Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly from Bloomberg Radio. Hi. I'm Jason Kelly, and welcome
Speaker 1: to the weekend edition of Bloomberg Business Week. Over the
Speaker 1: next couple of hours, I'm going to bring you news
Speaker 1: of the week, insights from the magazine, and more. And
Speaker 1: I say I not we I'm missing something this week.
Speaker 1: My partner, Carol Masser, she is taking a well deserved vacation.
Speaker 1: But as you'll hear throughout the show, I was joined
Speaker 1: throughout the week by Bloomberg anchor and a good friend
Speaker 1: of mine, reporter Scarlet Food. She was along for the
Speaker 1: Bloomberg Business Week Show. We had some great conversations this week.
Speaker 1: The cover story Americans, Well, they aren't making babies, and
Speaker 1: it's not just bad for maybe us as humans, it's
Speaker 1: bad for the economy. Plus why veteran investor Alan Patrick
Speaker 1: off he's betting on aging consumers with a new thirty
Speaker 1: two million dollar venture capital fund. And how do we
Speaker 1: stuff up and make sure that communities get the resources
Speaker 1: they need. We'll hear from Georgetown University professor Marcia Chaplin
Speaker 1: on her new book, It's called Franchise. The Golden Arches
Speaker 1: in Black America all about McDonald's and its role in
Speaker 1: racial diversity or lack thereof. An amazing look and an
Speaker 1: amazingly timely book as well. But first, the US reaching
Speaker 1: a grim milestone this week to be sure, coronavirus deaths
Speaker 1: topping one hundred and fifty thousand people. Well. Dr Bruce Farber,
Speaker 1: he's the chief of Infectious Diseases at north Well Health.
Speaker 1: He joined us to discuss where we stand with the
Speaker 1: virus and developments around a vaccine. We started off by
Speaker 1: talking about the shift in cases in the Northeast and
Speaker 1: the success in this part of the country at fighting
Speaker 1: COVID nineteen. It's dramatically better than it was obviously months ago,
Speaker 1: and it sounds like it's dramatically better than it is
Speaker 1: in many parts of the country. We're sort of in
Speaker 1: the eye of the hurricane in the sense that things
Speaker 1: are quiet. Our healthcare facilities have single digited ations of
Speaker 1: COVID patients, not zero, but generally one to three per day.
Speaker 1: The total hospital census is dramatically down to double digits. Uh.
Speaker 1: Many of the chronic patients who are still around, the
Speaker 1: severe long term survivors that are struggling to get off ventilators.
Speaker 1: Um and uh, the number of sick patients being admitted
Speaker 1: is dramatically lower. UM. So things are good. Elective surgery
Speaker 1: has restarted. People are screened regularly before coming into the hospital.
Speaker 1: When they come into the hospital for even treat and
Speaker 1: release things, they're often screened, and they're screened before any
Speaker 1: elective surgery. So things are good. They're certainly not normal,
Speaker 1: and I don't anticipate they will be for a long time,
Speaker 1: you know. Um. The New York Times has a map
Speaker 1: on its website that tracks the number of cases across
Speaker 1: the country, and the northeast New York, New Jersey, Connecticut,
Speaker 1: and New England are in the best position. Right were
Speaker 1: light yellow versus dark red for Florida and California. However,
Speaker 1: New Jersey's transmission rate, according to Bloomberg a story on
Speaker 1: Top worldwide, has risen to one point one four, a
Speaker 1: thirteen week high. Dr Farber, do you think it's inevitable
Speaker 1: that New York City will also see a rise? I
Speaker 1: think it's uh. I don't know inevitable, but it's certainly
Speaker 1: a risk, and I think we're preparing for it. It's
Speaker 1: hard to stay locked down number one, and it's hard
Speaker 1: to prevent people from reintroducing the virus from other parts
Speaker 1: of the country. And that's a reality. Although as you know,
Speaker 1: there's quarantines for what thirty one states and people coming
Speaker 1: in they are impossible to enforce, their difficult to monitor.
Speaker 1: And uh, we see a lot of people coming up
Speaker 1: from Florida, you know, who are nervous, and other states
Speaker 1: who have relatives and other people in the in the northeast,
Speaker 1: So you know, inevitable. I don't know, but it's certainly
Speaker 1: a risk and it's hard to imagine that, um there
Speaker 1: aren't going to be bumps along the way. Well, you know,
Speaker 1: it's interesting. Dr Farber and its Scarlet raised this as
Speaker 1: we were preparing for this segment very rightly. We were
Speaker 1: just talking about this party in Southampton. You know that
Speaker 1: the CEO of Goldman Sachs was the DJ four and
Speaker 1: you know, it's upset the Governor of New York pretty tremendously.
Speaker 1: There must be a lot of heightened interest, uh and
Speaker 1: concern on the part of public officials. How are the
Speaker 1: public officials feeling about kind of where we are and
Speaker 1: what are they most worried about. I think people let
Speaker 1: their guard down quick Tranckically. I'm always amazed how intelligent
Speaker 1: people know what they should be doing. But you know,
Speaker 1: a few months go by, they don't here as much,
Speaker 1: the hospitals aren't busy, and they let their guard down,
Speaker 1: and UM, it's not right. I agree with the governor
Speaker 1: in this instance. Um, you cannot have large parties. You know,
Speaker 1: you can't open up these bars. You can't have crowded
Speaker 1: restaurants and crowded parties and weddings and concerts. We're just
Speaker 1: not there yet, and I don't know when we're going
Speaker 1: to be there, but whenever that happens, there's going to
Speaker 1: be a clusters. We've certainly seen clusters just in a
Speaker 1: couple of local retirement parties and other birthday parties. Um,
Speaker 1: sometimes they're outside, but most often they're in enclosed spaces
Speaker 1: where people take off the mask to eat and drink. Okay,
Speaker 1: you can't have large parties, and a few people would
Speaker 1: compare school to partying, but can you have kids go
Speaker 1: back to school then? So, as you know, it's an
Speaker 1: extraordinary complicated issue. But I would summarize it by saying
Speaker 1: the safety of the schools is going to be predominantly
Speaker 1: dependent by how low the transmission rates are in the
Speaker 1: community in which the school is located. So clearly it's
Speaker 1: not going to be safe to open schools in southern
Speaker 1: Florida and Houston at the present time. In New York,
Speaker 1: that's a different story. I mean, it's as safe as
Speaker 1: it's going to be. At some point in time, we're
Speaker 1: gonna have to open schools. We're not gonna have closed
Speaker 1: schools for years and years and years. And no matter
Speaker 1: how often optimistic you are about a vaccine, I don't
Speaker 1: think there's any realistic way this thing is coming to
Speaker 1: an end within the next year, even if we have
Speaker 1: a good vaccine. So I think it is safe to
Speaker 1: carefully open schools, but it's not going to be fail proof,
Speaker 1: and there are going to be outbreaks. There are going
Speaker 1: to be little clusters. They just have to be whacked
Speaker 1: down when they occur. You have to have good protocols,
Speaker 1: you have to have careful monitoring, you have to available testing,
Speaker 1: and you have to be prepared that it's not going
Speaker 1: to be perfect. And that's north Well Health chief of
Speaker 1: Infectious Diseases Dr Bruce Farber. We always learned so much
Speaker 1: from him, in part because he was in one of
Speaker 1: the systems that had to deal with COVID nineteen early
Speaker 1: early on in this epidemic. We know that the New
Speaker 1: York area was such a hotspot, really the epicenter of
Speaker 1: this disease outbreak early on. When we think about March, April,
Speaker 1: and May, it's a very different world right now here
Speaker 1: in the Tri State area, but very different outside of
Speaker 1: this area as well. You're listening to Bloomberg business Week.
Speaker 1: Coming up. What veteran investor Alan patrick Off says he's
Speaker 1: doing in the third chapter of his life and why
Speaker 1: he says he's king startups, writing what he calls the
Speaker 1: Silver Tsunami. Yeah, it's an interesting one. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly from Bloomberg Radio. Well, today I'm bringing you some
Speaker 1: of the most important and informative conversations we had on
Speaker 1: our daily Bloomberg Business Week radio show. I was joined
Speaker 1: by Scarlett Food, Bloomberg Television and Radio anchor in Carol
Speaker 1: Master's absence, well famed investor Alan Patricoff. He's making his
Speaker 1: next big bet. He's made a lot of them over
Speaker 1: the years across the technology landscape. This new project, it's
Speaker 1: a little bit different. He's teaming up with entrepreneur and
Speaker 1: former Thrive Global president Abby Miller Levy. They're backing startups
Speaker 1: focused on aging consumers. They both joined us to discuss.
Speaker 1: In all the years I've been in this business, I've
Speaker 1: never seen a idea resonates so effectively. And it's just
Speaker 1: a great experience to his partnering with Abby, who is
Speaker 1: you know, been indoctrinated the wellness area for the last
Speaker 1: at least asked four or five years. And uh, I've
Speaker 1: been focused in this area for the last year, and
Speaker 1: together we're an incredible team. And I will tell you
Speaker 1: that the idea has just resonated based on all the
Speaker 1: media coverage and all the inbound inquiries we're getting today. Yeah,
Speaker 1: it's been very exciting. So Alan, take us back a
Speaker 1: little bit here, because you're talking about making investments in
Speaker 1: companies and financing products and services for an aging population
Speaker 1: and investing in these older entrepreneurs basically people over the
Speaker 1: age of what fifty five sixty? How did you come
Speaker 1: up with this idea? What happened to get you thinking
Speaker 1: about this opportunity? The idea came together because Abby has
Speaker 1: been working on this idea for a year, and I've
Speaker 1: been talking about it. She'd been doing something and she
Speaker 1: was preparing to launch. And through one of my sons
Speaker 1: who said, you know, Dad, you already get together with that.
Speaker 1: You knew both of us obviously, and he said, you're
Speaker 1: you're both focusing on the same area. And I guess
Speaker 1: you have to be honest and say, I got to
Speaker 1: it because my wife has Alzheimer's and has had it
Speaker 1: this is our eleventh year. So I've watched her slow deterioration.
Speaker 1: But I'm more so I've learned took the time to
Speaker 1: learn about the aging market and what the needs are,
Speaker 1: which are so different than what the millennial generation is
Speaker 1: and and you know, so much of our money is
Speaker 1: being spent a marketing dollars of being spent on the
Speaker 1: on the uh, younger generation of millennials, where the money
Speaker 1: the money is in the older generation who you know
Speaker 1: made it and uh and and now need all kinds
Speaker 1: of service. This was this whole concept came about pre COVID.
Speaker 1: COVID is just frosting on the cake. Frankly, Abby, you
Speaker 1: know your background, as Alan has so nicely teet it
Speaker 1: up for us is really just made for this. Tell
Speaker 1: us about the idea from your perspective and how you
Speaker 1: really locked in on this through your work at Thrive
Speaker 1: and soul Cycle among others. Well, thank you so much
Speaker 1: for having us today. We're we're thrilled to be with you. UM.
Speaker 1: You know, the the interesting thing for me as I
Speaker 1: looked at the space around UM aging an older adults,
Speaker 1: where there was so few startups, so few entrepreneurs who
Speaker 1: are designing new businesses for this consumer. And as Alan said,
Speaker 1: this consumer that is the fastest growing segment of our
Speaker 1: population UM, of our population, six of our network as
Speaker 1: a country UM, and less than ten percent of the
Speaker 1: marketing spend. So I was really excited to um, you know,
Speaker 1: think about how we can get more entrepreneurs interested in
Speaker 1: the older all this consumer because to date, I think
Speaker 1: there's very outdated images. And I'm sure you would agree
Speaker 1: on what it is to uh to age, particularly age
Speaker 1: in America, and Alan's the perfect example of at at age.
Speaker 1: Hope you don't mind Alan at age eight five. You know,
Speaker 1: Alan bike rides ten fifteen twenty miles a day, was
Speaker 1: in the ocean, you know, uh for for for a dip,
Speaker 1: just the other day, and you know, with prime time,
Speaker 1: this is his you know, next new venture, his next
Speaker 1: new entrepreneur venture. So I think for us, we're really
Speaker 1: excited about finding founders and entrepreneurs who are designing for
Speaker 1: a much more up to date view of what aging
Speaker 1: looks like. Yeah, and health, of course, health care and
Speaker 1: wellness is just one part of it. I've seen home builders,
Speaker 1: for instance, UM not just target the senior living population,
Speaker 1: but the active adult population, so folks who are over
Speaker 1: the age of fifty five but who are still very
Speaker 1: physically active, like Allen UM. Talk a little bit here
Speaker 1: about why there aren't other VC funds who are targeting
Speaker 1: the same demographic the way you guys are. I mean,
Speaker 1: this all makes great sense, and the numbers are behind you.
Speaker 1: You would think that more people would be doing this.
Speaker 1: You know, we'll be ask we get that question often,
Speaker 1: and I don't want to clean pride of ownership because
Speaker 1: a lot of vcs have had what they called a
Speaker 1: silver tsunami as a bullet point on their investment teams.
Speaker 1: I mean, it's hard to talk to any health or
Speaker 1: wellness related UH venture capital fund that isn't eyeing this
Speaker 1: population because to your point on the data. I think
Speaker 1: what's prevented UM having more involvement in the space is
Speaker 1: you know, first or rather what I think is one
Speaker 1: of our advantages is really being specialized, so for you know,
Speaker 1: for us to really understand, you know, how to reach
Speaker 1: this consumer both through B two B as well as
Speaker 1: B to see UM, how to UM you know, look
Speaker 1: at this consumer, you know in their headergy to genety.
Speaker 1: Since a very diverse audience UM, I think is something
Speaker 1: that is a real advantage for prime time UM. And
Speaker 1: at the same time, UM, you know, it's not really
Speaker 1: the VCS faults at the same time, because there actually
Speaker 1: haven't been as many startups focusing on this audience because
Speaker 1: if the majority of founders are people in their twenties
Speaker 1: and thirties, they're typically solving for the user needs that
Speaker 1: are supposest to them. And so what we're seeing though,
Speaker 1: and it's been interesting, you know, I've been tracking this
Speaker 1: this segment for you know, at least a year now,
Speaker 1: and I've been working on this idea for a few
Speaker 1: of these for a few years. But really since November
Speaker 1: when Allen and I met kind of teamed up UM,
Speaker 1: we've seen really a steady increase in the number of
Speaker 1: business plans and an early stage businesses that have come
Speaker 1: across our our inboxes and it's only accelerated with COVID.
Speaker 1: And I think part of that is that more founders. Well,
Speaker 1: first of all, to take a little what the COVID
Speaker 1: COVID impacts had to to to dramatic sides and both
Speaker 1: supply and demand. Abbie, let me start with you. We
Speaker 1: were talking earlier about the opportunities here. Have you made
Speaker 1: the investment yet in this fund? Absolutely? So, you know,
Speaker 1: this is uh something. While we we just closed our
Speaker 1: first closing of the fund, it is still open until
Speaker 1: October for strategic investors. But um, we have made foreign
Speaker 1: investments to date UM and are about to close on
Speaker 1: two additional ones. And I think it's really a sign
Speaker 1: of just the momentum in the space. While we're specialized
Speaker 1: and focused on the older Delta's consumer, we're pretty diversified
Speaker 1: from the spector perspective. So our investments we've made to
Speaker 1: date are in financial services, telemedicine, UM, e commerce and media,
Speaker 1: so you know, really across the board. UM. You know,
Speaker 1: as we look at opportunities for founders, and that's entrepreneur
Speaker 1: and former Thrive Global president Abby Miller Levy, joined by
Speaker 1: veteran investor Alan patrickof well known inventure capital and political circles.
Speaker 1: I'm fascinated by what they're doing, in part because you
Speaker 1: gotta watch someone like Alan Patrick off over decades and
Speaker 1: decades he has not just seen but participated in the
Speaker 1: growth of venture capital, betting on some very well known startups.
Speaker 1: And now he's looking at a new market and that
Speaker 1: bears some attention. You're listening to Bloomberg business Week. Coming up,
Speaker 1: how the pandemic is impacting the travel industry. We'll hear
Speaker 1: from Travaco CEO Axel Helfa. This is Bloomberg. This is
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly from
Speaker 1: Bloomberg Radio. What does that bring you? Some of the
Speaker 1: most important and informative conversations I had along with Scarlet
Speaker 1: Food on our daily Bloomberg Business Week radio show. This week,
Speaker 1: Carol Masser is on vacation. Will travel, Speaking of vacation
Speaker 1: continues to be, unfortunately one of the industry's hit hardest
Speaker 1: by the pandemic. International travel, of course, is one of
Speaker 1: the areas that is suffering mightily. Will Travago CEO Axel Helfa.
Speaker 1: He was back with us. He joined us from Germany
Speaker 1: to talk about why, and we started by asking him
Speaker 1: about his backyard in Germany is unfortunately significantly better than
Speaker 1: what we've seen last earnings. Um so UM, there is
Speaker 1: quite a bit of travel activity. The health situation is
Speaker 1: relatively speaking stable. And just to give you give you
Speaker 1: an idea, if we compare the travel um environment in Germany. UM,
Speaker 1: all leisure nature destinations like beaches and mountains are getting
Speaker 1: close to last year's volume, whereas city trips and international
Speaker 1: are around fifty so still significantly down. That is incredible.
Speaker 1: I just think about how many people here. Um. Jason's
Speaker 1: working from home. So many of our colleagues are working
Speaker 1: from home. No one's taken it any time off in
Speaker 1: the last four or five months. Because you're working from home.
Speaker 1: You want to stay productive. You're just grateful to have
Speaker 1: a job at this point, Axel, who is taking these vacations?
Speaker 1: Are companies m granting vacations the way they were every year? Yeah,
Speaker 1: I mean people are taking vocations, but and and in
Speaker 1: particularly families are obviously desperate and the difficult situation to
Speaker 1: also get some rest in the summer, which is also
Speaker 1: something that you see across Europe, but not to the
Speaker 1: same extent than in Germany. And I think to be honest,
Speaker 1: in particular, in a situation where a lot of people
Speaker 1: are working from home with all the stress that is
Speaker 1: related to that, it is important to take a break.
Speaker 1: And we, for example UM have have basically introduced a
Speaker 1: mandatory vocation of one week in August for our employees
Speaker 1: to make sure that they do get some rest and
Speaker 1: also do take some time off. Well. I wondered about
Speaker 1: that actual sort of the running of the company, because
Speaker 1: obviously we talked to you so much about sort of
Speaker 1: what you're seeing in terms of trends and and travel
Speaker 1: on on the parts of so many people around the world.
Speaker 1: But I do wonder, like what the challenges have been
Speaker 1: for you running your operation there. I that's difficult. Way
Speaker 1: we have to start. So the in in March, basically
Speaker 1: our revenue collapsed too close to zero in April and
Speaker 1: UM at that point in time, clearly, UM, I mean
Speaker 1: you're initially obviously in paralysis. So what is going on? UM,
Speaker 1: what what shall we do? And UM The thought that
Speaker 1: that it was really helpful to us was that we
Speaker 1: very early on accepted that the traveler would disappear or
Speaker 1: at least temporarily, and said, okay, how will the world
Speaker 1: look in the future, And we we define three phases
Speaker 1: of recovery, no traveling, some traveling with the restrictions, which
Speaker 1: is basically where we are right now, and then the
Speaker 1: new normal, whatever that will look like, and work backwards
Speaker 1: and said, okay, what do we need to do for
Speaker 1: the traveler, for our customer and UM and what do
Speaker 1: we need to prepare for And so despite the fact
Speaker 1: that the timing of all these phases is completely uncertain,
Speaker 1: it gives you a stability and also a clear focus
Speaker 1: and UH and focus and structure is what in these
Speaker 1: uncertain times is extremely helpful. UM to give guidance and
Speaker 1: also also emotional support, to be honest to all of us.
Speaker 1: That's a really great way of breaking it down. And
Speaker 1: I want to pick up down that point. If we're
Speaker 1: in the some travel phase right now and eventually we'll
Speaker 1: get to the new normal, what are you seeing in
Speaker 1: the some travel phase now that will become part of
Speaker 1: the new normal. Will people avoid cities, Will people avoid
Speaker 1: the United States? Will they choose to go on vacations
Speaker 1: that are local and reached by car as opposed to
Speaker 1: by plane or by boat. So what we do do
Speaker 1: see right now and and most pronounced obviously in Germany
Speaker 1: is there the situation is very stable, but pretty much
Speaker 1: in most of the markets, UM is that that the
Speaker 1: first destination and the first vacation that that people and
Speaker 1: travelers want to do is is really to the nature beaches,
Speaker 1: normal summer vacation destinations and just get a break and UM.
Speaker 1: So that that's something clearly a trend and they're What
Speaker 1: you also can see is that destinations that can reach
Speaker 1: by car and even more importantly left by car in
Speaker 1: case something would happen UM are clearly favored by many
Speaker 1: many travelers. The second thing that you can observe is
Speaker 1: that apartments and the vacation houses are more popular than
Speaker 1: before because a certain segment of travelers is preferring to
Speaker 1: be really on their own on vacation. And in the
Speaker 1: US and particularly what we've seen is that there is
Speaker 1: a lot more are um um interstate travel UM so
Speaker 1: going to closer destinations that are better known and that
Speaker 1: just feel safer. And I do think and we overall
Speaker 1: think that there's trend. Two, more local travel will continue
Speaker 1: for the foreseeable future, whether it will remain and stay
Speaker 1: for the very long term, I think that's too early
Speaker 1: to be to be seen. But International Longhould Travel, I
Speaker 1: think will be will be muted for um for quite
Speaker 1: some time. And that's Travago CEO Axel half A joining
Speaker 1: Scarlett Food and Me from Germany on the heels of
Speaker 1: his earnings, giving us a sense of how travel looks
Speaker 1: in different parts of the world. And some themes are
Speaker 1: emerging here as we look at when people start traveling
Speaker 1: and where they're going to go, and the answer is
Speaker 1: they're getting back slowly and they're staying pretty close to home.
Speaker 1: You're listening to Bloomberg Business Week. We talked to someone
Speaker 1: else who's very familiar with the travel business. He's the
Speaker 1: former chief ethics officer of ARABBNB. But we were talking
Speaker 1: about home sharing. We were talking about integrity. That's coming
Speaker 1: up next. This is Rupert. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Jason Kelly from Bloomberg Radio. Well
Speaker 1: today and bringing you some of the most important and
Speaker 1: informative conversations from our daily radio show this week. And
Speaker 1: we talked a little bit about travel with Axel Hetha
Speaker 1: earlier in the show, just a few minutes ago. So
Speaker 1: another big name in the travel business, certainly one that
Speaker 1: has become very popular over the past few years, is Airbnb,
Speaker 1: the famous home sharing service, the unicorn that everyone's waiting
Speaker 1: to go public. We caught up Scarlett Foo and I
Speaker 1: did with the former top lawyer at Airbnb is a
Speaker 1: guy named Rob Chestnut. He also was a top lawyer
Speaker 1: at eBay. He's a former federal prosecutor, and we weren't
Speaker 1: talking to him about his jobs at any of those places,
Speaker 1: at least not directly. We're talking about a new book
Speaker 1: that he's put out. It's called Intentional int Aegrity, How
Speaker 1: smart companies can lead an ethical revolution. And this conversation,
Speaker 1: interestingly happened during a week where big tech executives were
Speaker 1: on Capitol Hill, the leaders of the biggest technology companies
Speaker 1: in the world virtually zooming in or webexing into Capitol
Speaker 1: Hill to face a lot of scrutiny from lawmakers about
Speaker 1: their role in society, their lack of competition, and what
Speaker 1: they've been doing along the way. Amid a lot of investigations,
Speaker 1: a lot of big, almost existential questions about the role
Speaker 1: of technology in our lives. One of the core issues
Speaker 1: is what effect all of this technology is having on
Speaker 1: us as humans, but also how these companies are run,
Speaker 1: and that was very top of mind for Rob Chestnut.
Speaker 1: I think everyone needs a like a north star in life,
Speaker 1: a purpose and sort of a commitment to live with
Speaker 1: integrity as they can best perceive it. But people also,
Speaker 1: I think, need to have some self awareness and listen
Speaker 1: to people around them. Uh, and they willing to adjust
Speaker 1: their views as they learn more information. Uh. You know,
Speaker 1: it seems like we do a lot of partisan thinking
Speaker 1: in this country where people kind of get stuck on
Speaker 1: one side and just feel like they're dogged and committing
Speaker 1: to stick by it no matter what. And that's not
Speaker 1: going to get us a good place. So tell us
Speaker 1: about the sort of the foundation of this book, because
Speaker 1: I'm fascinated by your background. You are a federal prosecutor.
Speaker 1: You went to work for eBay, I believe in ultimately
Speaker 1: at Airbnb. What led you? What? What was sort of
Speaker 1: the genesis of the spark? Well, I've been I've been
Speaker 1: dealing with rules. I think my whole life as a
Speaker 1: photo prosecutor, I prosecuted espionage cases. Uh, you know, which
Speaker 1: I think it shows about as much lack of integrity
Speaker 1: as you can you can ever find in a work. Kames, right,
Speaker 1: you were involved in that league, James, he was one
Speaker 1: of the cases that I prosecuted. When I was in
Speaker 1: nor of the Virginia, I bet an eBay. I started
Speaker 1: their trust and safety department. All the rules around what
Speaker 1: you can sell on eBay, you know, can you sell
Speaker 1: guns and alcohol and tobacco products and drugs and the like.
Speaker 1: So I'm the dealing with the rules my whole lifetime.
Speaker 1: But uh, you know, just the last three or four years,
Speaker 1: I've really gotten a sense that the world is changing. Uh.
Speaker 1: People are far faster now to call out bad conduct
Speaker 1: by leaders and my companies. I refer to it, you know,
Speaker 1: as an integrity revolution in the book. Uh, people are
Speaker 1: really desiring when they go to work to have a
Speaker 1: positive impact in the world. And if they perceived the
Speaker 1: values of their company to not be aligned with their
Speaker 1: own values. In the past, they were quiet. Now they're
Speaker 1: communicating with each other on blind and Slack, and they're
Speaker 1: blogging about it, they're tweeting about it. They're even organizing walkouts.
Speaker 1: And I think it's not just employees it's customers. Now
Speaker 1: we are in an age of conscious consumerism where you know, consumers,
Speaker 1: if they don't like the way that a particular company operates,
Speaker 1: they're going to take their money and they're gonna move
Speaker 1: it somewhere else faster than ever before. So the generalis
Speaker 1: for the book, I think is it was really recognizing
Speaker 1: the sea change and this heightened expectation that the world's
Speaker 1: putting on leaders and on companies, and there's an effort
Speaker 1: to try to help companies adjust in this new world
Speaker 1: so that they can really take advantage of it and
Speaker 1: led it as opposed to fighting the todd and ultimately
Speaker 1: really hurting their brands. You know, Rob, let's talk a
Speaker 1: little bit about the tech world if we can. You've
Speaker 1: been a part of it, uh in many ways. And
Speaker 1: as Scarlett pointed out, and as we talked about earlier,
Speaker 1: you know, this is a day where we had some
Speaker 1: very well known tech executives on Capitol Hill. It does
Speaker 1: virtually that is uh some cases not being able to
Speaker 1: ironically figure out the technology to testify. But we'll set
Speaker 1: that aside for a second. Um, how big of the
Speaker 1: deal is it or how big a deal should we
Speaker 1: make of it? That we have some big existential questions
Speaker 1: around the role of technology in our lives and the
Speaker 1: behavior of big tech. Well, I remember back when tech
Speaker 1: was the darling. Don't you know, of course that companies
Speaker 1: they were going to save the world, right and the
Speaker 1: boy things have changed and I think, uh a lot
Speaker 1: of that I think has been their own doing in
Speaker 1: In a number of the large tech companies, I think
Speaker 1: it's a singular focus on making money, which is of
Speaker 1: course critical, but you've got to be thinking about other stakeholders.
Speaker 1: You've got to be thinking about your employees, you've gotta
Speaker 1: be thinking about the communities where you do business. And
Speaker 1: I think and that's on that scorecard and ab these
Speaker 1: big companies haven't done as well, and that has caused
Speaker 1: the world to to take a hard look at them.
Speaker 1: The microscope is out and I think we need to
Speaker 1: see them get ahead of the curve. I think Microsoft,
Speaker 1: for example, is doing a pretty good job of this,
Speaker 1: actually recognizing that the world needs more from big tech.
Speaker 1: They need big tech to step up and salves some
Speaker 1: big problems instead of solely focusing on that quarterly that
Speaker 1: quarterly reports think about you know, I have to look
Speaker 1: at Facebook, so they've got to deal with misinformation and
Speaker 1: hate on their platform. I think they've got to own
Speaker 1: up to it and their failure to do it, and
Speaker 1: I think they've been kind of stubborn about this is
Speaker 1: really hurting Bright. How much of that do you think
Speaker 1: is tied to the fact that a lot of these
Speaker 1: big tech companies are still fairly young companies run by
Speaker 1: their founders. You bring up Microsoft, and that's, you know,
Speaker 1: at this point, an old company. Uh. The guy who
Speaker 1: runs at such a Nodela is not Bill Gates. Um,
Speaker 1: he's a hired hand. Essentially, he's a professional manager. Whereas
Speaker 1: Facebook is run by Mark Zuckerberg, Amazon is run by
Speaker 1: Jeff Bezos. They are still in the mindset of building
Speaker 1: their company, building market share, uh, growing as fast as
Speaker 1: they can, as opposed to understanding that they are behemoths. Now.
Speaker 1: I think some of it may be the lack of experience.
Speaker 1: Someone like such an develop perhaps has been around a
Speaker 1: little longer sort of understands this idea of building a
Speaker 1: loved brand for an infinite time hase. And but you know,
Speaker 1: look at Brian Schusky and Airbnb. I think the Airbnb
Speaker 1: has done pretty well overall in recognizing that there's something
Speaker 1: bigger than just getting big. That the way that you
Speaker 1: do it and the values that you demonstrate while you're
Speaker 1: going big, uh, make a huge difference. A lot of
Speaker 1: it is who you listen to. I think that some
Speaker 1: of the younger tech executives, it isn't the fact that
Speaker 1: they're young and inexperienced as much as are they really
Speaker 1: demonstrating an open mind, a curious learning mindset to listen
Speaker 1: to people who are outside of their type inner circle
Speaker 1: and learn from them. I do think Facebook could do
Speaker 1: a better job in this regard. And Jason, that's why
Speaker 1: diversity and inclusion is so important, to make sure that
Speaker 1: you don't have the same kinds of people in your
Speaker 1: company that you talked to all day long. Totally, I
Speaker 1: was that's exactly where I was going to go next,
Speaker 1: and Rob, I do wonder along those exact lines. It
Speaker 1: feels like these dual crises, the pandemic and the virtual
Speaker 1: world we're living in, you know, zoom to zoom or
Speaker 1: however you're communicating with people, as well as a long
Speaker 1: overdue reckoning. When it comes to racial inequality, it feels
Speaker 1: like it's laid there a lot at all sorts of companies,
Speaker 1: big and small. How do we take advantage of that
Speaker 1: and and maybe reset ourselves well, I think we need
Speaker 1: to start with an understanding that we all come to
Speaker 1: the world with our own specific set of goggles and
Speaker 1: lens as we see the world through our own lives
Speaker 1: and our own experiences. But what we sometimes fail to
Speaker 1: understand is that there are a whole broad set of
Speaker 1: experiences out there that diversity can really help us learn from.
Speaker 1: I'll take Airbnb. You know, when the Airbnb face of
Speaker 1: discrimination crisis several years ago on its platform. I think
Speaker 1: part of those caused by the fact that there wasn't
Speaker 1: enough diversity in the leadership of the company back then,
Speaker 1: people who would actually experienced discrimination who could have helped,
Speaker 1: I think, be a little more proactive and getting and
Speaker 1: getting on top of these sorts of issues. Diversity brings
Speaker 1: the power of human experience beyond what any one individual
Speaker 1: can do. I love walking into a room and seeing
Speaker 1: people that look different than I do, because it means
Speaker 1: that we're going to get some different perspectives that I
Speaker 1: couldn't begin to understand. But those are critical, I think
Speaker 1: in dealing with dealing with crisis and dealing with the
Speaker 1: racial injustice, you've got to have that understanding inside your
Speaker 1: company at the leadership level. Rob, you talked about stakeholders
Speaker 1: earlier on, and that brought me to the Business Roundtables. Uh,
Speaker 1: definition of a corporation or purpose of a corporation. Last
Speaker 1: summer they came out they revised their mission statement, essentially
Speaker 1: saying that it's not just for the shareholders right there,
Speaker 1: They're not just committing to shareholders, are committing to their employees,
Speaker 1: to customers, two suppliers, to the communities as well. How
Speaker 1: did you interpret that because it was sufficiently vague that
Speaker 1: one can walk away with the interpretation that they want. Well,
Speaker 1: I think it was a powerful move. Uh. Well, we're
Speaker 1: talking about abandoning now decades of thinking about the purpose
Speaker 1: of a company and why it exists. And I think
Speaker 1: the fact that the Business round Table did this was
Speaker 1: a big step. But you're right, there's still a lot.
Speaker 1: There's still a lot to interpret. And that was Rob Chestnut,
Speaker 1: the former chief ethics officer at Airbnb, that company's top lawyer.
Speaker 1: He worked at eBay. He also was a very successful
Speaker 1: federal prosecutor, so he understands not just ethics but integrity,
Speaker 1: and that led him to write this book. It's called
Speaker 1: intentional integrity. How smart companies can lead in ethical revolution.
Speaker 1: Fascinating to get some time with him this week and
Speaker 1: at this moment where we as a country are facing
Speaker 1: dueling crises and there are a lot of big questions
Speaker 1: about the role of companies as we think about where
Speaker 1: we work, what we buy, and who we buy it
Speaker 1: from in an entirely different light. Well plenty coming up
Speaker 1: in our next hour. Americans, they aren't making as many
Speaker 1: babies during the pandemic, contrary to what people might have
Speaker 1: thought about a pandemic baby boom. And that's bad for
Speaker 1: the economy, so says Peter Coy. It's the cover story
Speaker 1: this week in Bloomberg Business Week, plus Georgetown University professor
Speaker 1: Marcia Chaplin on her book franchise, The Golden Arches in
Speaker 1: Black America. This is Bloomberg. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Jason Kelly from Bloomberg Radio. Hello,
Speaker 1: I'm Jason Kelly. Put ahead for you in this hour
Speaker 1: of the weekend edition of Bloomberg Business Week, including Georgetown
Speaker 1: University professor my alma mater. Proud to have her on
Speaker 1: the show, Marcia Chatelaine. She's got a new book. It's
Speaker 1: called Franchise The Golden Arches in Black America. Incredibly timely
Speaker 1: a look at one of the best known companies in
Speaker 1: the world and certainly in the United States, McDonald's its
Speaker 1: role in the struggle for racial equality. Plus, we'll hear
Speaker 1: from Stanford Graduate School of Business Dean Jonathan Levin and
Speaker 1: Associate Dean Sarah Soul about that same issue. Stanford it's
Speaker 1: the number one business school according to Bloomberg Business Week.
Speaker 1: Carol Master of my partner and I have been there
Speaker 1: the last couple of years to talk about what they're doing. Well,
Speaker 1: they've got a new plan as it relates to racial equity,
Speaker 1: and so we give Carol Master. You're not hearing here
Speaker 1: this week, she's on vacation, but you will hear Scarlet
Speaker 1: Food throughout these conversations. She was nice enough to join
Speaker 1: me throughout the week on our daily Bloomberg Business Week
Speaker 1: radio show. Let's begin this hour with our Business Week
Speaker 1: cover story. Economics editor Peter coy writes, I'm quoting here
Speaker 1: pandas and white rhinos are the only creatures that are
Speaker 1: unsuccessful at Maybean Captivity. Yep, he's talking about human beings
Speaker 1: he's talking about us as Americans. The US could see
Speaker 1: five hundred thousand fewer births next year. That, of course,
Speaker 1: will have strong repercussions long after the pandemic is over,
Speaker 1: especially on the economy. Peter and the editor of the the magazine,
Speaker 1: Joe Weber, joined us with this story. Peter and I
Speaker 1: started talking about this, Uh. That brought a sense of
Speaker 1: demographics um earlier in the year. Uh. And then you know,
Speaker 1: we started this lockdown thing, and we kept talking about
Speaker 1: it because I was like, man, there might be a
Speaker 1: lot of babies that come out of this, and so
Speaker 1: we kind of stuck with that. And then it sort
Speaker 1: of went the other way, and what we expected to
Speaker 1: be a baby boom ended up being more of a
Speaker 1: baby bust. Uh. So we called, um, you know, sex
Speaker 1: columnists slash um economists Peter Koy and asked him to
Speaker 1: do that. UM. So, Peter, can you walk us through
Speaker 1: what what you what you were able to discover as
Speaker 1: you were reporting the story. Yeah, I mean, as you said,
Speaker 1: you didn't get a chance to put a lot of
Speaker 1: babies on the cover. Um. But I think I came
Speaker 1: out of okay anyway, because we we came up with
Speaker 1: a good storyline, which is not only is there a
Speaker 1: deep line in uh fertilities fewer pregnancies, but it seems
Speaker 1: as if it's probably not going to be made up
Speaker 1: after we're out of the recession the pandemic, so that
Speaker 1: the consequences will be long lasting. You know, think about it.
Speaker 1: Babies who are not born in are people who will
Speaker 1: not be alive in the twenty second century. I mean,
Speaker 1: this is a This is in a way. In some ways,
Speaker 1: the number of missing people from the population because of
Speaker 1: the decline in births is bigger the number of missing
Speaker 1: people from the population from the deaths from COVID and
Speaker 1: and those numbers are actually worth just kind of dwelling
Speaker 1: on for a second, because we're up to like one
Speaker 1: fifty deaths in the US now, but it could be
Speaker 1: as number of a number as high as five hundred
Speaker 1: thousand babies that are not born next year at least bookings. Okay,
Speaker 1: so some staggering numbers there, But when you think about it,
Speaker 1: when you take a step back, policy is not aligned
Speaker 1: with having kids. They are damn expensive and sorry for
Speaker 1: for just swearing there, but you are on your own
Speaker 1: to find childcare, education, expensive healthcare. I mean, people when
Speaker 1: they get healthcare, they don't want to leave it. Then
Speaker 1: of course there is a motherhood penalty and fatherhood penalty,
Speaker 1: and very rarely do see middle cost families with more
Speaker 1: than three kids, um, Peter. Was the birth rate rising
Speaker 1: or was it holding up pretty well? Before the pandemic?
Speaker 1: The US had been known for a long time for
Speaker 1: having an unusually high fertility rate compared to other wealthy nations.
Speaker 1: As recently as two thousand seven, it was two point
Speaker 1: one children per women woman, which is replacement rate that
Speaker 1: if you if you have that rate, the US population
Speaker 1: be stable over time. But it started falling in the
Speaker 1: last recession, remember that one yeah, Um, And then it
Speaker 1: didn't recover afterwards as people had expected. It's down to
Speaker 1: under one point seven in who knows it's going to
Speaker 1: go even lower now. So it's not as low as
Speaker 1: that of say Japan, South Korea, Western Europe, but it's
Speaker 1: it's definitely below replacement rate. And now this comes along
Speaker 1: and then that magic number Peter for for sort of
Speaker 1: a population is two point one um. And it was
Speaker 1: to walk us through why that number matters so much
Speaker 1: where the US is now and what implications that has
Speaker 1: for growth. Well, just think about it, um each um couple.
Speaker 1: Just imagine you have a couple, they produced two children
Speaker 1: to replace themselves. The reason it has to be more
Speaker 1: than two is that not everybody will survive to adulthood
Speaker 1: and have children of their own. So it's a little
Speaker 1: over two. And as I said, we're down at around
Speaker 1: one point seven. Now in the US, you have countries
Speaker 1: like Russia, I mentioned South Korea and so on, they're
Speaker 1: down to one point three area. Actually Rush came back
Speaker 1: a little bit, but yeah, um, one point three. It
Speaker 1: means that your population is going to be falling, if
Speaker 1: it's not already falling well. And the employment picture, I mean,
Speaker 1: you mentioned this in your story, and I think this
Speaker 1: is an interesting thing. And I mean this is more
Speaker 1: I guess sociological, maybe psychological. I mean, there are people
Speaker 1: who are just experiencing a high level of unemployment, anxiety,
Speaker 1: all sorts of things, you know, worried about their health.
Speaker 1: People just like I don't want to have sex. What
Speaker 1: they're doing it with protection? Who knows, let's not. I
Speaker 1: deliberately didn't get into that. And then Jason goes and
Speaker 1: brings it off, and that's Spoomberg. Business Week Economics editor
Speaker 1: Peter Coy and the editor of the magazine, Joel Webber.
Speaker 1: And one of the things I loved about this interview
Speaker 1: you can actually hear Peter Coy blushing a little bit
Speaker 1: when I bring up the idea of people actually having sex.
Speaker 1: So uh, that was a fun moment for me across
Speaker 1: the week, but a really important story to understand the
Speaker 1: economic implications of where we are. Maybe an unexpected one captivity.
Speaker 1: It isn't so good for reproduction. It turns out you're
Speaker 1: listening to Bloomberg Business Week. Coming up, our next guest
Speaker 1: reveals the untold history of how fast food became one
Speaker 1: of the greatest generators of black wealth in America. We'll
Speaker 1: hear from Georgetown professor Marcia Chatwin. This is Bloomberg. This
Speaker 1: is Bloomberg Business Week with Carol Masser and Jason Kelly
Speaker 1: from Bloomberg Radio. Well, today I bring you some of
Speaker 1: the most important and informative conversations we had on our
Speaker 1: daily radio show this week. Carol Masser, my partner was
Speaker 1: on vacation, but Scarlet Food gamely filled in throughout the
Speaker 1: week on Bloomberg Business Week, And I want to bring
Speaker 1: you our conversation with Georgetown professor and author of franchise
Speaker 1: The Golden Arches in Black America talking about Marcia Chatwin.
Speaker 1: This is an incredibly compelling book, in part because it
Speaker 1: breaks down at an incredibly timely moment, the complicated and
Speaker 1: intimate relationship between Black America and McDonald's. Listening, the story
Speaker 1: of McDonald's and Black America starts in ninety eight after
Speaker 1: the assassination of Dr Martin Luther King Jr. And essentially,
Speaker 1: at this moment, like our moment today, people were really
Speaker 1: reflective about the various pressures that were happening in predominantly
Speaker 1: African American communities that had been cut off from resources.
Speaker 1: And in addition to many of the concerns of communities,
Speaker 1: people said that they would like to see more black
Speaker 1: owned businesses. And this was a moment in which a
Speaker 1: lot of corporations were shifting in that direction. And so
Speaker 1: McDonald was a leader in the sense in recruiting African
Speaker 1: American franchise owners to go into African American communities and
Speaker 1: to build McDonald's the brand, as well as use their
Speaker 1: restaurants as a way to reinvest in communities. And so
Speaker 1: how did it come about? I mean, because there must
Speaker 1: have been some sort of candidly, you know, just knowing
Speaker 1: a little bit about the history some tricky mechanics and
Speaker 1: politics around that at the time, especially in the sixties,
Speaker 1: Dr Chaplin help us understand those right. Is a really
Speaker 1: pivotal moment because the mainstream civil rights movement um is
Speaker 1: trying to decide what direction it should take, and having
Speaker 1: having seen so many legislative victories in the nineteen sixties
Speaker 1: but not actually seeing this translate into economic opportunity, better schools,
Speaker 1: better access to housing, a number of leaders and civil
Speaker 1: rights movement really wanted to work with business and corporations
Speaker 1: to bring in these opportunities. In addition to that, many
Speaker 1: white franchise owners no longer wanted to do business in
Speaker 1: group in communities that were becoming increasingly black or were
Speaker 1: segregated and all black. And so you see this convergence
Speaker 1: of an economic white flight as well as the support
Speaker 1: of the civil rights movement. And then you have President
Speaker 1: Richard Nixon who is investing in this idea of black
Speaker 1: capitalism where he's putting money in business. But one of
Speaker 1: the things that I think is important to note is
Speaker 1: that none of these approaches necessarily get at the root
Speaker 1: causes of structural inequality. But you start to see business
Speaker 1: becoming part of the conversation. Business becomes part of the conversation,
Speaker 1: and it becomes part of the community. You write about
Speaker 1: how these black owned franchises of McDonald's shape the community
Speaker 1: around them. They it goes beyond providing jobs. They play
Speaker 1: a leading cultural role. Talk a little bit about that, right, So,
Speaker 1: African American franchise owners take on the role that black
Speaker 1: business owners have historically taken on, and that means that
Speaker 1: they're providing other resources and communities because of the color
Speaker 1: line in government services and opportunities. So they're underwriting youth
Speaker 1: programs at schools, They're making sure that first jobs are
Speaker 1: actually being created in the communities. They are sponsoring things
Speaker 1: like the early Martin Luther King Jr. Holiday. So you
Speaker 1: start to see their influence not just in the business sector,
Speaker 1: but for historically black colleges and universities for the creation
Speaker 1: of the All American basketball team. And so these black
Speaker 1: franchise owners become incredibly visible and incredibly popular in these
Speaker 1: communities because, as I say in my book, these communities
Speaker 1: are cut off from federal resources and other types of
Speaker 1: opportunities in order to have their needs met. So, Dr Chaplin,
Speaker 1: how far does it extend beyond McDonald's, because we do
Speaker 1: know that today in the gap in wealth between Black
Speaker 1: Americans and white Americans is massive. Why didn't this catch
Speaker 1: on more beyond McDonald's. Well, I think that the reality
Speaker 1: is is that you can't solve robust and complex and
Speaker 1: deep social problems simply by um having business lead the
Speaker 1: way that we have a public sphere, we have public policy,
Speaker 1: we have public resources like taxes in order to do that.
Speaker 1: But what it does reveal is that this moment that
Speaker 1: McDonald's is in right now saying that they stand for
Speaker 1: black lives donating to the c P, it's not new.
Speaker 1: We have a fifty year plus history of McDonald's inserting
Speaker 1: itself into the civil rights struggles so that they can
Speaker 1: appear that they're on the right side of history. But
Speaker 1: in this early period when McDonald's was extending the opportunity
Speaker 1: for franchising, people did not have the full understanding of
Speaker 1: the consequences of fast food on the American diet, as
Speaker 1: well as the concerns about wages in the industry. Today,
Speaker 1: supporting black lives via v McDonald's has more to do
Speaker 1: with the quality of work and benefits and providing for
Speaker 1: its people than some of these other solutions from the past.
Speaker 1: Very well said, and I'm struck also by the parallels
Speaker 1: to today, this idea that um companies, the private sector
Speaker 1: kind of pick up the sl when the government, the
Speaker 1: public government is unwilling or can't provide a lot of
Speaker 1: the funding. How did you come to writing this book, Well,
Speaker 1: I was concerned about that very issue. I think that
Speaker 1: this book is a story about how these relationships are complicated.
Speaker 1: On one hand, we can't say that we're concerned about
Speaker 1: the gap in nutrition and help outcomes and access in
Speaker 1: African American communities without understanding the history of how fast
Speaker 1: food became such a presence in certain parts of our country.
Speaker 1: And we can't say that it's simply a matter of
Speaker 1: giving people food choices and then they'll follow without understanding
Speaker 1: the other kinds of relationships that businesses have with communities.
Speaker 1: And we also have to remember that if we want
Speaker 1: to solve problems, we have to invest in the public good,
Speaker 1: the public sphere, and we can't allow corporations to lead
Speaker 1: the way. One of the things that I was struck
Speaker 1: I had the opportunity to serve on a panel with
Speaker 1: Congressman Lewis, and he described the moment after teen election
Speaker 1: as some of the most challenging and trying of his life,
Speaker 1: which is an incredibly um poignant thing to hear from
Speaker 1: someone who lived through so many times of turmoil. But
Speaker 1: I think that at both moments sixty eight and today,
Speaker 1: we have a growing consciousness among a larger group of
Speaker 1: people about the problems of racial injustice. And that's Georgetown
Speaker 1: professor Hoya Sasa and author of franchise The Golden Arches
Speaker 1: in Black America. Marcia Chaplin, fascinated by this book, had
Speaker 1: tipped to my co host this week's Scarlet Food for
Speaker 1: bringing this book to our attention. And man, this book
Speaker 1: could not be more timely as we start to understand
Speaker 1: the economic intricacies of racial injustice that has lasted centuries
Speaker 1: in this country. A really important look and a really
Speaker 1: important book. You're listening to Bloomberg Business Week coming up,
Speaker 1: speaking of racial inequality and efforts to combat at it.
Speaker 1: How Stanford is working on a new plan to increase
Speaker 1: racial equity on its campus. It's the number one business
Speaker 1: school according to Bloomberg Business Week. We'll hear from Stanford
Speaker 1: Graduate School Business Dean Jonathan Levin and Associate Dean Sarah Soul.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Jason Kelly from Bloomberg Radio. Well today and
Speaker 1: bring you some most important and informative conversations from our
Speaker 1: daily Bloomberg Business Week radio show. Scarlett Foo was joining
Speaker 1: me throughout the week. Carol Master is on vacation. Well,
Speaker 1: our next guest hail from the number one business school
Speaker 1: in America, according to none other than Bloomberg. Sweet Carol
Speaker 1: Master and I have been there the last couple of
Speaker 1: years to celebrate Stanford's Graduate School of Business, so we
Speaker 1: were really glad to welcome back the Dean, Jonathan Levin,
Speaker 1: as well as Associate Dean Sarah Soul. They've both been
Speaker 1: guests on this program before, and they talked to us
Speaker 1: about the school's action plan for increasing racial equality and equity.
Speaker 1: It's important for them as a school. It's also important
Speaker 1: because they are in the heart of Silicon Valley. It's
Speaker 1: a very unusual time. There's nothing. You know, a university
Speaker 1: campus is meant to be a place with interaction and
Speaker 1: students and faculty and staff and everyone just bumping into
Speaker 1: each other, and right now it feels lonely and empty
Speaker 1: on the Stanford campus. Yeah, that interaction is key, and
Speaker 1: it's what contributes to the success of institutions like Stanford
Speaker 1: Graduate School of Business UH associating SOUL. I want to
Speaker 1: bring you into this conversation here because obviously, as with
Speaker 1: other universities UH, Stanford is trying to of course increase
Speaker 1: its diversity, equity and inclusion efforts, really increasing the representation
Speaker 1: of black and other disenfranchised UH people, not just amongst students,
Speaker 1: but also in your faculty as well. Talk a little
Speaker 1: bit about the plan to increase racial How do you
Speaker 1: go about that in this kind of environment when people
Speaker 1: cannot get together and the interaction is so artificial and
Speaker 1: in stilted. Yes, thank you, with Scarlett, It's really nice
Speaker 1: to meet you. Nice to meet another Cornell alum. Yes. Yes,
Speaker 1: let me step back a little bit and say a
Speaker 1: word or two about what it is we've been working
Speaker 1: on here at the Stanford Graduate School of Business. In ten,
Speaker 1: we re released our first Diversity, Equity and Inclusion Report,
Speaker 1: and one of the goals that we issued in that
Speaker 1: report for the academic year of was to spend some
Speaker 1: time studying and thinking about how we could do better
Speaker 1: as a school, as an institution to learn from and
Speaker 1: um increase representation and increase a sense of an inclusion
Speaker 1: and belonging for groups that otherwise before had been underrepresented
Speaker 1: in our effort to date, So what we've been working
Speaker 1: on really started last year, and what we're announcing today
Speaker 1: is what we're calling the Racial Equity Action Plan for
Speaker 1: the school. And as you noticed, Scarlett, one of the
Speaker 1: things that we are working on is representation in particular,
Speaker 1: and so what we are thinking about in in this
Speaker 1: particular bucket and what we're announcing our commitment for is
Speaker 1: thinking how we can do better about bringing black and
Speaker 1: other underrepresented minority teaching faculty, staff, and students to campus.
Speaker 1: And you know, as I noted, this commitment really does
Speaker 1: build on the momentum that we have had over the
Speaker 1: last couple of years around our broader diversity, equity and
Speaker 1: inclusion efforts. But in particular, when we think about uh
Speaker 1: hiring of black and you are in teaching faculties, what
Speaker 1: we're thinking about doing in particular is taking advantage of
Speaker 1: an incredible um initiative on the part of the university
Speaker 1: at Stanford University to UM to to bring ten new
Speaker 1: faculty members and tender line faculty members to campus UM
Speaker 1: on a search that is really centered around the impacts
Speaker 1: of race in America. So that's one piece of what
Speaker 1: it is that we're working on collaborating with the university
Speaker 1: to take advantage of these new ten billets for ten
Speaker 1: year line faculty members. And then on the on the
Speaker 1: sort of lecturer side, we also have a number of
Speaker 1: UM practitioners who lecture in our classes. We're working actively
Speaker 1: with our alums and also with our our faculty to
Speaker 1: identify more black and underrepresented minority teaching faculty as well
Speaker 1: as guest speakers too, so we can make sure that
Speaker 1: we are having voices heard in the classroom and that
Speaker 1: we're able to teach issues related to race in business
Speaker 1: and race in America. One of the topics that we've
Speaker 1: spent a lot of time thinking about in in our
Speaker 1: curriculum over the last few years has been generally preparing
Speaker 1: students to go out and be effective managers and leaders
Speaker 1: in uh in diverse organizations and to help go organizational
Speaker 1: cultures and be the effective in leading in the world
Speaker 1: where the country has become more diverse and the need
Speaker 1: for businesses to create widespread opportunity in many different ways
Speaker 1: has become increasingly important and is on everyone's mind. And
Speaker 1: that Stanford Graduate School of Business Dean Jonathan Levin and
Speaker 1: Associate Dean Sarah Soul the architects of this new plan
Speaker 1: that Stanford has. I'm going to say it again. It's
Speaker 1: the number one business school in America according to Bloomberg
Speaker 1: Business Week, so people look to them for leadership. It's
Speaker 1: also notable that they are not just in Silicon Valley.
Speaker 1: They are of Silicon Valley, and they have helped create
Speaker 1: so much of the innovation, and they dry the conversation
Speaker 1: in a really meaningful way. So what they do is
Speaker 1: going to have a dramatic impact, not just there in
Speaker 1: the Bay Area, but beyond. You're listening to Bloomberg Business Week.
Speaker 1: Coming up, we'll take you even further afield talk about
Speaker 1: China with author Chris Benton. He's an entertainment and executive.
Speaker 1: He's got a new book out. It's called Feeding the Dragon.
Speaker 1: Inside the trillion Dollar Dilemma facing Hollywood, the NBA and
Speaker 1: American business. This is Bloomberg. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Jason Kelly from Bloomberg Radio. Well,
Speaker 1: today I'm bringing you some of the most important and
Speaker 1: informative conversations we had across the week on our daily
Speaker 1: Bloomberg Business Week radio show, Scarlet Food. You'll hear her
Speaker 1: voice in just a few minutes. She joined me while
Speaker 1: Carol Master was on vacation. Well, we've talked a lot
Speaker 1: during the course of this show about some domestic issues
Speaker 1: as it relates to racial equality or lack thereof, some
Speaker 1: of the history of it, and some of what big
Speaker 1: institutions are doing to combat it. Let's broaden the conversation
Speaker 1: to China because it has been one of the stories
Speaker 1: we've been following so closely over the past couple of years.
Speaker 1: We were delighted to have back with us Chris Fenton.
Speaker 1: He's a longtime entertainment executive, and in fact, his interest
Speaker 1: in entertainment goes almost all the way back to when
Speaker 1: he was a student at Cornell, Scarlet Foods alma mater.
Speaker 1: He went on to work as a Hollywood agent and
Speaker 1: then got deeper and deeper into the entertainment business. As
Speaker 1: he did that, he spent a lot of time going
Speaker 1: back and forth between the US and China and really
Speaker 1: started to understand the complicated economic relationship, the political relationship,
Speaker 1: and the consumer relationship between the two superpowers. That led
Speaker 1: to his new book. It's called Feeding the Dragon. Inside
Speaker 1: the Trillion Dollar Dilemma facing Hollywood, the NBA, and American business.
Speaker 1: Another timely read. Check it out. I was in the
Speaker 1: process of meeting with publishers last time I was on
Speaker 1: the show, which was in October, just after Daryl Morey,
Speaker 1: the GM of the Houston Rockets, sent out that tweet
Speaker 1: supporting the huston of the Hong Kong protesters, and we
Speaker 1: we talked quite deeply about the NBA's issues. And then
Speaker 1: Lebron James had just landed back in the US and
Speaker 1: he had um issues explaining exactly where his point of
Speaker 1: view was on it. And and it's amazing because the book. Yes,
Speaker 1: the timing of having a book like this is fantastic,
Speaker 1: um in regards to selling books. But if it's a
Speaker 1: little bitter sweet, because um, we're also facing probably one
Speaker 1: of the worst relationships the two countries, the U S
Speaker 1: And China have had in the last forty years. So
Speaker 1: it's a bit concerning, But yes, um, a lot of
Speaker 1: it has to do a lot more than with than
Speaker 1: just with commodities or tech. UM. I was in the
Speaker 1: middle of definitely the cultural and commercial exchange between the
Speaker 1: two countries, and the culture between us is really a
Speaker 1: very strong glue, whether that's in the sports industry or
Speaker 1: in the movie business. Basically you're talking about soft power.
Speaker 1: I mean the NBA, Hollywood movies. That's America's soft power
Speaker 1: and that's what people in China kind of fell in
Speaker 1: love with. And um, it's one of our most powerful
Speaker 1: ways of influencing the rest of the world. How much
Speaker 1: did that get caught up in the trade war, the
Speaker 1: trade discussions or was it something on the side, Well,
Speaker 1: it's it's funny because you have, um a lot of
Speaker 1: hawks that want to decouple completely from the relationship. And
Speaker 1: I argue to the hawks that UM some of the
Speaker 1: most powerful if you want to say the words weapons
Speaker 1: are our products in the cultural business because not only
Speaker 1: can we monetize that market, because there is a large
Speaker 1: demand in the consumer market of China for things like movies,
Speaker 1: are television program and our sports um are sports industry. UM.
Speaker 1: But on top of it, there is real money to
Speaker 1: make from those products and services too. So every time
Speaker 1: a kid puts on a pair of Nike shoes, or
Speaker 1: every time they watch a Transformers movie or they see
Speaker 1: an episode of Game of Thrones or House of Cards,
Speaker 1: they're getting a little seepage of Western democracy into that market.
Speaker 1: So there's this soft power influence that comes even with
Speaker 1: the money that we're generating. It's sort of a two
Speaker 1: handed sword. So let's talk more about that because and
Speaker 1: and I'm glad you alluded to that time that we
Speaker 1: talked in October, because it was a banana's time to
Speaker 1: use a very technical term, because of what was going
Speaker 1: on with the n B A, I mean, with everything
Speaker 1: else that's happened in the world, that issue with Daryl
Speaker 1: Morey and Lebron James's response to it has largely faded,
Speaker 1: although with the Lebron issue it sort of came up
Speaker 1: again with the Hong Kong protests, you know, heating up
Speaker 1: again and everything that's happened between Beijing and Hong Kong
Speaker 1: since then. But remind us kind of where the NBA
Speaker 1: sits in all of this, because the estimates for the
Speaker 1: money lost around that freakas as it were, was measured
Speaker 1: in I think a couple hundred million dollars. Yeah. Well,
Speaker 1: the NBA's issues are still ongoing. I mean, obviously Covids
Speaker 1: has caused other issues with the NBA, but um, up
Speaker 1: to now, they are still not broadcasting the games in China. Um,
Speaker 1: there are still quite a bit of merchandise, definitely from
Speaker 1: the Houston Rockets, but various other teams that aren't even
Speaker 1: sold over there. Um, there are some games that are
Speaker 1: delayed streamed on various platforms, but a lot of that,
Speaker 1: the lion share of the revenue that NBA was generating
Speaker 1: out of that market is non existent right now, and
Speaker 1: they're having a real hard time trying to get it back.
Speaker 1: So Um, part of that has to do obviously with
Speaker 1: the Darryl Morey situation back in October, which by the way,
Speaker 1: seems like ten years ago at this point. But then
Speaker 1: the the the second thing is just that the relationship
Speaker 1: between the two countries is so afraid right now it's
Speaker 1: very difficult to make any progress, um in the in
Speaker 1: the correct path that the NBA has to go at
Speaker 1: this point. You know, when you talk about the NBA
Speaker 1: in China, I can't help but think about Joseph Tie,
Speaker 1: who's a co founder of Ali Baba and how he's
Speaker 1: an owner of the New Jersey Nets or is it
Speaker 1: New York Nets. I'm showing my age here. That's a
Speaker 1: that's a callback Starlett it is. Um. How critical is
Speaker 1: that to mending some of the damage from between the NBA,
Speaker 1: between China and and kind of putting the best foot
Speaker 1: forward for both the league and the country. Well, I'm
Speaker 1: a little torn on that issue. I'm glad you brought
Speaker 1: him up. UM. You know, I don't know him personally,
Speaker 1: but I think, UM, the fact that he labeled what
Speaker 1: Darryl Moorey brought up and brought to the attention of Americans. UM,
Speaker 1: he called it a third rail issue, and why to
Speaker 1: keep it a third rail issue? I think is really
Speaker 1: a poor UM decision and a poor influence that he's
Speaker 1: trying to put through. We really need to put this
Speaker 1: stuff UM on the front burner and make it part
Speaker 1: of the national discussion right now. I mean, what happened
Speaker 1: in Hong Kong, what's happening with the leakers, what's happening
Speaker 1: in various unfair trade balance issues, UM, quotas, protectionist policies,
Speaker 1: forced j vs, UM, text swaps and intellectual properties. UM,
Speaker 1: you know, protection issues. These all need to be brought up,
Speaker 1: talked about, buy our legislators, um, by our business leaders,
Speaker 1: and we need to construct a proper path forward. UM.
Speaker 1: The time of sort of putting our ostrich heads in
Speaker 1: the sand is over and and quite frankly, if we
Speaker 1: figure out the right way to engage China moving forward,
Speaker 1: where it's a much more balanced relationship and we're addressing
Speaker 1: things that are American values and principles in the right way,
Speaker 1: so we feel good about it, the bilateral relationship is
Speaker 1: going to get repaired. In the process. It will be
Speaker 1: disruptive and a little messy in the interim, but will
Speaker 1: come out the backside of it in a much better
Speaker 1: situation where quite frankly, they'll be strategic competitors and and
Speaker 1: partners um, just simply because we both need each other.
Speaker 1: So Chris, let's talk about Hollywood, uh and the movie
Speaker 1: business and the entertainment business, because you have sat right
Speaker 1: at that nexus between the US and China. And if
Speaker 1: the NBA's relationship with China is complicated, I feel like
Speaker 1: the entertainment industry's relationship with China is ten times more so. Issues.
Speaker 1: Everyone needs a lot of therapy. Seriously, what break down
Speaker 1: the key issues for us and how you navigated them
Speaker 1: because you did UM in your former job over at
Speaker 1: DMG Entertainment. Yeah, well, I mean the micro issues UM
Speaker 1: are is very it as for instance, when we when
Speaker 1: we get a movie into that market, um our share
Speaker 1: of that that that receipt from that film is of
Speaker 1: the overall box office, whereas the global norm is closer
Speaker 1: to They also have a quota there where only thirty
Speaker 1: two to maybe thirty five movies internationally which includes Bollywood
Speaker 1: and Europe in that mix, are allowed into the market.
Speaker 1: And then on top of it, they have strict censorship rules,
Speaker 1: very strict marketing and distribution rules, etcetera, etcetera. UM that
Speaker 1: all needs to be figured out, and obviously that sits
Speaker 1: behind a lot of other big macro trade issues. But
Speaker 1: then there's things that really affect all Americans and just
Speaker 1: essentially what makes us UM the people that we're proud of,
Speaker 1: and one of those is our freedom of speech. And
Speaker 1: what Senator Ted Cruz and various other members of Congress
Speaker 1: that brought up is this cross border censorship that has
Speaker 1: been UM such a big issue right now between US
Speaker 1: and China, whether it's them trying to silence Daryl Morey
Speaker 1: outside of their borders and talking on behalf of Hong
Speaker 1: Kong protesters wore a jacket that Tom Cruise is wearing
Speaker 1: in Top Gun, where not only do they want to
Speaker 1: censor it in their country, but they want it censored
Speaker 1: when it showed in Argentina, Germany, or in Peory, Illinois.
Speaker 1: And that's something that we need to address. And that's
Speaker 1: Chris Fenton, author of Feeding the Dragon inside the Trillion
Speaker 1: Dollar Dilemma facing Hollywood, the NBA, and American business. And
Speaker 1: I loved that he reminded us about our last conversation,
Speaker 1: which was last October before he really got underway with
Speaker 1: this book, when the NBA was really front and center,
Speaker 1: the National Basketball Association and it's controversy over a single
Speaker 1: tweet by the general manager of the Houston Rockets that
Speaker 1: led to a couple of hundred million dollars in repercussions,
Speaker 1: a lot of rhetoric and a lot of lost opportunity
Speaker 1: and a lot of big question jens around how the
Speaker 1: US and China can do business and how global brands
Speaker 1: really can exist across the two superpowers. It's only gotten
Speaker 1: more complicated in the wake of the global pandemic and
Speaker 1: a lot of accusations certainly going from the US back
Speaker 1: to China about its role in the coronavirus outbreak. So
Speaker 1: a very important book by Chris Fenton. Well, that wraps
Speaker 1: up the weekend edition of Bloomberg Business Week from Bloomberg Radio.
Speaker 1: Thank you so much for joining me. I'm Jason Kelly.
Speaker 1: Be sure to tune into Bloomberg Business Week Radio. We're
Speaker 1: live Monday through Friday starting at two pm Wall Street Time.
Speaker 1: And if you can't catch us live, get our daily
Speaker 1: Bloomberg Business Week podcast wherever you get your podcasts. Get
Speaker 1: the full versions of conversations you heard on this show.
Speaker 1: You can also watch the show live on YouTube. Just
Speaker 1: search for Bloomberg Global News. Carol Master and I will
Speaker 1: be back right here next week at the same time.
Speaker 1: This is Bloomberg