1 00:00:02,920 --> 00:00:09,160 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. We want to bring 2 00:00:09,200 --> 00:00:11,600 Speaker 1: in Brad Lander. He is New York City Comptroller. He 3 00:00:11,680 --> 00:00:14,600 Speaker 1: represents the New York City Retirement Systems, which holds two 4 00:00:14,640 --> 00:00:17,440 Speaker 1: point six million dollars worth of shares of Disney valued 5 00:00:17,760 --> 00:00:20,680 Speaker 1: two point six million shares excuse me of Disney shares 6 00:00:20,720 --> 00:00:23,880 Speaker 1: valued at more than two hundred and ninety million dollars. Brad, 7 00:00:23,920 --> 00:00:25,360 Speaker 1: thank you so much for joining us today. 8 00:00:26,360 --> 00:00:28,720 Speaker 2: Great to be with you. It's an exciting proxy Bow. 9 00:00:29,320 --> 00:00:32,640 Speaker 1: So, as city comptroller, you are an investment advisor and 10 00:00:32,680 --> 00:00:36,479 Speaker 1: custodian for the city's public pension funds. I'm curious as 11 00:00:36,520 --> 00:00:40,640 Speaker 1: to whether institutional investors like yourself tend to vote early 12 00:00:40,760 --> 00:00:43,120 Speaker 1: or later. I'm just trying to gauge how much we 13 00:00:43,120 --> 00:00:46,000 Speaker 1: can read into our reporting that sixty percent of the 14 00:00:46,080 --> 00:00:49,360 Speaker 1: votes have been cast for the Disney Company as opposed 15 00:00:49,360 --> 00:00:50,120 Speaker 1: to Nelson Peltz. 16 00:00:50,920 --> 00:00:52,960 Speaker 3: Well, our votes have already been cast, so you know 17 00:00:53,000 --> 00:00:55,680 Speaker 3: we're amongst that sixty percent, and we did vote for 18 00:00:55,880 --> 00:00:59,520 Speaker 3: these slates supported by Disney management by bab Biger as 19 00:00:59,520 --> 00:01:02,280 Speaker 3: that quotes as that you put up. You know we 20 00:01:02,400 --> 00:01:05,520 Speaker 3: are not enthusiastic about Leonard Pelts fifteen of the twenty 21 00:01:05,560 --> 00:01:08,320 Speaker 3: two times he's taken a position on a company's board, 22 00:01:08,440 --> 00:01:11,679 Speaker 3: sixty eight percent of the time, it's underperformed the S 23 00:01:11,720 --> 00:01:13,640 Speaker 3: and P five hundred and look. 24 00:01:13,440 --> 00:01:15,839 Speaker 2: It's a short term oriented edge. 25 00:01:15,680 --> 00:01:19,880 Speaker 3: Fund strategy, and we're long term investors looking at two 26 00:01:19,959 --> 00:01:23,880 Speaker 3: hundred and ninety million dollars. That's the retirement security of teachers, firefighters, 27 00:01:24,000 --> 00:01:26,039 Speaker 3: cops and crossing guards, and we want to make sure 28 00:01:26,040 --> 00:01:27,000 Speaker 3: it's there for the long run. 29 00:01:27,440 --> 00:01:30,319 Speaker 1: So Trent has raised a number of grievances. He's pointed 30 00:01:30,319 --> 00:01:33,319 Speaker 1: out succession issues, how the board has fumbled that the 31 00:01:33,440 --> 00:01:36,760 Speaker 1: unprofitable streaming business, and of course a bunch of box 32 00:01:36,800 --> 00:01:39,240 Speaker 1: office does as well. Do you share any of his 33 00:01:39,400 --> 00:01:40,479 Speaker 1: specific concerns. 34 00:01:41,160 --> 00:01:42,840 Speaker 2: Well, look, the succession issue is real. 35 00:01:42,920 --> 00:01:46,000 Speaker 3: We were not pleased with Jpek's time as CEO, and 36 00:01:46,080 --> 00:01:48,800 Speaker 3: we want to see the transition to the new CEO 37 00:01:49,000 --> 00:01:52,440 Speaker 3: handled better. But we like the transformation plan that the 38 00:01:52,480 --> 00:01:56,000 Speaker 3: company has put forward. And look, there's some duds when 39 00:01:56,000 --> 00:01:58,920 Speaker 3: you run a studio, there's some successes as well, like 40 00:01:59,000 --> 00:02:02,600 Speaker 3: Taylor Swift and you know Marvel and Star Wars and look, 41 00:02:02,640 --> 00:02:04,920 Speaker 3: I just you know, Leonard Pelts has never been on 42 00:02:04,960 --> 00:02:07,960 Speaker 3: the board of or led a media company, so I 43 00:02:07,960 --> 00:02:10,440 Speaker 3: don't know what he's going to bring to solving streaming 44 00:02:10,480 --> 00:02:13,720 Speaker 3: problems or making sure that the next stream of films 45 00:02:14,000 --> 00:02:17,640 Speaker 3: our successes. Bob Biker's track record is good during from 46 00:02:17,639 --> 00:02:20,800 Speaker 3: twenty five to twenty twenty share this aout five hundred 47 00:02:20,800 --> 00:02:23,400 Speaker 3: and seventy nine percent, and even in this more recent 48 00:02:23,480 --> 00:02:26,799 Speaker 3: tenure better than Paramount and Box. You know, we think 49 00:02:26,840 --> 00:02:29,320 Speaker 3: this is it needs to improve, like they all do, 50 00:02:30,160 --> 00:02:32,080 Speaker 3: but one that has has done well by us. 51 00:02:32,560 --> 00:02:35,200 Speaker 1: You mentioned the long term return of Disney under Bob Byker. 52 00:02:35,280 --> 00:02:38,120 Speaker 1: The board battle has been, like, let's be honest, pretty 53 00:02:38,120 --> 00:02:40,280 Speaker 1: good for the stock as well, because since Pulse has 54 00:02:40,280 --> 00:02:43,880 Speaker 1: publicized has taken Disney, the stock has done fairly well, 55 00:02:44,160 --> 00:02:46,760 Speaker 1: almost fifty percent, outpacing the S and P five hundred's 56 00:02:46,800 --> 00:02:49,320 Speaker 1: return over that period. Do you think it's been good 57 00:02:49,360 --> 00:02:51,320 Speaker 1: for the company in terms of sharpening focus. 58 00:02:52,639 --> 00:02:54,200 Speaker 2: Well, look, there's two different questions. 59 00:02:54,280 --> 00:02:56,320 Speaker 3: One, does this push people to do their best to 60 00:02:56,320 --> 00:02:58,640 Speaker 3: try to make sure they're coming up with good ideas. 61 00:02:58,320 --> 00:03:01,560 Speaker 2: And probably it does. On the other hand, an activist. 62 00:03:01,040 --> 00:03:03,880 Speaker 3: Interest pushes up share price, but that doesn't do anything 63 00:03:03,919 --> 00:03:06,440 Speaker 3: for a long term value. That's probably why it's not 64 00:03:06,480 --> 00:03:09,079 Speaker 3: a strategy that we are generally supporting. 65 00:03:10,400 --> 00:03:12,880 Speaker 1: Whatever the outcome of tomorrow's vote will be. Do you 66 00:03:12,880 --> 00:03:15,840 Speaker 1: think this will mark the end of the proxy fight 67 00:03:15,919 --> 00:03:18,359 Speaker 1: at Disney or is it just end of stage one? 68 00:03:19,080 --> 00:03:20,799 Speaker 3: Well, you know, I noticed that Peltz has tried to 69 00:03:20,800 --> 00:03:23,360 Speaker 3: get on the Disney board twenty four times already. 70 00:03:23,360 --> 00:03:24,799 Speaker 2: I think this is the twenty fourth time. 71 00:03:24,880 --> 00:03:26,880 Speaker 3: So I wonder if he's just looking for a fast 72 00:03:26,919 --> 00:03:28,840 Speaker 3: pass so he can move through the Disney parks more 73 00:03:28,880 --> 00:03:30,639 Speaker 3: quickly with his brand kids. I say, give him a 74 00:03:30,720 --> 00:03:33,600 Speaker 3: fast pass instead of a seat on the board. Let's 75 00:03:33,600 --> 00:03:38,080 Speaker 3: see what happens tomorrow. Obviously, there are those CEO succession issues, 76 00:03:38,640 --> 00:03:40,520 Speaker 3: and those are important over the next few years. 77 00:03:40,840 --> 00:03:43,680 Speaker 1: Has he or Blackwells reached out to you, has their 78 00:03:43,760 --> 00:03:45,560 Speaker 1: side reached out to you to try to convince you 79 00:03:45,640 --> 00:03:47,480 Speaker 1: of their argument to get on their side. 80 00:03:48,760 --> 00:03:51,640 Speaker 2: We have talked with the company. I don't. We have 81 00:03:51,720 --> 00:03:54,520 Speaker 2: not talked with Peltzer, Okay, got it. 82 00:03:54,880 --> 00:03:58,240 Speaker 1: Investors like to compare Disney to Netflix. And if you 83 00:03:58,280 --> 00:04:00,560 Speaker 1: just look at the fundamentals, for instance, Disney trades at 84 00:04:00,600 --> 00:04:03,480 Speaker 1: twenty four times forward earnings Netflix at thirty three times. 85 00:04:03,480 --> 00:04:06,120 Speaker 1: Netflix of course is profitable with its streaming. Do you 86 00:04:06,160 --> 00:04:07,640 Speaker 1: think this is a fair comparison. 87 00:04:08,920 --> 00:04:11,360 Speaker 3: Well, you know, Disney's got four businesses, they've got a 88 00:04:11,360 --> 00:04:14,400 Speaker 3: film studio, they've got streaming, they've got ESPN, and they've 89 00:04:14,440 --> 00:04:17,920 Speaker 3: got the parks. So for the streaming service, Netflix is 90 00:04:17,960 --> 00:04:21,800 Speaker 3: the right comparison. But obviously you have to, you know, 91 00:04:21,839 --> 00:04:24,359 Speaker 3: look at other comparisons for the sports network. 92 00:04:24,720 --> 00:04:28,039 Speaker 1: Where is the underrealized value unrealized value in Disney? 93 00:04:29,480 --> 00:04:31,880 Speaker 3: Well, you know, look, that's what this transformation plan is 94 00:04:31,920 --> 00:04:34,520 Speaker 3: designed to find. Figuring out how to make sure that 95 00:04:34,560 --> 00:04:38,040 Speaker 3: your film production and your streaming aren't eating into each other, 96 00:04:38,120 --> 00:04:41,479 Speaker 3: that you're really getting that value. That's something that the company, 97 00:04:41,520 --> 00:04:43,640 Speaker 3: and really many of these companies are still working on. 98 00:04:44,120 --> 00:04:47,400 Speaker 3: Look at Disney brand, there's nothing like it. And how 99 00:04:47,480 --> 00:04:49,599 Speaker 3: you take that into the next generation. I think the 100 00:04:49,640 --> 00:04:53,280 Speaker 3: Taylor's Lip Concert is a great example of that. You know, 101 00:04:53,320 --> 00:04:55,720 Speaker 3: and you know, how many Marvel films you could put 102 00:04:55,720 --> 00:04:57,040 Speaker 3: out that'll keep being successful. 103 00:04:57,040 --> 00:05:01,479 Speaker 1: That's not my expertise, but to your point, it's not 104 00:05:01,560 --> 00:05:04,039 Speaker 1: Nelson Peltz's expertise either, So okay. 105 00:05:03,839 --> 00:05:04,640 Speaker 2: Exactly right. 106 00:05:04,680 --> 00:05:07,120 Speaker 3: I just don't see anything to indicate that he will 107 00:05:07,160 --> 00:05:07,839 Speaker 3: add long. 108 00:05:07,720 --> 00:05:10,480 Speaker 1: Term vantage So I want to also ask you, given 109 00:05:10,520 --> 00:05:13,200 Speaker 1: that your role here as the CFO of New York 110 00:05:13,240 --> 00:05:18,120 Speaker 1: City about congestion pricing, the MTA board basically gave it 111 00:05:18,120 --> 00:05:22,279 Speaker 1: its green light to the city's congestion pricing plan. Is 112 00:05:22,320 --> 00:05:24,240 Speaker 1: this pretty much a done deal or are we still 113 00:05:24,279 --> 00:05:26,760 Speaker 1: in the eighth in and given the outstanding lawsuit from 114 00:05:27,000 --> 00:05:28,919 Speaker 1: New Jersey, I think. 115 00:05:28,760 --> 00:05:30,920 Speaker 3: Eighth inning is right. I'm really hoping to get to 116 00:05:31,040 --> 00:05:33,599 Speaker 3: the close. Hope we'll bring in our relief pitcher and 117 00:05:33,640 --> 00:05:36,800 Speaker 3: get across the finish line, because look, we need that 118 00:05:36,880 --> 00:05:39,160 Speaker 3: investment in the subway. That's to me like partly we 119 00:05:39,240 --> 00:05:42,320 Speaker 3: want to reduce congestion and partly we need to invest 120 00:05:42,360 --> 00:05:45,880 Speaker 3: in a modern signal system in accessibles of subway trains 121 00:05:45,920 --> 00:05:49,120 Speaker 3: like the mass transit. That is the future of New 122 00:05:49,200 --> 00:05:51,800 Speaker 3: York City is what our economy relies on. These are 123 00:05:51,800 --> 00:05:55,440 Speaker 3: the resources to make the investments to really modernize it 124 00:05:55,480 --> 00:05:57,040 Speaker 3: and make it run as effectively as it can. 125 00:05:57,480 --> 00:06:00,920 Speaker 1: So the MTA anticipates collecting about a billion dollars annually 126 00:06:01,040 --> 00:06:02,920 Speaker 1: from the new toll Is this what you would expect 127 00:06:02,920 --> 00:06:04,440 Speaker 1: as well? Is that what you've penciled in. 128 00:06:05,600 --> 00:06:06,719 Speaker 2: That is what's projected now. 129 00:06:06,760 --> 00:06:08,440 Speaker 3: Obviously, we have to see where it lands got to 130 00:06:08,480 --> 00:06:11,359 Speaker 3: get through the lawsuits, have to see how implementation goes. 131 00:06:11,400 --> 00:06:13,800 Speaker 3: But yes, about a billion dollars a year, which they're 132 00:06:13,839 --> 00:06:17,719 Speaker 3: going to write about a fifteen billion dollars on investment 133 00:06:17,800 --> 00:06:21,000 Speaker 3: against and that those are the resources that we need 134 00:06:21,040 --> 00:06:24,320 Speaker 3: to modernize the signal system. We're still operating on decades 135 00:06:24,360 --> 00:06:28,800 Speaker 3: old technology. Our peer cities are way out of us here. Safe, fast, 136 00:06:28,880 --> 00:06:31,800 Speaker 3: reliable mass transit is the key to New Yorks thriving. 137 00:06:31,880 --> 00:06:35,039 Speaker 3: And this is a big piece of the investment of 138 00:06:35,200 --> 00:06:35,720 Speaker 3: MAKE network. 139 00:06:35,960 --> 00:06:38,400 Speaker 1: Yes, but it will definitely put a lot of strain 140 00:06:38,600 --> 00:06:41,919 Speaker 1: on certain businesses located in areas right near where the 141 00:06:42,000 --> 00:06:46,400 Speaker 1: tolling is. Congestion pricing critics will say that small businesses 142 00:06:46,440 --> 00:06:49,039 Speaker 1: will have to take on this new expense, they'll have 143 00:06:49,080 --> 00:06:51,560 Speaker 1: to pass it on to their customers. For instance, how 144 00:06:51,560 --> 00:06:55,160 Speaker 1: do you see this affecting small businesses in midtown as 145 00:06:55,200 --> 00:06:55,960 Speaker 1: well as downtown. 146 00:06:56,760 --> 00:07:00,520 Speaker 3: Well, don't forget, we already have tolling on the Hudson Bridges. 147 00:07:00,560 --> 00:07:02,560 Speaker 3: We don't do on the East River bridges. So apparently 148 00:07:02,560 --> 00:07:04,880 Speaker 3: there's just sort of a whole set of quirks. 149 00:07:04,440 --> 00:07:05,159 Speaker 2: That right now. 150 00:07:05,279 --> 00:07:08,200 Speaker 3: Truck routing is already taking into account. So I think 151 00:07:08,240 --> 00:07:10,920 Speaker 3: this will actually even this out a little bit. There 152 00:07:10,960 --> 00:07:14,400 Speaker 3: will be a period of adjustment, but there are many 153 00:07:14,440 --> 00:07:17,920 Speaker 3: fewer people. Most people just do not drive their personal 154 00:07:18,000 --> 00:07:19,440 Speaker 3: cars into Manhattan. 155 00:07:19,560 --> 00:07:23,040 Speaker 2: So look, there's going to be some resetting and adjusting. 156 00:07:24,440 --> 00:07:27,720 Speaker 3: And look, I'm sympathetic to small business owners for whom 157 00:07:27,760 --> 00:07:29,600 Speaker 3: this is going to be an additional expense. 158 00:07:29,840 --> 00:07:31,640 Speaker 2: But you've just got to think about the city as 159 00:07:31,640 --> 00:07:32,080 Speaker 2: a whole. 160 00:07:32,240 --> 00:07:35,800 Speaker 3: Everyone will thrive better if customers can get to you faster, 161 00:07:35,960 --> 00:07:39,600 Speaker 3: if the city itself can keep its mass transit strong, 162 00:07:39,880 --> 00:07:44,480 Speaker 3: congestion is reduced, the it's a fair process to consider 163 00:07:44,760 --> 00:07:48,000 Speaker 3: exemption of people want more of them, I totally understand. 164 00:07:48,440 --> 00:07:50,560 Speaker 3: But from the point of view of long term investment 165 00:07:50,600 --> 00:07:51,880 Speaker 3: in the city, this makes sense. 166 00:07:52,440 --> 00:07:55,480 Speaker 1: Bradlander, really appreciate your joining us today. Look forward to 167 00:07:55,520 --> 00:07:57,880 Speaker 1: speaking with you again. New York City Control or Bradlander 168 00:07:57,880 --> 00:08:00,240 Speaker 1: there are talking to us about how he's voting in 169 00:08:00,480 --> 00:08:03,440 Speaker 1: the Disney proxy battle tomorrow, as well as New York 170 00:08:03,480 --> 00:08:04,880 Speaker 1: City's congestion pricing plan.