1 00:00:02,720 --> 00:00:04,420 Speaker 1: Bloomberg Audio Studios. 2 00:00:04,880 --> 00:00:05,580 Speaker 2: Podcasts. 3 00:00:05,900 --> 00:00:19,849 Speaker 3: Radio. News. Hello and welcome to another episode of the 4 00:00:19,890 --> 00:00:21,730 Speaker 3: OddLots Podcast. I'm Tracey Alloway. 5 00:00:21,850 --> 00:00:23,110 Speaker 1: And I'm Joe Weisenthal. 6 00:00:23,290 --> 00:00:26,029 Speaker 3: Joe, we are here in lovely Huntington Beach at the 7 00:00:26,070 --> 00:00:26,950 Speaker 3: Future Proof Conference. 8 00:00:27,250 --> 00:00:28,890 Speaker 1: I love coming to this conference. 9 00:00:29,200 --> 00:00:30,120 Speaker 2: You can't complain. 10 00:00:30,160 --> 00:00:31,160 Speaker 3: The beach is right there. 11 00:00:31,290 --> 00:00:32,769 Speaker 1: They do such a good job. 12 00:00:33,030 --> 00:00:35,590 Speaker 4: Every time I'm here, the only thought I have is 13 00:00:35,670 --> 00:00:39,030 Speaker 4: they have brought heaven on earth. And the only mystery 14 00:00:39,210 --> 00:00:42,390 Speaker 4: I have is why there are people, you know, you 15 00:00:42,409 --> 00:00:46,220 Speaker 4: think about like the great migration west. It's like, imagine 16 00:00:46,240 --> 00:00:49,060 Speaker 4: stopping in Nebraska. You could have gone a little bit 17 00:00:49,100 --> 00:00:51,339 Speaker 4: further and you could have been in California. 18 00:00:51,360 --> 00:00:51,440 Speaker 3: Yeah. 19 00:00:52,120 --> 00:00:54,280 Speaker 4: And it's like it was right there. And the question 20 00:00:54,320 --> 00:00:55,980 Speaker 4: I have is, why doesn't everyone live here? 21 00:00:56,220 --> 00:00:58,200 Speaker 3: OK, well, we made it to California. It's our fourth 22 00:00:58,240 --> 00:01:00,700 Speaker 3: year at this particular event. And we do, in fact, 23 00:01:00,840 --> 00:01:04,260 Speaker 3: have the perfect guest. We recorded an episode live on 24 00:01:04,340 --> 00:01:07,420 Speaker 3: stage with Gene Sykes. He is the co-head of Global 25 00:01:07,600 --> 00:01:10,300 Speaker 3: M & A at Goldman Sachs, a longtime partner and 26 00:01:10,560 --> 00:01:14,470 Speaker 3: also the president of the U.S. Olympic Committee. So take 27 00:01:14,510 --> 00:01:14,869 Speaker 3: a listen. 28 00:01:16,190 --> 00:01:18,009 Speaker 1: Gene, thank you so much for joining us. 29 00:01:18,350 --> 00:01:18,950 Speaker 2: Happy to be here. 30 00:01:19,560 --> 00:01:21,300 Speaker 1: Let's start really simple. 31 00:01:21,400 --> 00:01:23,800 Speaker 4: We can save the tough questions for the end, but 32 00:01:23,819 --> 00:01:25,720 Speaker 4: let's start really simple. 33 00:01:25,740 --> 00:01:28,380 Speaker 1: You wear many hats, Goldman, the Olympics. What are you 34 00:01:28,480 --> 00:01:29,039 Speaker 1: up to now? 35 00:01:29,959 --> 00:01:32,950 Speaker 2: Tell us who you are, maybe. Okay, I'm still a 36 00:01:32,990 --> 00:01:35,570 Speaker 2: Goldman Sachs partner after many, many years. I think I've 37 00:01:36,010 --> 00:01:38,050 Speaker 2: been a partner at Goldman Sachs for half my life. 38 00:01:38,770 --> 00:01:43,970 Speaker 2: And I work on technology and media, healthcare and other things. 39 00:01:44,030 --> 00:01:46,600 Speaker 2: And because I've been around for a long time, I 40 00:01:46,660 --> 00:01:48,480 Speaker 2: get to do more or less what I want, which 41 00:01:48,580 --> 00:01:51,880 Speaker 2: is to give people advice who need advice and value 42 00:01:51,940 --> 00:01:54,820 Speaker 2: it and work with all of our teams and spend 43 00:01:54,840 --> 00:01:57,260 Speaker 2: a lot of time mentoring people. So that's the Goldman 44 00:01:57,300 --> 00:02:00,830 Speaker 2: part of my time. The other half of my time 45 00:02:00,910 --> 00:02:04,150 Speaker 2: or more is spending time in everything related to the 46 00:02:04,210 --> 00:02:08,420 Speaker 2: Olympic and Paralympic ecosystem. So I was the head of 47 00:02:08,460 --> 00:02:11,320 Speaker 2: the bid when we bid for the games for Los Angeles, 48 00:02:11,820 --> 00:02:16,320 Speaker 2: originally for 2024. We were awarded the 2028 games, you know, 49 00:02:16,340 --> 00:02:19,350 Speaker 2: less than two years. We'll have the Olympic and Paralympic 50 00:02:19,370 --> 00:02:23,870 Speaker 2: games right here in Southern California. But then four years ago, 51 00:02:23,910 --> 00:02:26,150 Speaker 2: I became the chair of the board of the U.S. 52 00:02:26,230 --> 00:02:28,790 Speaker 2: Olympic and Paralympic Committee. So I spent a lot more 53 00:02:28,830 --> 00:02:32,250 Speaker 2: time now thinking about how do we create Team USA 54 00:02:32,770 --> 00:02:35,630 Speaker 2: so that our athletes are always the highest performing athletes 55 00:02:35,730 --> 00:02:39,119 Speaker 2: in any of these Olympic or Paralympic events. And then 56 00:02:39,160 --> 00:02:41,299 Speaker 2: about two and a half years ago, I became a 57 00:02:41,320 --> 00:02:44,070 Speaker 2: member of the International Olympic Committee. So I sort of 58 00:02:44,190 --> 00:02:47,329 Speaker 2: see the entire Olympic, Paralympic landscape. 59 00:02:47,770 --> 00:02:51,500 Speaker 3: When I think about the Olympics, I'm not big into sports. OK, 60 00:02:51,540 --> 00:02:55,720 Speaker 3: like I'm not not Sidney Sweeney, like sports, sports, sports, sports. Right. 61 00:02:55,760 --> 00:02:58,269 Speaker 3: I just see the Olympics. They're kind of interesting. What 62 00:02:58,350 --> 00:03:02,130 Speaker 3: counts to you as a successful Olympic Games? Is it 63 00:03:02,270 --> 00:03:04,669 Speaker 3: keeping the cost down as much as possible? 64 00:03:05,110 --> 00:03:06,050 Speaker 2: The vibes? 65 00:03:06,230 --> 00:03:07,389 Speaker 3: What does it actually look like? 66 00:03:07,450 --> 00:03:10,530 Speaker 2: Successful Olympic Games has to be a games that everyone says, 67 00:03:10,590 --> 00:03:14,239 Speaker 2: I'll never forget this. This is an incredible experience. And 68 00:03:14,300 --> 00:03:16,620 Speaker 2: I only saw it here. This is the only way 69 00:03:16,639 --> 00:03:19,770 Speaker 2: I can see all of these incredible athletes in these 70 00:03:19,850 --> 00:03:23,030 Speaker 2: kinds of competitions and see them in one place at 71 00:03:23,070 --> 00:03:25,190 Speaker 2: the same time. And when you say you're not a 72 00:03:25,210 --> 00:03:29,310 Speaker 2: sports fan, how many people are Alyssa Liu fans with 73 00:03:29,389 --> 00:03:32,950 Speaker 2: figure skating who wouldn't call themselves sports fans? The other 74 00:03:32,990 --> 00:03:35,530 Speaker 2: thing about the Olympics most people don't realize is the 75 00:03:35,590 --> 00:03:39,470 Speaker 2: Olympics are the one sports experience that skews toward women 76 00:03:39,890 --> 00:03:40,710 Speaker 2: more than toward men. 77 00:03:40,950 --> 00:03:41,250 Speaker 3: Really? 78 00:03:41,270 --> 00:03:44,070 Speaker 4: I would not have guessed that at all. You know, 79 00:03:44,130 --> 00:03:46,400 Speaker 4: we obviously just hit the World Cup in the U.S., 80 00:03:46,440 --> 00:03:49,680 Speaker 4: but that's like one sport. There are probably like 12 81 00:03:49,680 --> 00:03:54,040 Speaker 4: stadiums or something like that. There's one governing body. Can 82 00:03:54,080 --> 00:03:58,700 Speaker 4: you give us a feel for essentially like the sprawl 83 00:03:58,740 --> 00:04:03,400 Speaker 4: of the organization and how many different, maybe we call 84 00:04:03,420 --> 00:04:07,860 Speaker 4: them stakeholders, have to be brought in to make an 85 00:04:07,900 --> 00:04:08,800 Speaker 4: Olympics go well? 86 00:04:09,560 --> 00:04:12,820 Speaker 2: Sure. So in contrast to the World Cup, we had 87 00:04:12,820 --> 00:04:16,550 Speaker 2: 104 matches during the World Cup between Mexico, the U.S. 88 00:04:16,580 --> 00:04:20,070 Speaker 2: and Canada. 16 different stadiums were hosts for the events. 89 00:04:20,089 --> 00:04:20,510 Speaker 3: That's enough. 90 00:04:21,760 --> 00:04:25,120 Speaker 2: Not that much. 600 athletes, let's say. I mean, not 91 00:04:25,160 --> 00:04:29,860 Speaker 2: that many athletes. By comparison, in the Olympic and Paralympic Games, 92 00:04:29,920 --> 00:04:33,480 Speaker 2: when you put the two together, we'll have 17,000 athletes. 93 00:04:33,660 --> 00:04:39,419 Speaker 2: We'll have something like 900 separate events, medal events. It's enormous. 94 00:04:39,440 --> 00:04:43,400 Speaker 2: We'll sell 15 million tickets between the Olympic and the 95 00:04:43,430 --> 00:04:46,250 Speaker 2: Paralympic Games in Los Angeles. The World Cup sold 6.5 96 00:04:46,250 --> 00:04:51,110 Speaker 2: million tickets. So it's a significantly bigger and more complicated 97 00:04:51,190 --> 00:04:54,630 Speaker 2: experience than the World Cup. You know, it's not everything, 98 00:04:54,690 --> 00:04:58,029 Speaker 2: but it's maybe 90% of everything you can imagine in 99 00:04:58,050 --> 00:04:58,790 Speaker 2: the world of sports. 100 00:04:59,470 --> 00:05:01,390 Speaker 3: So if there is one thing I know about the Olympics, 101 00:05:01,450 --> 00:05:04,230 Speaker 3: it's that people like to complain about the cost, right? 102 00:05:04,310 --> 00:05:07,830 Speaker 3: And empty stadiums and finding uses for all this infrastructure 103 00:05:07,860 --> 00:05:11,779 Speaker 3: that was built afterwards. What's the funding mix actually supposed 104 00:05:11,820 --> 00:05:14,400 Speaker 3: to be for the 2028 LA games? Because I keep 105 00:05:14,420 --> 00:05:17,919 Speaker 3: reading headlines saying the first privately funded games. I'm not 106 00:05:17,940 --> 00:05:18,600 Speaker 3: sure that's true. 107 00:05:19,380 --> 00:05:22,680 Speaker 2: Well, it's essentially privately funded in that there's no government 108 00:05:22,720 --> 00:05:25,380 Speaker 2: support to put the games on, with the exception of 109 00:05:25,480 --> 00:05:29,950 Speaker 2: the federal government playing a role in security and security-related logistics, 110 00:05:29,990 --> 00:05:32,229 Speaker 2: things of that sort. You can't do that without the 111 00:05:32,290 --> 00:05:35,130 Speaker 2: federal government, with everybody in the world being here. There 112 00:05:35,370 --> 00:05:38,600 Speaker 2: are 206 countries that will send teams to the Olympic Games. 113 00:05:38,690 --> 00:05:43,540 Speaker 2: So it's quite a security event for sure. The idea 114 00:05:43,600 --> 00:05:47,160 Speaker 2: of the privately funded games in Southern California, we have 115 00:05:47,200 --> 00:05:50,360 Speaker 2: the best sports infrastructure here of any city in the world. 116 00:05:50,880 --> 00:05:54,440 Speaker 2: We have more stadia and arenas and world-class places where 117 00:05:54,839 --> 00:05:58,039 Speaker 2: sports already takes place. So we don't have to build anything. 118 00:05:58,520 --> 00:06:00,919 Speaker 2: We're not building a village for the athletes, you know, 119 00:06:00,960 --> 00:06:03,490 Speaker 2: which is what Paris had to do because we've got 120 00:06:03,550 --> 00:06:06,770 Speaker 2: such great residences at UCLA. We're going to keep all 121 00:06:06,810 --> 00:06:10,810 Speaker 2: the athletes at UCLA and UCLA houses many more students 122 00:06:10,970 --> 00:06:13,589 Speaker 2: in a regular year than we'll need to house athletes 123 00:06:13,650 --> 00:06:16,789 Speaker 2: during the games. So this is the ideal setting to 124 00:06:16,830 --> 00:06:18,590 Speaker 2: have a games like this. And that makes it a 125 00:06:18,610 --> 00:06:20,790 Speaker 2: lot easier to plan and to execute. 126 00:06:21,600 --> 00:06:23,660 Speaker 1: I have some friends in L.A. and they have a 127 00:06:23,700 --> 00:06:24,260 Speaker 1: house here. 128 00:06:24,279 --> 00:06:26,910 Speaker 4: And they're like, by the way, we're thinking of renting 129 00:06:26,970 --> 00:06:28,290 Speaker 4: out the house to people coming. 130 00:06:28,550 --> 00:06:30,490 Speaker 1: But if you wanted to come, we would let you 131 00:06:30,550 --> 00:06:31,190 Speaker 1: stay in the house. 132 00:06:31,210 --> 00:06:33,170 Speaker 3: They would give up the money for you, Joe. Yeah. 133 00:06:33,490 --> 00:06:35,380 Speaker 2: But to my mind. That's a good deal. I take it. 134 00:06:35,390 --> 00:06:36,160 Speaker 1: I know it's a good deal. 135 00:06:36,460 --> 00:06:40,580 Speaker 4: But the flip side is like, oh, my God, the traffic. 136 00:06:41,180 --> 00:06:44,219 Speaker 4: And the standing in lines, these are some of my 137 00:06:44,300 --> 00:06:47,600 Speaker 4: least favorite things to do in the world. Make the 138 00:06:47,779 --> 00:06:50,960 Speaker 4: argument to me that if I come down to L.A. 139 00:06:51,020 --> 00:06:54,140 Speaker 4: for the Olympics, I will actually find it a smooth 140 00:06:54,200 --> 00:06:57,550 Speaker 4: experience rather than an experience where I'm spending half the 141 00:06:57,589 --> 00:07:01,260 Speaker 4: day in lines. And then in the week up to it, 142 00:07:01,650 --> 00:07:04,150 Speaker 4: logging into eight different sites just to be able to 143 00:07:04,190 --> 00:07:04,690 Speaker 4: buy a ticket. 144 00:07:04,850 --> 00:07:05,410 Speaker 2: I mean, L.A. 145 00:07:05,430 --> 00:07:07,750 Speaker 3: Traffic is bad at the best of times, right? 146 00:07:07,770 --> 00:07:07,880 Speaker 4: Yeah. 147 00:07:08,900 --> 00:07:11,220 Speaker 2: Well, I don't know. The best of times, it's not bad. 148 00:07:11,940 --> 00:07:14,290 Speaker 1: Four in the morning, the best of times, it's not bad. 149 00:07:15,570 --> 00:07:18,650 Speaker 2: To give you some comfort, people said the same thing 150 00:07:18,690 --> 00:07:22,610 Speaker 2: about the 84 games. We hosted the games in 1984. 151 00:07:22,610 --> 00:07:24,690 Speaker 2: A lot of people said, I'm going to leave because 152 00:07:24,710 --> 00:07:27,060 Speaker 2: the traffic is going to be so bad. And the 153 00:07:27,120 --> 00:07:31,330 Speaker 2: traffic was totally manageable. The thing about LA and traffic 154 00:07:31,430 --> 00:07:34,489 Speaker 2: is if you tell people in advance something is happening, 155 00:07:34,690 --> 00:07:37,030 Speaker 2: stay off the roads, and they all know about it. 156 00:07:37,050 --> 00:07:38,590 Speaker 2: They know where it's going to be and they know 157 00:07:38,610 --> 00:07:42,190 Speaker 2: when it's going to happen. They do. People behave based 158 00:07:42,310 --> 00:07:44,710 Speaker 2: on what they know and what they're expecting to happen. 159 00:07:45,440 --> 00:07:47,140 Speaker 2: That plus the fact that you're going to have a 160 00:07:47,180 --> 00:07:51,320 Speaker 2: lot of very elaborate planning for how you get traffic 161 00:07:51,380 --> 00:07:55,300 Speaker 2: moving around through what will be called Olympic lanes. Today, 162 00:07:55,340 --> 00:07:58,230 Speaker 2: they're high occupancy vehicle lanes, HOV lanes. 163 00:07:58,380 --> 00:08:00,670 Speaker 4: Oh, yeah. Am I going to have to download three 164 00:08:00,810 --> 00:08:02,670 Speaker 4: apps to buy a ticket or whatever? 165 00:08:02,690 --> 00:08:02,770 Speaker 3: Yeah. 166 00:08:03,070 --> 00:08:05,590 Speaker 2: One app, you're either going to buy your tickets in advance. 167 00:08:05,950 --> 00:08:08,990 Speaker 2: Literally half the tickets have already been sold. So you 168 00:08:09,010 --> 00:08:11,310 Speaker 2: want to register for the tickets. The next time the 169 00:08:11,350 --> 00:08:14,370 Speaker 2: tickets are available is next year. Okay. So I think 170 00:08:14,430 --> 00:08:16,550 Speaker 2: tickets you'll get in advance. You don't have to go 171 00:08:16,570 --> 00:08:18,650 Speaker 2: to a bunch of different apps. You'll have one app, 172 00:08:18,690 --> 00:08:21,180 Speaker 2: which will tell you what's happening, where to go. It'll 173 00:08:21,220 --> 00:08:23,160 Speaker 2: be easy for you to see it. And I don't 174 00:08:23,180 --> 00:08:25,420 Speaker 2: think you'll have many lines. I think the venues actually 175 00:08:25,440 --> 00:08:28,900 Speaker 2: will be really great. Remember, all these venues already do sports. 176 00:08:29,080 --> 00:08:29,840 Speaker 1: You're selling me. 177 00:08:30,000 --> 00:08:33,530 Speaker 2: Well, think about it. All of these venues have enormous 178 00:08:33,630 --> 00:08:36,370 Speaker 2: events all the time that people who operate them know 179 00:08:36,410 --> 00:08:37,130 Speaker 2: exactly what to do. 180 00:08:37,860 --> 00:08:39,280 Speaker 3: You already have accommodation, Joe. 181 00:08:39,300 --> 00:08:40,860 Speaker 1: You should just do it. Just do it. 182 00:08:40,960 --> 00:08:44,179 Speaker 3: So I know it's not a perfect apples for apples comparison, but, 183 00:08:44,220 --> 00:08:48,640 Speaker 3: you know, the World Cup was the sprawling, complicated sports event. 184 00:08:48,720 --> 00:08:52,140 Speaker 3: When you look back at the summer, is there anything 185 00:08:52,320 --> 00:08:56,300 Speaker 3: with your Olympics board membership hat on that you would 186 00:08:56,340 --> 00:08:58,040 Speaker 3: have done differently when it comes to the World Cup? 187 00:08:59,050 --> 00:09:02,699 Speaker 2: Certainly, I would have been careful about calling the president 188 00:09:03,059 --> 00:09:05,940 Speaker 2: for a red card violation. That probably wasn't the best 189 00:09:05,980 --> 00:09:10,220 Speaker 2: thing for the World Cup's image. Having said that, the 190 00:09:10,280 --> 00:09:13,780 Speaker 2: experience for Americans was awesome. I mean, the fact that 191 00:09:13,880 --> 00:09:17,339 Speaker 2: people in the United States could see soccer, which everybody 192 00:09:17,400 --> 00:09:20,700 Speaker 2: else calls football, it's not really our sport, but they 193 00:09:20,720 --> 00:09:23,200 Speaker 2: could feel like they were part of it with the very, 194 00:09:23,260 --> 00:09:25,679 Speaker 2: very best athletes in the world. I think it actually 195 00:09:25,850 --> 00:09:30,030 Speaker 2: really transformed Americans' view of that sport. and they'll appreciate 196 00:09:30,070 --> 00:09:32,950 Speaker 2: that sport differently than they ever have before. Plus, the 197 00:09:32,990 --> 00:09:36,210 Speaker 2: people who came and they were cheering for their teams, 198 00:09:36,750 --> 00:09:40,650 Speaker 2: they found America to be incredibly welcoming and Americans to 199 00:09:40,700 --> 00:09:45,100 Speaker 2: be exciting and interesting. And the image that we Americans 200 00:09:45,179 --> 00:09:47,900 Speaker 2: made of ourselves to the rest of the world was 201 00:09:47,960 --> 00:09:52,300 Speaker 2: incredibly positive and constructive, even when the public image of 202 00:09:52,340 --> 00:09:55,880 Speaker 2: American politicians may be very mixed. So I think it 203 00:09:55,920 --> 00:09:57,040 Speaker 2: was a huge positive. 204 00:10:12,940 --> 00:10:15,770 Speaker 4: I don't think in my lifetime there has been a 205 00:10:15,910 --> 00:10:19,530 Speaker 4: single sporting event that the week before. 206 00:10:20,290 --> 00:10:22,880 Speaker 1: You see all these headlines. The stadiums aren't ready. 207 00:10:23,160 --> 00:10:27,060 Speaker 4: The grass isn't growing. The seats are still being installed. 208 00:10:27,120 --> 00:10:29,239 Speaker 4: And then it all works out fine. And then in 209 00:10:29,280 --> 00:10:32,890 Speaker 4: more recent sporting events, you're like, well, the international tourists 210 00:10:32,950 --> 00:10:36,830 Speaker 4: aren't coming. They don't like the vibes in the United States, etc. 211 00:10:37,230 --> 00:10:39,590 Speaker 4: Based on what you've seen so far, and you mentioned 212 00:10:39,610 --> 00:10:42,500 Speaker 4: the first batch of ticket sales, do you have any 213 00:10:42,640 --> 00:10:46,520 Speaker 4: reason to think that The environment in the U.S., which 214 00:10:46,559 --> 00:10:48,910 Speaker 4: we could talk about in a million different ways, is 215 00:10:48,950 --> 00:10:51,250 Speaker 4: going to affect attendance in one way or another. 216 00:10:51,850 --> 00:10:55,840 Speaker 2: No. The ticket sales, first of all, have been incredibly positive. 217 00:10:56,380 --> 00:10:59,140 Speaker 2: As soon as they were offered, everything was sold. And 218 00:10:59,420 --> 00:11:02,280 Speaker 2: you said they're high priced. They are high priced. But 219 00:11:02,620 --> 00:11:05,179 Speaker 2: they are priced at the market. And it's going to 220 00:11:05,220 --> 00:11:08,140 Speaker 2: take a lot of ticket sales to actually pay for 221 00:11:08,179 --> 00:11:11,120 Speaker 2: these games. So I don't really apologize for the fact 222 00:11:11,160 --> 00:11:13,569 Speaker 2: that they're high priced, except to say, if you want 223 00:11:13,590 --> 00:11:17,210 Speaker 2: to see the very, very best in sports, in any sport, 224 00:11:17,750 --> 00:11:20,970 Speaker 2: at one place, all at a very compressed period of time, 225 00:11:21,570 --> 00:11:24,350 Speaker 2: it's it's a premium priced experience. 226 00:11:24,390 --> 00:11:26,390 Speaker 3: Wait i didn't say they're high priced i have no 227 00:11:26,450 --> 00:11:29,450 Speaker 3: concept of what a fair value is for a sports 228 00:11:29,490 --> 00:11:32,210 Speaker 3: ticket but okay let me try to segue between the 229 00:11:32,270 --> 00:11:34,880 Speaker 3: olympics and the media landscape but you have to raise 230 00:11:34,929 --> 00:11:39,900 Speaker 3: money for this right through media sponsorships and air rights 231 00:11:40,000 --> 00:11:42,719 Speaker 3: and things like that what's the demand like that you're 232 00:11:42,740 --> 00:11:43,459 Speaker 3: seeing so far. 233 00:11:44,230 --> 00:11:46,790 Speaker 2: Well, the demand is great. So some of this is done. 234 00:11:46,809 --> 00:11:50,569 Speaker 2: It's pre-baked. The International Olympic Committee sells media rights for 235 00:11:50,610 --> 00:11:53,790 Speaker 2: all the games. They do it years in advance. NBC 236 00:11:53,890 --> 00:11:56,920 Speaker 2: is the media rights holder for the United States. They've 237 00:11:56,940 --> 00:12:00,080 Speaker 2: got a deal that now goes through 2036. We don't 238 00:12:00,100 --> 00:12:02,980 Speaker 2: even know where the games are going to be in 2036. 239 00:12:02,980 --> 00:12:05,860 Speaker 2: And they're committed to be the media partner in the 240 00:12:05,880 --> 00:12:09,160 Speaker 2: United States for those games. That's a significant amount of money. 241 00:12:09,480 --> 00:12:12,380 Speaker 2: It's a billion and a half dollars or more per 242 00:12:12,440 --> 00:12:15,860 Speaker 2: games to have the rights in the United States. Then 243 00:12:15,920 --> 00:12:18,880 Speaker 2: the IOC also sells a bunch of sponsorships to people 244 00:12:18,920 --> 00:12:22,570 Speaker 2: like Coca-Cola and Visa and Samsung. You've seen the names 245 00:12:22,610 --> 00:12:24,890 Speaker 2: of these companies around every one of the Olympic Games. 246 00:12:25,330 --> 00:12:28,690 Speaker 2: But then the domestic organizers get the opportunity to sell 247 00:12:28,950 --> 00:12:32,590 Speaker 2: more rights. And so they've sold rights to Starbucks and 248 00:12:32,790 --> 00:12:35,500 Speaker 2: Uber and Google. And so you get the idea that 249 00:12:35,880 --> 00:12:39,830 Speaker 2: there is huge corporate interest in sponsoring these games. They 250 00:12:39,870 --> 00:12:41,790 Speaker 2: want to be part of it because they know this 251 00:12:41,850 --> 00:12:44,250 Speaker 2: is going to be the biggest event in the history 252 00:12:44,270 --> 00:12:47,130 Speaker 2: of the world. And I mean, that sounds crazy, but 253 00:12:47,170 --> 00:12:49,170 Speaker 2: I think it will be that. And if you're here 254 00:12:49,230 --> 00:12:52,109 Speaker 2: for it, you're going to say, I have just been 255 00:12:52,190 --> 00:12:55,350 Speaker 2: part of something which is going to be remembered forever. 256 00:12:55,929 --> 00:12:58,559 Speaker 3: So I lied before when I said I don't like sports. 257 00:12:58,660 --> 00:13:01,640 Speaker 3: I do like football slash soccer. But one of the 258 00:13:01,679 --> 00:13:07,809 Speaker 3: criticisms of of FIFA was rampant commercialization in the games, right? So, 259 00:13:07,870 --> 00:13:09,830 Speaker 3: you know, 15 minute water breaks so that there are 260 00:13:09,850 --> 00:13:12,860 Speaker 3: more ad sales and stuff like that. Are you thinking 261 00:13:12,960 --> 00:13:16,480 Speaker 3: of additional ad or sponsorship opportunities for the Olympics? 262 00:13:16,540 --> 00:13:19,360 Speaker 2: Well, definitely not like that. So the Olympics are famous 263 00:13:19,400 --> 00:13:22,579 Speaker 2: for having clean venues. If you've been in Olympic games 264 00:13:22,660 --> 00:13:25,350 Speaker 2: and you see the field of play, you'll notice there's 265 00:13:25,450 --> 00:13:29,429 Speaker 2: no corporate advertising anywhere in the field of play. Anywhere 266 00:13:29,450 --> 00:13:32,870 Speaker 2: you see the athletes competing, there's no corporate advertising at all. 267 00:13:32,890 --> 00:13:36,200 Speaker 2: And that's kind of an Olympic rule. And everyone abides 268 00:13:36,240 --> 00:13:38,260 Speaker 2: by the rule. And if there's going to be any 269 00:13:38,340 --> 00:13:42,079 Speaker 2: sort of advertising, it's the brand and the brand is offstage. 270 00:13:42,120 --> 00:13:44,660 Speaker 2: It may be where the athletes are putting a helmet 271 00:13:44,740 --> 00:13:48,460 Speaker 2: on or something. Yeah. But it's very, very distinctive in 272 00:13:48,480 --> 00:13:50,819 Speaker 2: that it's totally clean. And you feel like, wow, this 273 00:13:50,880 --> 00:13:53,470 Speaker 2: is all about the sports and all about the athletes. 274 00:13:53,950 --> 00:13:56,730 Speaker 4: Let's talk about the media landscape, because you've been a 275 00:13:56,809 --> 00:13:59,770 Speaker 4: dealmaker in that space for a long time. And I 276 00:13:59,790 --> 00:14:03,590 Speaker 4: got first got my interest in markets during the dotcom bubble. 277 00:14:04,250 --> 00:14:06,670 Speaker 4: And the weird thing now, and we were talking about 278 00:14:06,690 --> 00:14:11,470 Speaker 4: this a little bit backstage. is this dynamic where the 279 00:14:11,530 --> 00:14:15,390 Speaker 4: public companies don't feel like the incumbents in some way. 280 00:14:15,910 --> 00:14:19,880 Speaker 4: And the incumbents, and I'm talking about AI specifically, feel 281 00:14:19,900 --> 00:14:23,320 Speaker 4: like the private companies. And I'm curious how much that 282 00:14:23,400 --> 00:14:29,760 Speaker 4: changes the business of dealmaking. This very strange condition where 283 00:14:30,260 --> 00:14:33,100 Speaker 4: it's not going to be the public companies making the 284 00:14:33,140 --> 00:14:34,660 Speaker 4: big acquisitions, etc. 285 00:14:34,720 --> 00:14:36,800 Speaker 1: It's like something is completely flipped. 286 00:14:37,770 --> 00:14:40,710 Speaker 2: Well, on the one hand, this is the biggest M & 287 00:14:40,410 --> 00:14:43,270 Speaker 2: A year in the history of the world. 288 00:14:43,830 --> 00:14:44,210 Speaker 3: Really? 289 00:14:44,430 --> 00:14:47,090 Speaker 2: Biggest year by far. We expect the M & A 290 00:14:47,170 --> 00:14:50,370 Speaker 2: market to be much bigger than it was at the peak. 291 00:14:50,410 --> 00:14:53,770 Speaker 2: The last peak was 2021, inflated by COVID. 292 00:14:54,150 --> 00:14:54,470 Speaker 3: Sure. 293 00:14:54,730 --> 00:14:58,170 Speaker 2: So just keep that in mind. And it's deep. And 294 00:14:58,750 --> 00:15:01,410 Speaker 2: for the past several years, 40% of the M & 295 00:15:01,190 --> 00:15:04,550 Speaker 2: A market has been selling companies that were owned by 296 00:15:04,630 --> 00:15:05,750 Speaker 2: private equity sponsors. 297 00:15:05,750 --> 00:15:07,060 Speaker 1: 40%. 298 00:15:07,060 --> 00:15:10,340 Speaker 2: This year, that's 30%. And the reason is there's so 299 00:15:10,380 --> 00:15:13,880 Speaker 2: much more substantive demand with things that are happening around 300 00:15:14,200 --> 00:15:18,720 Speaker 2: the technology impact of the economy in every possible way. 301 00:15:19,100 --> 00:15:22,100 Speaker 2: And you think about it, every industry, natural resources or 302 00:15:22,740 --> 00:15:27,530 Speaker 2: power generation, they're experiencing the same thing, again, because they're 303 00:15:27,590 --> 00:15:32,450 Speaker 2: building the infrastructure for AI. We've seen an enormous boom 304 00:15:32,850 --> 00:15:37,990 Speaker 2: in semiconductor technology, semiconductor equities and semiconductor M & A 305 00:15:38,410 --> 00:15:42,610 Speaker 2: when everybody wants to have proprietary semiconductor technology. So what's 306 00:15:42,730 --> 00:15:44,750 Speaker 2: what's driving the M & A market is the same 307 00:15:44,770 --> 00:15:48,610 Speaker 2: phenomenon that we see driving interest in almost everything. And 308 00:15:48,650 --> 00:15:50,010 Speaker 2: it's actually incredibly strong. 309 00:15:50,940 --> 00:15:54,390 Speaker 3: Can companies buy their way into, I guess, like AI 310 00:15:54,570 --> 00:15:57,910 Speaker 3: fluency or nativity? Because you see, I was reading the 311 00:15:57,930 --> 00:16:00,330 Speaker 3: Goldman Sachs M & A Outlook on the beach, which 312 00:16:00,410 --> 00:16:01,880 Speaker 3: is the best place to read it. And you were 313 00:16:01,910 --> 00:16:04,040 Speaker 3: talking about DNA deals and this idea. 314 00:16:04,060 --> 00:16:06,540 Speaker 2: Don't get sand on our stuff. Sorry. 315 00:16:07,580 --> 00:16:09,000 Speaker 3: And you were talking about this idea that like a 316 00:16:09,040 --> 00:16:10,880 Speaker 3: lot of the M & A activity is being driven 317 00:16:10,920 --> 00:16:13,940 Speaker 3: by companies that want more of a foothold in AI. 318 00:16:14,020 --> 00:16:16,280 Speaker 3: But then when I look at larger companies, it really 319 00:16:16,330 --> 00:16:20,090 Speaker 3: does feel like it's a challenge for big incumbent companies 320 00:16:20,150 --> 00:16:24,930 Speaker 3: to integrate AI into their existing organization. And sometimes it 321 00:16:24,970 --> 00:16:27,910 Speaker 3: feels a lot easier for the startups to just start 322 00:16:27,930 --> 00:16:30,390 Speaker 3: from scratch and say, we're an AI company. We're building 323 00:16:30,410 --> 00:16:31,300 Speaker 3: this from the ground up. 324 00:16:32,320 --> 00:16:35,880 Speaker 2: Well, every startup, even in AI, has to think to themselves, 325 00:16:35,980 --> 00:16:39,190 Speaker 2: what's the end game? And for 80% of the startups, 326 00:16:39,230 --> 00:16:42,270 Speaker 2: the end game is selling themselves to somebody else. So 327 00:16:42,350 --> 00:16:44,630 Speaker 2: I think that's in the mind of the entrepreneur who 328 00:16:44,670 --> 00:16:47,710 Speaker 2: is the founder. and the venture capitalists who are financing 329 00:16:47,750 --> 00:16:52,320 Speaker 2: the entrepreneur, that's sort of the economic payoff of actually 330 00:16:52,340 --> 00:16:55,580 Speaker 2: building something innovative. You have to think, how does what 331 00:16:55,680 --> 00:16:58,600 Speaker 2: I'm building help somebody else who has some other part 332 00:16:58,620 --> 00:17:01,400 Speaker 2: of the puzzle? And so I think that's actually present 333 00:17:01,620 --> 00:17:07,270 Speaker 2: in every kind of entrepreneurial investment, every entrepreneurial venture. that 334 00:17:07,350 --> 00:17:11,169 Speaker 2: the 20% that actually become sustained companies, they have something 335 00:17:11,270 --> 00:17:14,830 Speaker 2: totally differentiated, or frankly, they would never be able to 336 00:17:14,970 --> 00:17:18,510 Speaker 2: find somebody who could buy them. And you think about SpaceX. 337 00:17:19,270 --> 00:17:23,119 Speaker 2: SpaceX did something different And they did something different in 338 00:17:23,140 --> 00:17:25,580 Speaker 2: a market where there were lots of incumbents, but the 339 00:17:25,640 --> 00:17:30,879 Speaker 2: incumbents played in a regulatory environment that SpaceX decided to defy. 340 00:17:31,440 --> 00:17:34,639 Speaker 2: And it's that kind of differentiation that leads to a 341 00:17:34,680 --> 00:17:38,179 Speaker 2: company that becomes an independent company. I think we'll see, obviously, 342 00:17:38,260 --> 00:17:42,680 Speaker 2: Anthropic and OpenAI be independent companies. They're almost too big 343 00:17:42,720 --> 00:17:45,480 Speaker 2: for anybody to buy. And so that's the other part 344 00:17:45,520 --> 00:17:48,120 Speaker 2: of this. If the companies do become too big, they've 345 00:17:48,180 --> 00:17:50,960 Speaker 2: succeeded very, very well. But you just have to have 346 00:17:50,980 --> 00:17:53,590 Speaker 2: a lot of confidence that they're going to have a 347 00:17:53,650 --> 00:17:54,550 Speaker 2: durable platform. 348 00:17:55,230 --> 00:17:58,429 Speaker 4: Am I going to read an S-1 one day and 349 00:17:59,170 --> 00:18:02,290 Speaker 4: when you list through the risk factors that one of 350 00:18:02,369 --> 00:18:06,129 Speaker 4: the risks is we believe there is a non-trivial chance 351 00:18:06,190 --> 00:18:09,460 Speaker 4: that our technology wipes out the entirety of humanity? Is 352 00:18:09,500 --> 00:18:11,520 Speaker 4: that the type of thing the lawyers are going to 353 00:18:11,560 --> 00:18:12,239 Speaker 4: make them put in? 354 00:18:12,500 --> 00:18:14,820 Speaker 2: I think the lawyers will probably say you better protect 355 00:18:14,859 --> 00:18:20,480 Speaker 2: yourself and make sure that the disclosure is complete. So imagine... Big, crazy, 356 00:18:20,580 --> 00:18:23,780 Speaker 2: scary things like that will be present in S1 language 357 00:18:23,820 --> 00:18:24,180 Speaker 2: for sure. 358 00:18:24,619 --> 00:18:26,840 Speaker 4: I've always thought if people only read the S1s, they 359 00:18:26,859 --> 00:18:30,260 Speaker 4: would never invest in another company because they're always so frightening. 360 00:18:30,340 --> 00:18:32,460 Speaker 2: Maybe that's a sad comment about what people read. 361 00:18:32,980 --> 00:18:34,159 Speaker 1: That's probably the case. 362 00:18:34,619 --> 00:18:36,620 Speaker 3: Wait, when I read an S1, I always flip straight 363 00:18:36,660 --> 00:18:38,320 Speaker 3: to the risk factors. Is that bad? 364 00:18:38,450 --> 00:18:39,969 Speaker 1: We always do that. That's what we always do. 365 00:18:40,010 --> 00:18:42,850 Speaker 2: We always want to see that. It's our natural draw. 366 00:18:42,890 --> 00:18:46,070 Speaker 2: It's a risk. No, no, that's the journalist prerogative. That's 367 00:18:46,090 --> 00:18:47,610 Speaker 2: the journalist prerogative. Fair enough. 368 00:18:48,119 --> 00:18:51,300 Speaker 3: Given your TMT experience, you know, a lot of people 369 00:18:51,340 --> 00:18:53,780 Speaker 3: have been drawing parallels between what's going on in AI 370 00:18:53,840 --> 00:18:56,899 Speaker 3: right now with the TMT build out and everyone was 371 00:18:56,960 --> 00:18:59,139 Speaker 3: excited about the web. And so we laid loads and 372 00:18:59,160 --> 00:19:02,109 Speaker 3: loads of cable and directionally we were kind of right. 373 00:19:02,550 --> 00:19:04,690 Speaker 3: The Internet did in fact become a thing. 374 00:19:04,710 --> 00:19:05,970 Speaker 2: It all got used eventually. 375 00:19:06,150 --> 00:19:08,689 Speaker 3: It all got used eventually. But in the meantime, there 376 00:19:08,710 --> 00:19:11,150 Speaker 3: was a big bubble. Do you see parallels between what's 377 00:19:11,170 --> 00:19:11,570 Speaker 3: happening now? 378 00:19:12,060 --> 00:19:14,740 Speaker 2: Well, certainly there's no way to know for sure how 379 00:19:14,859 --> 00:19:17,619 Speaker 2: big is this market going to be? And are we 380 00:19:17,820 --> 00:19:21,359 Speaker 2: committing to build too much infrastructure relative to the real 381 00:19:21,420 --> 00:19:23,620 Speaker 2: demand that we're going to see five or six years 382 00:19:23,660 --> 00:19:25,880 Speaker 2: from now? I think the answer is we just don't know. 383 00:19:25,900 --> 00:19:29,800 Speaker 2: I will say the people financing the investments are not 384 00:19:29,859 --> 00:19:33,520 Speaker 2: just venture capitalists who are the principal investors. in the 385 00:19:33,600 --> 00:19:37,180 Speaker 2: first build out of the TMT internet phase in sort 386 00:19:37,200 --> 00:19:41,830 Speaker 2: of 2000, 2001. Now the investors in this build out 387 00:19:42,350 --> 00:19:45,909 Speaker 2: are the most successful big technology platforms anywhere in the 388 00:19:45,950 --> 00:19:49,250 Speaker 2: world who had hundreds of billions of dollars of free 389 00:19:49,290 --> 00:19:53,580 Speaker 2: cash flow until this year. So it's an incredible turnabout. 390 00:20:09,930 --> 00:20:12,780 Speaker 4: I have this theory and tell me if I'm wrong, 391 00:20:13,380 --> 00:20:17,500 Speaker 4: that actually enterprise AI adoption is literally zero. 392 00:20:17,660 --> 00:20:20,800 Speaker 2: And what I mean by that 2%, not 2%. 393 00:20:20,800 --> 00:20:21,040 Speaker 3: Okay. 394 00:20:21,300 --> 00:20:25,220 Speaker 2: Well, no, we just did an analysis and we said 395 00:20:25,340 --> 00:20:26,640 Speaker 2: it's 2% today. 396 00:20:26,640 --> 00:20:26,940 Speaker 1: 2%. 397 00:20:26,940 --> 00:20:28,300 Speaker 3: And what I mean, at least. 398 00:20:28,119 --> 00:20:29,720 Speaker 1: In my mind is like, sure. 399 00:20:29,940 --> 00:20:33,570 Speaker 4: Has every company gotten their employees like a chat GPT 400 00:20:33,710 --> 00:20:34,770 Speaker 4: or Claude subscription? 401 00:20:35,050 --> 00:20:36,270 Speaker 2: Yeah, sure. Probably. 402 00:20:36,910 --> 00:20:40,520 Speaker 4: But like, you know, if it's the if it's the 403 00:20:40,690 --> 00:20:43,560 Speaker 4: usage of like, oh, I'm going on the Oddlots podcast, 404 00:20:43,820 --> 00:20:46,000 Speaker 4: who are these Joe and Tracy fellows? What do they 405 00:20:46,020 --> 00:20:49,179 Speaker 4: ask questions like? I don't really consider that AI adoption 406 00:20:49,359 --> 00:20:51,810 Speaker 4: in a meaningful sense. That's a glorified search. 407 00:20:52,310 --> 00:20:56,550 Speaker 1: When you look at companies. in the range. Have you 408 00:20:56,609 --> 00:20:59,710 Speaker 1: seen any sense in which incumbent. 409 00:20:59,070 --> 00:21:05,120 Speaker 4: Companies are deeply building AI into the workflow such that 410 00:21:05,180 --> 00:21:07,940 Speaker 4: it's not just a window on a computer screen that 411 00:21:07,960 --> 00:21:08,840 Speaker 4: they can ask questions? 412 00:21:09,160 --> 00:21:13,210 Speaker 2: So 2% are the companies who in their earnings reports 413 00:21:13,250 --> 00:21:16,620 Speaker 2: have said, we see an impact on EPS, a positive 414 00:21:16,680 --> 00:21:21,360 Speaker 2: impact of our use of AI, 2% so far. There 415 00:21:21,420 --> 00:21:23,879 Speaker 2: are probably 20 or 30% of the companies that have 416 00:21:23,960 --> 00:21:28,710 Speaker 2: actually implemented strategies to use AI in everything they do. 417 00:21:28,730 --> 00:21:31,689 Speaker 2: I mean, I think about Goldman Sachs. We are. 418 00:21:33,480 --> 00:21:37,470 Speaker 2: You know, we have enormous numbers of prompts about things 419 00:21:37,490 --> 00:21:41,409 Speaker 2: that we use AI to do. And all of the 420 00:21:41,470 --> 00:21:44,380 Speaker 2: people who are the youngest people at Goldman Sachs are 421 00:21:44,500 --> 00:21:48,320 Speaker 2: sort of native AI people working to implement things that 422 00:21:48,380 --> 00:21:50,960 Speaker 2: we didn't think about a year ago. And now we've 423 00:21:51,000 --> 00:21:55,940 Speaker 2: found that we can give people more capacity more quickly 424 00:21:56,380 --> 00:21:58,980 Speaker 2: and get them to think about different types of problems 425 00:21:59,320 --> 00:22:01,200 Speaker 2: than we did, as I say, even a year ago. 426 00:22:01,560 --> 00:22:03,550 Speaker 2: So we're beginning to see how it changes the way 427 00:22:03,609 --> 00:22:05,989 Speaker 2: people work with each other and what they imagine they 428 00:22:06,030 --> 00:22:06,910 Speaker 2: can achieve. 429 00:22:07,600 --> 00:22:11,460 Speaker 3: Wait, say more about AI in the deal making business specifically, 430 00:22:11,480 --> 00:22:13,379 Speaker 3: because I imagine, yes, there are a bunch of junior 431 00:22:13,420 --> 00:22:16,260 Speaker 3: analysts who are using it to make PowerPoints look even 432 00:22:16,320 --> 00:22:20,320 Speaker 3: more beautiful than they already do and Excel spreadsheets. And 433 00:22:20,480 --> 00:22:23,540 Speaker 3: maybe you're even searching for like potential targets with an 434 00:22:23,600 --> 00:22:26,179 Speaker 3: AI prompt or something like that. But the other thing 435 00:22:26,220 --> 00:22:28,460 Speaker 3: you always hear about M & A is ultimately it's 436 00:22:28,480 --> 00:22:34,000 Speaker 3: a relationship business. What would you expect actual integrated AI 437 00:22:34,119 --> 00:22:35,980 Speaker 3: use to look like in the M & A space? 438 00:22:36,619 --> 00:22:40,760 Speaker 2: I think M & A is a business of using 439 00:22:41,119 --> 00:22:45,740 Speaker 2: trusted relationships and good advice. People are looking for someone 440 00:22:45,760 --> 00:22:48,940 Speaker 2: who understands the world and is able to synthesize a 441 00:22:49,000 --> 00:22:54,639 Speaker 2: lot of independent variables. synthesizing independent variables, it's a gift 442 00:22:54,900 --> 00:22:58,230 Speaker 2: that many people have. If they're good at this, they 443 00:22:58,250 --> 00:23:00,730 Speaker 2: will be better at it if they use AI. They'll 444 00:23:00,770 --> 00:23:04,330 Speaker 2: be faster at getting to conclusions. They'll be more imaginative 445 00:23:04,369 --> 00:23:07,060 Speaker 2: at saying, well, this is the first data point that 446 00:23:07,100 --> 00:23:09,139 Speaker 2: I was able to get when I asked this question, 447 00:23:09,420 --> 00:23:12,240 Speaker 2: but I don't exactly feel confident that's the right answer. 448 00:23:12,500 --> 00:23:15,109 Speaker 2: Let me go ask the counter question. And so I 449 00:23:15,119 --> 00:23:18,090 Speaker 2: think people become, it's not that they're becoming smarter, it's 450 00:23:18,150 --> 00:23:22,629 Speaker 2: if they have access to more information, better information, and 451 00:23:22,670 --> 00:23:25,159 Speaker 2: that allows them to have more confidence and better judgment. 452 00:23:25,540 --> 00:23:28,760 Speaker 2: And I actually think it will shape the way everybody 453 00:23:28,800 --> 00:23:32,909 Speaker 2: in this field provides advice and thinks about what the 454 00:23:32,990 --> 00:23:34,710 Speaker 2: expectations of the clients are going to be. 455 00:23:35,390 --> 00:23:39,100 Speaker 4: You know, on media specifically, setting aside the deal-making question, 456 00:23:39,580 --> 00:23:42,560 Speaker 4: I could see two totally– there's probably ten, but two 457 00:23:42,640 --> 00:23:46,300 Speaker 4: totally different visions of what AI could mean for media. 458 00:23:46,359 --> 00:23:48,560 Speaker 4: So there is the one view. It's like anyone could 459 00:23:48,580 --> 00:23:51,310 Speaker 4: be a media maker right now. Anyone could make video 460 00:23:51,410 --> 00:23:55,690 Speaker 4: right now from their home office, and therefore the value 461 00:23:55,830 --> 00:23:58,550 Speaker 4: of media becomes less valuable. 462 00:23:58,570 --> 00:23:59,290 Speaker 1: It's commoditized. 463 00:23:59,930 --> 00:24:03,490 Speaker 4: The other version I could see is if you have IP, 464 00:24:03,710 --> 00:24:06,710 Speaker 4: if you have a name, if you have et cetera, 465 00:24:07,410 --> 00:24:10,730 Speaker 4: AI could be this force multiplier. Maybe Tom Cruise will 466 00:24:10,790 --> 00:24:14,310 Speaker 4: license nine versions of Tom Cruise and Tom Cruise could 467 00:24:14,330 --> 00:24:15,430 Speaker 4: be in 10 movies. 468 00:24:15,570 --> 00:24:17,209 Speaker 3: Are we sure that's not already happening, Jim? 469 00:24:17,230 --> 00:24:18,600 Speaker 1: It may already be happening. 470 00:24:19,119 --> 00:24:22,720 Speaker 4: I'm curious whether the clients that you talk to are 471 00:24:22,780 --> 00:24:26,290 Speaker 4: more of like, I'm very anxious. This is like anyone 472 00:24:26,369 --> 00:24:29,100 Speaker 4: could do what before I took years to build a 473 00:24:29,180 --> 00:24:32,160 Speaker 4: giant lot in Hollywood and now it could be done 474 00:24:32,240 --> 00:24:35,899 Speaker 4: on some computer versus I own this thing and I 475 00:24:35,940 --> 00:24:37,900 Speaker 4: have so many more ways to make it extensible. 476 00:24:37,980 --> 00:24:40,950 Speaker 2: Depends on how self-confident the client is. Okay. I would 477 00:24:41,010 --> 00:24:43,810 Speaker 2: say if you look at incumbents in the music industry, 478 00:24:44,350 --> 00:24:49,300 Speaker 2: they're very anxious about bandit AI upending something that's been 479 00:24:49,390 --> 00:24:52,040 Speaker 2: seasoned and built over a long period of time. So 480 00:24:52,080 --> 00:24:55,180 Speaker 2: they look at how do I protect myself against somebody 481 00:24:55,270 --> 00:24:58,709 Speaker 2: misusing content that was created by me or one of 482 00:24:58,810 --> 00:25:01,590 Speaker 2: my clients or one of the people that I represent 483 00:25:01,650 --> 00:25:04,030 Speaker 2: or I have a license with. So I think that's 484 00:25:04,070 --> 00:25:06,889 Speaker 2: got to get sorted out. At the same time, if 485 00:25:07,330 --> 00:25:10,270 Speaker 2: you are the creator and you think, well, I just 486 00:25:10,330 --> 00:25:14,550 Speaker 2: have a tool that makes my creativity that much more potent. 487 00:25:15,180 --> 00:25:18,080 Speaker 2: And I'm going to do something I only imagined about doing, 488 00:25:18,100 --> 00:25:20,679 Speaker 2: but I could never figure out how to do it myself. Suddenly, 489 00:25:21,060 --> 00:25:24,320 Speaker 2: I can create music with themes and experiences that I 490 00:25:24,400 --> 00:25:26,940 Speaker 2: don't have the competence to do on my own, but 491 00:25:26,980 --> 00:25:29,690 Speaker 2: I can figure out how to get it. And that's 492 00:25:29,730 --> 00:25:33,290 Speaker 2: incredibly powerful. And I believe that will be a phenomenon 493 00:25:33,310 --> 00:25:37,090 Speaker 2: that impacts how media is both created and what becomes 494 00:25:37,150 --> 00:25:40,930 Speaker 2: popular and people's expectations for how do they get entertained? 495 00:25:41,350 --> 00:25:43,050 Speaker 2: What's going to be vivid enough that they want to 496 00:25:43,090 --> 00:25:45,050 Speaker 2: buy it or download it? 497 00:25:45,720 --> 00:25:48,020 Speaker 3: Do you have a sense of whether back catalogs or 498 00:25:48,080 --> 00:25:51,760 Speaker 3: libraries of content are getting more valuable or less valuable 499 00:25:51,840 --> 00:25:52,320 Speaker 3: right now? 500 00:25:52,740 --> 00:25:55,439 Speaker 2: Well, they have been getting more valuable over the past, 501 00:25:55,900 --> 00:25:59,100 Speaker 2: let's say, 10 years. In part, you've had people who 502 00:25:59,140 --> 00:26:02,280 Speaker 2: want to securitize the cash flows coming from them, right? 503 00:26:02,460 --> 00:26:04,619 Speaker 2: I actually think that there is a lot to be 504 00:26:04,720 --> 00:26:09,660 Speaker 2: said for familiarity and things that have already been seasoned 505 00:26:10,040 --> 00:26:13,060 Speaker 2: and they're widely appreciated. So I actually think it will 506 00:26:13,080 --> 00:26:15,590 Speaker 2: get more valuable. And I think AI is likely to 507 00:26:15,640 --> 00:26:20,050 Speaker 2: make existing contents in catalogs more valuable because it will 508 00:26:20,090 --> 00:26:23,150 Speaker 2: find more uses for existing content. We're going to be, 509 00:26:23,650 --> 00:26:27,369 Speaker 2: maybe AI will create an environment in which we're going 510 00:26:27,390 --> 00:26:30,210 Speaker 2: to find it will be pulsed by different types of 511 00:26:30,270 --> 00:26:33,910 Speaker 2: media content in ways we never imagined before. And rather 512 00:26:33,950 --> 00:26:37,129 Speaker 2: than be barraged by it and resent it, AI is 513 00:26:37,170 --> 00:26:39,169 Speaker 2: going to be smart enough to theoretically How do I 514 00:26:39,230 --> 00:26:42,080 Speaker 2: do this so it's actually appealing to people? You think 515 00:26:42,119 --> 00:26:47,199 Speaker 2: about maybe a progenitor of AI. It is actually created 516 00:26:47,240 --> 00:26:51,220 Speaker 2: with all the same tools. What makes TikTok so attractive 517 00:26:51,240 --> 00:26:55,140 Speaker 2: to people? Why are people drawn to TikToks? It's because 518 00:26:55,260 --> 00:26:59,520 Speaker 2: the algorithms designed by Yiping Zhang a decade ago and 519 00:26:59,540 --> 00:27:02,729 Speaker 2: the teams that he built in China to develop the 520 00:27:02,790 --> 00:27:06,810 Speaker 2: way that the system worked was incredibly positive. He is, 521 00:27:06,890 --> 00:27:10,070 Speaker 2: by the way, the one person who would say he 522 00:27:10,210 --> 00:27:15,570 Speaker 2: is the only Chinese person or only Chinese company to 523 00:27:15,609 --> 00:27:18,609 Speaker 2: have created something that the rest of the world really 524 00:27:18,650 --> 00:27:21,629 Speaker 2: wants to buy because it's totally unique and it was 525 00:27:21,670 --> 00:27:22,270 Speaker 2: developed there. 526 00:27:22,450 --> 00:27:25,179 Speaker 4: Yeah, it's really extraordinary and it's really a breakthrough. If 527 00:27:25,270 --> 00:27:28,609 Speaker 4: Tracy and I went to L.A., could we find a 528 00:27:30,210 --> 00:27:34,130 Speaker 4: startup agent or et cetera pitching us on the idea 529 00:27:34,150 --> 00:27:39,190 Speaker 4: that like, let me clone your voice and have you 530 00:27:39,210 --> 00:27:40,609 Speaker 4: could produce 10x the content? 531 00:27:40,690 --> 00:27:42,190 Speaker 1: Is that a thing that's happening right now? 532 00:27:42,650 --> 00:27:44,889 Speaker 2: I believe it is. I believe you'll find lots of 533 00:27:44,930 --> 00:27:47,629 Speaker 2: people encouraging you to try things that are out of 534 00:27:47,650 --> 00:27:49,990 Speaker 2: your comfort zone, but have great upside potential. 535 00:27:50,950 --> 00:27:52,369 Speaker 3: So one of the reasons we wanted to talk to 536 00:27:52,390 --> 00:27:54,250 Speaker 3: you is you've been in finance for, there are a 537 00:27:54,260 --> 00:27:56,540 Speaker 3: number of reasons, but you've been in finance for many 538 00:27:56,600 --> 00:27:59,260 Speaker 3: decades now, I think since the 1980s. So you've lived 539 00:27:59,300 --> 00:28:03,880 Speaker 3: through multiple cycles of, you know, top of the market 540 00:28:04,000 --> 00:28:07,439 Speaker 3: and then the inevitable bust. From your vantage point as 541 00:28:07,500 --> 00:28:10,139 Speaker 3: an M & A guy, you see a lot of 542 00:28:10,180 --> 00:28:12,740 Speaker 3: deals that come to fruition. I imagine you see a 543 00:28:12,780 --> 00:28:14,960 Speaker 3: lot of deals that just remain in the sort of 544 00:28:15,420 --> 00:28:19,859 Speaker 3: talked about stage. Are there certain ideas that you start 545 00:28:19,920 --> 00:28:22,720 Speaker 3: to see when markets are beginning to get a little 546 00:28:22,770 --> 00:28:26,590 Speaker 3: bit crazy, a little bit irrational that you think to yourself, well, 547 00:28:26,630 --> 00:28:29,350 Speaker 3: wait a second, maybe we're getting ahead of our skis 548 00:28:29,390 --> 00:28:29,870 Speaker 3: a little bit? 549 00:28:30,410 --> 00:28:33,510 Speaker 2: It's interesting. I think there's not a frenzy, but an 550 00:28:33,930 --> 00:28:36,840 Speaker 2: appetite for deals right now on the part of people 551 00:28:36,880 --> 00:28:39,840 Speaker 2: who think about changing what they have or making it 552 00:28:39,880 --> 00:28:42,640 Speaker 2: better by doing a deal that they didn't imagine they 553 00:28:42,660 --> 00:28:45,530 Speaker 2: would be able to get done five years ago. There's 554 00:28:45,570 --> 00:28:48,780 Speaker 2: a sense that now the world is open to this 555 00:28:48,860 --> 00:28:52,200 Speaker 2: kind of transaction. And if you don't do it, you're 556 00:28:52,260 --> 00:28:55,330 Speaker 2: probably going to lose the opportunity. This is not something 557 00:28:55,370 --> 00:28:58,720 Speaker 2: that we found is a persistent condition. There will be 558 00:28:58,780 --> 00:29:01,500 Speaker 2: other things that get in the way. The financial markets 559 00:29:01,560 --> 00:29:04,600 Speaker 2: won't be as open. You'll have a regulatory environment that 560 00:29:04,620 --> 00:29:07,860 Speaker 2: would be more resistant. So I actually think the bias 561 00:29:07,900 --> 00:29:10,550 Speaker 2: on the part of corporate boards and decision makers is 562 00:29:10,570 --> 00:29:13,510 Speaker 2: to be pro-deal in a way that we see from 563 00:29:13,570 --> 00:29:15,810 Speaker 2: time to time. But I don't think we see it 564 00:29:16,030 --> 00:29:19,190 Speaker 2: as something that lasts forever. You have to take advantage 565 00:29:19,230 --> 00:29:19,890 Speaker 2: of it when it's there. 566 00:29:20,490 --> 00:29:22,550 Speaker 4: I have one last question. A friend of mine said 567 00:29:22,570 --> 00:29:25,580 Speaker 4: something to me very interesting. We use this term M & A. 568 00:29:25,900 --> 00:29:26,560 Speaker 2: It's come up. 569 00:29:27,640 --> 00:29:30,650 Speaker 1: And he does M & A professionally. He's like, you know, Joe, 570 00:29:30,650 --> 00:29:32,660 Speaker 1: it's just A. There's no mergers anymore. 571 00:29:32,660 --> 00:29:35,250 Speaker 4: And I started thinking, I was like, yeah, it's a 572 00:29:35,330 --> 00:29:36,550 Speaker 4: Citigroup Travelers. 573 00:29:36,610 --> 00:29:37,670 Speaker 2: That's old. 574 00:29:38,050 --> 00:29:39,890 Speaker 1: Wait, but this was always true. 575 00:29:39,930 --> 00:29:42,950 Speaker 3: Whenever there was a merger, someone would always be acquiring 576 00:29:43,010 --> 00:29:43,450 Speaker 3: someone else. 577 00:29:43,470 --> 00:29:46,930 Speaker 1: But almost it all seems acquisitions. Are there still the M's? 578 00:29:47,540 --> 00:29:50,280 Speaker 2: Look, M is just a way of describing you're putting 579 00:29:50,320 --> 00:29:54,040 Speaker 2: two companies together that generally are in the same size category. 580 00:29:54,060 --> 00:29:55,100 Speaker 1: Roughly the same size, yeah. 581 00:29:55,140 --> 00:29:57,620 Speaker 2: And then sometimes you'll end up with board members coming 582 00:29:57,660 --> 00:30:00,520 Speaker 2: from both sides and you split the management teams. That 583 00:30:00,560 --> 00:30:04,219 Speaker 2: part of M never lasts. There are things that are 584 00:30:04,240 --> 00:30:07,440 Speaker 2: done to make the deal happen. You're giving people the 585 00:30:07,520 --> 00:30:09,860 Speaker 2: space to say, I think this is a smart thing 586 00:30:09,900 --> 00:30:12,600 Speaker 2: to do. I was able to sell at a premium 587 00:30:12,800 --> 00:30:14,740 Speaker 2: or I was able to merge at a premium. So 588 00:30:15,080 --> 00:30:18,120 Speaker 2: my shareholders will be comfortable. But a year after the 589 00:30:18,160 --> 00:30:20,530 Speaker 2: deal is done, you have to get used to the 590 00:30:20,810 --> 00:30:24,650 Speaker 2: world that you have and leadership and the influence to 591 00:30:24,690 --> 00:30:28,380 Speaker 2: make decisions for the company. tends to consolidate into a 592 00:30:28,800 --> 00:30:31,080 Speaker 2: set of hands that may not be exactly where you started. 593 00:30:31,860 --> 00:30:33,780 Speaker 3: All right, Gene Sykes, thank you so much for coming 594 00:30:33,860 --> 00:30:36,290 Speaker 3: on Odd Lots. Thank you, Future Proof, for having us 595 00:30:36,390 --> 00:30:38,870 Speaker 3: once again. And thank you to our lovely audience. Really 596 00:30:38,910 --> 00:30:39,990 Speaker 3: appreciate you being here today. 597 00:30:40,230 --> 00:30:41,229 Speaker 1: Thank you so much. 598 00:30:41,250 --> 00:30:56,660 Speaker 3: Thank you. That was our conversation with Gene Sykes, recorded 599 00:30:56,820 --> 00:30:58,360 Speaker 3: live at the Future Proof Conference. 600 00:30:58,600 --> 00:31:02,100 Speaker 1: Really enjoyed it. Learned a lot. I am more inclined 601 00:31:02,120 --> 00:31:02,380 Speaker 1: to maybe come. 602 00:31:02,400 --> 00:31:03,680 Speaker 3: I was going to say, this is the question. Are 603 00:31:03,700 --> 00:31:05,420 Speaker 3: you going to come in 2028? 604 00:31:05,420 --> 00:31:08,100 Speaker 4: I still think it sounds like a mess, but he 605 00:31:08,140 --> 00:31:10,959 Speaker 4: made a pretty compelling sales... I mean, he's a banker 606 00:31:10,980 --> 00:31:13,900 Speaker 4: at Goldman Sachs. If there's someone who I would expect 607 00:31:13,940 --> 00:31:15,940 Speaker 4: to be able to make a pretty compelling sales pitch, 608 00:31:15,960 --> 00:31:18,770 Speaker 4: it would be him. But maybe it won't be the 609 00:31:18,810 --> 00:31:21,750 Speaker 4: total mess that I have in my head of what 610 00:31:21,770 --> 00:31:22,070 Speaker 4: it'd be. 611 00:31:22,150 --> 00:31:22,350 Speaker 3: So. 612 00:31:23,200 --> 00:31:23,980 Speaker 1: I'm open to it. 613 00:31:24,080 --> 00:31:26,180 Speaker 3: I'm going to watch it on TV and contribute to 614 00:31:26,200 --> 00:31:27,480 Speaker 3: the air rights financing. 615 00:31:27,620 --> 00:31:29,580 Speaker 4: You know what I might do? I might get some 616 00:31:29,720 --> 00:31:33,420 Speaker 4: really cheap tickets, like the kayaking event or something like that. 617 00:31:33,510 --> 00:31:36,710 Speaker 4: Or ping pong would be really fun and probably not 618 00:31:36,730 --> 00:31:39,170 Speaker 4: too expensive compared to, say, track and field. 619 00:31:39,650 --> 00:31:39,870 Speaker 2: So. 620 00:31:40,620 --> 00:31:41,290 Speaker 1: I'm open to it. 621 00:31:41,420 --> 00:31:41,680 Speaker 2: All right. 622 00:31:41,700 --> 00:31:42,540 Speaker 3: Shall we leave it there for now? 623 00:31:42,660 --> 00:31:43,140 Speaker 2: Let's leave it there. 624 00:31:43,160 --> 00:31:43,500 Speaker 4: Okay. 625 00:31:43,540 --> 00:31:45,700 Speaker 3: This has been another episode of the All Thoughts Podcast. 626 00:31:45,780 --> 00:31:48,220 Speaker 3: I'm Tracy Allaway. You can follow me at Tracy Allaway. 627 00:31:48,500 --> 00:31:49,760 Speaker 4: And I'm Joe Weisenthal. 628 00:31:49,780 --> 00:31:51,300 Speaker 1: You can follow me at The Stalwart. 629 00:31:51,620 --> 00:31:55,270 Speaker 4: Follow our producers, Carmen Rodriguez at Carmen Arman, Dashiell Bennett 630 00:31:55,350 --> 00:31:58,690 Speaker 4: at Dashbot, Kale Brooks at Kale Brooks, and Kevin Lozano 631 00:31:58,810 --> 00:31:59,950 Speaker 4: at Kevin Lloyd Lozano. 632 00:32:00,490 --> 00:32:02,430 Speaker 3: And for more OddLots content, you should check out our 633 00:32:02,490 --> 00:32:05,800 Speaker 3: daily newsletter. You can find that at Bloomberg.com forward slash OddLots. 634 00:32:05,900 --> 00:32:08,479 Speaker 4: And you can chat about all of these topics 24-7 635 00:32:08,640 --> 00:32:12,400 Speaker 4: in our Discord, Discord.gg slash OddLots. 636 00:32:12,540 --> 00:32:15,220 Speaker 3: And if you enjoyed this conversation, then please like the 637 00:32:15,260 --> 00:32:17,900 Speaker 3: video or leave a comment or better yet, subscribe. 638 00:32:18,360 --> 00:32:19,580 Speaker 1: Thanks for watching and listening. 639 00:32:28,250 --> 00:32:29,370 Speaker 3: So so