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Speaker 1: Hi, everyone, Welcome to the Bloomberg Business Wee Weekend podcast.
Speaker 1: This past week, and Video became the first company to
Speaker 1: hit four trillion dollars in market cap, cementing AI's rally
Speaker 1: and its status as a kingpin in the global financial market.
Speaker 3: Okay, so that's sort of a micro economic look totally,
Speaker 3: even though in Video is such a big company, we
Speaker 3: could call it sort of like a macro event.
Speaker 4: True.
Speaker 3: On the macro side, though, there was a lot because
Speaker 3: President Donald Trump fired off letters to over a dozen
Speaker 3: trading partners threatening new and higher tear rates they will
Speaker 3: face if they don't make a trade deal by the
Speaker 3: new deadline of August first.
Speaker 1: To be fair, there was stuff happening with trade and
Speaker 1: tariffs as we were recording our broadcast and podcasts, so
Speaker 1: highly recommend you head to the Bloomberg or Bloomberg dot
Speaker 1: com for the latest and greatest when it comes to
Speaker 1: trade and tariffs. All right, on trade and tariffs, though,
Speaker 1: we talked to the CEO of Treks, it's public company
Speaker 1: that's the largest manufacturer of wood alternative decking products, and
Speaker 1: the company's CEO joined us to talk about the impact
Speaker 1: of President Trump's extended trade deadline.
Speaker 3: Meantime, the world's richest man tells one bullish Tesla analyst
Speaker 3: to shut up. That analyst opens up to us in
Speaker 3: just a moment.
Speaker 5: All right.
Speaker 1: We also get into some other stuff that's going on.
Speaker 1: Amazon's robotic milestone that could one day replace humans and warehouses,
Speaker 1: or maybe it's a case they're working side by side.
Speaker 1: We get into that, and then I got to say,
Speaker 1: in our second hour, we get to America's hot garbage problem,
Speaker 1: a bit of a disturbing store.
Speaker 3: Also the CEO of Brooklyn Sports and Entertainment, which owns
Speaker 3: the Brooklyn Nets and New York Liberty. All that to come.
Speaker 3: We begin with the analyst. You this week got a
Speaker 3: short but clear message from Elon Musk. The analyst, Dan Ives,
Speaker 3: Global head of Technology research at Webbush securities.
Speaker 6: Look, I mean, I knew Elon was not gonna be happy,
Speaker 6: but the reality is, you know, the board they basically
Speaker 6: need to now step it up. And I think it's
Speaker 6: something where you know, I hear from sheeralders around the
Speaker 6: world right on Tesla and as one of the biggest
Speaker 6: supporters of Elon and Tesla, it was time to rip
Speaker 6: the band aid off. You got to now put a
Speaker 6: new structure. And actually one of them you know that
Speaker 6: we talked about in terms of the three things that
Speaker 6: we suggested, is that justly something Musk wants terms of
Speaker 6: twenty five percent voting rights and what I view is
Speaker 6: will ultimately be an XAI merger potentially, but second third,
Speaker 6: the political gambles and this side show it can't continue.
Speaker 3: You know, analysts were totally seemed totally fine with Elon
Speaker 3: Musk and correct me if I'm wrong. They seemed totally
Speaker 3: fine with him when he was getting along well with
Speaker 3: President Trump and it seemed like the president's policies would
Speaker 3: favor his companies. Is that fair to.
Speaker 6: Say it's that's one hundred percent. I mean, I view
Speaker 6: it is like and we talked about it. The best
Speaker 6: ever happened to Musk at that time was Trump getting
Speaker 6: into the White House. And obviously, you know you could
Speaker 6: argue Trump doesn't get into the White House if it's
Speaker 6: not from Musk.
Speaker 5: But like a lot of things, it took on a
Speaker 5: life of its own.
Speaker 6: Doge BFFs spending now time with Tesla, mar Lag or
Speaker 6: DC Doge the brand issues That ultimately is why then
Speaker 6: Musk had to take a step back and basically leave
Speaker 6: the Trump administration. But in your wildest nightmare, no one expected, hey,
Speaker 6: let's triple down start a third political party where now
Speaker 6: Trump actually becomes a foe, Republican part becomes fue and
Speaker 6: that just becomes more of an overhang for Tesla.
Speaker 1: So the board as it exists now, is this the
Speaker 1: board that you think can bring about the necessary changes
Speaker 1: and set the ground rules as you are calling for Tesla?
Speaker 1: And Jack Hartung who has been CFO of Starbucks, not
Speaker 1: Starbucks of Chipotle, excuse me, Kimball, Reeve Musk is on it,
Speaker 1: Jim Murdoch of course, Elon Robin Denholm, an Australian business
Speaker 1: executive from her accountant, chair of the Tesla board. So
Speaker 1: I'm just trying to think, is this the board that
Speaker 1: you think can execute the changes that need to be done.
Speaker 5: Well, they don't have a choice.
Speaker 1: No, this is I mean they don't have a choice because.
Speaker 6: They don't have a choice where the sometimes boards look,
Speaker 6: if you go back to history of Tesla, what Elon does?
Speaker 5: What he do?
Speaker 6: You know, you can never argue a bet against them,
Speaker 6: And that's been that's been the m right, that's been
Speaker 6: the DNA. The problem is is that essential the clock
Speaker 6: strikes midnight when now it comes to these political ventures
Speaker 6: and endeavors as well as the time spent at Tesla
Speaker 6: the board, you're not going to have a major change
Speaker 6: or makeup in a board that would take many years.
Speaker 6: The board now, as a public company, needs to a
Speaker 6: new pay package. We talked about twenty five percent voting shares,
Speaker 6: but then established the guardrails because it's a public company
Speaker 6: and shareholders are demanding and the stock reflects changes that
Speaker 6: need to be made.
Speaker 3: You know, the board certainly is part of it. But
Speaker 3: I think bigger picture question that I have is an
Speaker 3: existential one about Tesla Dan and that's with regard to
Speaker 3: Chinese competition, and we've seen sales get hammered over the
Speaker 3: last year, and that really the narrative has been around
Speaker 3: Musks and his association with politics, whether we're talking about
Speaker 3: that in the US or about that in Europe. But
Speaker 3: what about the China factor? Does Tesla have what it
Speaker 3: takes to compete around the world with Chinese EV's, they have.
Speaker 6: What it takes with Musk in other words, like Musk
Speaker 6: is the biggest asset for Tesla, but they don't.
Speaker 3: Have the products. But they don't have products that compete
Speaker 3: at those price points and with that test.
Speaker 6: Yeah, So on that point, Look, it's so much spends
Speaker 6: time in China, like competition, Bid neo xpaying everything. We've
Speaker 6: seen clearly it's become much more of a competitive market.
Speaker 6: I just I continue to view is that Tesla is
Speaker 6: still a gold standard globally when it comes to EV's.
Speaker 6: I think when it comes to China, Look the big
Speaker 6: game right now that they're a win. It's not this
Speaker 6: sid about deliveries, it's about can they win the autonomous
Speaker 6: and robotics future. That book that is the way you
Speaker 6: get to two trillion, The way you get to trillion
Speaker 6: dollar incremental evaluation because of autonomous is that way.
Speaker 1: You know, it's interesting that you say that because one
Speaker 1: of our producers Sebastian Escobar said, Hey, Weimos are coming
Speaker 1: to my town where I live in, which is just
Speaker 1: across from Loower Manhattan, And I'm like, wait what? And
Speaker 1: Weimo seem to be expanding pretty aggressively, and so it
Speaker 1: does seem like folks are going after what could be
Speaker 1: ultimately the future right of Tesla. I really autonomous works.
Speaker 1: I mean that's where the growth comes right going forward
Speaker 1: for Tesla in your.
Speaker 6: View, sure, but to that point, I look, weymos are
Speaker 6: two undred thousand dollars cars, like you're essentially in five
Speaker 6: six cities. Yeah, when you do about the scale and
Speaker 6: Scoop Tessa were talking about twenty twenty five cities over
Speaker 6: the next year. When it comes to robo attack, I mean,
Speaker 6: that's the whole opportunity, Like when you think about twenty
Speaker 6: percent of what I view is like ride sharing over
Speaker 6: the next four or five years is going to be autonomous,
Speaker 6: no driver. So that's the opportunity that Tessa is going after.
Speaker 6: But then it goes back to politically, you can't have Trump, Duffy,
Speaker 6: whoever else you want to talk about for administration now
Speaker 6: as a friend, but as a foe when you go
Speaker 6: into the most important chapter of growth and success. What
Speaker 6: I view on the horizon for Tesla has has.
Speaker 1: Elon reached out to have you reached out to him?
Speaker 5: I mean, I won't comment there.
Speaker 6: I would just say that, like, the message has definitely
Speaker 6: been received by Elon, It's been received by the board,
Speaker 6: and that was my goal, right, Like my goal is
Speaker 6: is that sometimes it's like tough love, right, Like the
Speaker 6: point is like it comes down to like if you
Speaker 6: don't reprimand or whatever, if you like, you know, it's
Speaker 6: like there's good times in bad times, but this is
Speaker 6: a time and the stock reflects it that the board,
Speaker 6: the adults.
Speaker 5: In the room, what everyone want to talk about. They
Speaker 5: need to weigh the guard rails.
Speaker 6: Out from Musk, especially around the political ambition.
Speaker 5: That that is the key.
Speaker 3: Dan, How does it feel to have Elon Musk tell
Speaker 3: you to in all seriousness? What did it feel like
Speaker 3: to have him tell you to shut up? On his platform?
Speaker 3: He's got I don't even know how many followers he has.
Speaker 3: It has to be over one hundred million, hundreds of
Speaker 3: Millik's like two hundred and twenty million followers. How did
Speaker 3: that feel? I mean, I imagine too as his sort
Speaker 3: of army came after you as well.
Speaker 6: Yeah, I don't you know you we knew each other. Well,
Speaker 6: It's like I don't worry about that. I mean, to me,
Speaker 6: I just actually view it more as like he has
Speaker 6: his right to an opinion. I disagree. I'm a huge
Speaker 6: supporter him and Tessa, but I'm more focused on, like
Speaker 6: it creating dialogue, Like he'll say shut up Dan, and
Speaker 6: I have one hundred memes sent to me about different
Speaker 6: shut up Dan stuff and actually got in the street
Speaker 6: yesterday yelled from New York City across the streets like
Speaker 6: shut up Dance. So that's that's that's that's cool. But
Speaker 6: to me, it's about creating the dialogue because now it's like, Okay,
Speaker 6: what what is the community?
Speaker 5: What is ship?
Speaker 6: I'm here from sheeralders all day. Right, that's the important thing.
Speaker 6: What it means for the Tesla story. That's the whole goal.
Speaker 1: I wonder has the board reached out to you and said, hey,
Speaker 1: thanks Stan for that?
Speaker 7: Yeah?
Speaker 6: No, I mean, I just the good thing is like
Speaker 6: I feel like I definitely feel like this message has
Speaker 6: been received by the you know, I think everyone's seeing it.
Speaker 6: And at least now now it comes down to like, Okay,
Speaker 6: are there actions like does what does the board do
Speaker 6: with the next pay package? Remember is the other fifty
Speaker 6: six billion dollar pay package is still in the legal
Speaker 6: sort of wimbow because of Delaware Foxy still hasn't been
Speaker 6: you know, ultimately sent. That's been the way. So this
Speaker 6: is a key period of time for the board.
Speaker 5: From Musk.
Speaker 1: Another message that was received for the world of Elon
Speaker 1: Musk was from the CEO of X, Linda Yakarino, stepping
Speaker 1: down a CEO after two years post on X decided
Speaker 1: to step down as CEO. I'll be cheering you all
Speaker 1: as you continue to change the world. What's your view
Speaker 1: on that? What's how do we read it?
Speaker 6: I think I have a very positive view of her, right,
Speaker 6: besides the fact that she's a Penn Stater.
Speaker 5: We are, but.
Speaker 6: All right, let you know, but my view is she
Speaker 6: turned around acts. She navigated massive political storm, right. I
Speaker 6: think very few people could have done the advertising.
Speaker 5: I think a lot of it has rebound. There's still
Speaker 5: obviously queer headwinds, but I think.
Speaker 6: Like this is like, look, it's it's huge shoes to fill,
Speaker 6: Like it is a big hole. Herd weaving because she
Speaker 6: is a unique background because of advertising because of her personality.
Speaker 6: I think she got along very well with Musk. So
Speaker 6: it is it is a huge you know what I view,
Speaker 6: it's a negative. But now it comes down like who
Speaker 6: fills that role?
Speaker 8: Yeah?
Speaker 1: Interesting stuff. Listen, We're so glad we could catch up
Speaker 1: with you here. Yeah, we really, we really appreciate it.
Speaker 5: I'm so glad to be here and talking. This is
Speaker 5: a you know, get the popcorn out. A lot of
Speaker 5: soap operas ahead pack.
Speaker 3: If you want to not be yelled on the street, Dan,
Speaker 3: you're gonna have to tone down the wardrobe a little
Speaker 3: bit and go incognito and not wear the signature. Dan
Speaker 3: ives closed. I don't know if you need to go incognito,
Speaker 3: but you know I love it. We love it. Dan
Speaker 3: Id's global head of Technology research at web Bush Securities.
Speaker 3: Joining us from New York.
Speaker 2: You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
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Speaker 2: or watch us live on YouTube.
Speaker 3: Well, if you've built a deck in the last few years,
Speaker 3: you probably know about Treks. The company makes composite decking
Speaker 3: for mostly recycled materials, including reclaimed wood and polyethylene film.
Speaker 3: Trex is publicly traded. It's got a market cap of
Speaker 3: about six point one billion dollars. The stock's down around
Speaker 3: seventeen percent so far this year. Like many companies in
Speaker 3: housing and home improvement, it has been a challenging first
Speaker 3: half of the year. Brian Thanks is with us. He's
Speaker 3: president and CEO of Tracks. He joins US in the
Speaker 3: Bloomberg Interactive Brokers studio. Brian, welcome, How are you?
Speaker 9: Thanks? Great to be here?
Speaker 10: Well, welcome.
Speaker 3: Welcome. Trek sales in more than forty countries, so that's
Speaker 3: kind of where I want to start. How is the
Speaker 3: environment in the US for your customers, for your potential
Speaker 3: customers versus other parts of the world that you sell
Speaker 3: in the US?
Speaker 9: Environment is still relatively strong. Most of our consumers are
Speaker 9: going to be family income of one hundred twenty thousand
Speaker 9: dollars plus, and we've all talked for a long time
Speaker 9: about the bifurcation of the premium customer versus the entry
Speaker 9: level customer. Because most of our customers are that one
Speaker 9: hundred plus. We've continued to do well in the marketplace
Speaker 9: this year. We gie to five to seven percent growth.
Speaker 9: We reiterated that guy just a couple of weeks ago.
Speaker 9: Our contractors generally have six to eight week type backlogs
Speaker 9: at this point, and overall we're pleased with what we're
Speaker 9: seeing in the market.
Speaker 11: Where are most of the sales coming from. Is it
Speaker 11: people homeowners who who are putting in a deck for
Speaker 11: the first time, or are they remodeling or are they
Speaker 11: just completely kind of I guess yeah, remodeling their backyard.
Speaker 9: All the above, But more often than not, it's going
Speaker 9: to be a consumer that's already experienced a wood deck.
Speaker 9: It's failed between twelve to fifteen years, maybe eighteen years.
Speaker 9: On the long end of it. The quality of pressure
Speaker 9: treated lumber is not what it used to be, so
Speaker 9: that decision and the payback period of putting in a
Speaker 9: treks deck versus a wood deck is very different today.
Speaker 9: But we also put on a lot of new decks
Speaker 9: on new homes as well as homes that are just
Speaker 9: looking for existing square footage. More difficult to move up
Speaker 9: to that larger home. Now, how do I add more
Speaker 9: space to entertain with your friend's family, and it put
Speaker 9: a deck on the back of the house.
Speaker 3: But isn't a deck built with treks framed by pressure
Speaker 3: treated wood under it anyway?
Speaker 10: That's correct?
Speaker 3: So is that is that an issue? Ever, where the
Speaker 3: wood that provides the framing the structure that doesn't last
Speaker 3: as long as the.
Speaker 9: That structure is going to be protected by the trek,
Speaker 9: so it doesn't get nearly the same beating from a
Speaker 9: weather perspective or for chemicals, UV rays, things like that,
Speaker 9: so that structure tends to last quite a bit longer,
Speaker 9: whereas the decking itself is what's subject to the majority
Speaker 9: of the environmental conditions.
Speaker 3: So what exactly is it made of? On the website
Speaker 3: it says that it is made of mostly recycled materials,
Speaker 3: reclaimed wood, polyethylene film.
Speaker 9: What's the secret sauce at ninety five percent recycled and
Speaker 9: reclaimed material. So the recycled piece of it is going
Speaker 9: to be the polyethylene films that we buy from all
Speaker 9: over the country and up into Canada. It's about one
Speaker 9: thousand pounds bail of film. We'll bring that in, we'll
Speaker 9: reprocess it, and then we also purchase wood furniture flooring
Speaker 9: manufacturers from some other sources as well to mix that
Speaker 9: together with the plastic, we extrude it into a deck board.
Speaker 9: We apply our proprietary shell on the board to give
Speaker 9: it its fade, stain and scratch characteristics. That's pretty much
Speaker 9: the way it's done. Buying recycled materials does give us
Speaker 9: a healthy cost advantage. We can be buying plastic anywhere
Speaker 9: between five cents and up thirty cents for cleaner plastic.
Speaker 9: We still have to process it, so there's some additional
Speaker 9: cost added, whereas virgin materials are going to be sixty
Speaker 9: to seventy cents per pound.
Speaker 3: You mentioned buying some product at least from Canada, the
Speaker 3: polyethylene film. The tariff situation, we've spent the whole day
Speaker 3: talking about clarity or lack thereof that we are getting
Speaker 3: that CEOs and business owners are getting right now from Washington.
Speaker 3: How have tariffs affected you.
Speaker 9: Well, there's a lack of clarity, that's for sure. For CEOs,
Speaker 9: we are primarily a US manufacturing company. We've got three
Speaker 9: manufacturing sites, one in Virginia, one in Nevada, and then
Speaker 9: we're building a green field site in Little Rock, Arkansas
Speaker 9: that we're excited about. Today. We are recycling plastic in
Speaker 9: Little Rock, and then we're moving that to our other
Speaker 9: two plants to use there As we continue to build
Speaker 9: out that facility, less than five percent of our cost
Speaker 9: of goods sold is going to be impacted by tariffs,
Speaker 9: And in looking at the those tariffs, we look at
Speaker 9: how can we potentially source out of other countries, negotiating
Speaker 9: with those vendors, and then eventually taking pricing. We've taken
Speaker 9: a very conservative view of pricing of let's try to
Speaker 9: let tariffs settle out of where their endpoint is going
Speaker 9: to be, rather than immediately reacting the day the announcements
Speaker 9: were made.
Speaker 11: So we're tim asked about the tariffs, I'm going to
Speaker 11: ask about the big beautiful bill. We're going to hit
Speaker 11: you with the two main current events of the news
Speaker 11: cycle right now. Have you heard anything from the consumer
Speaker 11: about how this bill is going to impact their spending behavior?
Speaker 9: It is too early. I think everybody is just beginning
Speaker 9: to digest everything that's actually in that bill, and so
Speaker 9: I've not really had any feedback from it as of yet.
Speaker 9: We haven't had a chance to pull our contractors or
Speaker 9: work further with our consumers as well as all of
Speaker 9: those dealers as well as retail channel locations.
Speaker 3: I know you're ninety five percent repair remodel based. So
Speaker 3: the housing market weakness that we've seen when it comes
Speaker 3: to new housing isn't necessarily Can we can we do
Speaker 3: a do a through line from housing data to you
Speaker 3: or is this all about, Hey, somebody's been in a house,
Speaker 3: they want to put in a new deck, they're going
Speaker 3: to they're going to use tracks. Is there any is
Speaker 3: there any anything that comes you know, when you're talking
Speaker 3: about new housing demand and like people buying new homes
Speaker 3: that that accompanies demand and tracks.
Speaker 9: The only impact with the new home buying side of
Speaker 9: things is it does generate existing home sales. We've all
Speaker 9: seen existing home sales have been lower the past couple
Speaker 9: of years. That has driven repair and remodel spending negative numbers.
Speaker 9: The past couple of years, we've been able to well
Speaker 9: out growth that mid single digit growth for US small
Speaker 9: single digit negative growth in repair and remodels. So we've
Speaker 9: been able to well out perform at but it would
Speaker 9: be great to see the existing home sale side of
Speaker 9: things really pick up and drive that remodeling engine.
Speaker 3: Do you work at all with the large developers of
Speaker 3: property or the large homebuilders like the Lenar's or the
Speaker 3: KB Homes, for example, to use your materials.
Speaker 9: We do. We've had agreement with the majority of the
Speaker 9: large home builders that are in the marketplace, so it
Speaker 9: is an important part of our business. But generally we're
Speaker 9: about ninety five ninety to ninety five percent repair, remodel
Speaker 9: the remainder.
Speaker 11: Of that on new home You guys have a pretty
Speaker 11: large part of the market share, but that's not for
Speaker 11: lack of competition. James Hardy just closed on its acquisition
Speaker 11: of Aazec, which is your largest competitor. How are you
Speaker 11: thinking about keeping that market share now that there's been
Speaker 11: a pretty big deal in the space.
Speaker 9: It's a highly concentrated market. As you mentioned, we're about
Speaker 9: fifty percent. Azak TimberTech roughly thirty percent of the marketplace,
Speaker 9: and they've always been a good competitor, and I think
Speaker 9: it makes both of us better having good competitors that
Speaker 9: are out there. We're not going to be seating market share.
Speaker 3: Back to tariffs in terms of how the product is
Speaker 3: purchased outside of the US retaliatory tarraf from other countries.
Speaker 3: Has that been an issue yet for you?
Speaker 9: It has not been an issue, and that goes back
Speaker 9: to the fact that we're ninety five percent US source
Speaker 9: US manium.
Speaker 3: But if you're US source and US manufactured, let's say
Speaker 3: you want to export the US product.
Speaker 9: Right, I see on the flip side, Yeah, the flip.
Speaker 3: Side of that would be another country saying, wait a second,
Speaker 3: we don't want you to buy this product from the
Speaker 3: US because we're entering this period of global trade that
Speaker 3: is more insular, where we're seeing sort of like the
Speaker 3: world is not flat anymore. You know, it's been a
Speaker 3: kind of a weird twenty five years. Is that is
Speaker 3: that on your radar at all?
Speaker 9: Our international sales are a small part of the overall company.
Speaker 9: Now we do ship to forty countries around the world.
Speaker 9: We've not heard any of that feedback as of yet.
Speaker 9: Because we get further in the year and the tariff
Speaker 9: structure settles out to where it's going to end up being,
Speaker 9: I expect there'll be some additional discussions around that and
Speaker 9: we'll hear more feedback from some of those countries.
Speaker 6: How do you.
Speaker 11: Guys kind of deal with the rising rising commodities prices?
Speaker 11: I remember writing an article a couple of years ago
Speaker 11: when lumber was just absolutely soaring, and I wrote about
Speaker 11: like wood alternative companies doing really well in the face
Speaker 11: of that, But I imagine that you do have to
Speaker 11: source some materials and if inflation does persist, is that
Speaker 11: an issue.
Speaker 9: Sure, inflation absolutely hits our business during the pandemic. We
Speaker 9: raise prices like many other building product makers. We also
Speaker 9: have a strong internal improvement program where we look at
Speaker 9: all of the costs that we can control and understand
Speaker 9: how can we take cost out of the business so
Speaker 9: that we can fund some of those cost increases. Internally,
Speaker 9: we know every year the cost of labor is going
Speaker 9: to go up, certain commodity costs are going to go
Speaker 9: up along the way. How much of that can we
Speaker 9: fund by our own internal engineering R and D efforts
Speaker 9: and our own efficiency efforts. But sometimes we do have
Speaker 9: to take pricing to be able to cover those additional costs.
Speaker 3: One of the big selling points of Track is just
Speaker 3: how long it lasts. This idea of not having to
Speaker 3: replace a deck for twenty five years, for example. That
Speaker 3: also means that when somebody purchases the product from you,
Speaker 3: they're probably not going to buy anything else from you.
Speaker 3: How do you build a part of the business that's
Speaker 3: like not necessarily services, but more ancillary products that are
Speaker 3: add ons or how do you get that existing customer
Speaker 3: who knows about trucks to spend more money with you?
Speaker 9: Right, that's an important point. Our warranties are anywhere from
Speaker 9: twenty five up to fifty years. This product will last
Speaker 9: a long time, but the market size is such a
Speaker 9: there's fifty to sixty million decks in North America. Half
Speaker 9: of those decks are at or beyond their serviceable life. Today,
Speaker 9: composites account for about twenty five percent of the volume
Speaker 9: of decking that's sold. So there is a large opportunity
Speaker 9: out there to go convert more of that wood business
Speaker 9: into Trek's composite business.
Speaker 3: Is new business still wood business? Like are people still
Speaker 3: building wood decks?
Speaker 9: People are still building wood decks yet?
Speaker 3: Well, why are they doing that when this like, when
Speaker 3: they're in that moment of truth where they're choosing their material,
Speaker 3: Why are they still going with wood?
Speaker 9: A lot of it is because that's what they know,
Speaker 9: that's what they've done in the past. So the challenge
Speaker 9: for us is making sure that we're in front of
Speaker 9: that consumer while they're making that decision, showing them that
Speaker 9: we have products. In the case of the decking product
Speaker 9: are enhanced basics is roughly two times the price of lumber.
Speaker 9: So for an extra eight hundred dollars, you can have
Speaker 9: a Trek surface on your deck and prices go up
Speaker 9: from there. For an extra five hundred dollars. On top
Speaker 9: of that, move up to our next line, our Treks
Speaker 9: Enhance Naturals product line. So it's really important that our
Speaker 9: marketing engine gets in front of those consumers before they're
Speaker 9: making that final decision social media.
Speaker 11: I've seen some of your social media content.
Speaker 3: Ah, Trek's TikTok?
Speaker 5: Is that what it is?
Speaker 11: It's other people on social media stick.
Speaker 10: About their deck.
Speaker 3: Oh interesting, I haven't seen that. Hey, Brian, thanks for
Speaker 3: stopping by. It's been a couple of years. Do appreciate
Speaker 3: you taking the time. Brian Fairbanks, President and CEO of Tracks,
Speaker 3: joining us here in the Bloomberg Interactive Broker's studio.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 1: Amazon held its annual Prime Day this past weekend for
Speaker 1: the first time ever. It happened over a course of
Speaker 1: four days, Amazon betting the extension would give shoppers more
Speaker 1: time to navigate the millions of deals despite terror related
Speaker 1: price worries, a.
Speaker 3: Bunch of robots lending a helping hand to get orders
Speaker 3: out to customers. In fact, Amazon marked a milestone earlier
Speaker 3: this month when an announced it's now using over one
Speaker 3: million robots in its warehouses. That's actually about the same
Speaker 3: number of human employees at the facilities. The news comes
Speaker 3: at a time when more tech companies are making job
Speaker 3: cuts and issuing automation warnings.
Speaker 1: Ty Brady is the chief technologist for robotics at Amazon.
Speaker 1: He joined Matt Miller and me all the way from Tokyo, Japan.
Speaker 1: It was in the middle of the night when he
Speaker 1: spoke with us, but it was weird that one millionth
Speaker 1: robot was deployed in a Japanese fulfillment warehouse.
Speaker 12: It's an incredible achievement. I'm so proud of our team
Speaker 12: to be able to deploy more than one million robots
Speaker 12: to our global fleet. Our one millionth robot. I'm here
Speaker 12: in Tokyo. We actually deliver it to a fulfillment center
Speaker 12: in Chiba here in Japan, a great region for us
Speaker 12: for sure, And the way that we see it is
Speaker 12: it's really a force multiplier for both safety for our
Speaker 12: employees and also for the efficiencies getting those goods right
Speaker 12: to our customer's door on time, at a low cost,
Speaker 12: just in time for prime day.
Speaker 10: So when we talk about robots, I don't think of
Speaker 10: the roomba. I think of C three PO and that
Speaker 10: doesn't seem to be where we are quite yet, certainly
Speaker 10: not in America, right we don't have a bunch of
Speaker 10: humanoid androids running around. How far away is that?
Speaker 12: Matt, You're speaking my love language, because when I think
Speaker 12: of robots, I actually think of R two D two,
Speaker 12: not C three PO. Because I do want to remind
Speaker 12: you who is in the back of the X Wing
Speaker 12: Fighter when Luke Skywalker had to go into into the
Speaker 12: desk Star. That was R two D two.
Speaker 5: And why I love R.
Speaker 12: Two do and actually R two D two was the
Speaker 12: inspiration for my entire career. It's because R two D
Speaker 12: two helps a Jedi be more Jedi. And that's kind
Speaker 12: of the way that we view our robotics. Inside of Amazon.
Speaker 12: We see our robotics as an extension and amplification of
Speaker 12: what a person can do. Just like any great robots,
Speaker 12: it should be a tool centered around a person, right,
Speaker 12: So we put people at the center of the robotics universe.
Speaker 12: That's what we've done with a million robots that we've
Speaker 12: deployed out there, whether it's in mobility or manipulation. We
Speaker 12: are giving our frontline employees the right tool set in
Speaker 12: order to do their jobs more efficiently, and we're also
Speaker 12: created more safety for them.
Speaker 10: Hi, where's it all going?
Speaker 1: And I asked that if we're giving you know, increasingly,
Speaker 1: you've got these robots, you've got AI and all of
Speaker 1: this is assisting workers, Like, where is it all headed?
Speaker 12: Yeah, it's well, I really do believe that we're pioneering
Speaker 12: the field of collaborative robotics. So as we continue to
Speaker 12: gain efficiencies, as we continue to create safety for our employees,
Speaker 12: we become more productive. That has clearly worked inside of
Speaker 12: Amazon and frankly for e commerce, where we see that
Speaker 12: if you can build your robots in the right way
Speaker 12: that amplifies human potential and as a system that works
Speaker 12: with people. It's not people versus machines, but it's machines
Speaker 12: and people working together nor to the job. We have
Speaker 12: really revolutionized that field. So what we have seen historically
Speaker 12: is the more robots that we have added, and this
Speaker 12: is now over a ten years plus since Amazon really
Speaker 12: got serious about robotics, We've created hundreds of thousands of
Speaker 12: new jobs, and we've also even created new job types.
Speaker 12: So where I see it going is that the onus
Speaker 12: is on us roboticists to build our machines in a
Speaker 12: way that is intuitive and natural for people to use,
Speaker 12: to build them with specific intent in the functions in
Speaker 12: order to help people do their jobs better. And my
Speaker 12: goal is to eliminate the menial, the mundane, and the repetitive.
Speaker 12: I aim to eliminate every single one of those tasks
Speaker 12: and allow people to think at a higher level and
Speaker 12: use the tool set in order to get the job done.
Speaker 10: What kind of robots are helping you deal with? Like
Speaker 10: Prime Day, for instance, it's coming up. I think July
Speaker 10: eighth is when it kicks off massive shopping day for
Speaker 10: people around the world, but also for people in Amazon warehouses.
Speaker 10: I mean, do they have like an exoskeleton like tom Cruise,
Speaker 10: an Edge of Tomorrow or is it actually you know,
Speaker 10: a humanoid that's running around picking up orders and putting
Speaker 10: them in boxes to ship out.
Speaker 12: Yeah, we think of function first before form, right, So
Speaker 12: and when you say humanoid, that's really form base. But
Speaker 12: the functions that we really index on in robotics is
Speaker 12: the ability to move items from one side of the
Speaker 12: warehouse to another, or manipulate items, or store or sort
Speaker 12: or identify and pack those items. That's really what we do.
Speaker 12: So if you were to walk into one of our
Speaker 12: fulfillment centers, you would see these little drive units moving
Speaker 12: goods at will. Thousands and thousands of these drive units
Speaker 12: moving our pods to a person in order to pick
Speaker 12: out those items. You would see robotic arms picking up
Speaker 12: heavy packages. These are the repetitive jobs that I speak of.
Speaker 12: Before picking up heavy packages and moving those into sortation systems.
Speaker 12: You would see sortation drives moving to the right and
Speaker 12: correct spot in order to bring it to the truck.
Speaker 12: You would see a cute little robot that we call Proteus,
Speaker 12: and that's the safety certified around people that can move
Speaker 12: these large containers of goods to the right truck at
Speaker 12: the right time. So it's really the symphony of people
Speaker 12: and machines that working together, which is really incredible to see.
Speaker 12: And it's a very practical in a very practical manner,
Speaker 12: and that's something that I'm very proud of because this
Speaker 12: application is really what's driving the fundamentals of robotics. It
Speaker 12: allows us to be adaptive and more modular or creating
Speaker 12: the safer environment for our employees and also frankly, gaining
Speaker 12: a lot of efficiencies.
Speaker 1: Hey, Ty, it does look like we're just showing some
Speaker 1: pictures out there for those who are watching us right now,
Speaker 1: and it does look like robots are increasingly becoming more
Speaker 1: quote unquote human like in terms of standing up and
Speaker 1: having kind of appendages.
Speaker 10: That's the form he doesn't want to talk about.
Speaker 1: I know, I know you don't, but I want to
Speaker 1: go to something Times of London out Andy Jassey. Of course,
Speaker 1: you're chief executive sending a memo to staff in June
Speaker 1: saying he expected it's corporate workforce with shrink as it
Speaker 1: rolls out AI, and this was the quote, we will
Speaker 1: need fewer people doing some of the jobs that are
Speaker 1: being done today and more people doing other types of jobs.
Speaker 1: In the next few years. We expect that this will
Speaker 1: reduce our total corporate workforce as we get efficiency gains
Speaker 1: from using AI extensively across the company. That's AI. But
Speaker 1: I do think about AI and robotics really increasingly merging
Speaker 1: replacing workers. How close are you guys to using more
Speaker 1: robots than humans in your warehouses?
Speaker 12: Yeah, it's a it's a great quote, first of all,
Speaker 12: and I do want to point out the difference between
Speaker 12: there's AI systems and there's physical AI systems.
Speaker 5: Right.
Speaker 12: So you can think of an AI system as the
Speaker 12: digital chess that's in your computer and you can play
Speaker 12: chess there, but physical AI is that you would want
Speaker 12: a system with a real chess board in front of you.
Speaker 12: We're actually picking up the pieces and moving those pieces, right,
Speaker 12: So this physical association, and what we have seen is
Speaker 12: when we build the right tool set for our employees,
Speaker 12: what we do is we really increase productivity for our employees.
Speaker 12: And what that does is that allows us to invest
Speaker 12: more in two key areas. We invest in better collabative robotics, right,
Speaker 12: a better tool set for employees to use, and we
Speaker 12: all also invest in our people.
Speaker 5: Right.
Speaker 1: We have.
Speaker 12: Ups more than seven hundred thousand of our employees. It's
Speaker 12: really important to be mindful of upskilling it's important to
Speaker 12: realize that jobs will change over time. There's no doubt
Speaker 12: about that. And our aim is to give our employees,
Speaker 12: in particular our frontline employees, the best tool set possible
Speaker 12: for them to do their jobs.
Speaker 1: So I love that upskilling figure, And it sounds like
Speaker 1: you guys are prioritizing certainly making sure your employees they
Speaker 1: can kind of move up or move on to where
Speaker 1: you guys have demand and where you need workers. But
Speaker 1: I do want to go back to is there a
Speaker 1: point where you do have more robots than humans in
Speaker 1: your warehouses?
Speaker 8: And are you clothes?
Speaker 12: Yeah, it's just be careful about the correlation because imagine
Speaker 12: your let's just say that you're a carpenter, right. What
Speaker 12: I aim to do is give that carpenter the best
Speaker 12: tool set possible. I don't really count the number of
Speaker 12: tools that they would have, but instead I would actually
Speaker 12: index on the effectiveness of those tools. Are we allowing
Speaker 12: that carpenter to do their art and create or build
Speaker 12: the house in a shorter amount of time with even
Speaker 12: higher quality and create it as safer environment? So I
Speaker 12: mean we could index on the numbers. We're proud of
Speaker 12: the numbers that we have for sure, because it represents
Speaker 12: some really pioneering work by the many women and women
Speaker 12: and men scientists and engineers that have designed them. But
Speaker 12: remember we also manufacture these, so we have manufacturing jobs.
Speaker 12: Remember we support these in the field, we deploy these
Speaker 12: live in the field, and then of course we have
Speaker 12: our frontline operators that we're very, very thankful for. So
Speaker 12: it's a full ecosystem that when it's really a force
Speaker 12: multiplier when you do robotics right, when you do robotics
Speaker 12: that extends a person's capability to do their job, amplifies
Speaker 12: the human potential, then you really have changed the game.
Speaker 12: And that's what that's why today's one million. It's a
Speaker 12: one million force multiplier for our employees for the benefit
Speaker 12: of our employees and also for the benefits of our
Speaker 12: customers because we know that they love to have the
Speaker 12: world's largest selection of goods. Robotics helps with that. We
Speaker 12: can actually as compared to our manual buildings, we can
Speaker 12: storm more than forty percent more goods in the same footprint.
Speaker 12: We know that it fuels a lower cost that we
Speaker 12: can pass along to our customer because of the efficiency
Speaker 12: gains inside of our entire fulfillment chain. And we know
Speaker 12: what fuels the fast delivery times that we know our
Speaker 12: customers love because we have the ability to pull any
Speaker 12: order really quickly and bring that the right, good, right
Speaker 12: to the customers. So robotics is helping spin that flywheel.
Speaker 10: Carol has never gotten over Eric Brynjolfson's book Race Against
Speaker 10: the Machine, and so that's what she's asking about. You
Speaker 10: went to MIT, right, and so you know that, you know, Brinjoe.
Speaker 1: Here's the thing. I think it's great robotics, especially some
Speaker 1: of those tedious jobs, repetitive jobs, physical jobs. And then
Speaker 1: if you're upscaling to you know, people who are working
Speaker 1: now on creating the robots. Like, I think it's a
Speaker 1: pretty cool thing.
Speaker 10: I think, you know, it's supposed to be dystopian, but
Speaker 10: I the idea in Wally that we will eventually just
Speaker 10: float around in debt chairs on a cruise ship, drinking
Speaker 10: icys while the robots do our work for us and
Speaker 10: get paid dividends. What do you think about that kind
Speaker 10: of future? And I especially wonder about cryptocurrencies being used
Speaker 10: because machines will have to work with machines and transact.
Speaker 10: And this was the idea that we were kind of
Speaker 10: sold on at the birth of bitcoin. But is there
Speaker 10: any is there anything that's not science fiction to that idea?
Speaker 12: Well, I can tell you what we're doing is definitely
Speaker 12: not science fiction. It's actually very practical and applied, and
Speaker 12: it's it's giving a great success to our employees and
Speaker 12: it's also benefiting our customers very directly.
Speaker 3: That was Ty Brady, chief technologist for robotics over at Amazon.
Speaker 3: Matt Miller also there. He'll be back in our next.
Speaker 1: Hour, and I got to say, we want to have
Speaker 1: tie back really soon. Tim, You will love this guy.
Speaker 1: He's so into robotics but really understanding the science, the
Speaker 1: technology and kind of where we're going with all of this.
Speaker 3: But he's fully human. He's not part robout it.
Speaker 1: All as long as I know, as far as I know,
Speaker 1: all right. That wraps up our first hour of the
Speaker 1: weekend edition of Bloomberg Business Week from Bloomberg Radio. Ahead
Speaker 1: in our next hour, US landfills are heating to dangerous levels.
Speaker 1: It's viewing trash, juice and toxic emissions, and it's making
Speaker 1: people sick.
Speaker 3: We'll explaining plus building a new sports and entertainment empire
Speaker 3: with the parent of the Brooklyn Nets in New York Liberty.
Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and.
Speaker 3: I'm Tim Stenovik.
Speaker 2: You are listening to the Bloomberg Business Weekdaily Podcast. Catch
Speaker 2: us live weekday afternoons from two to five pm Eastern.
Speaker 2: Listen on Apple CarPlay and Android Auto with the Bloomberg
Speaker 2: Business app, or watch us live on YouTube.
Speaker 1: Plenty Ahead in our second hour of the weekend edition
Speaker 1: of Bloomberg Business Week, including how all those global tariffs,
Speaker 1: some in place, some to come maybe are affecting one
Speaker 1: small business in the luxury space.
Speaker 3: Plus as sports team valuations rise, the corporate empires running
Speaker 3: them are thriving. On that, we check in with the
Speaker 3: CEO of Brooklyn Sports and Entertainment. It's the parent company
Speaker 3: of the Brooklyn Nets and New York Liberty.
Speaker 1: First up this hour, addressing America's hot garbage problem. It
Speaker 1: was recently one of the most red stories on the
Speaker 1: Bloomberg and a Bloomberg Big Take. It explores one of
Speaker 1: the lesser known environmental fiascos in the United States. We
Speaker 1: are talking about toxic landfills.
Speaker 3: Bloomberg BusinessWeek writers Laura Bliss and Rachel Doddell reported and
Speaker 3: analyzed just how overheating waste below the surface of US
Speaker 3: landfills is harming the environment and surrounding communities which are
Speaker 3: left with little recourse. Laura joined Carol and Matt Miller,
Speaker 3: and she began by discussing one of the US's largest
Speaker 3: repositories of municipal waste, the Chiquita Canyon Landfill in Los Angeles.
Speaker 7: The landfall that you mentioned in La County is a
Speaker 7: great example, and pockets of buried waste in this landfill
Speaker 7: have been rising to temperatures over two hundred degrees for
Speaker 7: the past three years. That's about forty percent higher than
Speaker 7: the EPA safety standard.
Speaker 4: California regulators suspect.
Speaker 7: That what's causing this is too much much oxygen getting
Speaker 7: into this landfill, which is a problem known to start fires.
Speaker 7: This goes against federal regulations. The landfill operator says that's
Speaker 7: not the case, says nothing is on fire. And as
Speaker 7: I found out, these landfills that have been overheating are
Speaker 7: a phenomenon that we've seen across the US over the
Speaker 7: last twenty years, and there's real debate, there's real controversy,
Speaker 7: you know, within the industry, in between regulators about what's
Speaker 7: causing them.
Speaker 4: And what to do about it.
Speaker 10: Laura, First of all, I read your story the first
Speaker 10: thing I read on the Bloomberg and I could not
Speaker 10: put it down. And you know, I'm the type of
Speaker 10: reader who typically gets goes to the first four paragraphs.
Speaker 10: I'm from the Matt Winkler school of Bloomberg and then
Speaker 10: I'm done. So fantastic job writing this. Uh. One question
Speaker 10: I did have is isn't it pretty easy to determine
Speaker 10: whether something is on fire or not? I mean, it
Speaker 10: seems like you could gauge that pretty quickly.
Speaker 4: You would, You would think so, you would think so.
Speaker 7: And a challenge with these incidents is that, you know,
Speaker 7: the the temperature climbs. You know, this is happening several
Speaker 7: feet below the surface of the landfill, and so you
Speaker 7: don't necessarily see smoke. You don't necessarily smell, you know,
Speaker 7: what you might think of as a burning smell. You know,
Speaker 7: these events can can manifest in a lot of different ways.
Speaker 7: And it's because actually that you don't necessarily see those
Speaker 7: you know, classic fire symptoms that the industry is saying, well,
Speaker 7: this is this is not a fire. We think it's
Speaker 7: something else that's that's going on here. But as the
Speaker 7: story shows, and thank you so much for reading it.
Speaker 7: I mean, you know, regardless of what we call it,
Speaker 7: you know, residents are getting sick, and there's a lot
Speaker 7: of challenges in really dressing the problem and kind of
Speaker 7: getting to the root cause.
Speaker 1: What's exactly what's crazy is like people are getting caught
Speaker 1: up is it a fire? Is it not a fire?
Speaker 1: And there's all these terminal terminology, subsurface oxidation, smoldering events.
Speaker 10: But it's an important.
Speaker 1: Distinction because you write the distinction is in trivial federal
Speaker 1: regulations explicitly forbid operators from running landfills in a way
Speaker 1: that starts fires. Why is that so important, especially when
Speaker 1: you so clearly write that people who are living nearby,
Speaker 1: they and their families are getting pretty sick.
Speaker 7: Absolutely, I mean it's it's been, you know, a well
Speaker 7: known issue in the industry for years. You know that
Speaker 7: these fires can create really dangerous and toxic situations.
Speaker 4: And you know, among the you know.
Speaker 7: Few regulations that are out there at the federal level
Speaker 7: for landfills, you know, don't start a fire is absolutely
Speaker 7: one of them. And you know, one of the concerning
Speaker 7: things that I found is that one of the key
Speaker 7: rules that environmental engineers and safety advocates say, you know,
Speaker 7: was really there to prevent fire was actually rolled back,
Speaker 7: and so you know, as far as like what is
Speaker 7: there to do about it? That is something that a
Speaker 7: number of scientists highlighted for me that we we need
Speaker 7: the return of some of these rules, for example, to
Speaker 7: stop too much oxygen from getting in because as we
Speaker 7: all know, right that can that can start fires when
Speaker 7: you when you mix that with hot enough temperatures.
Speaker 1: And the point is it starts fires, but it also
Speaker 1: gives off really dangerous gases, right, and and talk to
Speaker 1: us about what's happening to people who live nearby.
Speaker 7: Yeah, I mean, so just to take the Chiquita Canyon
Speaker 7: landfall as an example, I mean, we see elevated levels
Speaker 7: of benzene, you know, a known carcinogen, carbon monoxide, other
Speaker 7: toxic gases that are known you know, to cause the
Speaker 7: kind of respiratory, neurological, cardiovascular symptoms that people are reporting,
Speaker 7: you know, hand tremors, headaches, nosebleeds that won't end. You know,
Speaker 7: people are having you know, cancer also, And one wondering,
Speaker 7: you know, is what's going on with the landfill having
Speaker 7: to do with my diagnosis.
Speaker 10: So what can these people do about it? I mean,
Speaker 10: as I was reading your story, I had a feeling
Speaker 10: of like frustration in my chest because it's so hard
Speaker 10: to prove causation.
Speaker 9: Right.
Speaker 10: People are getting sick who don't live near the landfill also,
Speaker 10: and these corporations have seemingly endless pools of money for litigation.
Speaker 10: I think of dark Waters. I think of Aaron Brockovich.
Speaker 10: You know, what can the houses who is the couple
Speaker 10: that you that you write about in your lead, what
Speaker 10: can they do about it?
Speaker 4: Yeah, I mean it's a great question.
Speaker 7: There are like I think over a dozen, you know,
Speaker 7: mass torts moving through the legal system right now of
Speaker 7: residents trying to take legal action to represent themselves. Los
Speaker 7: Angeles County has also sued you know this at the
Speaker 7: state regulatory level. There have been a lot of enforcement actions,
Speaker 7: and I think, what a lot of these efforts are
Speaker 7: all kind of pushing for our funds, you know, from
Speaker 7: the operator, to fund the relocation of residents right to
Speaker 7: get out of this danger zone. And so I think
Speaker 7: that is what a lot of people are pushing for
Speaker 7: at this point. But you know there's also I write
Speaker 7: about in the story Polar Chiavo who's an assembly member
Speaker 7: in California has a has a bill that's she's you know,
Speaker 7: I think, is awaiting a hearing in the state Senate
Speaker 7: that would basically just attach more you know, penalties right
Speaker 7: to landfills in the future that you know, exhibit these
Speaker 7: symptoms that are cause these kinds of problems for people.
Speaker 7: What do the companies say, Well, just to reiterate, right,
Speaker 7: they say that this is not a fire. This is
Speaker 7: what they call an elevated temperature landfill, which is a
Speaker 7: term that you know, the industry is applied to at
Speaker 7: least ten, you know, large landfills across the US over
Speaker 7: the last twenty years that have exhibited similar symptoms. And
Speaker 7: you know, they pointed to you know, millions of dollars
Speaker 7: that they've spent in mitigating the problem, adding gas wells
Speaker 7: to trap the odors, putting a cover on top, you know,
Speaker 7: contributing some money to residents to you know, buy air
Speaker 7: filters and things like that.
Speaker 10: Why don't they just go in there with cranes and
Speaker 10: dump trucks and move it away. I mean, there is
Speaker 10: a temperature regulation, right, They're not allowed to be above
Speaker 10: a certain temperature, and you can just stick a thermometer
Speaker 10: in there and see that this does exceed that regulation.
Speaker 4: It's true, It's absolutely true.
Speaker 7: I think the challenge is, you know, what do you
Speaker 7: do when these kind of hot temperatures become this kind
Speaker 7: of runaway problem?
Speaker 4: And again the question of causation, what to call it?
Speaker 7: Like this this all matters, right, because that drives it
Speaker 7: the question of what do you do about it? And
Speaker 7: California regulators say you need to dig a fire break,
Speaker 7: which is actually not unlike what you're saying, right, you
Speaker 7: need to sort of create almost a trench, right to
Speaker 7: stop this reaction from progressing. The operator says that that
Speaker 7: would make things much worse. They say that the solution
Speaker 7: is to pulling heat out using these wells. So there's
Speaker 7: just there's a lot of disagreement there, well.
Speaker 1: You know, and I feel like it gets into a
Speaker 1: bigger problem in the United States, and that has to
Speaker 1: do with waste, right, like what do we do with it?
Speaker 10: You know?
Speaker 1: If you can't you know, I think there's pushback against
Speaker 1: creating new waste facilities, right or waste or dumps based
Speaker 1: on one in exactly exactly. So then what you have
Speaker 1: to do is deal with the existing ones and just
Speaker 1: pile more and more stuff into it. I mean, as
Speaker 1: you noted in our in your story, is that for
Speaker 1: a long time people burn garbage. We thought that was
Speaker 1: the way to do it, and then we realized, okay,
Speaker 1: that's not the way. I mean, and doing kind of
Speaker 1: also some you know, giving us a little bit of
Speaker 1: a history lesson in terms of dealing with garbage. I mean,
Speaker 1: this is again becoming another big problem, not only maybe
Speaker 1: potentially for the health of US citizens, but also for
Speaker 1: the climate.
Speaker 7: Yeah, I mean absolutely, I think this, this whole situation
Speaker 7: is a great and really alarming, you know picture of
Speaker 7: the problems that can arise, like when we just keep
Speaker 7: kind of piling our trash higher and deeper, right, And
Speaker 7: I mean I will also add that, you know, safety
Speaker 7: advocates will say, you know, we don't we're going to
Speaker 7: generate trash, right, we know that we're gonna that trash
Speaker 7: is going to generate methane emissions. And that's kind of
Speaker 7: part of the story too, because trapping these emissions, you
Speaker 7: use these wells that can actually lead to more oxygen intrusion,
Speaker 7: which is known to start these fires.
Speaker 4: And so you know, advocates will say, like we just
Speaker 4: need better monitoring.
Speaker 7: Right, we need you know, better technology to monitor emission levels,
Speaker 7: you know, real time temperature monitoring for example, so that
Speaker 7: you know, operators and regulators can take action more quickly
Speaker 7: instead of you know, letting problems kind of spiral.
Speaker 10: Well, and as Carol and I were talking about this yesterday,
Speaker 10: one of the great things to do would be to
Speaker 10: stop generating as much waste. Right. I was over the
Speaker 10: weekend camping looking for a spoon, and I went to
Speaker 10: a store and they had a box of two hundred
Speaker 10: plastic ones if I wanted it. But that's part of
Speaker 10: the problem.
Speaker 1: Yeah, like making things that you actually want, you go
Speaker 1: to attack.
Speaker 10: The problem at the root, right, Laura, I'm sure you've
Speaker 10: thought about.
Speaker 12: This a lot.
Speaker 4: Absolutely. I mean it's funny.
Speaker 7: I part of the way I celebrated publishing this story
Speaker 7: yesterday was taking the base of my dead electric toothbrush
Speaker 7: to a battery recycling facility, which, even in the city
Speaker 7: of San Francisco, was not that easy to find. But
Speaker 7: that's another problem. That's another you know issue of this too. Right,
Speaker 7: We're not just generating more waste, we also have a
Speaker 7: lot more flammable waste, you know, vapes e cigarettes like
Speaker 7: these kinds of things, and so you know, figuring out
Speaker 7: the right safest place to put it is important too.
Speaker 1: Yeah, and you bring on the recycling experts to it,
Speaker 1: they'll say, you know, you think so much stuff is
Speaker 1: being recycling, but it recycled. But it's not necessarily ape case.
Speaker 10: Doesn't everybody now have a drawer full of dead vape batteries?
Speaker 10: Not in my hand?
Speaker 1: No, Laura, incredible story.
Speaker 4: That's right.
Speaker 1: We were talking about kind of the waste yesterday and
Speaker 1: when he saw it this morning, he's like, oh my god,
Speaker 1: this is what we've been talking about. It's a great
Speaker 1: deep dive and we so appreciate you giving us some
Speaker 1: time with it. Laura Bliss, Bloomberg Business Week editor and writer.
Speaker 1: Check it out. You can find it on the Bloomberg
Speaker 1: and at bloomberg dot com slash BusinessWeek.
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Speaker 3: Well The WNBA, known as the WTA fans announced plans
Speaker 3: to expand eighteen teams by twenty thirty, adding Philadelphia, Detroit,
Speaker 3: and Cleveland to the previously announced Portland and Toronto teams,
Speaker 3: which begin play next year. The expansion builds on several
Speaker 3: seasons of dramatic growth and comes at a time sports
Speaker 3: teams have been getting acquired for record breaking and I
Speaker 3: popping amounts. So let's talk about sports and enter aman
Speaker 3: and hospitality. We've got Sam Zusman with us. He's CEO
Speaker 3: of Brooklyn Sports and Entertainment. It is the parent company
Speaker 3: of the NBA's Brooklyn Nets, the WNBA's New York Liberty,
Speaker 3: and their home arena at the Barkley Center. We're also
Speaker 3: joined by Randall Williams. He's a familiar voice and face
Speaker 3: to all of you. He's Bloomberg News Global Business of
Speaker 3: Sports reporter. Both of them join us here in the
Speaker 3: Bloomberg Studio. Sam, I want to start with you. I
Speaker 3: think you know the brand Brooklyn is something that you
Speaker 3: are leaning into big time here with the Brooklyn Nets,
Speaker 3: also of course with the New York Liberty with the
Speaker 3: Barkley Center. But I think people outside of New York
Speaker 3: might be surprised to find that the Barkley Center basketball
Speaker 3: is a big part of it, but it's not the
Speaker 3: biggest part of it by any means. Sort of break
Speaker 3: down the share of what comes from basketball versus what
Speaker 3: comes from everything else that the Barkley Center does.
Speaker 8: Yeah, so thank you for that, Tim. So, Barkley Center
Speaker 8: is a real entertainment mecca. We are open roughly one
Speaker 8: hundred and ninety nights a year. We do somewhere around
Speaker 8: seventy five to eighty concerts a year. Brooklyn Nets games
Speaker 8: around in the forties, Liberty games in the twenties. We
Speaker 8: are the third highest grossing arena in the world. And
Speaker 8: it's not just about the content, it's also about how
Speaker 8: we do it. Our goal at Brooklyn Sports and Entertainment
Speaker 8: is to create bold and unique experiences the Brooklyn Way
Speaker 8: meaning Brooklyn DNA. Right, if you sort of think about
Speaker 8: what Brooklyn stands for globally, not just nationally, for creativity,
Speaker 8: for relentless hustle, for authenticity, for diversity. We represent about
Speaker 8: one hundred and fifty different cultures, and so we want
Speaker 8: to make sure that when you come to an experience
Speaker 8: at Barkley Center, whether it's a concert or a game,
Speaker 8: you have a unique DNA Brooklyn DNA based experience that
Speaker 8: might be different from the experience you would have with
Speaker 8: the same game played at a different arena or the
Speaker 8: same concert played at a different arena. And we manifest
Speaker 8: that with food, with service, with ancillary entertainment, with how
Speaker 8: the venue is and the fan experience. The audience experience
Speaker 8: is sort of first, then we manifest that.
Speaker 13: So, Sam, one of the things you mentioned was culture,
Speaker 13: and the reason I bring that up is because obviously
Speaker 13: New York City has a lot of it, but Madison
Speaker 13: Square Garden in particular has been open for since nineteen
Speaker 13: sixty eight. The Barclay Center opened I believe in twenty
Speaker 13: eleven or twenty twelve. You built culture in fifteen years
Speaker 13: to become the third excuse me, third highest grossing stadium
Speaker 13: arena in the world. What went into that?
Speaker 8: So the work and division of a lot of people
Speaker 8: that came before me. But I would say it's focus
Speaker 8: first and foremost. But secondarily and maybe first is a
Speaker 8: lot of long term thinking. So we are I consider
Speaker 8: us and the ownership group to be long term builders.
Speaker 8: Everything that we do is with the long term goal.
Speaker 8: We're focused on building generational fandom. We're focused on building
Speaker 8: the experience, the service that we provide, the training that
Speaker 8: we put in, the selection of vendors, the selection of entertainment,
Speaker 8: the selection of concerts. If you look at Barkley Center,
Speaker 8: it is only to your point, opened in twenty twelve.
Speaker 8: It is only thirteen years old, and we've already embarked
Speaker 8: on a set of arena renovations with over one hundred
Speaker 8: and fifty million dollars over four years. And we've opened
Speaker 8: several new clubs that you told me the Crown.
Speaker 10: Club is my favorite. The Crown Club is my favorite. Yeah,
Speaker 10: and look, Crime Club literally.
Speaker 8: Is first and unique in its experience, a chef restaurant
Speaker 8: with unparalleled wine list, where people come in and they're
Speaker 8: havn't the time of their life, you know before.
Speaker 13: For some people who don't even go to the game,
Speaker 13: they just go to the Crown Club and sit down
Speaker 13: there the entire time. I think, he's your guy, not me,
Speaker 13: he's your guy. There a follow up to the renovations.
Speaker 13: We're seeing this age of sports teams who have to
Speaker 13: renovate these stadiums, and the cost of that continues to
Speaker 13: go up. You guys obviously got out ahead of that.
Speaker 5: Why is that.
Speaker 13: Important to say, hey, we're going to put money into
Speaker 13: this even though the stadium is less than fifteen years old.
Speaker 13: You know, there's a world where the Scy family could
Speaker 13: have waited twenty years down the line and be like, okay,
Speaker 13: now's the time. But you're out ahead of this.
Speaker 8: Why is that? It is because we're long term thinkers,
Speaker 8: and it is because we're audience and fan focused. Right.
Speaker 5: So, just to give you an.
Speaker 8: Example, we have taken two levels of suites and we've
Speaker 8: turned them over into bullfacing clubs. Where the reason we
Speaker 8: did that was not the utilization. The reason we did
Speaker 8: that is that we notice that the consumption pattern and
Speaker 8: the preference of the audience has shifted. People like less
Speaker 8: to run from their seats to buy something and run
Speaker 8: back and miss the game and so on.
Speaker 10: There are there are.
Speaker 8: Folks who come in. Look when you look at overall,
Speaker 8: how you experience a concert or a game, it's an experience.
Speaker 8: It's it's it's it's entertainment. And so if you can
Speaker 8: offer somebody the opportunity to come into a club with
Speaker 8: several hundred people, to be able to eat, drink, take
Speaker 8: that food to your seat, watch the show or watch
Speaker 8: the game, go back and forth, be with your friends,
Speaker 8: entertain your clients. It's a very different experience than buying
Speaker 8: a ticket and sitting in a seat. And so what
Speaker 8: we've observed is this is the trend, this is what
Speaker 8: people want. We've done primary research, we spoke to people,
Speaker 8: and so we want to give that experience to people.
Speaker 8: And we have not invested. We're not doing this because
Speaker 8: things are getting gold, because we want to give things
Speaker 8: a facelift. We're doing this because we want to satisfy
Speaker 8: the patterns of what we hear people are wanting. And
Speaker 8: we believe in the notion of keeping everything fresh, of
Speaker 8: being being leaders and thought and entertainment. And we're putting
Speaker 8: our we're putting our money, you know, to work.
Speaker 11: I want to talk about the growth of women's basketball
Speaker 11: and the WNBA. Randall had pointed out to Tim and
Speaker 11: I that the Liberty were ranked the second most valuable
Speaker 11: WNBA team four hundred and fifty million at least by Sportico.
Speaker 11: Is it possible to get to one billion? And what
Speaker 11: would that look like? Talk about like how we've gotten
Speaker 11: here and where we're going.
Speaker 8: I think it's not just possible. I think it's highly likely.
Speaker 10: You think there's a race to get there. Look, we're
Speaker 10: in sports.
Speaker 8: There's always a race, right.
Speaker 10: The Look, we don't, But I would say this.
Speaker 8: The race is to win another championship, to be a dynasty,
Speaker 8: to give fans a great experience, to have the best players,
Speaker 8: to take care of our players, and so on. That's
Speaker 8: that's what the race is. Not to evaluation. You also
Speaker 8: don't dictate the valuation. The valuation comes because you do
Speaker 8: all these things right. But yes, I do think that
Speaker 8: it will happen. I think it is you know, famous
Speaker 8: last words. But it feels to me like it's straight
Speaker 8: down the fairway when I look at I joined the
Speaker 8: company three years ago. I have seen the average crowd
Speaker 8: go from two thousands so much different times years ago,
Speaker 8: from two thousand to a sellout. I have seen, you know,
Speaker 8: I won't I won't labor all the all the key
Speaker 8: performance indicators, but attendance, ticket, ticket prices, season ticket holders, sponsorships,
Speaker 8: every single metric has gone up tens of percentages a year.
Speaker 8: And and when you are at the arena, it's palatable.
Speaker 8: A Liberty game is loud, it is a party, It
Speaker 8: is a fun experience and everyone is invested, and there
Speaker 8: are some things that you could you could just see,
Speaker 8: you can you can feel.
Speaker 3: We're speaking with Sam's usman CEO Brooklyn Sports and Entertainment.
Speaker 3: Also joining us Randall Williams, Bloomberg News Global Business of
Speaker 3: a sports reporter, Sam. How is the consumer doing right
Speaker 3: now based on ticket sales? Are you seeing any weakness,
Speaker 3: any lack of demand in different events due to concerns
Speaker 3: that the consumer has about parting with discretionary income. I mean,
Speaker 3: there's nothing essentially more discretionary than what we're talking about here.
Speaker 8: Yeah, you know, it's interesting. We are we're in the
Speaker 8: experience economy, right, Like when you think of people buying
Speaker 8: products and services, they do that in order to save
Speaker 8: time in order to gain efficiency. For us, it's the opposite.
Speaker 11: For us.
Speaker 8: People are giving us their time and giving us the
Speaker 8: money their money in order to in order to gain
Speaker 8: an experience. And so it's it's it's quite interesting. It's
Speaker 8: it's in good times that people want to do it,
Speaker 8: and it's actually in tough times people want to do
Speaker 8: that as well. And so look, I don't exactly I
Speaker 8: can't exactly measure the macro, but I can tell you
Speaker 8: in the micro. If we look at attendance in concerts,
Speaker 8: it is it is stronger than ever. If you look
Speaker 8: at attendance in Brooklyn Nets and New York Liberty Games,
Speaker 8: we are in the high ninety percentage. You know, when
Speaker 8: you look at discretionary purchases off merchandise or food and
Speaker 8: beverage and so on, if you look at ticket prices,
Speaker 8: if I only had those to go by, I would
Speaker 8: tell you that the economy is doing great.
Speaker 5: See.
Speaker 13: And one of the things that both you and Emily
Speaker 13: mentioned was the growth of the WNBA. And I'm going
Speaker 13: to ask you about these CBA negotiations, negotiations that are
Speaker 13: going on, and I don't know if you can answer that,
Speaker 13: but the players have said they want better salaries, better benefits,
Speaker 13: increase retirement, all of these things. We haven't heard much
Speaker 13: from the league. So from your vantage point, what do
Speaker 13: you think is a fair deal from both sides? Because
Speaker 13: you know these CBA negotiations go on once every decade and.
Speaker 3: We only have twenty seconds.
Speaker 8: Yeah, well, I won't use that because I that is
Speaker 8: actually a topic that I that I should refrain from.
Speaker 8: It's an active negotiation, and so I think we should
Speaker 8: let the professionals, negotiator on the table a.
Speaker 3: Good place to end at. Sam Zusman, CEO of Brooklyn
Speaker 3: Sports Entertainment, Randall Williams and Bloomberg News Global Business of
Speaker 3: Sports reporter. This is BusinessWeek.
Speaker 2: You're listening to the Bloomberg Business Weekdaily podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Applecarplay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 1: A recent most read story on the Bloomberg and at
Speaker 1: Bloomberg dot Com that caught our attention highlighted the struggles
Speaker 1: that some US small business owners are facing due to
Speaker 1: volatile trade policies. It was about Robert Keeley, the owner
Speaker 1: of Killey Electronics, who used his one point eighty three
Speaker 1: million American Express Reward points almost two million to pay
Speaker 1: an eleven thousand dollars tariff bill.
Speaker 3: For some, it may feel like they're only lifeline left.
Speaker 3: Small business owners often lack the cash reserves, lobbying muscle,
Speaker 3: or supply chain flexibility to absorb steep terrifikes or pivot production.
Speaker 1: One small US business owner with the global supply chain
Speaker 1: is Steven Silver. He's chairman and CEO of the independent
Speaker 1: family owned Steven Silver Fine Jewelry.
Speaker 14: I think that the tariffs have put a lot of
Speaker 14: pressure on imports as Swiss watches, and yeah, that's an
Speaker 14: interesting situations that they're having to deal with. We're having
Speaker 14: to deal with as a company that's supporting twenty one
Speaker 14: independent Swiss watch brands. So navigating that's been pretty interesting.
Speaker 14: From the perspective of inventories that are hold held inside
Speaker 14: the United States, those inventories have gotten more valuable because
Speaker 14: the tariffs don't affect those. The interesting sidebar with red
Speaker 14: arts to manufacturing, which is I think one of the
Speaker 14: major purposes of these tariffs is we bring as a trade.
Speaker 14: We bring in a lot of rough a lot of
Speaker 14: cut gemstones, but they haven't made into anything yet, so
Speaker 14: tariff on those products coming in we've never experienced before.
Speaker 14: So I think you may see an elevated price point jump,
Speaker 14: whether the consumers are forced to absorb that or not.
Speaker 14: As a different story, but unless little modifications are made
Speaker 14: to these tariffs to support us manufacturing in this country
Speaker 14: with the loose goods that we bring in, you'll probably
Speaker 14: see some jewelry pricing increases. Who knows, I mean It
Speaker 14: really depends on how much the manufacturers are willing to
Speaker 14: absorb in the process of delivering the product to the public.
Speaker 10: How much does it matter to you. I was in
Speaker 10: Lamon in France a couple of weeks ago, and I
Speaker 10: had the opportunity to sit down with Richard Meel, who makes,
Speaker 10: you know, great watches and very expensive watches. I mean,
Speaker 10: I don't know the exact prices, but we're talking about
Speaker 10: three hundred thousand dollars riskwatches. And you know, for his
Speaker 10: clients a ten percent bump doesn't matter very much if
Speaker 10: they even have to raise the price that much.
Speaker 14: Yeah, I mean, Richard Meal is a company that we
Speaker 14: started with when we first went into the independent watch
Speaker 14: business about seven years ago. The way that these things
Speaker 14: will be acted or reacted to is about what the
Speaker 14: brand wants to absorb in the process of delivering product
Speaker 14: to its consumers.
Speaker 10: And it's a very good point because they have I'm
Speaker 10: guessing they have massive margins.
Speaker 14: Well they have margins, so to the degree that they
Speaker 14: want to eat into that, they will in order to
Speaker 14: support their business and their consumers.
Speaker 1: So tell us about your world, and I'm just curious
Speaker 1: about what you are seeing I'm assuming you have, you know,
Speaker 1: tell us about your typical client if it's a gamut
Speaker 1: of you know, in terms of price points and what
Speaker 1: it is telling you about the consumer right now.
Speaker 10: And you're dealing with also incredibly high end stuff, right
Speaker 10: cashmere sapphires, pink diamonds, Richard Meal watches, so.
Speaker 14: Well, not Reshart Meal anymore, they went Mono brand and
Speaker 14: we were eliminated. But but other brands on the level
Speaker 14: of Reshard Meal or even finer, you know, some of
Speaker 14: the brands like Groogle, Foresa and other important brands.
Speaker 1: Do you have one carrot diamond rings? You have you know,
Speaker 1: multiple carrots, So like there is a range.
Speaker 10: So what are you seeing.
Speaker 14: Well, the consumers, as we discussed earlier, as we move
Speaker 14: up into the to the different levels of consumer activity
Speaker 14: and we start getting into the ultra high end attitude shift,
Speaker 14: reasons to buy shift. A lot of our ultra high
Speaker 14: net worth consumers are buying is storage of wealth. So
Speaker 14: that points to you know, product like ultra rare pink diamonds,
Speaker 14: blue diamonds, red diamonds. Some of the unique rare historical
Speaker 14: pieces that we've dealt with over the years, like the
Speaker 14: colon and blue diamond necklace, which we donated to our
Speaker 14: National Gem Collection in twenty ten that sits in the Smithsonian.
Speaker 14: You know, things like that, historical pieces that are real,
Speaker 14: really true collectibles and investments or act like investments.
Speaker 10: But did you see I promised diamond? By the way,
Speaker 10: I mean, the colon in for me has even more
Speaker 10: significance because Rolls Royce actually named the SUV after this diamond.
Speaker 14: You know, we were actually in discussions with them about
Speaker 14: when they were first coming out or with the concept
Speaker 14: of the colony. We sat down with them and we
Speaker 14: actually gave them a color chart of what the colon
Speaker 14: in blue diamond color was and to see if they
Speaker 14: wanted to match the color of the paint of the
Speaker 14: colon in. That would be insane, would We Unfortunately didn't
Speaker 14: do it with them, but it was an interesting discussion
Speaker 14: to have with with Rolls Royce at that time.
Speaker 10: What a cool brush with history it is. I mean,
Speaker 10: in two different ways. Can I ask about the lab
Speaker 10: grown because to me this is okay. Obviously no one's
Speaker 10: replacing a culon or a pink promise with a lab
Speaker 10: grown diamond. But you point to you point out that
Speaker 10: for a large swath of people, diamonds are more than jewelry.
Speaker 10: They're a store of wealth.
Speaker 3: I have some.
Speaker 10: I have a very wealthy friend who gave his wife
Speaker 10: a giant diamond and she immediately got a fake made
Speaker 10: of it and put the real thing in a safety
Speaker 10: deposit box, because that's just how that set rolls, you know.
Speaker 10: But for the normal people among us, like for me,
Speaker 10: I just want to get as much size as I
Speaker 10: can to put on my wife's finger, right, I don't care.
Speaker 14: I'm sure she appreciates, yes.
Speaker 10: So, like, how do you see this debate between lab
Speaker 10: grown and you know what I would have called blood diamonds,
Speaker 10: But I don't think that's fair anymore.
Speaker 14: Well, the impact on our trade is still an evolution.
Speaker 14: The last time something this massive happened to our trade
Speaker 14: probably goes back to the time of Micking Moto inventing
Speaker 14: the technology to culture appearl and it really impacted the
Speaker 14: natural pearl market. This is a little different in the
Speaker 14: context of the ability to measure the market. It will
Speaker 14: define itself over time, I'm sure, but it looks like
Speaker 14: to me anyway that the trend is more of a
Speaker 14: mass market product that really impacts positively the average consumer.
Speaker 14: That spends twenty five hundred to maybe set five six
Speaker 14: seven thousand dollars to buy a piece of jewelry for
Speaker 14: an anniversary or a special occasion. Instead of spending or
Speaker 14: financing that purchase at twenty thirty cents on the dollar,
Speaker 14: they can afford to just write a check and not
Speaker 14: get into debt in the process of buying that product.
Speaker 14: So I think for that market it's probably a great
Speaker 14: tool because the product looks like a natural stone. It's
Speaker 14: a synthetic diamond, absolute match to what nature produces, but
Speaker 14: it's not in a laboratory.
Speaker 10: So but it will hold any value.
Speaker 14: Zero value at all, because the measure of value in
Speaker 14: our world is what the secondary market wants to buy
Speaker 14: that product back into the trade for. So if there's
Speaker 14: no support there, which there is not, then it's sort
Speaker 14: of the same thing as buying a T shirt. Once
Speaker 14: you've used it, it's done. There is no value. The
Speaker 14: trade won't recognize it as a secondhand purchase with value. However,
Speaker 14: with the natural stone, it's a fully developed second mark
Speaker 14: secondary market. The state jewelry has bought and sold every
Speaker 14: day in massive volumes along with metals. So in the alternative,
Speaker 14: again going back to the Mickey Moto experience, is there
Speaker 14: is a market for mickeymotocultured pearls or cultured pearls, but
Speaker 14: that's because they farm them. They actually it's a farming
Speaker 14: process that does have the risk associated with not producing
Speaker 14: the product. So is a farming product as the trade
Speaker 14: recognizes a value. But it is definitely a different marketplace
Speaker 14: than the natural pearl market. It's massively different. Natural pearls
Speaker 14: and a big size can be worth millions of dollars
Speaker 14: as a pearl, and nothing even comes near to that
Speaker 14: with a single pearl in the culture cultured world.
Speaker 1: I am curious, Steven, because we talked with some folks
Speaker 1: in the high end real estate and that when there
Speaker 1: was the turmoil in the marketplace and we saw stock
Speaker 1: sell off a lot, that people were pulling back from
Speaker 1: buying property. And these are even wealthy, Like we talked
Speaker 1: to high end real estate. Did you see any kind
Speaker 1: of slow down amid the market volatility?
Speaker 14: Some Yeah, yeah, for sure there because we're also a
Speaker 14: wholesale business as well as well as a retail business,
Speaker 14: so we saw a lot of resistance slow down in
Speaker 14: our wholesale side, you know, with the ultra high end,
Speaker 14: they're they're very very smart consumers and where they see opportunity,
Speaker 14: they'll take it. And buying something that they don't need
Speaker 14: but want is a different thing that understanding that their
Speaker 14: capital may be better suited for a dip in a market,
Speaker 14: they'll put money into that versus a luxury item like
Speaker 14: what we deal with in the long haul over a
Speaker 14: long period of time. These rare collectibles are very very
Speaker 14: strong though. They hold a very very strong position and
Speaker 14: resistance to volatility is part of that. Interesting charts that
Speaker 14: we develop and look at in our own world. What
Speaker 14: is a pink diamond done in the last ten years?
Speaker 1: What has it done in the last time?
Speaker 14: Really interesting chart with very very little volatility. Depends on size, color, clarity,
Speaker 14: cone of color. But the vivid pink category and intense
Speaker 14: pink category has been a very very gradual increase over
Speaker 14: the last twenty years. That has spun off amazing returns
Speaker 14: for people that that buy them, and I believe, honestly
Speaker 14: we'll consistently do that in the future because they're so rare.
Speaker 1: Have you seen the Missus Bezos diamond?
Speaker 5: I didn't know.
Speaker 1: It's I think like twenty thirty carrots.
Speaker 4: It's pretty wild.
Speaker 10: I want to ask about watches because you know, on
Speaker 10: Wall Street, I think there may be some lack of creativity.
Speaker 10: So the guy that makes you know his first ten
Speaker 10: million is going to go out and buy something from
Speaker 10: ap or Petech, Fhi Leap, but not necessarily Grooble Foresay
Speaker 10: or mbn F. What are the most important indie brands
Speaker 10: right now? For those that really know, and I'm not
Speaker 10: one of those people, what are the ones that are
Speaker 10: sought after so once?
Speaker 14: So this is a really interesting question because the what
Speaker 14: I call the independent stables Rishard, Meil, ap Rolex. Those
Speaker 14: are your three dominant big boy brands that dominate the
Speaker 14: high end luxury watch Constantine, Paddocks of course, but Vacheon
Speaker 14: is probably number five or six. I'm not sure the
Speaker 14: top off the top of my head with the top
Speaker 14: ten are, but these that I've mentioned are certainly in
Speaker 14: the top four. Then you have this sector called independence,
Speaker 14: but they're not usually big businesses doing big volume. But
Speaker 14: that's where the innovation is, and that's where you see
Speaker 14: the MBNF and this wonderful design and this really unique
Speaker 14: quality the grooble Foray. These companies don't make a lot
Speaker 14: of watches. They may make three hundred or four hundred max.
Speaker 14: But the innovation, the time and the effort the finishing
Speaker 14: on these watches is equal to or surpassing great cars
Speaker 14: that are incredibly rich cars, right, very very expensive cars.
Speaker 14: So that kind of engineering is the samekind of engineering
Speaker 14: that goes into these independent watch brands. That's where the
Speaker 14: innovation is. It's also points to our client in Silicon Valley.
Speaker 14: This is a valley of innovation and has been for decades.
Speaker 10: So the this is why we see like Mark Zuckerberg
Speaker 10: wearing the Google Forces only recently, right.
Speaker 1: I mean, you guys are in Menlo Park and I'm
Speaker 1: just curious, you know, what would you tell us about
Speaker 1: kind of to look on Valley today in terms of
Speaker 1: based on the purchasing and what you're seeing.
Speaker 14: Well, we started in nineteen eighty, so we've seen pretty
Speaker 14: much the entire evolution of the different technology companies that
Speaker 14: have evolved. They're certainly different today. They're much bigger, and
Speaker 14: they're much you know as they the.
Speaker 1: AI guys like watches and as much as everybody else.
Speaker 14: Absolutely. I mean, we've got twenty one watch brand sitting
Speaker 14: at the Villa, which is our new home you know,
Speaker 14: we built a thirty six thousand foot building just to
Speaker 14: service the clientele. That is our local clientele.
Speaker 10: Who are the most famous. I mean, I'm sure you
Speaker 10: can't divulge the names of your clients, but you know how.
Speaker 14: Many NDA's I've signed, So don't go.
Speaker 10: No, I get that, but some of them are open
Speaker 10: about their hobby, right, So we know Mark Zuckerberg now
Speaker 10: has just a pretty decent stable of watches. Who are
Speaker 10: the most famous horological experts in you know, Silicon Valley
Speaker 10: or Hollywood And.
Speaker 1: Just got about thirty forty second.
Speaker 14: All right, Well, you know I can't say names, but
Speaker 14: I can tell you that the leaders of some of
Speaker 14: the big tech companies that you're reporting on every day
Speaker 14: of the week. So and also some of the most
Speaker 14: important venture capital guys or I've been clients of ours
Speaker 14: for forty fifty years. So so they love to buy watch, Matt.
Speaker 9: You know that they do.
Speaker 10: You just need to look at I love it.
Speaker 9: I love it.
Speaker 1: But Stephen, thank you so much, Thanks for coming by,
Speaker 1: Thank you for having me. Yeah, a pleasure, Steven silver
Speaker 1: chair the way, I.
Speaker 14: Want to make a quick chat out to enchant or uncharted. Yeah,
Speaker 14: they were amazing Noah and and Michael and Michah. Yeah,
Speaker 14: done such an amazing job.
Speaker 10: That was the event you did to the Hamptons.
Speaker 14: Unbelievable and we hosted at dinner by the Way for
Speaker 14: them on the West Coast before they did.
Speaker 1: We'll catch up soon.
Speaker 11: I agree.
Speaker 1: It was like a whole different slice of life and
Speaker 1: it was fun to bring it to our Bloomberg audience.
Speaker 1: Steven Silver, thank you so much.
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