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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news on the Bloomberg Markets Podcast,

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. So let's talk to

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Speaker 1: somebody who does this stuff for a living. Chance see

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Speaker 1: I own partner, Oxbow Advisers. Chance you know the last

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Speaker 1: I don't know four or five weeks have suggested that

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Speaker 1: the market might be thinking maybe this FED can go

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Speaker 1: slower rather than faster in terms of raising rates. How

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Speaker 1: do you think about it? Yeah, Hi, Paul and Matt,

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Speaker 1: I think yeah. It's been interesting to see this rally

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Speaker 1: here July and into August. It seems like investors are

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Speaker 1: getting more excited that the FED may be able to

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Speaker 1: pull off this soft landing. We don't think, though, that

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Speaker 1: the lower than expected inflation number yesterday really changes the

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Speaker 1: Fed's plans. We think they're still going to hike in

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Speaker 1: September and November. You wouldn't really see them hit a

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Speaker 1: point that you might think they'd be about done hiking

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Speaker 1: until you see the federal funds rate above the two

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Speaker 1: year rate. That's usually when you'd start to see maybe

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Speaker 1: they would start to pivot in terms of their activity.

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Speaker 1: But we would expect the inflation rate to still only

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Speaker 1: come down slowly, and we're still seeing an economic slowdown.

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Speaker 1: So for us, our positions unchanged that we continue to

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Speaker 1: be pretty cautious in this environment. We did see the

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Speaker 1: two year come down drastically UM after the CPI number.

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Speaker 1: Now it's at three spot one seven three per cent,

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Speaker 1: so it looks like we need to go another sixty

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Speaker 1: seven point three basis points. Do you think they're gonna

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Speaker 1: go seventy five chance? I don't know. It seems like

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Speaker 1: maybe they just go with fifty um. Although when you

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Speaker 1: have the equity market rising like this, they kind of

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Speaker 1: given them permission to raise however much they want. Uh. Really,

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Speaker 1: only when the equity market starts to go down into

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Speaker 1: a significant extent that you think maybe that might really

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Speaker 1: pressed whether they want to push through as many hikes

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Speaker 1: as they'd intend to, especially with three and a half

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Speaker 1: percent unemployment. I know it's a backwards looking data point,

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Speaker 1: but still, uh, they seem to be really interested in

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Speaker 1: front loading. I think that's the case. And I think

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Speaker 1: the other thing to keep in mind is, even though

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Speaker 1: the month over month number on inflation was lower than

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Speaker 1: expected and you're starting to see, Okay, maybe we peaked

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Speaker 1: at nine percent last month and now it's going to

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Speaker 1: start trending down, you're still looking at an above eight

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Speaker 1: percent annual inflation number and how many months in a

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Speaker 1: row of real wages being negative for workers around the country.

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Speaker 1: And that's really where their top of mind is. And

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Speaker 1: like you said, if the unemployment rate is this low,

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Speaker 1: they're gonna want to keep pushing on that to try

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Speaker 1: and get back to an inflation number that at least

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Speaker 1: allows wage growth to be at least even, I know,

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Speaker 1: rather than losing versus inflation. Yeah, but this you look

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Speaker 1: at this equity markets chance and he really gets your

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Speaker 1: attention here. I mean, we get the SMP up, you know,

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Speaker 1: sixt offense low, the NaSTA on offense low. I mean,

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Speaker 1: you can't it's nothing to sneeze at. But is it

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Speaker 1: now suggests that maybe there's some risk greater risk in

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Speaker 1: the equity markets right here? Or do you think there's

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Speaker 1: more upside to go? We certainly think there's greater risk

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Speaker 1: at these prices. Just some numbers that we've been looking at. First,

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Speaker 1: the forward price to earnings ratio is back to nearly

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Speaker 1: eighteen times, which that's above the historic average, and that's

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Speaker 1: with earnings growth decelerating. We just went through a quarter

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Speaker 1: of earnings reports where it really was the energy, materials,

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Speaker 1: and industrial sectors that carried the earnings growth, and we

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Speaker 1: would expect their contribution to fade a bit and the

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Speaker 1: quarters that come considering the commodities prices are now starting

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Speaker 1: to come down. And then just looking at our own

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Speaker 1: portfolio are long term growth strategy that we managed for

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Speaker 1: our equity clients. We try to hold positions for the

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Speaker 1: long term, but we look at all of the positions

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Speaker 1: in there, there isn't a single one in that list

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Speaker 1: that we would consider to be undervalued versus their UH

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Speaker 1: on their current valuation versus their historic average. So it

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Speaker 1: just tells you how much markets have rallied back and

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Speaker 1: we don't see much opportunity at these prices. We've had

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Speaker 1: actually been reducing our exposure to cyclical sectors that typically

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Speaker 1: do well late cycle but then start to underperform in

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Speaker 1: a recession, So like financials, energy, and materials. We've been

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Speaker 1: cutting back in those areas. How do you assess earning

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Speaker 1: season so far? I mean what, um, you know, what

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Speaker 1: kind of forward e from the forward price earnings ratio

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Speaker 1: can you gauge from what we've seen. Yeah, it seems

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Speaker 1: like this current quarter that just we got done reporting, Uh,

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Speaker 1: everyone has seemed to already expect there's going to be

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Speaker 1: some disappointment. So it was actually the first quarter you

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Speaker 1: had in quite a while where companies that reported mrs

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Speaker 1: actually were up one percent the day after they reported,

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Speaker 1: which that rarely ever happened. So that tells you how

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Speaker 1: low expectations were. But it is notable to us that

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Speaker 1: companies with very long track records of outperforming expectations reported mrs,

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Speaker 1: like Microsoft or Alphabet and uh, and that just tells

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Speaker 1: you that it's going to be a more difficult environment

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Speaker 1: in the quarters to come. And you're still seeing some

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Speaker 1: news coming out like we're seeing with a Nvidia or

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Speaker 1: icon that there's some weakness on the horizon. And uh, frankly,

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Speaker 1: it's almost a quarter early for some of those semiconductor businesses.

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Speaker 1: I think it was gonna be more the third quarter

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Speaker 1: that people were expecting to see that weakness and it

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Speaker 1: arrived even sooner than that. So monitoring this closely. Alright, Chance,

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Speaker 1: question of the morning. Here, You've got your undergraduate degree

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Speaker 1: and your NBA Indiana. What the heck is a Hoosier?

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Speaker 1: I actually I don't even have a great explanation for that.

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Speaker 1: Nobody does. No, I don't know, um and I'm probably

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Speaker 1: failing for everybody who who grew up and I went

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Speaker 1: to school at that there. But I wouldn't be able

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Speaker 1: to agree with you a great definition. I mean, my

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Speaker 1: mild definition. It's somebody from Indiana. I think that might be.

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Speaker 1: It actually is basically it not based off an animal

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Speaker 1: or anything like That's like, it wasn't the state bird?

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Speaker 1: Is it a state? I got nothing, and I've asked

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Speaker 1: every Indiana grad I know, I got nothing. But anyway, Chance,

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Speaker 1: thanks for chipping in there. We appreciate it. Chance Fukan

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Speaker 1: c I O partner Oxbow Advisors. Danielle Bragg, a founder

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Speaker 1: and CEO of Defined dot AI, joins US fashionating area

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Speaker 1: of technology artificial intelligence. Danielle, thank you so much for

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Speaker 1: joining us, just for my own sake. How do you

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Speaker 1: define artificial intelligence? Hi? Medh and everybody? Well, artificial intelligence

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Speaker 1: is the simulation of a of a human brain. And

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Speaker 1: just like a name says artisticially, so it is it

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Speaker 1: counts with unlight and unlike UH software, it is trained,

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Speaker 1: it is not coded. So it's just like a human brain.

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Speaker 1: The more we learn, the more we can resolve daily situation.

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Speaker 1: And you know, I think I heard a lot about

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Speaker 1: this a couple of days ago as President Biden signed

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Speaker 1: the Chips Act. Is the federal government subsidizing AI research?

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Speaker 1: You think enough that we can keep up in the

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Speaker 1: kind of race to win technology. Well, the the US

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Speaker 1: government has been has been growing AI investment across all

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Speaker 1: their uh, all the departments that that has been on

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Speaker 1: the rise in the last five years. We have now

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Speaker 1: this Unair Task Force for the for the Investment of

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Speaker 1: AI in the Nation, which I'm part of alongside with

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Speaker 1: my colleagues twelve called well independent people. So yeah, the

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Speaker 1: West CONN continues to pour. But the interesting thing is

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Speaker 1: that the US on itself, the United States with the

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Speaker 1: private sector part as well, has been has invested fifty

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Speaker 1: two point nine billion last year, UH, followed by China

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Speaker 1: very far out with seventeen point two billions. So we

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Speaker 1: are putting in the public and the private sector are

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Speaker 1: a lot of investment. So where where where do you

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Speaker 1: think the most I guess appealing or attractive applications for

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Speaker 1: artificial intelligence are because you know, I listen to conference calls,

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Speaker 1: quarterly earnings conference calls, and I've got companies from you know,

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Speaker 1: like cookie makers, to technology companies, to entertainment companies, to

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Speaker 1: people who make shoes whatever, everybody's carmakers. Everybody talks about

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Speaker 1: artificial intelligence in their business. So I'm just wondering, where

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Speaker 1: do you think some of the most you know, tragic

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Speaker 1: actuations are. Yeah, well, the thing is a lot of

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Speaker 1: people talk about it and they're not doing AI. They

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Speaker 1: are still doing rule based systems and they just INSERTA

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Speaker 1: to where they A because it looks more fancy. But

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Speaker 1: where the thing is exciting right now, And you can

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Speaker 1: see in the rise, including in our business, which is

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Speaker 1: what we see our clients do is conversationally everywhere, which

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Speaker 1: is this part of the I where you can talk

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Speaker 1: two machine as you are talking to people. And this

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Speaker 1: is happening across everywhere. So in fitness steak in of course,

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Speaker 1: now we we are I mean in education and healthcare

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Speaker 1: with tele medazine, with and the classic ones on virtual

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Speaker 1: systems and in the car and in the house. And

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Speaker 1: if you combine conversationally I with robots, that will help

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Speaker 1: you whether you're in a work setting on or you

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Speaker 1: environ in a in a homesteading with daily tasks around

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Speaker 1: the house. This is becoming really exciting. How long until

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Speaker 1: it actually works? I mean I've been using the newest

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Speaker 1: and best car in fontainment systems. You know, I test

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Speaker 1: out new cars every every couple of weeks, and it

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Speaker 1: never really works. I'll say, you know, like play the

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Speaker 1: grateful Dead channel for me and it'll call my mom

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Speaker 1: that That is a great point. The investment done so

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Speaker 1: far is still not up to the results the we

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Speaker 1: should be at already. Uh And and on top of that,

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Speaker 1: while language model language models are more capable than ever

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Speaker 1: and you probably all know the latest on the the

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Speaker 1: suspicion that Google has created as C D N A I,

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Speaker 1: which is not We're so far from resolving the basics.

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Speaker 1: We can't get into the emotion emotionally I yet. But

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Speaker 1: the problem with that is the as you as you

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Speaker 1: grow more larger models, the models are more biased too,

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Speaker 1: and the rise of the ethical AI is everywhere, which

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Speaker 1: also translates into regulations, and we've seen from twenty sixteen

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Speaker 1: to twenty twenty one bills in twenty twenty five countries

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Speaker 1: going from one to eighteen. And now you see all

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Speaker 1: the data privacy all around. So now you're right, we're

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Speaker 1: very far. I'm glad you brought up the sentient AI

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Speaker 1: at Google because that's one of my favorite stories, really

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Speaker 1: non market stories of the here. But are we in

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Speaker 1: a race to our own enslavement or death? I mean,

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Speaker 1: isn't this AI going to eventually take us over or

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Speaker 1: kill us? I mean a movie about that. I think

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Speaker 1: Ellen must Bill Gates. All these people are worried about

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Speaker 1: that the terminator, Well they yeah, they are really being

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Speaker 1: in the space for twenty two years and understanding how

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Speaker 1: slow technology moves in these fields. We are still resolving barely,

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Speaker 1: like you guys said, the narrow AI problem, which is

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Speaker 1: resolving one task at the time. Lets let alone a contextual,

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Speaker 1: contextual information interaction between systems. We're very sharp on that.

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Speaker 1: We are in towards the world and more and more

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Speaker 1: this ethically I is uh an every big company and

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Speaker 1: small company has this UH this charter. Now starting data,

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Speaker 1: if you starting the data side but everybody is on

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Speaker 1: the same path to work along machine and not replace humans.

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Speaker 1: Humans activity will continue to be right for generations her

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Speaker 1: years from now, I hope so. Daniel Le Bragga, founder

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Speaker 1: and CEO of to Find dot Ai. Our next guest

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Speaker 1: is from the Great State of Ohio. And remember Mary,

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Speaker 1: yesterday we were talking about Cedar Point. They had the Gemini,

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Speaker 1: they have the Demon draw but they but they never

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Speaker 1: to me. I never thought it was as good as

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Speaker 1: King's Island, probably because King's I was a little bit

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Speaker 1: further away. I couldn't get there as easily, and King's

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Speaker 1: Island had the Beast, which was the largest wooden roller

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Speaker 1: coaster in the whole world. Yeah. So the Beck Ramaswamy

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Speaker 1: started um an asset management company called Strive Asset Management.

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Speaker 1: He's written a couple of books as well, um the

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Speaker 1: most well, the first one being Woke Incorporated Inside Corporate

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Speaker 1: America's Social Justice Scam, and the second book, I'm Gonna

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Speaker 1: Guess is not yet published next month, next next month.

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Speaker 1: So Beck is here with us in studio. I'm really

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Speaker 1: strive Asset Management's first e t f UM which is

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Speaker 1: d r l L that's the ticker in the New

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Speaker 1: York Stock Exchange, and uh, it was extremely successful. Tell

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Speaker 1: us about it. Yeah, we're happy to have seen this

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Speaker 1: taken off. Hopefully that that, you know, trend continues, because

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Speaker 1: I think it's really important what we hope to deliver

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Speaker 1: to the U S energy sector the man It actually

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Speaker 1: is really simple, dr LLL drill. It's a new what

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Speaker 1: I call post E s G mandate to the U

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Speaker 1: S energy sector, telling these companies that you should focus

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Speaker 1: exclusively on what allows you to be most successful, most

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Speaker 1: profitable over the long run, without regard to any other environmental, social,

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Speaker 1: or political agenda. As important as those agendas, maybe we

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Speaker 1: should sort them out through the political process, but in

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Speaker 1: the boardroom, we're focused exclusively on the success of companies

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Speaker 1: and that's a really different message then you get from

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Speaker 1: other large asset managers, and we think we need to

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Speaker 1: have that debate well in the boardrooms. It was described

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Speaker 1: to me yesterday when we were talking about your launch,

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Speaker 1: because is we're gonna have you on Bloomberg's e t

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Speaker 1: f i Q on Monday UM. It was described to

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Speaker 1: me as an anti woke e t F. And my

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Speaker 1: first thought was, why would you want to do an

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Speaker 1: anti woke or awoke e t F because you wanted

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Speaker 1: the goal of investing is to make the most money

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Speaker 1: you can. And then so it's not, actually it's anti

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Speaker 1: woke e t F. It's not. I have I have

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Speaker 1: literally no idea why the well, Actually, my best guess

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Speaker 1: is in fairness, my book was called woking. I wrote

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Speaker 1: that in a personal capacity. So maybe people want to

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Speaker 1: push this narrative together for a headline, but for Stripes purposes,

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Speaker 1: our goal is to focus companies on excellence. There's nothing

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Speaker 1: woke or anti woke about it. And you know what,

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Speaker 1: I think that the E s G movement may have

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Speaker 1: offered some useful lessons for energy companies in the last decade,

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Speaker 1: maybe not the ones that they offered as their headlines,

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Speaker 1: but energy companies did overspend and over lever in the

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Speaker 1: early twenty teens, saying they're investing for growth. The shale

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Speaker 1: revolution was assigned shiny object. Interest rates were low, there

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Speaker 1: were some mistakes made for profitability in this sector. So

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Speaker 1: I think there are good lessons learned, but I think

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Speaker 1: the time has come to move past that e s

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Speaker 1: G investment consensus to say, you know what, fossil fuels

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Speaker 1: are not going anywhere after and if American energy companies

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Speaker 1: can actually invest to fill a massive looming supply, demand

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Speaker 1: and balance for global energy, that can lead these companies

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Speaker 1: to be more successful to trade at higher multiples. They

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Speaker 1: traded a lower multiple than the SMP five hundred, certainly

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Speaker 1: than US Tech today. They traded a lower multiple than

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Speaker 1: they've traded over their last thirty year average. I think

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Speaker 1: a b SG movement is in large part responsible for that.

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Speaker 1: We can unlock value by causing these companies to behave

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Speaker 1: in a way that actually takes exclusively their own financial

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Speaker 1: interests over the long run into account, rather than these

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Speaker 1: environmental and social agendas that have been imposed on them

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Speaker 1: top down by their shareholders. And it's interesting because when

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Speaker 1: I went to business school many moons ago, I learned

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Speaker 1: that the responsibility of the corporation was to maximize profits

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Speaker 1: for shareholders. Uh that has changed, I guess over the

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Speaker 1: last six, seven, eight years. I think the Business Roundtable

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Speaker 1: even came out with something saying kind of replacing shareholders

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Speaker 1: with stakeholders, introducing this whole against certain elements of the

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Speaker 1: E s G concept. Um, that's what I learned, and

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Speaker 1: I went to the most leftist college in the entire country,

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Speaker 1: exactly in Antioch. So what's the response been to your

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Speaker 1: your book, this E T F. Maybe I know you've

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Speaker 1: had discussions probably with investors, boards, things like that. What's

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Speaker 1: the feedback. So the feedback, certainly behind closed doors, is

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Speaker 1: almost universally positive. And then I think even in the

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Speaker 1: open what I've been pleased about is we're starting conversations

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Speaker 1: that people were not having, and I want to see

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Speaker 1: those conversations happen in the boardrooms of U S energy companies.

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Speaker 1: I think we're gonna catalyze. It actually spoke to the

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Speaker 1: one of the largest that might be the largest energy

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Speaker 1: conference in the country. It was the Intercom conference in

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Speaker 1: Denver earlier this week. It was a room full of

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Speaker 1: oil and gas ceo s. I don't think it's because

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Speaker 1: of the quality of my speech, but I got a

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Speaker 1: standing ovation at the end of the speech, which actually mystified.

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Speaker 1: There was a reporter in the room who tweeted about this,

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Speaker 1: who said, wait a minute, why are the same oil

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Speaker 1: executives who told me that they believe in their E

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Speaker 1: S G principles giving a standing ovation to Vec ramist

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Speaker 1: Amy speech because she, I think misunderstood it to be

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Speaker 1: anti E s G. I think the things she missed

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Speaker 1: is we're talking about moving forward past the E s

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Speaker 1: G investment consensus to meet an important human need. We

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Speaker 1: have a massive energy shortage, a supply demand imbalance that

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Speaker 1: isn't just short term. This isn't going away because systematic

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Speaker 1: underinvestment in production is a multi year peycle, not being

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Speaker 1: an energy When I see these energy prices going higher

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Speaker 1: and higher and higher, that yes, come back a little bit.

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Speaker 1: I see what's going on in Ukraine and Germany and

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Speaker 1: the and the energy crisis they're having in Europe, which

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Speaker 1: is going to get even worse this winter. Mike's dumb

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Speaker 1: question is like, just go build some more refineries on

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Speaker 1: the Gulf coast and we'll crank all this stuff out.

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Speaker 1: It would you really do that? In this regulatory environment

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Speaker 1: that my own president goes to Saudi Arabia before he

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Speaker 1: goes to Texas, Well, you know what it's it's it's

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Speaker 1: really interesting. So I think that there's there's two shackles

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Speaker 1: on the U s energy industry. One is imposed by policymakers.

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Speaker 1: The second is imposed by lowercase p policymakers through the

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Speaker 1: E s G movement in the boardroom. I'm actually optimistic

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Speaker 1: on the first of those. So here's something that I

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Speaker 1: think most market participants have not caught up to yet.

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Speaker 1: But it was a big deal West Virginia versus e

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Speaker 1: p A. I personally think it was the most important

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Speaker 1: Supreme Court case on this year's docket, which found that

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Speaker 1: one of the regulations imposed by the e p A

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Speaker 1: on the coal industry was actually unconstitutional because it caused

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Speaker 1: the EPA basically exceeded the scope of the statutory authority

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Speaker 1: granted to it by Congress. If that was unconstitutional, then

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Speaker 1: most of the regulations on the U. S energy industry

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Speaker 1: are also unconstitutional. And guess what the one way to

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Speaker 1: fix that is for Congress. In the spring Court basically

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Speaker 1: implies this Congress could pass the law and make it

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Speaker 1: part of the law. That's not gonna happen after what's

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Speaker 1: coming this November, after the changing political wins in this country.

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Speaker 1: So on the political and regulatory side, I think what

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Speaker 1: people see as a headwind amongst investors could actually be

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Speaker 1: a tail wind for the sector that leaves the real

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Speaker 1: remaining obstacle to be in the boardrooms imposed by e

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Speaker 1: SG linked asset managers. That's what we're hoping to fix

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Speaker 1: it strip. By the way, a lot of people on

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Speaker 1: the left also think that was the most important ruling,

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Speaker 1: but they're very much ended it right. Well, Congress is

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Speaker 1: going to have to make laws for every single regulation

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Speaker 1: rather than uh, you know, giving that power to a

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Speaker 1: board like the body like the e p A exactly.

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Speaker 1: Let let me ask quickly, how difficult is it to

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Speaker 1: go up against the goliath in the E t F

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Speaker 1: industry like black Rock, which does have some pretty strong

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Speaker 1: E s G and sustainability principle. But we'll find out.

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Speaker 1: It's it's it's we announced it yesterday. I will say

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Speaker 1: that the folks of the New York Stock Exchange told

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Speaker 1: me it was one of the strongest, if not strongest

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Speaker 1: launch of its kind in years that they had seen.

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Speaker 1: And I think that again, I don't take credit for that.

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Speaker 1: I think that this is this is a demand that

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Speaker 1: already exists amongst capital owners in this country, amongst everyday

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Speaker 1: citizens whose money is today being invested by large asset

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Speaker 1: managers who are delivering messages to the energy company's boardrooms

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Speaker 1: that most of those everyday citizens disagree with. So that's

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Speaker 1: what we have going for us is I think the

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Speaker 1: majority of capital owners, the majority of capital does not

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Speaker 1: want the black Rock message delivered to the boardrooms. They

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Speaker 1: want the Strive message, I believe, delivered to the boardrooms. Now.

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Speaker 1: The question is there's a lot of plumbing to do

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Speaker 1: to make sure that capital can actually flow through vehicles

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Speaker 1: like ours that actually speak on their behalf. It's up

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Speaker 1: to us to see if we can do it. All right,

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Speaker 1: Thanks so much for joining us here in our studios.

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Speaker 1: Here the fact. Ramiswanny, co founder and executive chairman of

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Speaker 1: Strive Asset Management. I'm not a gamer, Matt, you probably

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Speaker 1: know that. But our next guest is going to give

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Speaker 1: us a kind of lay of the land. What's going

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Speaker 1: on in the world. I used to be a big

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Speaker 1: gamer back in the day. I have. I've bought every

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Speaker 1: single Call of Duty release and spent hundreds of dollars

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Speaker 1: in the game up until what age, up until I

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Speaker 1: had a baby, which was October. That's when I stopped

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Speaker 1: putting in three to four hours the world. You're forty

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Speaker 1: eight years of age, and but I will play until

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Speaker 1: the end of my life. I love playing called. Mark Alfinbain,

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Speaker 1: CEO of X one e Sports, joins us. Mark, give

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Speaker 1: us a sense of kind of where we are in

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Speaker 1: the gaming market trends, you know, kind of prependemic, going

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Speaker 1: into the pandemic and now coming out of the pandemic. Yeah,

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Speaker 1: thanks for having me here today and just going back,

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Speaker 1: if you held onto some of those video games you're

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Speaker 1: talking about, they may actually be worth some money right now.

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Speaker 1: A lot of these video games self for like thousands

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Speaker 1: of dollars on eBay, so you might want to hold

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Speaker 1: onto the I've still got Duke Newcomb um for the

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Speaker 1: Nintendo sixty four. I've still got Kid Chameleon, which is

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Speaker 1: one of my all time favorite games um as well

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Speaker 1: as obviously all the Mario titles. YEA, keep from a

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Speaker 1: good condition and pass them down. But yeah, the the

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Speaker 1: you know, the industry really significantly increased. If we looked

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Speaker 1: at the global value of the industry, just before COVID

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Speaker 1: in around two thousand nineteen, the industry was around a

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Speaker 1: hundred and thirty billion dollar industry, and by about two

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Speaker 1: one it had grown to a hundred and eighty billion

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Speaker 1: dollar industry. As you could imagine, um generations of people

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Speaker 1: were at home and we're you know, spending a lot

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Speaker 1: of time doing things like you know, looking at TikTok

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Speaker 1: videos and playing video games. So it generated a significant, uh,

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Speaker 1: you know, sustainable bump for overall video game usage. I

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Speaker 1: have to say, during the pandemic, I got this um

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Speaker 1: high school friends chat group and we're all, you know,

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Speaker 1: some of my buddies were paying like a grand for

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Speaker 1: a Microsoft Xbox or for the PlayStation five because you

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Speaker 1: couldn't just you couldn't find them anywhere. Is that demand?

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Speaker 1: Has that fallen and has the supply caught up it? Actually,

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Speaker 1: interestingly it hasn't. So the you know, if you can

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Speaker 1: find a PlayStation five right now, that's something you may

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Speaker 1: also want to want to get your hands on. They've

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Speaker 1: been very very elusive to find. Probably last year, I

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Speaker 1: would say we're one of the largest Christmas gifts out there,

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Speaker 1: if you can, if you can get them. But between

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Speaker 1: the consoles, the other thing really moving up on popularity

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Speaker 1: is the virtual reality gaming we're seeing with the Oculus Quest,

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Speaker 1: and that's almost like the next revolution of gaming as

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Speaker 1: the aiming industry reinvents itself. Can you play legit games

431
00:23:03,320 --> 00:23:07,040
Speaker 1: with that? I mean can you really, um have a

432
00:23:07,080 --> 00:23:10,600
Speaker 1: first person shooter that works well with the oculus there

433
00:23:10,600 --> 00:23:13,160
Speaker 1: are you know, there's a game up there called Population One,

434
00:23:13,320 --> 00:23:16,480
Speaker 1: which is a multiplayer game. UM and it's really the

435
00:23:16,520 --> 00:23:20,080
Speaker 1: new form of social you know, kind of social communication.

436
00:23:20,119 --> 00:23:23,119
Speaker 1: I would say, jumping on these multiplayer games, especially if

437
00:23:23,160 --> 00:23:26,560
Speaker 1: you could imagine you're in the same virtual reality environment

438
00:23:27,080 --> 00:23:29,320
Speaker 1: and your friends are, you know, people around the world.

439
00:23:29,359 --> 00:23:32,119
Speaker 1: It's it's a really incredible experience. It's it's come a

440
00:23:32,119 --> 00:23:34,840
Speaker 1: little bit since the days of Atari in the early eighties.

441
00:23:34,840 --> 00:23:37,080
Speaker 1: I would say, I gotta say that's how I mean.

442
00:23:37,119 --> 00:23:40,760
Speaker 1: I've I was always into Atari and Nintendo and Sega.

443
00:23:40,840 --> 00:23:43,560
Speaker 1: But when I first got a job and moved to

444
00:23:43,600 --> 00:23:46,200
Speaker 1: Germany out of college, all my friends were scattered around

445
00:23:46,240 --> 00:23:48,600
Speaker 1: the world and we couldn't really afford to call each other.

446
00:23:49,000 --> 00:23:51,320
Speaker 1: So what we did is we all got xboxes, we

447
00:23:51,359 --> 00:23:53,960
Speaker 1: all got Halo, and we would just sit in Halo

448
00:23:54,359 --> 00:23:57,680
Speaker 1: in the chat, you know, and like shooting at each other. Well,

449
00:23:57,680 --> 00:24:00,480
Speaker 1: it's also incredibly if you think about during COVID couldn't

450
00:24:00,520 --> 00:24:04,240
Speaker 1: really see people. People were are restricted, especially in certain

451
00:24:04,240 --> 00:24:06,760
Speaker 1: parts of the world, and it's really was the only

452
00:24:06,800 --> 00:24:09,639
Speaker 1: way to feel like you were with people during this time,

453
00:24:09,960 --> 00:24:12,719
Speaker 1: which probably is the reason why the industry grew so

454
00:24:12,800 --> 00:24:16,119
Speaker 1: tremendously during that cult period. Alright, Mark, I see on

455
00:24:16,160 --> 00:24:18,240
Speaker 1: your CV that you have a bachelor's in business from

456
00:24:18,240 --> 00:24:21,239
Speaker 1: the University of Manitoba. And to be honest to just

457
00:24:21,280 --> 00:24:24,080
Speaker 1: to show my ignorance, I did not know where Manitoba was.

458
00:24:25,640 --> 00:24:27,280
Speaker 1: I know it's in Canada, but wearing Canada. So I

459
00:24:27,320 --> 00:24:29,040
Speaker 1: go to my Google Maps. It's kind of right smack

460
00:24:29,040 --> 00:24:32,840
Speaker 1: in the middle of Canada. It's home to Winnipeg and

461
00:24:32,880 --> 00:24:36,320
Speaker 1: it's also home to Lake Winnipeg. Do people kind of

462
00:24:36,400 --> 00:24:40,320
Speaker 1: is that a busy like summer place to go, like Winnipeg. Yeah, yeah,

463
00:24:40,320 --> 00:24:42,600
Speaker 1: if you're if you're living in Winnipeg right now, chances

464
00:24:42,680 --> 00:24:45,520
Speaker 1: you would not be in your home during the summertime.

465
00:24:45,560 --> 00:24:47,480
Speaker 1: You're going to be at one of the lakes. Lake

466
00:24:47,480 --> 00:24:50,600
Speaker 1: Winnipeg is a nice place called Grand Beach Um also

467
00:24:50,640 --> 00:24:56,280
Speaker 1: a home actually of the NHL's Winnipeg jeff A Story franchise.

468
00:24:56,680 --> 00:24:58,639
Speaker 1: But the one thing I would say about Winnipeg, I

469
00:24:58,640 --> 00:25:02,600
Speaker 1: think it might literally be the coldest place in the world,

470
00:25:02,600 --> 00:25:08,000
Speaker 1: with the population of over five thousand people. I heard Philip, Well,

471
00:25:08,200 --> 00:25:10,320
Speaker 1: so when you guys, have your fifteen minutes of summer.

472
00:25:10,680 --> 00:25:13,679
Speaker 1: You've got to get out to Lake Winnipeg. It is

473
00:25:13,720 --> 00:25:16,480
Speaker 1: so I think it's literally three months and you're really

474
00:25:16,560 --> 00:25:20,240
Speaker 1: maximizing that time. So a lot of out there barbecues. Um,

475
00:25:20,280 --> 00:25:22,520
Speaker 1: you do get de sensipized with the cold a little bit.

476
00:25:22,600 --> 00:25:25,320
Speaker 1: So if you come anywhere south of the border, winter

477
00:25:25,480 --> 00:25:28,800
Speaker 1: is like summer too. All right, we gotta get you

478
00:25:28,840 --> 00:25:30,400
Speaker 1: back on mar because I want to know about the

479
00:25:30,400 --> 00:25:33,399
Speaker 1: the next sort of evolutions that are coming in the

480
00:25:33,400 --> 00:25:35,000
Speaker 1: gaming industry. But we don't have any more time. So

481
00:25:35,040 --> 00:25:38,440
Speaker 1: Mark elfen Bind, their CEO of x one E Sports,

482
00:25:40,520 --> 00:25:42,760
Speaker 1: do a remote in Manitoba. The tick, yeah, we should

483
00:25:42,760 --> 00:25:44,399
Speaker 1: do that. We should go up there. The ticker is

484
00:25:44,720 --> 00:25:47,840
Speaker 1: this is on the Canadian Stock Exchange X one so

485
00:25:48,160 --> 00:25:51,760
Speaker 1: x O n E. That's some cool stuff. So yeah,

486
00:25:51,800 --> 00:25:53,440
Speaker 1: I want to get to the sports next time we

487
00:25:53,520 --> 00:25:59,160
Speaker 1: chat with them, because that's actually big business there. We're

488
00:25:59,160 --> 00:26:01,000
Speaker 1: gonna talk about some this near and dear to my

489
00:26:01,080 --> 00:26:04,960
Speaker 1: hard pol And I'm pretty excited about the story. Um,

490
00:26:05,000 --> 00:26:07,840
Speaker 1: it's probably a big deal for you too, being a

491
00:26:07,880 --> 00:26:11,080
Speaker 1: calms guy. Um, but the reporter we're gonna bring in

492
00:26:11,160 --> 00:26:15,679
Speaker 1: he he dissed me pretty hard twice yesterday. Jerry Smith

493
00:26:15,720 --> 00:26:17,840
Speaker 1: is a media reporter for Bloomberg News. One of them.

494
00:26:17,840 --> 00:26:24,359
Speaker 1: He wrote the story about CBS and NBC vying for

495
00:26:24,680 --> 00:26:29,080
Speaker 1: the Big Ten um getting it from ESPN. And Jerry,

496
00:26:29,520 --> 00:26:35,000
Speaker 1: you referred to the Buckeyes as Ohio State University, but

497
00:26:35,160 --> 00:26:38,320
Speaker 1: you know it's the Ohio State University. Boy, And I

498
00:26:38,359 --> 00:26:43,160
Speaker 1: can only imagine you did this because you're a Northwestern guy. Yeah.

499
00:26:43,240 --> 00:26:45,960
Speaker 1: I just wanted to apologize personally to you for that

500
00:26:46,119 --> 00:26:49,560
Speaker 1: and and I really do hope you forgive me. I

501
00:26:49,600 --> 00:26:52,920
Speaker 1: even messaged you and you didn't message back. Busy guy.

502
00:26:53,000 --> 00:26:56,399
Speaker 1: He's he's got big media moguls. He talks to Jerry

503
00:26:56,440 --> 00:26:59,439
Speaker 1: to me, the news was here the Big ten. You know,

504
00:27:00,320 --> 00:27:04,160
Speaker 1: Big ten has been on ESPN for a very long time,

505
00:27:04,800 --> 00:27:07,560
Speaker 1: and the ESPN kind of walked away. That's what shocked me.

506
00:27:07,680 --> 00:27:11,840
Speaker 1: What's going on there? Yeah, so they walked away from

507
00:27:11,840 --> 00:27:14,439
Speaker 1: the bidding, and it's it's a big deal because this

508
00:27:14,520 --> 00:27:16,720
Speaker 1: is a relationship that ESPN has had with the Big

509
00:27:16,760 --> 00:27:20,679
Speaker 1: Tent for about four decades UM, and the price just

510
00:27:20,760 --> 00:27:23,960
Speaker 1: got too high for them. Um. So what you know,

511
00:27:24,000 --> 00:27:28,080
Speaker 1: what we expect to see now is that Big ten sports,

512
00:27:28,520 --> 00:27:31,840
Speaker 1: with college football being the big draw, are going to

513
00:27:31,960 --> 00:27:35,480
Speaker 1: be on Fox, CBS, and NBC. Fox is going to

514
00:27:35,560 --> 00:27:38,520
Speaker 1: have that noon window, CBS will have a three thirty window,

515
00:27:38,600 --> 00:27:42,200
Speaker 1: and and UM an NBC, which really to this point

516
00:27:42,320 --> 00:27:45,280
Speaker 1: is just mostly broadcast Notre Dame football, they'll have the

517
00:27:45,400 --> 00:27:49,159
Speaker 1: evening window in prime time. So, I mean, I've covered

518
00:27:49,200 --> 00:27:52,959
Speaker 1: the Walt Disney Company for decades from a financial analyst perspective,

519
00:27:52,760 --> 00:27:56,120
Speaker 1: I I can't recall them walking away from too many

520
00:27:56,640 --> 00:28:00,040
Speaker 1: marquee events. Now the Big ten here, we've got a

521
00:28:00,240 --> 00:28:02,240
Speaker 1: cricket league, which I know that's a big fan of

522
00:28:02,680 --> 00:28:05,600
Speaker 1: in India. I'm sorry, the India Cricket League. Um they

523
00:28:05,640 --> 00:28:09,119
Speaker 1: walked away from that? Is? Well? Here is it? Are

524
00:28:09,160 --> 00:28:13,880
Speaker 1: things changing at ESPN where they tightening their belts? Yeah, well,

525
00:28:13,880 --> 00:28:16,320
Speaker 1: I think a couple of things are happening. You. You're right.

526
00:28:16,440 --> 00:28:20,119
Speaker 1: They are under pressure from Wall Street to UM you know,

527
00:28:20,200 --> 00:28:22,919
Speaker 1: show more profits, particularly in streaming, and we saw that

528
00:28:22,960 --> 00:28:25,679
Speaker 1: in UM some of the moves they're making, uh in

529
00:28:25,720 --> 00:28:30,560
Speaker 1: their earnings yesterday where they're raising prices for their streaming services. Uh.

530
00:28:30,680 --> 00:28:33,680
Speaker 1: So they are being a little more selective about what

531
00:28:33,840 --> 00:28:36,560
Speaker 1: type of sports rights. Uh they go after and as

532
00:28:36,600 --> 00:28:39,240
Speaker 1: you know, sports rights to keep getting more expensive. Uh.

533
00:28:39,320 --> 00:28:42,080
Speaker 1: The other thing to think about is ESPN is still

534
00:28:42,600 --> 00:28:44,960
Speaker 1: has a lot of sports rights, and if you think

535
00:28:45,000 --> 00:28:48,880
Speaker 1: about college they still have. They actually going to take

536
00:28:48,920 --> 00:28:51,840
Speaker 1: over the SEC and a couple of years from CS

537
00:28:52,280 --> 00:28:55,320
Speaker 1: and that's that's huge. I mean, that's arguably more popular

538
00:28:55,360 --> 00:28:57,719
Speaker 1: than the Big Ten in terms of college football. And

539
00:28:57,720 --> 00:28:59,440
Speaker 1: then you've got you know, they have the rights to

540
00:28:59,440 --> 00:29:01,959
Speaker 1: the a c S, the Big Twelve, the Pack twelve,

541
00:29:02,520 --> 00:29:05,520
Speaker 1: which are going to be renewing renegotiating their rights soon.

542
00:29:05,720 --> 00:29:09,280
Speaker 1: So I would not say that ESPN is walking away

543
00:29:09,280 --> 00:29:12,560
Speaker 1: from college sports. They're very much uh still a major

544
00:29:12,640 --> 00:29:16,400
Speaker 1: college sports broadcaster. But they did decide that the Big

545
00:29:16,440 --> 00:29:18,640
Speaker 1: Ten is going to be too um, you know, just

546
00:29:18,680 --> 00:29:21,479
Speaker 1: too much too expenses for them. How about just broadly

547
00:29:21,520 --> 00:29:23,680
Speaker 1: speaking about sports rights fees, Jerry, you can you cover

548
00:29:23,720 --> 00:29:26,160
Speaker 1: a lot of these all these big media companies with

549
00:29:26,240 --> 00:29:30,600
Speaker 1: court cutting at all and streaming taking a bigger percentage

550
00:29:30,600 --> 00:29:35,400
Speaker 1: of viewership. How did the big media companies justify spending

551
00:29:36,000 --> 00:29:39,360
Speaker 1: ever increasing amounts on sports rights when their audience is

552
00:29:39,400 --> 00:29:43,440
Speaker 1: really in decline because of court cutting. Yeah, I mean,

553
00:29:43,560 --> 00:29:45,960
Speaker 1: I think we're the media companies are really going to

554
00:29:46,040 --> 00:29:48,800
Speaker 1: start to feel the squeeze here going forward. I mean,

555
00:29:48,840 --> 00:29:51,560
Speaker 1: on one hand, they're trying to protect the cable bundle

556
00:29:51,840 --> 00:29:55,680
Speaker 1: and live sports is really the biggest reason why people

557
00:29:55,720 --> 00:29:58,760
Speaker 1: are still subscribing to cable. But as you point out

558
00:29:58,840 --> 00:30:03,920
Speaker 1: that there's cable subscriptions are really um. Cord cutting is accelerating,

559
00:30:04,120 --> 00:30:07,480
Speaker 1: and the fees that these media companies get from cable

560
00:30:07,520 --> 00:30:10,400
Speaker 1: subscribers is continuing to go down at the same time

561
00:30:10,440 --> 00:30:13,080
Speaker 1: that they're paying more and more for these sports rights.

562
00:30:13,200 --> 00:30:16,080
Speaker 1: Uh So, yeah, it's um. That's part of why you're

563
00:30:16,080 --> 00:30:18,479
Speaker 1: starting to see companies like ESPN be a little more

564
00:30:18,520 --> 00:30:22,440
Speaker 1: selective because the money from the cable bundle UM is

565
00:30:22,480 --> 00:30:25,840
Speaker 1: not supporting it's not going to support these ever escalating

566
00:30:25,920 --> 00:30:28,080
Speaker 1: rights fees the way they used to. It hurts me

567
00:30:28,160 --> 00:30:32,160
Speaker 1: to think of the SEC, well just in general, but

568
00:30:32,240 --> 00:30:36,360
Speaker 1: as a better, more popular football company. It's close. No,

569
00:30:36,560 --> 00:30:39,880
Speaker 1: it's I think it's it's not good what's happening. The

570
00:30:39,920 --> 00:30:42,440
Speaker 1: Big Town was three and three against the SEC last season.

571
00:30:43,360 --> 00:30:45,280
Speaker 1: But I mean, Jerry, one of the things that we've

572
00:30:45,280 --> 00:30:48,920
Speaker 1: seen is you know, these super the expansion Jerry, how

573
00:30:49,000 --> 00:30:51,480
Speaker 1: how how much were the realignment really so you've got

574
00:30:51,520 --> 00:30:53,360
Speaker 1: USC and U c l A going into the big

575
00:30:53,480 --> 00:30:56,480
Speaker 1: tent exactly. And I mean it just kind of says, hey, Jerry,

576
00:30:56,520 --> 00:31:01,000
Speaker 1: you're awake Forest undergrad. Like if you're the SEC for football,

577
00:31:01,040 --> 00:31:03,400
Speaker 1: You're like, well, if I'm not in the SEC and

578
00:31:03,440 --> 00:31:07,160
Speaker 1: I'm not in the Big Ten, where am I. I

579
00:31:07,200 --> 00:31:12,040
Speaker 1: think we're seeing a real consolidation in both UM college

580
00:31:12,280 --> 00:31:15,280
Speaker 1: sports and college sports broadcasting. I think what you're starting

581
00:31:15,280 --> 00:31:17,960
Speaker 1: to see now is that the Big Ten and the

582
00:31:18,120 --> 00:31:22,920
Speaker 1: SEC are the super conferences, and ESPN and Fox are

583
00:31:23,440 --> 00:31:25,560
Speaker 1: the broadcasters that have the rights. I mean, you know,

584
00:31:25,600 --> 00:31:28,440
Speaker 1: Fox has UM, you know, part owner of a Big

585
00:31:28,440 --> 00:31:31,800
Speaker 1: ten network, and they've got UM They've renewed their Big

586
00:31:31,800 --> 00:31:34,920
Speaker 1: Ten rights deal. And then ESPN as as chose in

587
00:31:34,920 --> 00:31:37,720
Speaker 1: the SEC, so um, you know, and we I think

588
00:31:37,720 --> 00:31:41,000
Speaker 1: we're going to start to see more schools that continue

589
00:31:41,040 --> 00:31:44,480
Speaker 1: to go towards these bigger super conferences and UM it's

590
00:31:44,480 --> 00:31:46,880
Speaker 1: really a rivalry that a lot of people feel like

591
00:31:47,040 --> 00:31:51,360
Speaker 1: between ESPN and Fox here alright. So I mean I

592
00:31:51,440 --> 00:31:54,000
Speaker 1: think that the question for a lot of folks is

593
00:31:54,000 --> 00:31:56,000
Speaker 1: is it you know, if I'm a I don't know,

594
00:31:56,320 --> 00:31:59,040
Speaker 1: the University of Colorado, If I'm Awake Force or even

595
00:31:59,040 --> 00:32:01,640
Speaker 1: a Duke. I mean, it just seems like if I'm

596
00:32:01,640 --> 00:32:05,400
Speaker 1: not in one of these big power power conferences, I'm

597
00:32:05,400 --> 00:32:07,520
Speaker 1: going to risk out on some of the losing the

598
00:32:07,520 --> 00:32:09,880
Speaker 1: growth in the TV money which is kind of driving

599
00:32:09,960 --> 00:32:12,840
Speaker 1: all of this. Um. I mean to put USC and

600
00:32:12,960 --> 00:32:14,920
Speaker 1: U c l A to leave that Packed twelve or

601
00:32:14,920 --> 00:32:18,400
Speaker 1: Pack ten, whatever it's called, it just seems sacrilege to me.

602
00:32:18,560 --> 00:32:20,800
Speaker 1: And you're not gonna but it's all about the money, yeah,

603
00:32:20,920 --> 00:32:23,360
Speaker 1: to eat TV money. So Jerry's just a trend that's

604
00:32:23,360 --> 00:32:26,320
Speaker 1: gonna continue. Do you think. I think the big test

605
00:32:26,360 --> 00:32:30,600
Speaker 1: will be the next big college right sports rights deal,

606
00:32:30,600 --> 00:32:32,280
Speaker 1: and that's going to be the Pack twelve. And then

607
00:32:32,360 --> 00:32:34,360
Speaker 1: I think after that will be the Big twelve and

608
00:32:34,400 --> 00:32:37,680
Speaker 1: we'll have to see, um, you know, whether the big

609
00:32:37,680 --> 00:32:42,560
Speaker 1: broadcasters like ESPN are are willing to u spend um

610
00:32:42,880 --> 00:32:46,360
Speaker 1: more and more money for these conferences that have lost

611
00:32:46,480 --> 00:32:49,480
Speaker 1: some really popular teams. And then and then schools like

612
00:32:49,560 --> 00:32:52,280
Speaker 1: Duke or Wake Forest aren't going to be able to

613
00:32:52,320 --> 00:32:54,440
Speaker 1: spend as much money on the program, right. So I mean,

614
00:32:54,480 --> 00:32:56,600
Speaker 1: I mean, at least Duke has the hoops, which really

615
00:32:56,680 --> 00:33:00,239
Speaker 1: drives the athletics. Well, wait for great football team they

616
00:33:00,280 --> 00:33:02,280
Speaker 1: had for such how many people go there? Like a

617
00:33:02,320 --> 00:33:04,160
Speaker 1: fifty people go to week for Erry Head Wait for

618
00:33:04,280 --> 00:33:06,160
Speaker 1: you got thirty seconds Stary to give us breakdown wake

619
00:33:06,200 --> 00:33:09,840
Speaker 1: Forest football? Why are they so good? You know, you'd

620
00:33:09,840 --> 00:33:12,000
Speaker 1: have to have somebody smarter than me. But I feel

621
00:33:12,040 --> 00:33:15,080
Speaker 1: like wake Forest has always um hunched above its weight.

622
00:33:15,120 --> 00:33:17,000
Speaker 1: I mean when I was there, there were four thousand

623
00:33:17,120 --> 00:33:20,280
Speaker 1: undergrads and uh I was there when Chris Paul was there. Yeah,

624
00:33:20,320 --> 00:33:23,280
Speaker 1: we had a nice run in basketball. Um so yeah,

625
00:33:23,360 --> 00:33:26,720
Speaker 1: the conference is still is still strong. But um, you know,

626
00:33:26,760 --> 00:33:29,200
Speaker 1: I think we're seeing with these sports right deals at

627
00:33:29,200 --> 00:33:32,160
Speaker 1: Big ten and SEC really dominate, all right, Jerry good,

628
00:33:32,160 --> 00:33:35,680
Speaker 1: good stuff. Jerry Smith excellent media reporter for Bloomberg News,

629
00:33:35,800 --> 00:33:40,640
Speaker 1: phoning it in. I will note today thanks for listening

630
00:33:40,680 --> 00:33:44,160
Speaker 1: to the Bloomberg Markets podcast. You can subscribe and listen

631
00:33:44,200 --> 00:33:48,480
Speaker 1: to interviews at Apple Podcasts or whatever podcast platform you prefer.

632
00:33:48,880 --> 00:33:52,840
Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three.

633
00:33:53,200 --> 00:33:55,760
Speaker 1: Pet On false Sweeney I'm on Twitter at pt Sweeney.

634
00:33:55,800 --> 00:33:58,479
Speaker 1: Before the podcast, you can always catch us worldwide at

635
00:33:58,480 --> 00:34:00,400
Speaker 1: Bloomberg Radio four