecting intellectual property and technology transfer, and those concerns really 0:23:47.119 --> 0:23:53.040 have not been addressed. We're undergoing a four year required 0:23:53.160 --> 0:23:58.119 review of tariffs, and of course China also retaliated putting 0:23:58.200 --> 0:24:02.719 tariffs in place on us. We have to see what 0:24:02.840 --> 0:24:06.280 comes out of the four year review, but I would 0:24:06.320 --> 0:24:12.239 emphasize that really the underlying concerns we have have not 0:24:12.359 --> 0:24:15.760 yet been addressed, and we need to work on that 0:24:15.880 --> 0:24:16.680 going forward. 0:24:17.560 --> 0:24:20.320 But when you're looking at de escalating, we're trying to 0:24:20.320 --> 0:24:22.160 figure out what we'll be left on the table, because 0:24:22.200 --> 0:24:24.480 what it feels right now is the administration is actually 0:24:24.520 --> 0:24:27.040 just amping up when it comes to potential tit for 0:24:27.119 --> 0:24:30.959 tat with Beijing. There is the outbound Executive Order that 0:24:31.000 --> 0:24:32.560 potentially we could see as soon as the end of 0:24:32.680 --> 0:24:35.760 July or this summer. Could that be a place pulling 0:24:35.760 --> 0:24:38.600 a punch from the outbound Executive order, maybe making that 0:24:38.680 --> 0:24:40.000 a little bit more toned down. 0:24:40.400 --> 0:24:43.080 Could that be a place you could de escalate with Beijing. 0:24:46.520 --> 0:24:48.760 Well, first of all, I want to say that what 0:24:48.760 --> 0:24:52.920 we're doing is not tit for tet. What we're doing 0:24:53.280 --> 0:25:01.160 is putting in place controls. They're designed to protect US 0:25:01.320 --> 0:25:07.960 national security and in some cases to address fundamental human 0:25:08.080 --> 0:25:14.439 rights abuses, and we do intend to protect our national 0:25:14.880 --> 0:25:20.440 security we have export controls that play an important role 0:25:20.920 --> 0:25:24.480 in accomplishing that. And what I try to explain to 0:25:24.600 --> 0:25:31.520 our Chinese counterparts is that our desire is to make 0:25:31.600 --> 0:25:40.760 these US policies clearly national security focused, transparent and narrow, 0:25:41.800 --> 0:25:47.880 that we're not attempting to stifle economic progress in China 0:25:48.040 --> 0:25:53.080 that we have and want to continue to have deep 0:25:53.160 --> 0:25:57.719 economic ties. After all, this year, our trade has reached 0:25:57.800 --> 0:26:05.880 almost seven hundred billion dollars. National security concern economic. 0:26:06.680 --> 0:26:09.360 Madame, Secretary of the National Security concerns are so important. 0:26:09.400 --> 0:26:13.160 Jake Sullivan called for this outbound of executive order two 0:26:13.240 --> 0:26:13.800 years ago. 0:26:14.000 --> 0:26:16.200 Why is it taking the administration so long? 0:26:19.800 --> 0:26:25.120 So we are looking carefully at outbound investment controls, and 0:26:25.640 --> 0:26:30.240 they would serve as a complement to the export controls 0:26:30.680 --> 0:26:35.119 that we have in place to make sure that we 0:26:35.160 --> 0:26:39.719 have covered all the channels by which technologies can be 0:26:39.800 --> 0:26:45.120 transferred to China that we think pose national security concerns. 0:26:45.520 --> 0:26:49.239 I explained to my Chinese counterparts that if we go 0:26:49.400 --> 0:26:53.800 forward with these, they would indeed be narrowly targeted. They 0:26:53.800 --> 0:27:00.800 would focus on a few sectors, in particular semiconductors, quantum computing, 0:27:01.320 --> 0:27:07.800 and artificial intelligence, that they would contain a combination of 0:27:08.000 --> 0:27:15.680 notification requirements and in very narrowly scoped portions of these 0:27:15.720 --> 0:27:22.000 sectors prohibitions. But these would not be broad controls that 0:27:22.119 --> 0:27:28.560 would affect US investment broadly in China or in my opinion, 0:27:29.720 --> 0:27:37.040 have a fundamental impact on affecting the investment climate for China, 0:27:37.480 --> 0:27:40.800 So these would be national security focused. 0:27:42.840 --> 0:27:44.320 It sounds like it's already done. 0:27:44.440 --> 0:27:47.639 Is the administration have it finished and is just waiting 0:27:47.640 --> 0:27:49.040 for a good time to release it. 0:27:52.160 --> 0:27:54.080 We want to make sure if we do this, that 0:27:54.200 --> 0:27:57.880 we get it right, and we've been working on the details. 0:27:58.600 --> 0:28:01.600 If we do go ahead, and there is a good 0:28:01.680 --> 0:28:06.240 chance that we will, that we would put out along 0:28:06.320 --> 0:28:10.840 with the executive Order and notice of proposed rulemaking, so 0:28:10.920 --> 0:28:14.640 that the public would have a chance to comment on 0:28:14.720 --> 0:28:20.919 these proposed controls and we would receive a wide range 0:28:20.960 --> 0:28:26.000 of public input before finalizing anything that we do. 0:28:28.320 --> 0:28:30.480 Madame Secretary, you obviously have a lot on your plate 0:28:30.520 --> 0:28:33.119 when it comes to re engaging with China and your 0:28:33.160 --> 0:28:34.400 discussions there. 0:28:34.720 --> 0:28:37.400 Just off this trip from Beijing, I'm curious how. 0:28:37.240 --> 0:28:40.880 Difficult the dialogue is going to continue to be After 0:28:40.920 --> 0:28:47.040 the revelations about the Chinese hacking of your colleague, Secretary 0:28:47.080 --> 0:28:47.840 Gina Ramundo. 0:28:51.600 --> 0:28:57.960 So, I do have concerns about hacking of US government 0:28:58.000 --> 0:29:03.640 officials or at individuals or companies, and I know the 0:29:03.760 --> 0:29:09.680 United States has expressed those concerns. But we intend to 0:29:10.360 --> 0:29:17.360 continue to deepen our discussions with China to increase our engagement. 0:29:18.240 --> 0:29:25.360 It's especially important to explain what our motivation is to 0:29:25.440 --> 0:29:32.560 avoid misunderstandings that can lead to necessary, unnecessary and dangerous escalation. 0:29:33.680 --> 0:29:41.920 President Chi and President Biden agreed in Bali that senior officials, 0:29:41.960 --> 0:29:49.520 including those in economics, should interact more regularly, and I 0:29:49.560 --> 0:29:53.440 think an outcome of my trip there was that we 0:29:53.480 --> 0:29:57.360 will have deeper, ongoing engagement at all levels. 0:29:58.880 --> 0:30:01.120 When did you learn about the China email hacking. 0:30:01.160 --> 0:30:02.920 I'm curious if you had a chance to maybe bring 0:30:03.000 --> 0:30:04.880 this up on your trip to Beijing. 0:30:08.960 --> 0:30:12.600 I believe I did not know about that in Beijing. 0:30:13.600 --> 0:30:16.080 Wasn't one of the things that we discussed. 0:30:17.640 --> 0:30:20.000 I also want to ask about what's happening on the ground, 0:30:20.120 --> 0:30:22.360 something that I know is very important to you, and 0:30:22.400 --> 0:30:26.520 this comes to debt relief of these developing countries. There 0:30:26.680 --> 0:30:30.480 has been this push from the US administration to use 0:30:30.520 --> 0:30:35.280 the Zambia principle for other countries like Ghana, but that's 0:30:35.320 --> 0:30:37.920 not getting the broad support it needs in India. On 0:30:38.000 --> 0:30:42.240 the ground amongst other G twenty finance ministers is China 0:30:42.280 --> 0:30:43.120 the hold up here? 0:30:46.480 --> 0:30:52.280 Well, we designed the G twenty designed something called the 0:30:52.320 --> 0:30:57.240 Common Framework, which is a set of two principles and 0:30:57.840 --> 0:31:05.120 processes to deal with unsustainable debt situations. And we would 0:31:05.200 --> 0:31:08.880 like to see countries that apply to use the Common 0:31:09.000 --> 0:31:15.560 Framework get rapid relief from their debt that they need 0:31:15.680 --> 0:31:19.080 in order to grow and be able to attract investment 0:31:19.520 --> 0:31:25.720 and undertake IMF programs that can help to stabilize their economies. 0:31:26.240 --> 0:31:27.640 And the few. 0:31:27.520 --> 0:31:33.680 Cases that have applied to use the Common Framework, including Zambia, 0:31:33.920 --> 0:31:38.520 have taken far too long. The process has been onerous 0:31:38.800 --> 0:31:42.600 and it's taken a very long time to get debt relief. 0:31:43.280 --> 0:31:47.000 We are pleased that China has become China, after all, 0:31:47.160 --> 0:31:51.920 is a major creditor of these countries. We have been 0:31:52.000 --> 0:31:56.200 anxious to see China move more quickly and take a 0:31:56.240 --> 0:32:02.680 more constructive attitude participate painting in these debt relief talks, 0:32:03.160 --> 0:32:08.920 and getting agreement on Zambia was an important step. China 0:32:08.920 --> 0:32:13.840 has also been helpful in Ghana, the case of Ghana 0:32:14.000 --> 0:32:19.560 and Sri Lanka, and I'm hopeful that we'll be able 0:32:19.720 --> 0:32:24.800 going forward to make more rapid progress. I should emphasize 0:32:25.000 --> 0:32:28.440 that the debt issue is one that concerns the entire 0:32:28.560 --> 0:32:33.040 g twinning and we are united in wanting to see 0:32:33.040 --> 0:32:38.680 this framework work more effectively, and it is a priority 0:32:38.800 --> 0:32:40.000 for India as well. 0:32:40.320 --> 0:32:40.640 All Right. 0:32:40.640 --> 0:32:43.720 That was Bloomberg's Washington correspondent and Marie Horder sitting down 0:32:43.760 --> 0:32:47.080 with Treasury Secretary Jennet Yelling for an exclusive interview from 0:32:47.120 --> 0:32:50.120 the G twenty summit India, talking about all things at 0:32:50.200 --> 0:32:52.400 China and the global economy. We want to follow that 0:32:52.480 --> 0:32:55.120 up with a discussion with Endocurrent. He's a global economy 0:32:55.120 --> 0:33:00.400 reporter of Bloomberg News. So and fascinating discussion Anry Hordern 0:33:00.480 --> 0:33:02.520 had this morning with Secretary Yelling here. 0:33:02.560 --> 0:33:02.920 I mean, the. 0:33:04.600 --> 0:33:06.960 Messaging seems to be that the US government's trying to 0:33:06.960 --> 0:33:08.680 work with the Chinese government, but there was just a 0:33:08.720 --> 0:33:11.720 lot of challenges out there. What did you take away 0:33:11.720 --> 0:33:12.520 from this discussion? 0:33:14.120 --> 0:33:16.920 Maybe some mixed messaging I think coming from the administration, 0:33:17.000 --> 0:33:19.719 because obviously we know there's been a very hawkish rhetoric 0:33:19.760 --> 0:33:23.040 it's all about US strategic rivalry with China. But we 0:33:23.080 --> 0:33:26.040 had this morning mister Ellen making those making those comments 0:33:26.040 --> 0:33:27.880 in the interview that he just played, saying, for example, 0:33:28.160 --> 0:33:30.680 the US would go ahead with those investment restrictions on China, 0:33:30.720 --> 0:33:34.120 but she doesn't really see it having an overall harmful effect. 0:33:34.120 --> 0:33:38.160 It's fairly targeted, precision kind of policy, and obviously that 0:33:38.160 --> 0:33:43.200 will stoked about over you know what exact China strategy 0:33:43.280 --> 0:33:45.480 is administration pursuing. Are they trying to get things on 0:33:45.520 --> 0:33:48.400 an even keel and and sort of riachual conciliation or 0:33:48.400 --> 0:33:50.600 are they pushing ahead with sort of the Holkish side 0:33:50.640 --> 0:33:53.440 of things. So I think there's grands for debate there 0:33:53.440 --> 0:33:55.720 around there's some of the signals coming from that. She 0:33:55.800 --> 0:33:59.440 also spoke though about what the Chinese economy is singing 0:33:59.520 --> 0:34:01.640 for the rest of the global economy, and she made 0:34:01.640 --> 0:34:04.880 some remarks during the G twenty about how China slow 0:34:04.920 --> 0:34:07.480 down is definitely going to slow down trading partners in 0:34:07.520 --> 0:34:10.000 the Asia region, but probably won't be enough to spill 0:34:10.000 --> 0:34:13.160 over to the US and drag the US economy into 0:34:13.200 --> 0:34:16.719 interior session itself. So, as I say, covering a lot 0:34:16.760 --> 0:34:19.120 of ground, but maybe mixed signals from the Treasury Secretary 0:34:19.120 --> 0:34:20.240 on the China policy. 0:34:20.600 --> 0:34:24.680 Something that struck me in Paul was when Yellen was 0:34:24.680 --> 0:34:28.279 talking about youth unemployment being so high in China. Do 0:34:28.320 --> 0:34:30.680 you know exactly what drives that dynamic. 0:34:31.800 --> 0:34:34.760 Yeah, it's up over twenty percent. Now, again, on paper, 0:34:34.760 --> 0:34:36.920 that's a record, but the data doesn't actually go back 0:34:36.960 --> 0:34:40.000 that far, and it goes back to twenty eighteen. There 0:34:40.000 --> 0:34:42.640 are a few different things a play in China. There's 0:34:42.719 --> 0:34:45.560 been a record amount of graduates coming on the market. 0:34:45.600 --> 0:34:48.279 I think it's eleven nine million this year, so they're 0:34:48.280 --> 0:34:49.920 obviously all going to be looking for work. There's a 0:34:49.920 --> 0:34:52.200 lot of there's been a lot of change in China's 0:34:52.200 --> 0:34:55.600 economy recent years. That big regulatory crackdown on the tech sector, 0:34:55.640 --> 0:34:58.120 for example, took away some of the low hanging fruit 0:34:58.160 --> 0:35:01.080 when they come to see young graduates getting work. That's 0:35:01.120 --> 0:35:03.160 been cited as one factor, and of course then you 0:35:03.200 --> 0:35:05.279 have this broader slow down. This was meant to be 0:35:05.320 --> 0:35:09.040 the year of recovery in China's economy post the COVID 0:35:09.160 --> 0:35:13.240 zero policy. Services and consumption we are meant to drive 0:35:13.360 --> 0:35:15.960 this big ifiz in demand. Well, it looks like that's 0:35:16.040 --> 0:35:19.239 kind of peeling around. It's been at disappointing recovery. Lots 0:35:19.239 --> 0:35:23.400 of economists now downgrading their forecast for Chinese economy, some 0:35:23.440 --> 0:35:26.480 people even in the warning that the China's government will 0:35:26.480 --> 0:35:28.839 miss the growth target of around five percent is here. 0:35:28.920 --> 0:35:31.480 So you would have to say the pressure on ute 0:35:31.520 --> 0:35:34.360 employment is part of the mix of the broader economic 0:35:34.400 --> 0:35:35.200 slow down there too. 0:35:35.640 --> 0:35:37.840 So and how broad and how deep you think the 0:35:37.880 --> 0:35:40.520 economic slowdown is likely to be in China. I know 0:35:40.560 --> 0:35:45.400 it's tough to get reliable data and you know, but 0:35:46.000 --> 0:35:48.360 the concern is that could have impact on the global economy. 0:35:49.280 --> 0:35:50.880 Yeah, so this was meant to be the year that 0:35:50.960 --> 0:35:52.600 China would spill over to the rest of the world, 0:35:52.640 --> 0:35:55.120 as we were just talking about Chinese tourists would go 0:35:55.120 --> 0:35:58.520 everywhere and spend money, and Chinese students and of course 0:35:58.600 --> 0:36:01.680 Chinese demand for imports from bull commodities, everything else. But 0:36:01.719 --> 0:36:04.480 it hasn't really played out like that. And to your point, then, 0:36:04.600 --> 0:36:07.719 on the ground, all indications are the official data saying 0:36:07.760 --> 0:36:11.200 there has been a material slow down there. It's disappointing 0:36:11.360 --> 0:36:14.400 to the point now where economists are saying two things, 0:36:14.680 --> 0:36:18.160 China is at risk of deflation. Certainly start contrast to 0:36:18.160 --> 0:36:20.680 the US is there, and also that they may miss 0:36:20.719 --> 0:36:23.799 the official growth target of around five percent That was 0:36:23.840 --> 0:36:25.960 considered to be a conservative growth target when it was 0:36:25.960 --> 0:36:28.319 said that the government could pretty easily meet it, but 0:36:28.360 --> 0:36:31.319 now that's in danger. So of course it's difficult to 0:36:31.320 --> 0:36:33.840 tell what's going on in China. It's such a huge economy, 0:36:33.840 --> 0:36:37.560 and there are questions around transparency of data, but consistently 0:36:37.680 --> 0:36:40.160 showing that the real estate sectors and the slump, the 0:36:40.200 --> 0:36:43.800 consumer reband story isn't there. The industrial side of things 0:36:43.880 --> 0:36:45.960 is picking up a bit of the moment, but exports 0:36:46.000 --> 0:36:49.160 remain in adulgrum. So by all accounts, China's economy is 0:36:49.160 --> 0:36:51.479 certainly slowing down, and it's a question of by how much. 0:36:52.120 --> 0:36:54.040 All right, ed, I thank you so much. We appreciate that. 0:36:54.080 --> 0:36:56.680 As always end occurrent, he is just given us kind 0:36:56.680 --> 0:36:58.640 of an overview kind of what we're seeing here on 0:36:58.760 --> 0:37:00.480 the US and China to try to rea set some 0:37:00.600 --> 0:37:03.600 economic discussions here between the two countries. 0:37:05.160 --> 0:37:09.040 You're listening to the Team Can't Live program Bloomberg Markets 0:37:09.040 --> 0:37:12.160 weekdays at ten am Eastern on Bloomberg dot com, the 0:37:12.239 --> 0:37:15.360 iHeartRadio app, and the Bloomberg Business App, or listen on 0:37:15.440 --> 0:37:17.400 demand wherever you get your podcasts. 0:37:18.760 --> 0:37:21.360 Jasmint and Paul Sweeney here in the Bloomberg Interactive Broker 0:37:21.480 --> 0:37:23.359 Studio and for our next segment, we're going to talk 0:37:23.360 --> 0:37:26.800 about sort of scanning for stocks here with Julie Gorty, 0:37:26.840 --> 0:37:31.840 who's senior vice president for sustainable Investing at Impacts Asset Management, 0:37:31.960 --> 0:37:35.080 joining us on zoom to discuss how this record heat 0:37:35.440 --> 0:37:39.040 is affecting physical assets and which sectors and companies are 0:37:39.160 --> 0:37:42.000 most at risk. Julie, thank you so much for joining us. 0:37:42.200 --> 0:37:44.560 Take a step back and tell us about Impacts and 0:37:44.719 --> 0:37:45.279 what you do. 0:37:46.640 --> 0:37:49.440 Sure Impacts is an investor with about we have about 0:37:49.440 --> 0:37:53.360 fifty billion dollars in assets under management. We're based in London, 0:37:53.400 --> 0:37:56.880 but we have offices in North America and Asia, so 0:37:56.960 --> 0:38:00.000 we're a global investment firm and what we invest in 0:38:00.200 --> 0:38:02.799 is the transition to a sustainable economy. So everything that 0:38:02.840 --> 0:38:06.080 we do is aimed at investing in the things that 0:38:06.160 --> 0:38:08.800 have the long term value drivers of sustainability. 0:38:09.640 --> 0:38:11.719 So give us examples of kind of some of the 0:38:12.040 --> 0:38:13.960 areas that you've invested in. 0:38:15.800 --> 0:38:19.239 So we're investing in the food and ag sector and 0:38:19.400 --> 0:38:22.480 things that are crops that will be more resilient to 0:38:22.680 --> 0:38:26.279 heat and to drought. In climate change, we invest in 0:38:26.360 --> 0:38:31.440 solutions that will mitigate greenhouse gas emissions obviously wind and solar, 0:38:31.880 --> 0:38:36.640 but also things like pumps, pipes, filtration, much more efficient 0:38:37.960 --> 0:38:43.400 heating back, air conditioning, and space conditioning. We invest in 0:38:43.480 --> 0:38:47.239 things that are water saving and that actually help to 0:38:47.280 --> 0:38:50.040 purify the water, and things that avoid having to use 0:38:51.080 --> 0:38:53.799 things that allow you to use water in situe. Right, 0:38:53.800 --> 0:38:55.920 if you have to pump your water fifty miles from 0:38:55.960 --> 0:38:59.040 a reservoir and then back to the wastewater treatment plant, 0:38:59.040 --> 0:39:02.640 well water weighs about nine pounds a gallon and it 0:39:02.760 --> 0:39:05.440 takes a lot of energy to pump it. So anything 0:39:05.480 --> 0:39:08.080 you can do to retreat your water and we use 0:39:08.120 --> 0:39:10.000 it in situ is going to save you both in 0:39:10.080 --> 0:39:13.960 terms of water and climate. So ideas like that, chemicals 0:39:14.000 --> 0:39:16.160 that are less polluting, and stuff like that in. 0:39:16.080 --> 0:39:20.680 Relation to these physical assets. What is physical climate risk 0:39:20.800 --> 0:39:23.160 so important in particular when you want to look at 0:39:23.160 --> 0:39:26.200 more industries in this stock market too. 0:39:27.000 --> 0:39:31.080 Yeah, So when we think about climate risk, in the past, 0:39:31.120 --> 0:39:34.280 we've tended to think about the big emitter, so energy 0:39:34.320 --> 0:39:38.640 stocks and utilities and things like that, but everybody is 0:39:38.719 --> 0:39:41.760 vulnerable to physical risk. You can be a non emitter, 0:39:42.120 --> 0:39:44.640 but if you're on a coastline that's vulnerable to a hurricane, 0:39:44.680 --> 0:39:47.440 you can still get effected by climate change. And increasingly 0:39:48.080 --> 0:39:51.719 that's happened. We've seen disruptions in air travel. We've seen 0:39:51.760 --> 0:39:55.759 outdoor work become much more dangerous. There are people, there's 0:39:55.800 --> 0:39:59.440 a high rising mortality rate, and it absolutely affects productivity 0:39:59.440 --> 0:40:02.799 of both p people and other organisms that have to 0:40:02.840 --> 0:40:07.759 work outside in high heat. You see vulnerability of whole economies. 0:40:07.840 --> 0:40:12.720 Local economies do things like hurricanes and severe weather, coastal storms, 0:40:12.719 --> 0:40:15.800 sea level rise, all that stuff can have a major 0:40:15.840 --> 0:40:18.439 economic impact. Right now, it's having impacts that are running 0:40:18.480 --> 0:40:22.600 in the hundreds of billions of dollars of insured losses annually. 0:40:22.640 --> 0:40:24.880 And that's just the insured losses, so double that if 0:40:24.920 --> 0:40:26.920 you want to, or you know, could be even higher 0:40:27.400 --> 0:40:29.799 if we count uninsured losses. And that's going nowhere. But 0:40:29.920 --> 0:40:32.960 up as long as our emissions are rising, physical risk 0:40:33.080 --> 0:40:35.360 is rising can affect anybody. 0:40:35.520 --> 0:40:40.880 You talked about energy, What other specific sectors, industry groups 0:40:40.920 --> 0:40:43.000 do you think the stock market is most vulnerable to 0:40:43.280 --> 0:40:45.439 when you're talking about physical climate risk? 0:40:46.560 --> 0:40:50.000 Okay, so agriculture obviously anything in the food value chain. 0:40:51.719 --> 0:40:54.840 There are also a lot of electric rids that are vulnerable. 0:40:54.880 --> 0:40:57.120 That's not energy production, but it's sort of getting the 0:40:57.239 --> 0:41:01.239 energy to households. We've seen rolling blackouts and California. You know, 0:41:01.280 --> 0:41:06.000 we saw the Texas grid freeze basically go out because 0:41:06.040 --> 0:41:08.959 of that. But you know, we can all can also 0:41:08.960 --> 0:41:11.600 affect transportation. So we saw, you know, like if it 0:41:11.640 --> 0:41:16.680 gets hot enough, the asphalt buckles and rails expand, so 0:41:17.480 --> 0:41:20.399 things like air travel get disrupted by the storms as 0:41:20.400 --> 0:41:24.200 well as just by what's happening on the asphalt in airports. 0:41:24.840 --> 0:41:28.239 So anyone who ships their goods, you know, it could 0:41:28.239 --> 0:41:31.480 be vulnerable to disruptions and transportation. We were just having 0:41:31.560 --> 0:41:35.080 a call this morning with a really big semiconductor company 0:41:35.080 --> 0:41:37.759 that ships most of their stuff by air. So air 0:41:37.760 --> 0:41:41.000 disruptions can matter a great deal to the semiconductor supply chain. 0:41:41.080 --> 0:41:42.759 Do you want to know what that disruption looks like? 0:41:42.800 --> 0:41:46.239 Look at what happened during COVID, So, Julie, it. 0:41:46.200 --> 0:41:48.319 Just feels like, you know, climate change has become such 0:41:48.360 --> 0:41:50.520 a political issue here in US. I don't know how 0:41:50.520 --> 0:41:52.840 it is around the world. Here in other parts of 0:41:52.840 --> 0:41:56.640 the world. Do you encounter that with your investing with 0:41:56.719 --> 0:41:59.440 companies you look at with your discussions of all the 0:41:59.520 --> 0:42:02.200 stakehold out there, and if so, how do you deal 0:42:02.239 --> 0:42:02.520 with it. 0:42:04.840 --> 0:42:08.960 So the backlash in the US, primarily, I would say, 0:42:09.080 --> 0:42:12.719 is primarily political. When we talk to firms about it, 0:42:12.760 --> 0:42:15.560 when we talk to them about physical risks or transition risks, 0:42:15.600 --> 0:42:19.680 they get it. Whatever the political discourse is, it doesn't 0:42:19.680 --> 0:42:23.160 affect the facts. Really, it can affect policy, but the 0:42:23.200 --> 0:42:25.399 fact that physical risk is happening is going to happen, 0:42:25.440 --> 0:42:28.640 whether people believe it or not. So they get it. 0:42:28.760 --> 0:42:30.440 When we talk to the firms in the s and P. 0:42:30.520 --> 0:42:33.919 Five hundred about physical risk, the firms that had thought 0:42:33.920 --> 0:42:38.120 about it understood that it was the impacts could be severe, unexpected. 0:42:38.760 --> 0:42:41.200 Making decisions in a crisis, like if you have a 0:42:41.440 --> 0:42:45.160 hotel full of passengers stranded in the Bahamas by a hurricane, 0:42:45.560 --> 0:42:47.440 you have to do something to get them out if 0:42:47.480 --> 0:42:50.040 you're the hotel company, so otherwise they're never going to 0:42:50.040 --> 0:42:53.120 stay at one of your hotels again. So our discussions 0:42:53.120 --> 0:42:56.280 with companies are usually pretty productive. They understand the importance 0:42:56.320 --> 0:42:59.319 of climate risk, they understand the importance of doing something 0:42:59.400 --> 0:43:01.480 about it. And so do our shareholders. 0:43:02.400 --> 0:43:05.839 What do companies need to disclose when it comes to 0:43:05.880 --> 0:43:10.400 these key assets and where the value chain dependencies end 0:43:10.480 --> 0:43:11.360 up being located. 0:43:12.440 --> 0:43:15.719 What a good question, That's exactly what we ask them. 0:43:16.239 --> 0:43:18.960 So the first thing we need to know is investors, 0:43:19.000 --> 0:43:21.520 what we're pricing is where the puck is going, not 0:43:21.600 --> 0:43:24.000 where it is right, So we need to know what 0:43:24.200 --> 0:43:27.520 assets are going to be vulnerable to physical risks, and 0:43:27.560 --> 0:43:30.960 since physical risk, how much physical risk you face and 0:43:30.960 --> 0:43:32.759 what type depends on where you are. The first thing 0:43:32.760 --> 0:43:35.480 we need to know is where are your assets? It's 0:43:35.480 --> 0:43:37.520 a where are your manufacturing plants? Where are your big 0:43:37.560 --> 0:43:42.640 distribution centers, what courts do your primary shipping? Does your 0:43:42.640 --> 0:43:46.400 primary shipping go through? Where are your key supply chain dependency? 0:43:46.520 --> 0:43:50.279 So I'll just give you a quick example. Biggest semiconductor 0:43:50.320 --> 0:43:53.960 manufacturer in the world is TSMC. A couple of years ago, 0:43:54.080 --> 0:43:57.280 the drought in Taiwan was so severe that they almost 0:43:57.280 --> 0:43:59.000 had to close down their planet. It takes a lot 0:43:59.040 --> 0:44:02.080 of water to make semtors. Very little which ends up 0:44:02.120 --> 0:44:04.320 in the semiconductor, but it takes a lot to make one. 0:44:04.800 --> 0:44:07.440 The government was considering even seating clouds to try to 0:44:07.480 --> 0:44:11.120 make it rain. Luckily the drought ended first, but that 0:44:11.160 --> 0:44:15.680 could have been really a disaster for them. So the 0:44:15.719 --> 0:44:18.360 first thing we need to know is where are you 0:44:18.360 --> 0:44:20.480 you know, and where are the keynodes in your supply 0:44:20.560 --> 0:44:26.120 chain so that we can assess your vulnerability. We can 0:44:26.200 --> 0:44:28.600 run the climate models, and we do, but we need 0:44:28.600 --> 0:44:31.879 to know whether what they're going to affect in terms 0:44:31.920 --> 0:44:34.440 of companies' assets and dependencies. The next thing we need 0:44:34.480 --> 0:44:36.040 to know is what you're doing about it. So do 0:44:36.080 --> 0:44:38.879 you recognize what these risks are, and if so, what 0:44:39.440 --> 0:44:43.319 measures have you taken to avoid being vulnerable during an 0:44:43.440 --> 0:44:46.960 event a hurricane, of flood, of wildfire, a drought and 0:44:47.080 --> 0:44:50.560 outage in the grid, something like that. Then if we 0:44:50.600 --> 0:44:53.040 have that kind of information, then we can, you know, 0:44:53.080 --> 0:44:54.960 do our own magic and figure out what the how 0:44:54.960 --> 0:44:57.920 to price that risk. But we don't even have physical 0:44:57.960 --> 0:44:59.400 location information right now. 0:45:00.080 --> 0:45:01.440 That's kind of where I wanted to go, Julie, And 0:45:01.480 --> 0:45:04.600 we can about thirty seconds left data we're bloomberg here 0:45:04.640 --> 0:45:06.880 where Data company? Is there adequate data for you to 0:45:06.960 --> 0:45:08.600 really do your job and assess the risk. 0:45:10.040 --> 0:45:10.160 Now? 0:45:10.360 --> 0:45:12.600 And we can get information on where the risks are 0:45:12.640 --> 0:45:14.759 and we know some of the company location, so we 0:45:14.840 --> 0:45:17.439 can do assessments, but in order to do a really 0:45:17.480 --> 0:45:19.520 good job, we'd need to have much better data on 0:45:19.600 --> 0:45:24.239 location and on companies management and recognition of physicalness and 0:45:24.280 --> 0:45:25.000 how they're adapted. 0:45:25.920 --> 0:45:28.680 Julie, thanks so much for joining us. Fascinating discussion and 0:45:28.760 --> 0:45:33.239 growing field. Of course, Julie Gorte, Senior Vice president for 0:45:33.360 --> 0:45:37.440 Sustainable Investing Impacts asset Management, kind of going to a 0:45:37.560 --> 0:45:39.160 risk here as part of that, I guess a broader 0:45:39.239 --> 0:45:43.280 EESG is discussion, which again is Julia was just mentioning 0:45:43.320 --> 0:45:47.440 has become highly politicized here in the US, much more 0:45:47.520 --> 0:45:50.120 so than in other parts of the world, and making 0:45:50.480 --> 0:45:52.520 you folks that are focusing on that their job a 0:45:52.560 --> 0:45:53.400 little bit more difficult. 0:45:53.719 --> 0:45:56.840 You're listening to the tape kens our live program Bloomberg 0:45:56.920 --> 0:46:00.799 Markets weekdays at ten am Eastern on Bloomberg, the tune 0:46:00.840 --> 0:46:03.759 in app, Bloomberg dot Com, and the Bloomberg Business App. 0:46:03.840 --> 0:46:06.640 You can also listen live on Amazon Alexa from our 0:46:06.680 --> 0:46:11.720 flagship New York station. Just say Alexa play Bloomberg eleven thirty. 0:46:12.280 --> 0:46:14.799 All right, let's talk about the business of sports, and 0:46:14.840 --> 0:46:17.799 this is a good one. The Fenway Sports Group, you 0:46:17.880 --> 0:46:19.440 know them, they own the Boston Red. 0:46:19.320 --> 0:46:21.520 Sox, Pittsburgh Penguins. 0:46:21.000 --> 0:46:25.360 Pittsburgh Penguins, and then Liverpool Football Club plus some other businesses. 0:46:25.360 --> 0:46:28.399 And I'm a Yankee fan full disclosure, but Yankee fans 0:46:28.440 --> 0:46:29.839 have a lot of respect for Boston. We know how 0:46:29.840 --> 0:46:31.680 good they are because we have to play them like 0:46:31.760 --> 0:46:33.799 seventeen times every year. Let's talk about the business there. 0:46:33.880 --> 0:46:37.840 Julie Swinehart joins us. She's a CFO and EVP of 0:46:37.920 --> 0:46:41.320 Fenway Sports Groups. Joins us via zoom. Julie, thanks so 0:46:41.400 --> 0:46:42.000 much for joining us. 0:46:42.000 --> 0:46:42.160 Share. 0:46:42.160 --> 0:46:44.080 I want to talk to you about the real businesses sports, 0:46:44.120 --> 0:46:45.840 and the part of it that I know well is 0:46:45.880 --> 0:46:48.920 the regional sports networks that support some of these regional 0:46:48.920 --> 0:46:52.840 sports like Major League Baseball, like NHL hockey. The regional 0:46:52.880 --> 0:46:56.239 sports network business is in a world of hurt. The 0:46:56.280 --> 0:47:00.000 biggest one just filed for bankruptcy. Revenues are down jamatic 0:47:00.280 --> 0:47:03.120 because everybody's cutting the cord. How do you guys deal 0:47:03.160 --> 0:47:06.839 with it at the new England Sports Network and how 0:47:06.840 --> 0:47:08.400 are you kind of dealing with those changes? 0:47:09.280 --> 0:47:11.480 Well, thanks for the question. First and foremost, thanks for 0:47:11.520 --> 0:47:13.799 having me today. It's great to speak with both of you. 0:47:14.760 --> 0:47:17.919 Regional sports networks are in a time of change, I'd 0:47:17.920 --> 0:47:22.440 say for sure right now, New England Sports Network. You know, 0:47:22.719 --> 0:47:29.840 our ownership team supported them and you know, really encourage 0:47:29.840 --> 0:47:31.880 them to get ahead of try to get ahead of 0:47:31.960 --> 0:47:35.080 what's happening as you described in the marketplace. So we 0:47:35.080 --> 0:47:38.120 were I believe, the first to market with a direct 0:47:38.120 --> 0:47:42.279 to consumer product which launched just about twelve months ago. 0:47:42.320 --> 0:47:44.840 And so that's one way that Nessen is trying to 0:47:44.840 --> 0:47:48.480 stay ahead and stay relevant and successful. And I think 0:47:48.880 --> 0:47:52.880 there's been a lot of early wins with DTC, a 0:47:52.920 --> 0:47:56.319 lot of learning as well, but more to come there 0:47:56.360 --> 0:47:58.560 and I think that's one way that we can try 0:47:58.560 --> 0:48:00.439 to combat some of the headwinds out there that are 0:48:00.680 --> 0:48:02.560 that are just part of the landscape. 0:48:02.920 --> 0:48:06.560 So what does it take to fund a winning sports team? 0:48:06.600 --> 0:48:07.840 Where does the revenue come from? 0:48:09.320 --> 0:48:09.720 Uh? 0:48:09.760 --> 0:48:11.040 Well, I don't I don't know how NERD do you 0:48:11.080 --> 0:48:14.200 want me to get with revenue renues? But you know, 0:48:14.280 --> 0:48:16.880 coming in and I've been here just about a year, Uh, 0:48:17.520 --> 0:48:20.080 there's been a lot of learning, but a lot of 0:48:20.120 --> 0:48:22.759 aha moments for me. And there's more similarities across the 0:48:22.760 --> 0:48:25.920 different teams in terms of the revenue structure than I 0:48:26.000 --> 0:48:29.120 guess what I would have originally expected. But uh, there's 0:48:29.120 --> 0:48:33.680 the obvious, you know, media revenue sources, there's sponsorship, partnership, 0:48:33.760 --> 0:48:37.400 advertising revenue, depending on which entity we're speaking about, and 0:48:37.440 --> 0:48:40.960 then also game day or match day sales, so fans 0:48:41.000 --> 0:48:46.200 coming to the venues and spending money on concessions and whatnot. 0:48:46.280 --> 0:48:48.160 So but each of the teams have a little bit 0:48:48.160 --> 0:48:50.799 of a different makeup across the revenue. And really what 0:48:50.960 --> 0:48:53.720 keeps it all going is, as I think is probably 0:48:53.719 --> 0:48:57.960 pretty intuitive, is the excitement around winning. And we are 0:48:57.960 --> 0:49:00.600 here to win championships. And I think we've done and strated, 0:49:01.440 --> 0:49:03.319 you know, with John Henry and Tom Werner and Mike 0:49:03.360 --> 0:49:06.959 Gordon and what they've built here a really winning track 0:49:07.040 --> 0:49:09.160 record that allows us to do all those things. 0:49:09.719 --> 0:49:11.920 Talk to us about the Liverpool Football Club at the 0:49:11.920 --> 0:49:16.600 English Premier League. It's such a global business, a global brand, 0:49:16.680 --> 0:49:20.040 a global game. Talk to us about kind of your 0:49:20.040 --> 0:49:21.799 experience owning this. I think you guys have owned this 0:49:21.840 --> 0:49:23.560 club for almost a decade. 0:49:23.200 --> 0:49:26.960 Now, yeah, a little over a decade, and you know, 0:49:27.000 --> 0:49:31.239 I think the investment over time, you know, we take 0:49:31.400 --> 0:49:33.279 I should start with we take a long view on 0:49:33.360 --> 0:49:37.719 all of our investments and a very intentional approach in 0:49:37.800 --> 0:49:40.600 terms of trying to elevate and make make the teams 0:49:40.640 --> 0:49:45.440 more successful, make them better. Liverpool does have a global 0:49:45.480 --> 0:49:49.799 reach and they're one of our many important assets, so 0:49:49.880 --> 0:49:52.080 it comes with just the right amount of support from 0:49:52.400 --> 0:49:56.319 from the FSG entity, always listening to the supporters and 0:49:56.360 --> 0:49:58.719 the fans and trying to get input there from what 0:49:58.760 --> 0:50:02.399 they're looking for, what's important to them. And I'm learning, 0:50:02.480 --> 0:50:06.000 especially with that team, the fan base is really integral 0:50:06.040 --> 0:50:07.279 like it is for all of our teams, but in 0:50:07.280 --> 0:50:09.359 a little bit of a different way over there, and 0:50:09.400 --> 0:50:12.360 we've demonstrated again a lot of success and we're always 0:50:12.440 --> 0:50:15.040 trying to think of ways to keep that going, whether 0:50:15.040 --> 0:50:21.080 it be with players or data or nutrition. It's those 0:50:21.320 --> 0:50:24.799 micro advantages and sports in any of these sports teams 0:50:24.800 --> 0:50:29.279 that we own that really can be what really makes 0:50:29.280 --> 0:50:32.120 the difference between a mediocre team and a championship team. 0:50:32.640 --> 0:50:34.719 Paul, I knew with your experience as an analysts you're 0:50:34.719 --> 0:50:37.560 really focused when it comes to those media contracts on 0:50:37.960 --> 0:50:40.040 when it comes to local and national right. 0:50:40.280 --> 0:50:43.160 Yeah, absolutely, I mean I think the one of the 0:50:43.160 --> 0:50:45.360 big issues actually one of the things it's interesting Julie, 0:50:45.400 --> 0:50:47.200 I mean, I'm just looking at your the assets you 0:50:47.200 --> 0:50:50.759 guys do have here. Is there room for growth in 0:50:50.840 --> 0:50:54.640 other sports? Which you think about the NBA or maybe 0:50:54.719 --> 0:50:57.319 take a huge leap and think about the NFL. How 0:50:57.360 --> 0:50:59.640 do you is there other sports that you guys are 0:50:59.640 --> 0:51:00.000 looking at. 0:51:01.080 --> 0:51:05.000 I think we're definitely in growth mode. We did only recently, 0:51:05.080 --> 0:51:09.360 pretty recently acquire the majority of the Pittsburgh Penguins, so 0:51:09.400 --> 0:51:13.399 we're still, you know, on onboarding and bringing them into 0:51:13.400 --> 0:51:16.000 the family. Although it's been a it's been a nice transition, 0:51:16.080 --> 0:51:18.279 I think for everyone involved there. So you know, our 0:51:18.680 --> 0:51:22.640 I think you know, our aspirations are limitless, whether it 0:51:22.680 --> 0:51:26.280 be a major league such as those of you described, 0:51:26.400 --> 0:51:29.520 or something new and different like tomorrow Golf League. We 0:51:29.600 --> 0:51:33.560 recently announced that we are owners of the second team 0:51:33.840 --> 0:51:36.480 in that sixth i think initially six team league. So 0:51:36.520 --> 0:51:40.200 we've got the Boston New England team in our in 0:51:40.239 --> 0:51:42.799 our FSG family as that league is getting started and 0:51:42.800 --> 0:51:45.120 building out, and that's a really exciting opportunity to So 0:51:45.440 --> 0:51:48.160 they're not all going to be those large scale opportunities, 0:51:48.200 --> 0:51:51.120 but hopefully in time will continue to grow in in 0:51:51.160 --> 0:51:52.120 bigger ways as well. 0:51:52.360 --> 0:51:54.960 All Right, So for all the Red Sox fans out there, 0:51:55.800 --> 0:51:57.560 the Red Sox are tied I believe with the Yankees 0:51:57.560 --> 0:51:59.839 as of today for last place in the American League. 0:52:00.080 --> 0:52:02.480 State is the most competitive division in all of Major 0:52:02.520 --> 0:52:05.959 League Baseballutely, what do you guys do here? It's mid July. 0:52:06.400 --> 0:52:07.640 What do you guys do here? You come up to 0:52:07.640 --> 0:52:10.680 the trade deadline? How aggressive is the Red Sox can be? 0:52:10.719 --> 0:52:11.880 Are they can be buyers or sellers? 0:52:11.920 --> 0:52:12.120 Here? 0:52:12.760 --> 0:52:13.080 Ah? 0:52:13.960 --> 0:52:17.160 Question of the morning. I can't share a whole lot there, 0:52:17.160 --> 0:52:19.040 but I will say there's a lot of excitement around 0:52:19.080 --> 0:52:22.040 how the team's been performing, especially as of late, and 0:52:22.160 --> 0:52:25.439 I think the second half of the season. Time will tell, 0:52:25.520 --> 0:52:28.400 but I hold a lot of optimism for the Red Sox. 0:52:28.520 --> 0:52:31.560 All Right, So Fenway, real quick, thirty seconds. I love Fenway. 0:52:31.560 --> 0:52:34.640 It's iconic. Everybody loves Fenway. Any changes coming to Fenway. 0:52:36.160 --> 0:52:39.759 There's always something going on, whether it be a new 0:52:40.920 --> 0:52:44.160 I think we just we had pickleball here recently. There's 0:52:44.239 --> 0:52:46.600 concerts coming up, some things like that are new. But 0:52:46.640 --> 0:52:52.560 also we recently received some key approvals for some real 0:52:52.680 --> 0:52:55.800 estate expansion around the park, so we're partnering with WS 0:52:55.840 --> 0:52:59.960 Development here in Boston to overtime add about two million 0:53:00.040 --> 0:53:03.360 square feed of mixed use to really just continue to 0:53:03.480 --> 0:53:08.319 elevate Funway Park, make it even more welcoming to more 0:53:08.360 --> 0:53:11.760 people and very focused on pedestrians, and we're really excited 0:53:11.760 --> 0:53:14.080 that that project seems to be moving along great. 0:53:14.320 --> 0:53:16.920 Julie Swineheart, thanks so much for joining us. Juliu Swinheart's 0:53:16.920 --> 0:53:20.720 CFO and executive vice president for the Fenway Sports groups 0:53:21.520 --> 0:53:22.720 the Dreaded Red Sox. 0:53:24.960 --> 0:53:28.080 Thanks for listening to the Bloomberg Markets podcast. You can 0:53:28.080 --> 0:53:31.880 subscribe and listen to interviews at Apple Podcasts or whatever 0:53:31.960 --> 0:53:35.680 podcast platform you prefer. I'm Matt Miller. I'm on Twitter 0:53:35.880 --> 0:53:39.160 at Matt Miller nineteen seventy three and on Fall Sweeney. 0:53:39.160 --> 0:53:41.799 I'm on Twitter at pt Sweeney. Before the podcast, you 0:53:41.800 --> 0:53:45.200 can always catch us worldwide at Bloomberg Radio