Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened. Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. I'm Tim Stinovic. Carol Masser
Speaker 1: is off this week well with Labor Day. Now in
Speaker 1: the rear view mirror, we're going to ask a pair
Speaker 1: of CEOs what to expect from their businesses. Down the
Speaker 1: final stretch of two. The CEO of price Line gives
Speaker 1: us a peek at fall travel trends, and the head
Speaker 1: of Chesapeake Energy provides a pulse check on the global
Speaker 1: gas market amid this ongoing energy crisis. Meantime, with the
Speaker 1: US Open wrapping up this weekend, you'll hear the story
Speaker 1: of how America's biggest tennis tournament nearly left the Big
Speaker 1: Apple and what it took to keep it here. All
Speaker 1: of that to come. We begin with a story from
Speaker 1: Bloomberg Business Week that you can find online and on
Speaker 1: the term and all it centers around Silicon Valley heavyweight
Speaker 1: Peter Teel's growing standoff with the Republican Party. The tech
Speaker 1: entrepreneur had previously teamed up with Donald Trump to help
Speaker 1: win GOP Senate nominations for two ex employees. We're talking
Speaker 1: about j D. Vanson Ohio and Blake Masters in Arizona. Now,
Speaker 1: both candidates faced challenging general elections against wealth funded Democrats
Speaker 1: come November. As their own war chests start to dry
Speaker 1: up from one hy Teal is suddenly tightening the belts
Speaker 1: on these campaigns. Bloomberg Senior Markets reporter Katie Grathel and
Speaker 1: I spoke with Business Week editor Joe Weber and the
Speaker 1: man who wrote the piece columnists for the magazine, Max Chafkin.
Speaker 1: The best here for Teal and I think for a
Speaker 1: lot of these kind of um pro Trump sort of
Speaker 1: horror hard right candidacies, was that there was going to
Speaker 1: be you know, Republican wave election in general, you know,
Speaker 1: mid term elections, the party that's out of powers is
Speaker 1: the one that does well. Um and pulling early on
Speaker 1: in this cycle looked really good for Republicans, really bad
Speaker 1: for Democrats. Joe Binds prov ratings, you know, they crept
Speaker 1: up a little bit, but they were very low going
Speaker 1: back a couple of months ago. And I think the
Speaker 1: thought here was that with somebody like Teal is he's
Speaker 1: going to help push in these kind of neophyte candidates
Speaker 1: who are extremely you know, ideologically hard right, very much
Speaker 1: you know, part of his world, and that you know,
Speaker 1: Mitch McConnell and the Republicans were going to take care
Speaker 1: of the rest because you gotta figure in an election
Speaker 1: where Republicans are expected to do well, that that these
Speaker 1: Republicans Senate candidates will will sort of be dragged along
Speaker 1: with them. But but what's happened is that the environment
Speaker 1: has shifted, Republicans are getting out fundraised by Democrats, and
Speaker 1: you have this standoff where Mitch McConnell and his allies
Speaker 1: are sort of looking at some of these races, races
Speaker 1: that they thought would be well in hand, seeing that
Speaker 1: they're close or that Republicans are even behind, and asking,
Speaker 1: you know, Peter Teal, guy who who put put these
Speaker 1: candidates in the position that they're in, to kind of
Speaker 1: pick up the slack, and Teal so far has said no.
Speaker 1: So we have this kind of very awkward situation. But
Speaker 1: the sort of Republican establishment and this kind of like
Speaker 1: trump best wing, of which Teal is probably the most
Speaker 1: important donor. I mean you've written a ton about Tell
Speaker 1: in your book, and of course studied him for years
Speaker 1: and interviewed so many people around him. How is this
Speaker 1: just straight out of a venture capitalist playbook? Yeah? So,
Speaker 1: I mean Teel's whole thing, and I wrote about this
Speaker 1: column in the column today is is you know, making
Speaker 1: very early investments in kind of high risk, high reward startups, right,
Speaker 1: startups that are likely to fail. He buys in early
Speaker 1: and then you know, later stage investors are are the
Speaker 1: ones who kind of make up take it the rest
Speaker 1: of the way. So you know, going back to you know,
Speaker 1: making the first investment in Facebook co founding palat here,
Speaker 1: but you know a bunch of these kind of like
Speaker 1: super high risk, high reward situations. And I think there's
Speaker 1: a way to look at Master's advance that way. Mitch McConnell.
Speaker 1: Of course, politics as a different sport than investing, and
Speaker 1: and from the sort of mainstream Republican view, the feeling
Speaker 1: is like, look, Peter, tell you stuck us with these
Speaker 1: candidates that are kind of subpar right there, their inexperience,
Speaker 1: they've got lots of baggage. They're not necessarily, you know,
Speaker 1: the most broadly electable candidates, and now here you are.
Speaker 1: I wanted to finish the job, right, And so they're
Speaker 1: they're feeling very much confused, betrayed. Whatever. There's the the
Speaker 1: upshot of this, if things don't go well in these
Speaker 1: races is Peter Teele could get blamed for costing Republicans
Speaker 1: control of the Senate. So in that case it might
Speaker 1: be a bit of an out for the Republican Party.
Speaker 1: But you have a great quote in here from an
Speaker 1: anonymous person who works in Republican politics. I'm quite puzzled
Speaker 1: how you'd arrive at a decision to spend thirty million
Speaker 1: dollars on primaries and zero dollars in a general election.
Speaker 1: What do we know about Teal's VC playbook that might
Speaker 1: give us any sort of hint as to if he
Speaker 1: would start to spend money, what would kind of break
Speaker 1: the damn there? Well, I think the playbook would be
Speaker 1: not to spend any money, right, and that's clearly what
Speaker 1: he's trying to do now. Of course McConnell, partly because
Speaker 1: McConnell's under a lot of pressure, right, you have these
Speaker 1: other races that aren't going well. The money is not unlimited.
Speaker 1: McConnell's calling his bluff, and I think at some point,
Speaker 1: you know, I would expect to heal to pony up
Speaker 1: to some extent, right, go back into his wallet and
Speaker 1: donate a little bit of money. But the thing is
Speaker 1: that if you're a sort of mainstream Republican, the damage
Speaker 1: is being done every day that that he hasn't done
Speaker 1: that right, because we are you know, as him said
Speaker 1: at the top, you know, this is like the home
Speaker 1: stretch of the election. Um. Every day his candidates are
Speaker 1: getting out spent on advertising, and the window to kind
Speaker 1: of turn things around, especially in Arizona, is shrinking. So
Speaker 1: you gotta think he'll will come to the table um.
Speaker 1: But but again he's going to try to limit his
Speaker 1: financial exposure, try to spend as little as he can,
Speaker 1: and try to put as much of this on on
Speaker 1: Mitch McConnell's possible. And you know, I'm curious here, since
Speaker 1: there are opposing candidates in both of these races, what
Speaker 1: what are the Democrats doing or is this just implosion
Speaker 1: on on the GP sid Well, you have a couple
Speaker 1: of a couple of things. One is in Arizona. Uh,
Speaker 1: you have a very well funded incumbent in in Mark Kelly. Um. Uh.
Speaker 1: He's run a very quiet campaign, but he's raised a
Speaker 1: ton of money. Um and and as a result, he's
Speaker 1: he's formidable. UM. Ohio is a little bit different, and
Speaker 1: I say, from the publican point of view, more disappointing,
Speaker 1: because you know, Arizona is a state that Joe Biden won.
Speaker 1: Ohio is the state that Donald Trump won handily. Um.
Speaker 1: The the current holder of that Senate seat won his
Speaker 1: seat by twenty points. So the fact that it's it's
Speaker 1: even close is kind of amazing. That was Bloomberg Business
Speaker 1: Week column, Miss Max Chaffkin. He's also the author of
Speaker 1: the contrarian Peter tile in Silicon Valley's Pursuit of Power.
Speaker 1: The book is out now. Also joining US Business, we
Speaker 1: Get ititor Joe Weber and Bloomberg's Katie Greifeld as well.
Speaker 1: Coming up, why something's still not sitting right for Amazon
Speaker 1: executives five years after the company spent nearly fourteen billion
Speaker 1: dollars to buy Whole Foods. You're listening to Bloomberg Business Week.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick takes Tim Stinovan from Bloomberg Radio
Speaker 1: Well in the current issue of Bloomberg business Week magazine
Speaker 1: Catch it now. It's on news stands online on the
Speaker 1: terminal of course as well. And then at Bloomberg dot
Speaker 1: com slash a business Week there's an article about five
Speaker 1: years on Amazon is still digesting that thirteen point seven
Speaker 1: billion dollar Whole Foods takeover. The article written by Matt Day.
Speaker 1: It's edited by Joshua Brustein. He is with us on
Speaker 1: the phone right now. Also with us is Joel Weber.
Speaker 1: He is the editor of Bloomberg business Week. He's with
Speaker 1: us in the Bloomberg Interactive Broker studio. Katie and I.
Speaker 1: We're talking about this a few minutes ago. Joel. It
Speaker 1: was sort of like the where were you when you
Speaker 1: heard moment? There were so many jokes about getting avocado
Speaker 1: toast by drone. Yeah, so waiting for that. That's still
Speaker 1: by the way, that's another good Bloomberg Business Week story
Speaker 1: is about that the drones common serializing. But but what's
Speaker 1: going on with John Mackie, the guy who he's gone
Speaker 1: all he's gone exactly, So that co founder of Whole
Speaker 1: Foods UM. Five years ago, Amazon uh went shopping for
Speaker 1: some produce and ended up with Whole Foods UM. And
Speaker 1: you know, I think the point of the story is
Speaker 1: five years on, what was it all about? And that
Speaker 1: was sort of I think, what what interested Matt and uh,
Speaker 1: you know what, Josh to just put it to you,
Speaker 1: what was it all about? And what does Amazon really
Speaker 1: have to show for it? Now? Thirteen point seven billion
Speaker 1: for groceries is more than I usually spent exactly. Um. Yeah,
Speaker 1: I think both five years ago, both Whole Foods and
Speaker 1: Amazon needed something. Whole Foods had built itself up into
Speaker 1: this really big player in the organic grocery market, and
Speaker 1: then everyone else kind of figured out that they could
Speaker 1: do the same thing. And so Whole Foods was UM
Speaker 1: really struggling to figure out what its second act would be.
Speaker 1: UM investors were calling for a shake up, and it
Speaker 1: was just having a lot of trouble in the public markets. Meanwhile,
Speaker 1: Amazon had really been trying to get into groceries and
Speaker 1: grocery delivery, and it thought, you know, by this five
Speaker 1: hundred store chain of grocery stores and really just really
Speaker 1: power up our own entry into the grocery market. Um.
Speaker 1: And five years later, it doesn't seem like Whole Foods
Speaker 1: problems have been solved. Its problems are still mostly the same.
Speaker 1: Amazon also has not taken over groceries, despite the fears
Speaker 1: that it would at that time. And it seems like
Speaker 1: we're largely kind of where we were and not as
Speaker 1: much as happened as we would thought. Well, that's what
Speaker 1: I want to talk about. Five years later, what does
Speaker 1: it Amazon have to show with this purchase. What is
Speaker 1: Whole Foods actually added or subtracted from its bottom line?
Speaker 1: So in terms of its bottom line, the answer is
Speaker 1: that this is not This is one of the slower
Speaker 1: growing parts of Amazon's business. If you look at other
Speaker 1: other aspects of Amazon's business like cloud, cloud computing and
Speaker 1: sort of other real revenue drivers, those have been growing
Speaker 1: faster than the grocery business. Um, and that business is
Speaker 1: also being Uh, it's not just that groceries are going slower,
Speaker 1: it's like they're not even growing as fast as competitors.
Speaker 1: So that just really hasn't taken off. They haven't figured
Speaker 1: out how to combine these two companies in a way
Speaker 1: that helps them compete in the specific market. Okay, so
Speaker 1: one thing though, that it has done is you know,
Speaker 1: if you need to return Amazon products or you know,
Speaker 1: get grocery pickups. There have been some some noteworthy enhancements
Speaker 1: that either you know, either the mergers helped facilitate or
Speaker 1: that maybe Amazon shoppers have gotten out of it. So,
Speaker 1: so what has been on the on the good side here? Yeah,
Speaker 1: so I think the good side is that you know,
Speaker 1: Amazon uh does have a large, uh this large network
Speaker 1: of physical stores um. As I said, there's about five
Speaker 1: d um and it has started to lean on Whole
Speaker 1: Foods the expertise in there to help with Amazon Fresh,
Speaker 1: which is its other chain of grocery outlets. UM. And
Speaker 1: we haven't really seen the fruits of that yet so speak,
Speaker 1: but that could come in the future that you could
Speaker 1: see if if Amazon Fresh really does mature, um and
Speaker 1: turn into something really substantial for the company, that a
Speaker 1: lot of Whole Foods wisdom will have gone into the
Speaker 1: building of that product. It's just not quite um there yet.
Speaker 1: So we mentioned John Mackie. He was the co founder
Speaker 1: of Whole Foods. UM he's moved on retired as of
Speaker 1: September one. Who's in charge of Whole Foods within Amazon now? Yeah,
Speaker 1: so uh he is being taken over by his former CEO,
Speaker 1: former management consultant UM very kind of uh. Mackew was
Speaker 1: known as an as an over as as sort of
Speaker 1: a really big personality UM, whereas his successor is less so.
Speaker 1: Jason Jason Bush is his name. Yea, yeah, I mean,
Speaker 1: I'm I'm sorry. Jason mentioned that UM and his plan
Speaker 1: is kind of to take Whole Foods back to its roots,
Speaker 1: as he says, to try to get back to some
Speaker 1: of like the local produce offerings and doing things that
Speaker 1: makes Whole Foods kind of not feel like an Amazon honestly,
Speaker 1: to feel like not you get the same experience everywhere,
Speaker 1: but you go and you know that your local Whole
Speaker 1: Foods has whatever the produces UM you know in your region. Well, Joshua,
Speaker 1: that's been a big complaint for people who were sort
Speaker 1: of the die hard Whole Foods people before Amazon purchased
Speaker 1: the company. If you go back to you know, the
Speaker 1: roots of this company. It started in Austin, and it
Speaker 1: was kind of this like weird alternative grocery store, right
Speaker 1: and even when it was a publicly traded company, it
Speaker 1: and it made a ton of acquisitions around the country,
Speaker 1: it still was unique because it had that local produce
Speaker 1: and it had that kind of heart to get stuff.
Speaker 1: And I'm wondering. It's funny, you know, when this article
Speaker 1: came out, I saw people tweeting about it who didn't
Speaker 1: work at Bloomberg, and they were saying, the Whole Foods,
Speaker 1: the experience of going to Whole Foods has changed too
Speaker 1: much since Amazon took it on, So you know, I
Speaker 1: don't go there anymore. Is one of the tweets that
Speaker 1: that I saw that tweeted out this story. How is
Speaker 1: Whole Foods physically different because of Amazon? Like what's the
Speaker 1: experience like? Now? Yeah, I think there's two things in
Speaker 1: there that The first that you mentioned about, you know,
Speaker 1: the Whole Foods really feeling different and sort of losing
Speaker 1: that local feel is is that was a complaint before
Speaker 1: the acquisition. And one that I think one of the
Speaker 1: problems that Whole food had and it certainly hasn't been solved. Um.
Speaker 1: Hasn't been solved by Amazon, nor would it really Like
Speaker 1: that's not Amazon's strength. UM. But to your question about
Speaker 1: what's physically different, you know, Amazon has has helped re
Speaker 1: re engineer Whole Foods UH stores a little bit to
Speaker 1: be UM, you know, more focused on delivery. There's a
Speaker 1: lot of delivery pickers in the store people mentioned, which
Speaker 1: I think some people really don't like. You know, You're
Speaker 1: you're trying to shop and there's someone, you know, they're
Speaker 1: like clearly like filling up carts to move along. And
Speaker 1: they've had to dedicate some some space that used to
Speaker 1: be cafes and somewhat for the physical infrastructure around the
Speaker 1: delivery business. So that I think has really changed in
Speaker 1: some of the stores in ways that um, you know,
Speaker 1: long standing customers don't necessarily like. That was the Technology
Speaker 1: editor of Bloomberg Business Week. Josh Brustein, along with Joe Weber,
Speaker 1: the editor of the magazine, and Katie Greifeld read the
Speaker 1: entire story in the Technology section of this week's special
Speaker 1: double issue. It's available online, It's on news stands and
Speaker 1: on the Bloomberg Terminal. Still ahead on Bloomberg Business Week,
Speaker 1: we turn our attention to the energy market and an
Speaker 1: executive who says his company is poised for growth even
Speaker 1: as prices start to come down. We have the leading
Speaker 1: natural gas portfolio in North America, and what is a
Speaker 1: market that needs a lot more natural gas? Chesapeake Energy
Speaker 1: president and CEO Nick de Lasso joins us on the
Speaker 1: other side. This is Bloomberg broadcasting from the financial capital
Speaker 1: of the World, Bloomberg eleven Frio in New York to Washington,
Speaker 1: d C. Bloomberg to Boston, Bloomberg one oh six one
Speaker 1: to San Francisco, Bloomberg nine sixty to the country Sirius
Speaker 1: XM Chado one nine team, and around the globe the
Speaker 1: Bloomberg Business app and Bloomberg Radio dot Com. This is
Speaker 1: Bloomberg Business Week. Gas prices in the US reached a
Speaker 1: record high in mid June, topping five dollars a gallon
Speaker 1: the Auto Club. Triple A reports that prices have since
Speaker 1: dropped from those highs, coming in closer now to three
Speaker 1: dollars and seventy five cents as of the middle of
Speaker 1: this past week. For an update on supply and demand
Speaker 1: and on a portfolio that's looking increasingly attractive to investors,
Speaker 1: Katie Grayfield and I spoke with Nick de Lasso. He's
Speaker 1: president and CEO of Chesapeake Energy. He was elevated from
Speaker 1: CFO back in October one, just eight months after the
Speaker 1: firm exited Chapter eleven bankruptcy, and he says conditions well
Speaker 1: they're continuing to improve. Our team is super excited of
Speaker 1: where we sit in the market today the things we've
Speaker 1: been able to accomplish. We've completed two outstanding acquisitions to
Speaker 1: bolster our inventory in our Haynesville and Marcellus positions. We
Speaker 1: have the leading natural gas portfolio in North America and
Speaker 1: what is a market that needs a lot more natural gas?
Speaker 1: Natural gas has been the story of the energy space
Speaker 1: over the last year, and chest Beak sits in a
Speaker 1: fantastic position to deliver on that well. As part of
Speaker 1: that focus on natural gas, last month, there was some
Speaker 1: news that you were planning to exit your Eagle Forward
Speaker 1: Shale of South Texas investment to double down on natural gas.
Speaker 1: So I have two questions for you. One is how
Speaker 1: is that sale going? And the second question is are
Speaker 1: you looking for one buyer or multiple buyers? Here? Sure? So,
Speaker 1: we did announced last month that we're going to be
Speaker 1: pursuing a sale of our Eagleford sail assets. That's really
Speaker 1: based on the strength of our natural gas portfolio. We
Speaker 1: are just getting that process started, so it will take
Speaker 1: a fair amount of time. Is a really large asset
Speaker 1: with some great characteristics. We do think that because it
Speaker 1: is a really large asset across a pretty wide span
Speaker 1: of geography that they're likely could be more than one
Speaker 1: buyer for that. So what do you end up doing
Speaker 1: with the proceeds then, Well, we have the leading return
Speaker 1: framework in the industry today. We have a base dividend,
Speaker 1: we have a variable dividend that is our free cash flow,
Speaker 1: and we also have a two billion dollar buyback program.
Speaker 1: The proceeds from this, we see is enhancing that overall
Speaker 1: return profile that leads the industry. There's this interesting dance
Speaker 1: or balance that needs to be struck between domestic demands
Speaker 1: and what we're seeing from overseas and exports. Since how
Speaker 1: high does does domestics production need to go to strike
Speaker 1: that balance? So it doesn't need to go a lot higher, uh,
Speaker 1: we need to see continued growth in production in the
Speaker 1: US Today, we've had a big increase in overall demand
Speaker 1: for natural gas. However, we've also seen continued switching away
Speaker 1: from coal, which is fantastic for the environment to see
Speaker 1: the lower carbon resource of natural gas displaced coal. It
Speaker 1: has a huge impact on the g h G intensity
Speaker 1: of energy supply in the United States, and we think
Speaker 1: there's more to be done there. However, it doesn't take
Speaker 1: a whole lot to move the market in natural gas.
Speaker 1: It's a it's a historically volatile commodity. We know that
Speaker 1: when production increases a bit, it can really change the prices.
Speaker 1: So we do expect to see natural gas production increase,
Speaker 1: and we do expect to see prices come down a
Speaker 1: bit as a result of that. How much do you
Speaker 1: expect prices to come down? I mean, is the era
Speaker 1: of two dollar natural gas? Is that over? You know,
Speaker 1: we're really optimistic about long term natural gas prices, but
Speaker 1: today where they sit in the eight nine dollar range
Speaker 1: over the last month, we do think they should come
Speaker 1: down a bit from there. You know, historically we did
Speaker 1: think about natural gas prices settling in and that mid
Speaker 1: twos range. We do think that floor has moved up
Speaker 1: considerably from that and it's never again two dollars. Well,
Speaker 1: I think never again is a hard thing to say.
Speaker 1: Gas will be a volatile commodity and it may have
Speaker 1: dips for short periods of time, but we think that
Speaker 1: general assumed floor should be in the mid threes or
Speaker 1: maybe even approaching for and of course it's hard to
Speaker 1: have this conversation without talking about Europe, where gas prices
Speaker 1: are going crazy right now. What exposure do you have
Speaker 1: to those international prices today? We don't have any direct exposure. However,
Speaker 1: you've seen the prices in the US come up significantly
Speaker 1: as prices around the world have have increased. We've talked
Speaker 1: a lot about l en G and what our resources
Speaker 1: mean to the supply of len G export out of
Speaker 1: the US, and we're really well positioned for that. We
Speaker 1: have a very large position in the Haynesville Shale in
Speaker 1: Louisiana and we can be a really important supplier of
Speaker 1: len G to the world. As a result, I think
Speaker 1: we're all thinking about cybersecurity in the wake of what
Speaker 1: happened at Colonial Pipeline and other things completely unrelated to
Speaker 1: oil and gas. What are you guys doing at Chesapeake
Speaker 1: to make sure your systems are safe from a cybersecurity perspective.
Speaker 1: So we partner with a number of different outside firms
Speaker 1: that help us look at and analyze our systems and
Speaker 1: make sure that they're resilient against attacks. We track all
Speaker 1: of the daily thousands of hits that our systems receive.
Speaker 1: We educate our employees about how to be safe with
Speaker 1: their cybersecurity approach, and the risks that exist in the environment. Uh,
Speaker 1: and so we stay really plugged in on that and
Speaker 1: we take the threat very seriously. We did talk about
Speaker 1: the Eagle Forward sale, wondering if you're looking at any
Speaker 1: sort of acquisitions here. So we've done two acquisitions over
Speaker 1: the last year. It's given us a tremendous length to
Speaker 1: our portfolio that we feel great about. We don't need
Speaker 1: to do anything else on the acquisition side, but we
Speaker 1: do believe in scale. We do believe in consolidation in
Speaker 1: the industry. So if another opportunity comes up that meets
Speaker 1: what we call our non negotiables, which ensure that we
Speaker 1: make our company better through acquisitions, not just bigger than
Speaker 1: we would consider those opportunities in the future. That was
Speaker 1: Nick de Lasso, President and CEO of Chesapeake Energy, with
Speaker 1: me and Katie Greifeld coming up next, we're gonna stay
Speaker 1: in the C suite. We're gonna check in with the
Speaker 1: CEO of Priceline. The online travel platform gives us an
Speaker 1: up close view on how inflation is affecting consumer demand,
Speaker 1: and it provides some tips for vacationing without breaking your budget.
Speaker 1: This is Bloomberg. You're listening to Bloomberg Business Week with
Speaker 1: Carol Messer and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio.
Speaker 1: Web searches for round trip flights more than double view
Speaker 1: over year. Hotel searches well not far behind up in
Speaker 1: domestic and international. Some of the top spots include San Juan, Honolulu, Houston,
Speaker 1: and Miami. That's according to our next Guest price Line
Speaker 1: CEO Brett Keller. So how much will it cost to
Speaker 1: go to these places? So we talked about energy in
Speaker 1: our last segment, and well, gas prices have come off
Speaker 1: their record highs, they are still above normal. Bloomberg's Katie
Speaker 1: Greifeld and I asked Brett whether he's seen those high
Speaker 1: costs starting to impact travel demand. We haven't yet. And
Speaker 1: there's two I think facts we can point to here.
Speaker 1: One is that hotel demand through the month of July,
Speaker 1: you know, public data show that that was very healthy,
Speaker 1: and I think what we're seeing in August continues to
Speaker 1: be healthy. You know, the drive market is a big
Speaker 1: market in the US, and gas prices certainly should play
Speaker 1: a role in that. I think with gas prices coming
Speaker 1: down a bit over the last few weeks, that's certainly
Speaker 1: going to help labor day. What hasn't really moved down
Speaker 1: yet is jet fuel prices. Those are still up over
Speaker 1: where they were last year, and while flight prices aren't
Speaker 1: up quite that high. So because because we've seen a
Speaker 1: decline in the price of oil and as a results,
Speaker 1: we've seen a decline in the price of regular gas
Speaker 1: that we used to fill up our cars, do we
Speaker 1: anticipate that we're also going to see some sort of
Speaker 1: decline in the price of jet fuel and then in
Speaker 1: turn airline tickets to Yeah, that's stepped down a little bit.
Speaker 1: You know, if you look back four or five weeks ago,
Speaker 1: jet fuel was up over a hundred percent. So it's
Speaker 1: come down you know, ten to fifteen percent here in
Speaker 1: the past few weeks, but it does seem to drag
Speaker 1: and fall behind its speed of return, uh, compared to
Speaker 1: you know, gas prices. The consumat're paint at the pump.
Speaker 1: So I think we've got a little bit of a
Speaker 1: weight to go there if even if pump prices continue
Speaker 1: to drop in the airspace. And so I want to
Speaker 1: talk about how this compares to what we have seen
Speaker 1: in one but also pre pandemic levels sort of the
Speaker 1: demand that you're seeing for flights and hotels for searches.
Speaker 1: What does it look like? Well, when you look ahead
Speaker 1: at fall travel, flight searches are significantly on the price
Speaker 1: line platform versus last year. We're seeing flight searches up
Speaker 1: over a versus last year for fall travel, and we're
Speaker 1: seeing a hotel searches up not quite that much. But now,
Speaker 1: not all of those consumers are ready to pull this
Speaker 1: trigger yet right there dealing with sticker shock again as
Speaker 1: they move into fall. But that does indicate a very
Speaker 1: very high demand to travel, a demand for travel, and
Speaker 1: so consumers are very active in the market right now,
Speaker 1: shopping and looking for value that they can pull the
Speaker 1: trigger on. You know, we can't predict the future. We
Speaker 1: don't know what's going to happen with the economic cycles here,
Speaker 1: but things are I think shaping up in a good
Speaker 1: place for the fall as well. Hey what about rental
Speaker 1: cars right now? They're offered on the price line platform.
Speaker 1: And I was shocked to find that my brother rented
Speaker 1: a van to carry his three kids and his whole
Speaker 1: family a few weeks ago. They did it for ten days,
Speaker 1: and it was like thirty five dollars bread just to
Speaker 1: rent this van. What is going on when it comes
Speaker 1: to rent our cars. Yeah, rental cars are in a
Speaker 1: very interesting, uh position right now. You know, coming out
Speaker 1: of the start of the pandemic, there was a couple
Speaker 1: of things putting pressure on the car industry. First of all,
Speaker 1: they had had a number of storms throughout two thousand
Speaker 1: nineteen that depleted quite a bit of their inventory. And
Speaker 1: as they entered into the pandemic, obviously many of the
Speaker 1: auto manufacturers had supply chain issues and stopped producing cars,
Speaker 1: and so that put further pressure on their fleets. And
Speaker 1: so as they downsized their fleet significantly, that caused prices
Speaker 1: to go up. It really just skyrocket. Last year prices
Speaker 1: were up almost sev versus two thousand nineteen. They've come
Speaker 1: down a little bit, believe it in hot versus last year,
Speaker 1: but there's still up six Consumers are paying significantly more
Speaker 1: to rent a car today than a couple of years ago.
Speaker 1: And then you add high gas prices on that that
Speaker 1: really puts a dent in the consumer's wallet. But with
Speaker 1: that said, they are selling out in a lot of markets,
Speaker 1: so consumers are still smoking these these higher prices. Brett,
Speaker 1: I gotta tell you, Katie needs a vacation. She's got
Speaker 1: plenty of days left. I'm looking at her calendar right here,
Speaker 1: which we can do at Bloomberg, which is fun, and
Speaker 1: she has a lot of vacation days left, Katie, that
Speaker 1: you've got to burn by the end of the year.
Speaker 1: I've got some vacation days. I've got to burn by
Speaker 1: the end of the year. Brett. Where are people going?
Speaker 1: Where are the hot places to fly? Right now? Alright?
Speaker 1: That is the question we need to answer here. We
Speaker 1: need to burn some vacations. So if you know, you
Speaker 1: look at basically any day of the year, the top
Speaker 1: destinations are typically the entertainment venue, so that's going to be,
Speaker 1: you know, topping the charts almost always is going to
Speaker 1: be Las Vegas, Orlando, New York. But as we started
Speaker 1: to look at where consumers are searching as we move
Speaker 1: into the fall, let me share a couple of destinations
Speaker 1: for you. Obviously, Puerto Rico, you know, San Juan tops
Speaker 1: our charts in terms of the most search and a
Speaker 1: domestic destination at least within or close to the borders
Speaker 1: of the US. Honolulu ranks number two in that list. Miami,
Speaker 1: of course, always a hot spot is where people are
Speaker 1: flocking here in the next couple of months where we
Speaker 1: are really seeing though searches pick up at a very
Speaker 1: very high paid It's almost ten times where we were
Speaker 1: last year. Are of course, international destinations. Things were not
Speaker 1: completely shut down last year, but really took travel. You
Speaker 1: had to test go through a number of hoops to
Speaker 1: actually get to your destinations. So this year that window
Speaker 1: has opened back up and we're seeing people really both
Speaker 1: travel to and search for international destinations. And the top
Speaker 1: ones on our list at least for the fall so
Speaker 1: far include destinations like Munich, so people are heading to
Speaker 1: October Fest that is back on the map again. People
Speaker 1: are going to destinations like Dublin and London. Other top
Speaker 1: destinations include to Amsterdam, Paris, Lisbon. Many of the hot
Speaker 1: spots that used to be big travel destinations for US
Speaker 1: consumers are now back in bog again. Okay, Brett, So
Speaker 1: I actually have vacation days put in for the first
Speaker 1: week of or rather the second week of October. It's
Speaker 1: our five year wedding anniversary. We haven't anything. We haven't
Speaker 1: booked anything. If I'm trying to book international right now,
Speaker 1: is it just is it a disaster? Should not even try? Well,
Speaker 1: it was a rough summer, right the major airports overseas
Speaker 1: really couldn't handle the pressure in the crowds, and so
Speaker 1: you heard stories of lines that were forward five hours
Speaker 1: in length, many people missing flights and rebooking. I think
Speaker 1: we're past that type of pain when it comes to
Speaker 1: international travel. We're certainly not dealing with many of the
Speaker 1: testing protocols and the issues that were associated with COVID.
Speaker 1: I think from that perspective, we're in good shape. From
Speaker 1: the airport and the congestion perspective, it will still be
Speaker 1: very busy because many of the Europeans are now of
Speaker 1: course moving around and across countries as well. But things
Speaker 1: have improved and many of the airports have put limits
Speaker 1: in place in terms of how many flights allowed to
Speaker 1: move through their airports. So I think you'll find that
Speaker 1: it's tolerable enough that you will want to travel to
Speaker 1: some of these destinations. It's it's it's you know, these
Speaker 1: are the kinds of things that if you keep passing
Speaker 1: up in life, you're just not going to enjoy some
Speaker 1: of the best travel that the world has to offer.
Speaker 1: That's a good point. I always think about Warren Miller
Speaker 1: and the Warren Miller films. If you don't do it
Speaker 1: this year, you're gonna be one year older when you do.
Speaker 1: They're always rumors about the best time to buy tickets,
Speaker 1: the cheapest days to buy tickets. I know the airlines
Speaker 1: have it pretty pretty figured out in terms of from
Speaker 1: an analytics perspective, you know how to get the most
Speaker 1: money from us. Given that we think prices for fuel
Speaker 1: will go down as a result of lower oil prices,
Speaker 1: should we still be booking our holiday travel really earlier?
Speaker 1: Should we wait for prices to fall? Well, one, I'm
Speaker 1: not sure that I would ever bet on oil prices falling.
Speaker 1: They're just as likely to go back up in the future.
Speaker 1: But when we look back in history, and this is
Speaker 1: true virtually every year. If you're booking holiday airfare, those
Speaker 1: are for the major holidays like Thanksgiving, Christmas, end of Year, etcetera.
Speaker 1: You need to book early. You need to be booking
Speaker 1: in this September October time frame. If you're talking about
Speaker 1: other types of fall travel, you really need to book
Speaker 1: at least two weeks in advance, and do not wait
Speaker 1: until the last week to book your flight. You will
Speaker 1: absolutely pay up. And it is true if you fly
Speaker 1: out on a Tuesday, you will save an average of
Speaker 1: at least eight percent on your ticket, so book in advance.
Speaker 1: There are certain days a week that will play to
Speaker 1: your favor and on price line you can do things
Speaker 1: like mix and match airlines, go out on one airline,
Speaker 1: come back on another. That typically can lead to savings
Speaker 1: of you know, almost ten percent if you're careful and
Speaker 1: how that how plan. So those types of changes can
Speaker 1: take off your trip if you're careful and how you plan.
Speaker 1: The only downside, of course, is that you might be
Speaker 1: flying out on a Tuesday, which sounds less than ideal.
Speaker 1: That was Priceline CEO Brett Keller, along with a Bloomberg
Speaker 1: Senior Markets reporter Katie greifeld. Well. That wraps up the
Speaker 1: first hour of the weekend edition of Bloomberg Business Week
Speaker 1: from Bloomberg Radio. I'm Tim Stenebec ahead in our next
Speaker 1: hour some of the highlights from our two days on
Speaker 1: site at the US Open. They include the story of
Speaker 1: how the world's largest tennis venue almost never came to be.
Speaker 1: In a conversation with former U s t A CEO
Speaker 1: Katrina Adams on diversity in the sport, I tell people
Speaker 1: that I didn't know that tennis wasn't a black sport
Speaker 1: until two years in because the programs in the tournament
Speaker 1: side was playing. There were so many black tennis players
Speaker 1: that were good and competitive, and so until I came
Speaker 1: into the USC system. I don't want to say it
Speaker 1: was tougher. It was just that because I was good
Speaker 1: enough to start playing or wanted to continue that it
Speaker 1: was more challenging because I was the only one. And
Speaker 1: if you prefer screen time to sports, We've got you
Speaker 1: covered there too. We're gonna hear from the former CEO
Speaker 1: of Movie Pass on the latest salvos in the streaming wars,
Speaker 1: and the next big thing in the entertainment business. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week, inside from the
Speaker 1: reporters and editors who bring you America's most trusted business magazine,
Speaker 1: plus global business, finance and tech news as it happened.
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stinovin on Bloomberg Radio. Plenty ahead in our second
Speaker 1: hour of the weekend edition of Bloomberg Business Week, including
Speaker 1: on the ground interviews from Queens, as we celebrate the
Speaker 1: US Open and the anniversary of Arthur ash Stadium. Just
Speaker 1: wait until you hear the price tag. This thing was
Speaker 1: pretty costly. Plus, former movie past CEO Mitch Lowe brings
Speaker 1: us lessons from decades long career and entertainment and predicts
Speaker 1: where the metaverse could meet the movie industry. But first
Speaker 1: up this hour, we dive back into our special double
Speaker 1: issue of Bloomberg Business Week. It's available online, on newsstands
Speaker 1: and on the Bloomberg terminal. You may be familiar with
Speaker 1: the term dinks. It's an acronym that stands for double
Speaker 1: income no kids. You know them young couples, both working,
Speaker 1: no children, and often with a little added disposable income
Speaker 1: as a result. I am not part of a dink
Speaker 1: a couple. A story on the economic section the magazine
Speaker 1: highlights out US women, though, who stay single and don't
Speaker 1: have kids, are also doing really well financially. Bloomberg News
Speaker 1: Economics editor Molly Smith is here to explain. Carol Masser
Speaker 1: and I caught up with Molly on site at the
Speaker 1: US Open in Queens. I was really inspired to write
Speaker 1: this story by many of my friends who lived this lifestyle.
Speaker 1: They're in their early forties. Uh, some of them are divorced,
Speaker 1: some never married and have just never really wanted children.
Speaker 1: That's never been part of their life's vision. And I
Speaker 1: wanted to just bring some real justice and service to
Speaker 1: that topic. I think a lot of women when they
Speaker 1: say they don't want to have kids, are kind of
Speaker 1: judged and looked at like, oh, weird, Like why it's
Speaker 1: almost thought of as like a shameful decision, that what's
Speaker 1: wrong with you? Right exactly, And they really take pride
Speaker 1: in this, that this is that's just not the lights
Speaker 1: that they want and there's nothing wrong with it. And
Speaker 1: they have advanced in their careers. They own at least
Speaker 1: one or multiple homes, including including apartments in New York City,
Speaker 1: and they're doing amazing personally and professionally. Well, let's talk
Speaker 1: about a couple of those women that you profile in here.
Speaker 1: Ashley Marrero is one of them, and an Ad Dixon
Speaker 1: actually a woman I used to work with earlier in
Speaker 1: my career. I was surprised to see her picture in
Speaker 1: this story. What did they tell you about their choices
Speaker 1: and how it's sort of given them this freedom to
Speaker 1: kind of drop everything and just go off to Alaska
Speaker 1: or something exactly. Yeah, and they have a group of
Speaker 1: like twenty five friends who are just like this. It's
Speaker 1: really incredible to see. And for Ashley Um, she was
Speaker 1: married when she was in her early twenties and I
Speaker 1: think she just felt very held back by it. There
Speaker 1: were so many things that she wanted to go out
Speaker 1: and do but didn't feel like her marriage really gave
Speaker 1: her that freedom and opportunity to do it, like to
Speaker 1: get up and do do these trips or go by
Speaker 1: the beach house. Um with Anna, I think it was
Speaker 1: this sim idea that just kids were never part of
Speaker 1: her plan. She's had a partner for a lot of
Speaker 1: her life, but it's just not interested in raising children,
Speaker 1: and it is very happy and resolute in that decision. Well,
Speaker 1: it was it a case of yes, they thought they
Speaker 1: would get married, didn't have kids and do that whole thing,
Speaker 1: and it just didn't work out. Or is it that
Speaker 1: it wasn't a driving force from the get go, so
Speaker 1: they thought more about like marriage could be in the picture,
Speaker 1: but less so kids. And Ashley even says to this
Speaker 1: day that if she were to meet somebody and get
Speaker 1: pregnant tomorrow, that she would have the child. But it
Speaker 1: just hasn't been something that she's actively pursued on her own,
Speaker 1: and especially since she's not in a committed relationship right
Speaker 1: now to like she has her eggs frozen, Is she
Speaker 1: really going to act on that when there's you know,
Speaker 1: no one right now who's seriously in the pictures. That's
Speaker 1: just not part of her plan. Tim and I talked
Speaker 1: about with a lot of our gas about equality between
Speaker 1: women and men, just basic equality in the workforce. And
Speaker 1: I'm always kind of like, as long as women have kids,
Speaker 1: they're never gonna have the equality because physically they're going
Speaker 1: to be out of the workforce. They're going to be
Speaker 1: looked at differently. Even if they go home for just
Speaker 1: a week and they go back to work. And I
Speaker 1: do wonder they really are financially wealthier than maybe if
Speaker 1: they had gone a different route with kids. I mean,
Speaker 1: it's hard to imagine how, how how it wouldn't be right.
Speaker 1: I mean, Ashley, for her job, is on the road
Speaker 1: a lot. She's a sales rep for a medical device company,
Speaker 1: so she's in the o R. She's with patients, traveling
Speaker 1: around to meet doctors. And she owns a one bedroom
Speaker 1: in the West Village. But if she had a child,
Speaker 1: she'd probably need a living help, like, I mean, like
Speaker 1: to do that on just her income would still definitely
Speaker 1: be challenging. The other part of this story, too, has
Speaker 1: to do with how expensive it is to raise kids.
Speaker 1: Look at the opportunities that these women have financially because
Speaker 1: they don't have to put money in a nine, they're
Speaker 1: not paying for daycare. And it's just in the US,
Speaker 1: and you write about this, birthrates and are declining and
Speaker 1: people are having kids later in life. Is there a
Speaker 1: lesson in here for policymakers. I mean, it's it's so
Speaker 1: mind boggling to me about how this like it's just
Speaker 1: there aren't a systems in place in the US to
Speaker 1: really support parents. I mean, how much of I'm sure
Speaker 1: you guys have talked about it, with all of the
Speaker 1: controversy around the overturning of the road decision, and that
Speaker 1: the US is like the only wealthy country that doesn't
Speaker 1: guarantee paid leave to new parents, that it's challenging and
Speaker 1: it's honestly like for so many people whose jobs don't
Speaker 1: afford that, it's it's un really unattainable. I love the
Speaker 1: kind of subline on this is foregoing marriage and parent
Speaker 1: and has a bigger payoff for American women than men.
Speaker 1: So even men who don't get married and have kids,
Speaker 1: women are finding a bigger payoff. That's right. Yeah. The St.
Speaker 1: Louis Fed research showed that what single women without children
Speaker 1: had an average of sixty five tho dollars in nets
Speaker 1: in net worth. While it's saying men with our kids,
Speaker 1: tell us about the response that you've gotten after writing this.
Speaker 1: I mean I saw Anna share this on LinkedIn and
Speaker 1: so many comments and likes. It's been overwhelming. I think
Speaker 1: what's I've really appreciated is the response that Ashley and
Speaker 1: Hannah have gotten and how many women have reached out
Speaker 1: to them and said, Hi, I'm at this similar point
Speaker 1: in my life. I'm trying to come to terms with it.
Speaker 1: Can I talk to you? And that's really just a
Speaker 1: beautiful thing to hear. That was Bloomberg News Economics editor
Speaker 1: Molly Smith. Check out her full story in the magazine.
Speaker 1: You're listening to Bloomberg Business Week. We're staying put at
Speaker 1: the US Open and diving into the origin story of
Speaker 1: the biggest tennis venue on the planet. We're talking Arthur
Speaker 1: Ashe Stadium. After the break, this is the biggest things
Speaker 1: have happened in New York and at that time Dave
Speaker 1: Daklins was there and he wanted this stadium, and they
Speaker 1: will talk about leaving the city because they didn't have
Speaker 1: a big enough facility to the US Open. I said,
Speaker 1: I gotta get involved, and I made a couple of goals.
Speaker 1: That was fortunate, and they retained me my firm, and
Speaker 1: we spent the next three years getting to put rations.
Speaker 1: Who is all about authors? It was sixteen courts than
Speaker 1: you can't remember forty eight weeks out of a year
Speaker 1: average people. Junior's scenes are using these best courts in
Speaker 1: the world, but they needed more room, attorney, said David
Speaker 1: Off on his role in the quarter billion dollar project.
Speaker 1: Next stick around, This is Bloomberg. This is Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes. Tim Stinnoby
Speaker 1: from Bloomberg Radio. Carol and I were lucky enough to
Speaker 1: spend a couple of days out in Queens, New York
Speaker 1: during the early rounds of the U s Open. We
Speaker 1: conducted our broadcast from the Billy Jean National Tennis Center
Speaker 1: in Queens. It's just a mecca when it comes to
Speaker 1: tennis fans. The venue continues to evolve to support the
Speaker 1: player and fan experience, and it often means renovations and
Speaker 1: building a new Our next guest understands what that process
Speaker 1: entails better than most people out there. We're talking about
Speaker 1: Sid david Off. He's a founding partner at david Off,
Speaker 1: Hutcher and Citron l l P. He's also chair of
Speaker 1: the firm's government relations practice, having worked on major development
Speaker 1: projects in New York City. He was even an administrative
Speaker 1: assistant to former New York Mayor John Lindsay for seven years.
Speaker 1: We spoke with Sid back on September one. Serena Williams
Speaker 1: was still in the field at that point and the
Speaker 1: fans were out in full force with darthur Ash Stadium
Speaker 1: celebrating its twenty fifth anniversary. We As said, if he
Speaker 1: could have imagined the tournament he loves and the facilities
Speaker 1: that he helped create, would ever come close to what
Speaker 1: they are today. At that time, Dame Dhinklins was Mayor
Speaker 1: um and he wanted the stadium that Dave was an
Speaker 1: incredible tennis enthusiast and really backed young tennis plays, particularly
Speaker 1: black young tennis plays and UH and they will talk
Speaker 1: about leaving the city because they didn't have a big
Speaker 1: enough facility to the US open and um, I said,
Speaker 1: I gotta get involved, and I made a couple of goals.
Speaker 1: That was fortunate and they retained me my firm, and
Speaker 1: we spent the next three years getting the permissions because
Speaker 1: it's it's interesting. This is park land and anything that
Speaker 1: happens in park land requires the community board involvement, this
Speaker 1: borough president, the city council, the legislature, and the governor.
Speaker 1: Because you're alienating an alienating park property, it has to
Speaker 1: go through the state legislature. None of this was here. Well, no,
Speaker 1: the the just the one right, the really armstrong was there.
Speaker 1: It was all about Arthur ash Um. They were a
Speaker 1: loted with sixteen courts. Now you can't remember forty eight
Speaker 1: weeks out of the year, average people, juniors, sceniors are
Speaker 1: using these best courts in the world. But they needed
Speaker 1: more room. So it was it was a negotiation. It
Speaker 1: was three years. Part of it is what we're seeing
Speaker 1: here today. All these people out here were just have
Speaker 1: day passes. It was required that they would have a
Speaker 1: minimum day passes for people who can't afford the seats
Speaker 1: in the stadium. If I can, I'd love to tell
Speaker 1: you a story about Arthur Ash. So he had to
Speaker 1: go to the four community planning boards that UH circle
Speaker 1: and involved with the Flesher Metal Corona Park and author
Speaker 1: asked that he wanted to come and convinced them that
Speaker 1: was the right thing to put this stadium here in
Speaker 1: this park. And he told the story of him growing
Speaker 1: up at Richmond, Virginia where he was playing in the
Speaker 1: public park and he was mentored he would never have
Speaker 1: been able to be who he was in tennis had
Speaker 1: it not been for a public park. And when he
Speaker 1: won the US Open at the west Side Tennis Center
Speaker 1: in Forest Hills in sixty seven, he couldn't be a
Speaker 1: member of that club. So he won the Open at
Speaker 1: a club that he couldn't be a member of it.
Speaker 1: And he would tell that story of this kid growing
Speaker 1: up and anybody who had any doubts that this facility
Speaker 1: belonged in this park at that ended it it was
Speaker 1: incredible And he's such a gentleman. And to be here
Speaker 1: in the stadium named after him, seeing Serena playing it
Speaker 1: last night, you know, I gotta tell you it's thrilled.
Speaker 1: And it is the best deal of any any arena
Speaker 1: in the country. The money that comes to the city
Speaker 1: with no expense of the city. I want to make
Speaker 1: sure understand this. Arthur Ash died in Yeah, so this
Speaker 1: was this that's planning for this was that long ago. Yes,
Speaker 1: it was David Dankles is man from three and it
Speaker 1: was his like final act that this scientist Antho was
Speaker 1: out there already suffering but you couldn't tell. But so
Speaker 1: the question was that I ever think would be like this.
Speaker 1: I never doubted it would be incredible, that I think
Speaker 1: would be multi incredible. So you talk about three three
Speaker 1: years of negotiations three years. What was the most difficult
Speaker 1: part of that? I can only imagine because major cities
Speaker 1: are very protective of their park land space, as they
Speaker 1: should be, right it is open to all communities and
Speaker 1: it's just important to have this open space. What was
Speaker 1: the toughest negotiating point? The toughest, And it was the
Speaker 1: craziest because there was definitely a group on the board
Speaker 1: of the U. S t A that didn't think that
Speaker 1: you New York audience was the forum for the USA
Speaker 1: talking about Atlanta. Were talking about Chicago certainly not New York.
Speaker 1: And you know, they didn't like who sat in the
Speaker 1: bleaches whatever, whatever. The whatever the reasons were, and they
Speaker 1: wanted to leave, there were any excuse to leave. So
Speaker 1: the issue then became the flyovers, the planes that land
Speaker 1: at the Guadia a stones throw from this a tennis stadium.
Speaker 1: And I kept saying, we who nobody, this isn't a
Speaker 1: big issue, but they said, this is a big issue.
Speaker 1: So at the time Ald Motto was the United States Senator,
Speaker 1: he actually held up the appointment of the head of
Speaker 1: the f A A which the Senate has the right
Speaker 1: to do, until they agreed that the planes would not
Speaker 1: fly over during the tournament. And the the interesting thing
Speaker 1: is that it was a Merrillo election. Giuliani was running
Speaker 1: aided the stadium, aided Dinkins obviously, and said that this
Speaker 1: said this a lot of history that said that this,
Speaker 1: this would this would be a safety factor. Anybody who
Speaker 1: flies in those name about planes. When the guy in
Speaker 1: the tower tells you where to fly, you fly, and
Speaker 1: and and he and he said, this is going to
Speaker 1: cost the city money. And the deal was that if
Speaker 1: there were five uh and incidance in one hour where
Speaker 1: a plane would fly where it wasn't an emergency, where
Speaker 1: they not following the rules of the tower, that then
Speaker 1: there was a fine or an abatement of the rant
Speaker 1: that it couldn't happen. The US Open brings in a
Speaker 1: ton of money in the city, doesn't it. Those assessments
Speaker 1: I heard was about seven hundred million dollars come in
Speaker 1: for the two weeks of the Open and the money
Speaker 1: said point in at the gate, the money that spent
Speaker 1: at the restaurants, some money that's spent in hotels, u
Speaker 1: ubis ams, etcetera. UM, the city gets a piece of everything.
Speaker 1: That was a negotiation and get a piece of the
Speaker 1: UM television money. The piece of the was that the
Speaker 1: negotiation from day one. Yeah, that was part of the
Speaker 1: deal and that was one of the reasons that you
Speaker 1: know that held it up a little bit because it
Speaker 1: was a big money thing. But in you know, it
Speaker 1: was important to the U. S t a uh how
Speaker 1: much they gave away, but would a lot of money
Speaker 1: and it was certainly worth it. Uh. And today looking
Speaker 1: and it's been said by many looking at any stadium
Speaker 1: in the country, this is the most profitable to any
Speaker 1: municipality without a hot any hard money being put in.
Speaker 1: That's remarkable because the tournament is two weeks a year exactly.
Speaker 1: So how did that so it's so much better than
Speaker 1: football stadiums and other parts of the country. Yes, and
Speaker 1: if you look at what they pay, they have all
Speaker 1: their maintenance is taken off like city field, Yankee dam whatever.
Speaker 1: Of course they take it off your rent. This is
Speaker 1: a net net least us TA runs it fifty two
Speaker 1: weeks of the year. They closed it down for the
Speaker 1: four weeks a week after week after the tournament, week
Speaker 1: before week after pay for everything all year round. City
Speaker 1: gets a piece of everything. Could you ever kind of
Speaker 1: replicate this? Too much reed in the industry. This is
Speaker 1: one that's industry. That's said David Off, founding partner at
Speaker 1: David Off, Hutcher and Citron LLLP. Still to come on
Speaker 1: Bloomberg Business Week, the former CEO of the u s
Speaker 1: TA talks about diversity in the sport and how the
Speaker 1: game has captivated American audiences. You're listening to Bloomberg Business Week.
Speaker 1: This is Bloomberg broadcasting from the financial capital of the world,
Speaker 1: Bloomberg eleve in Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one oh six one to San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM, Chado one
Speaker 1: nine team and around the globe, the Bloomberg Business app
Speaker 1: and Bloomberg Radio dot com. This is Bloomberg Business Week. Well,
Speaker 1: our next guest has gone from professional tennis player to
Speaker 1: coach to commentator, and she's now helping the next generation
Speaker 1: get there as well. Katrina Adams is the former president,
Speaker 1: chairman and CEO of the U S t A. It's
Speaker 1: the U S Tennis Association. She also contributes to CBS
Speaker 1: Sports Network and is the executive director of the Harlem
Speaker 1: Junior Tennis and Education Program. It's a non for profit
Speaker 1: education program for inner city kids to learn the game
Speaker 1: of tennis. Caroline I spoke with Katrina during the first
Speaker 1: week of Action at the US Open, and she explained
Speaker 1: how she draws on her own personal experiences as she
Speaker 1: tries to help cultivate future generations of tennis players. I
Speaker 1: started playing tennis when I was six in the city
Speaker 1: Parks of Chicago, Garfield Park on the West Side, through
Speaker 1: a local program and was able to progress through the sport.
Speaker 1: I had someone to a coach of that program, thought
Speaker 1: I had potential, took me on and I started to
Speaker 1: navigate the sport. You know, playing locally, sexually and then
Speaker 1: ultimately nationally. And I grew up in a program that
Speaker 1: was really an in JTL pilot program back in Chicago,
Speaker 1: Youth Action, and now our run one here in New York,
Speaker 1: so we have it's all about the grass roots. If
Speaker 1: we have to build a base in order to get
Speaker 1: some champions to come out in the future, and and
Speaker 1: that's about growing and developing the sport of tennis. Is
Speaker 1: that base big than it was in the nineteen eighties
Speaker 1: when you were going through it? You know what? I
Speaker 1: think I started in what they called the baby boom
Speaker 1: back then tennis was so popular in the US. But
Speaker 1: I would say the base has become more diverse since
Speaker 1: when I was playing in the seventies, and and that's
Speaker 1: a testament to players like Venus and Serena, williams Um
Speaker 1: and then of course Sloan and Madison and Taylor and
Speaker 1: now Coco. Is it actually more accessible though? Absolutely? I
Speaker 1: mean they're their programs and all all over the country.
Speaker 1: When I talk about the n j t L, the
Speaker 1: National Junior Tennis and Learning Network, there over two hundred
Speaker 1: chapters nationwide. The USCA Foundation funds many of these programs,
Speaker 1: whether it's financial or just with human resources and helping
Speaker 1: them to develop and grow. But there are also so
Speaker 1: many other community tennis programs around the cities, in the
Speaker 1: city parks as well as in some of the clubs
Speaker 1: as well. You know, when you look at tennis and
Speaker 1: house evolved over the years and it's a lot more colorful,
Speaker 1: a lot more excitement in the sport. You look at
Speaker 1: the Nick Kurios and he's actually drawing players into the
Speaker 1: sport because I think it's cool and that's what we need.
Speaker 1: We need personalities. He has a personality, but you know,
Speaker 1: Serena has a personality too, And you know, you look
Speaker 1: at the queen and the greatest of all time and
Speaker 1: what she is accomplished in her career and the number
Speaker 1: of athletes that she has attracted to the sport, boys
Speaker 1: and girls alike. I think it's phenomenal. I was reading
Speaker 1: your background and you know how you grew up right
Speaker 1: the West Side of Chicago, youngest of three, only girl,
Speaker 1: and there's a story. I guess it was sports illustrated
Speaker 1: growing up with the nineteen eighties when gangs were on
Speaker 1: the rise. That was their words. I hate that. I'm
Speaker 1: going to ask this you know, how did you do it?
Speaker 1: Because I feel like, you know, we are a diverse society,
Speaker 1: but we're still asking that question because many of the
Speaker 1: industries in our world are not as diverse as they
Speaker 1: should be and need to be. So, you know, how
Speaker 1: do we get there? It sounds like programs like you're doing,
Speaker 1: but how do we even get more diversity in a
Speaker 1: sport like tennis? Well, I think we've done a great
Speaker 1: job we made in the us c A over the
Speaker 1: years and becoming more accessible, um through programs like the
Speaker 1: nj t L chapters. UM, we have adaptive programs as well. UM.
Speaker 1: You know, we're a huge supporter of the lgbt Q
Speaker 1: plus community, and so last night was great, absolutely Pride
Speaker 1: Pride Night was last night with HBCU Live the night before.
Speaker 1: So when people turn on the television, they can see
Speaker 1: themselves in our sport, which as wow, they're they're accepting.
Speaker 1: You know, I want to try that sport. I want
Speaker 1: to find out more about it. How do I get
Speaker 1: more involved? And so we've definitely done a tremendous job
Speaker 1: over the last twenty years, I would say in opening
Speaker 1: up and being more open. Will be open is a
Speaker 1: hard when you started I won't say it was hard
Speaker 1: when I started, because when I started, I grew up
Speaker 1: in a community program. You know, I had coaches that
Speaker 1: loved me. I joined a program. In the wintertime, I
Speaker 1: joined another program. I started playing a t a nationals.
Speaker 1: I tell people that I didn't know that tennis wasn't
Speaker 1: a black sport until two years in because the programs,
Speaker 1: in the tournaments I were playing, there were so many
Speaker 1: black tennis play airs that were good and competitive and
Speaker 1: and so until I came into the USC system and
Speaker 1: the late late seven I don't say, I don't want
Speaker 1: to say it was tougher. It was just that because
Speaker 1: I was good enough to start playing or wanted to continue,
Speaker 1: that it was more challenging because I was the only
Speaker 1: one that I would see these tournaments. But it's it's um.
Speaker 1: It became a cost effective matter for a lot of
Speaker 1: the kids that I started playing tennis with. Katrina. The
Speaker 1: state of the US Tennis UH program when the Williams
Speaker 1: sisters are on their way out, it's awesome. The USA
Speaker 1: Player Development Program has done a phenomenal job of being
Speaker 1: more diverse, as we're talking about that, be more inclusive,
Speaker 1: making sure that these kids have a pathway to be,
Speaker 1: to develop, to be the champions that they want to be,
Speaker 1: and hopefully be a champion Right here on our thresh stadium.
Speaker 1: That's Katrina Adams, former president, chairman and CEO of the
Speaker 1: U S t A, and a big thank you to
Speaker 1: all of our guests who appeared with us on site
Speaker 1: during the tournament. You're listening to Bloomberg Business Week. Up next,
Speaker 1: we'll turn a from tennis, but keep an eye on
Speaker 1: the entertainment world. The former CEO of Movie Pass Mitch Lowe,
Speaker 1: details his journey from video stores through the streaming wars,
Speaker 1: and he's got a bold prediction about the next era
Speaker 1: of personal entertainment. This is Bloomberg. You're listening to Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovik from Bloomberg Radio. Last month, the Pursuits section of
Speaker 1: Business Week gave us a preview of what to watch
Speaker 1: this fall, from the Game of Thrones prequel series to
Speaker 1: a Mike Tyson Hulu documentary, which, by the way, our
Speaker 1: critic did not love. This week, we're rounding out our
Speaker 1: broadcast with more screen time a guest who's got a
Speaker 1: Macro review when it comes to the movie industry. Bloomberg
Speaker 1: senior markets reporter Katie Greifeld and I spoke with Mitch Low.
Speaker 1: You might recognize his name. He was an early executive
Speaker 1: at Netflix. He's former president of DVD rental service red Box,
Speaker 1: and also the former c of Movie Pass. Mitch dropped
Speaker 1: out of high school. He found himself in Eastern Europe,
Speaker 1: and then he became the owner of video stores, and
Speaker 1: somehow that experience led him to a Nissan company that
Speaker 1: would later become the world's premier movie streaming service. We're talking,
Speaker 1: of course, about Netflix. You can read all about it
Speaker 1: in his new book Watch and Learn How I turned
Speaker 1: Hollywood upside down with Netflix, red Box and movie Pass
Speaker 1: owning video stores. You could see the writing on the
Speaker 1: wall that it wasn't going to last forever. So I
Speaker 1: was always looking for new revenue streams and new businesses
Speaker 1: that could fit into this whole home entertainment. And I
Speaker 1: had founded a company called n s I And what
Speaker 1: we were doing is we remember this is we built
Speaker 1: a menu driven platform for video stores to build their
Speaker 1: own websites where they could send the newsletter, they could
Speaker 1: sell us movies, and they could show their customers their inventory.
Speaker 1: It all seems like real easy today, but in those
Speaker 1: days that was hard. It was a subscription based service.
Speaker 1: I was exhibiting it at a trade show in Las
Speaker 1: Vegas and a guy came up to my booth and
Speaker 1: started asking me all these questions about DVD which had
Speaker 1: just been released about six months prior. He kept asking me,
Speaker 1: do you think it would break if it went through
Speaker 1: the post office? Do you think people would rent on
Speaker 1: the internet? And and that was Mark Randolph, and of
Speaker 1: course became a great friend and introduced me to read. Okay,
Speaker 1: so you spend until two thousand three at Netflix, and
Speaker 1: then you see an opportunity after Netflix in the form
Speaker 1: of DVDs, but not delivered by mal we're talking red
Speaker 1: box here and McDonald's. I think a lot of people
Speaker 1: are would be surprised too, you know, if they didn't
Speaker 1: follow the industry closely that it that it was so
Speaker 1: closely aligned with McDonald's in the early days. You know
Speaker 1: what Netflix as as uh, you know, we got that
Speaker 1: hockey stick experience with the kind of the all you
Speaker 1: can eat subscription model. What I saw is that there
Speaker 1: was an other consumer in the US who couldn't afford
Speaker 1: in fact, didn't want to get committed to a subscription. Uh.
Speaker 1: And they were, you know, really interested in the new releases.
Speaker 1: They were interested in something very economical. Uh. They had
Speaker 1: tight budgets and and so the DVD vending machine idea
Speaker 1: was to serve that other, which it's about forty of
Speaker 1: us households that are on a budget, you know, need
Speaker 1: something to fill time. And what we were trying to
Speaker 1: do is to make it easy and inexpensive to rent
Speaker 1: the big hits that you normally at that time would
Speaker 1: pay four and five dollars for. We came out with
Speaker 1: a dollar in night pricing. Hey, Mitch, um, let's talk
Speaker 1: a little bit about where Netflix is right now. As
Speaker 1: you know, the company's stock prices certainly struggled this year.
Speaker 1: Curious about your thoughts on on whether we've hit peak
Speaker 1: Netflix and it's kind of downhill from here for the company.
Speaker 1: I do not think so. You know, the people and
Speaker 1: the culture that was built at Netflix will almost always
Speaker 1: overcome these kinds of challenges. I think the impact on
Speaker 1: their stock was way overdone. I mean, when you think
Speaker 1: about it, they really only lost a couple of percentage
Speaker 1: points of their subscribers. Yes, it's true that you know,
Speaker 1: their competitors have almost equaled their size in a in
Speaker 1: a few short years if you add a Disney plus
Speaker 1: and paramount. But I see, I see Netflix taking that
Speaker 1: huge next step which I think is going to be
Speaker 1: a whole new way for people, especially young people, to
Speaker 1: consume entertainment. And I and I would not count them out. Okay, Mitch,
Speaker 1: we've talked about Netflix, We've talked about red Box. I
Speaker 1: want to talk movie Pass here because I think a
Speaker 1: lot of people became familiar with you. You became really
Speaker 1: a household name if you're covering media. You know when
Speaker 1: movie Pass essentially went viral and ultimately it created a
Speaker 1: product that it it couldn't actually fulfill to consumers because
Speaker 1: it got so popular. The idea, of course, was ten
Speaker 1: bucks a month for unlimited movies. What, in your opinion,
Speaker 1: happened with movie Pass? Why did it fail? It failed
Speaker 1: for a number of reasons. The first one was we
Speaker 1: ran out of money. What we were trying to do
Speaker 1: a movie Pass was not unlike what we did at Netflix,
Speaker 1: not unlike what Spotify did. You gotta remember Spotify lost
Speaker 1: one point four billion dollars before it got to break even.
Speaker 1: And what we were trying to do is to build
Speaker 1: a large pool of movie goers and then monitor slowly
Speaker 1: but surely, get more and more of the average movie
Speaker 1: goer who wouldn't go four or five times a month,
Speaker 1: but go two times a month. Get a discount on tickets,
Speaker 1: and monetize those customers, you know, get them to use
Speaker 1: our card for babysitting and going to Starbucks, where we
Speaker 1: would earn seven per cent By helping market small films.
Speaker 1: We were on our way, but we needed a longer ramp.
Speaker 1: In the hindsight, I see things I could have done
Speaker 1: a little bit better to slow down. Kind of how
Speaker 1: fast this happened, But you know, we were on We
Speaker 1: were on a path. We had a great strategy. No
Speaker 1: one believed that it was doable. I remember when we
Speaker 1: launched Netflix in September of nine, when we first started
Speaker 1: the all you can eat program, we were terrified that
Speaker 1: there was no way we could break even on it.
Speaker 1: And so it wasn't an unusual model. The problem was
Speaker 1: we didn't have enough time. Insider reported a few weeks
Speaker 1: ago the movie Passes set to relaunch. Are you involved
Speaker 1: in that at all? No, I'm not. I'm it is
Speaker 1: actually the original founders or one of the founders, UH
Speaker 1: bought the assets of the company and he launched yesterday
Speaker 1: with a revised movie Pass offering. All right, I want
Speaker 1: to switch gears pretty traumatically and go from Movie Pass
Speaker 1: to the book. It's titled Watch and Learn How I
Speaker 1: turned Hollywood upside down with Netflix, red Box and Movie Pass,
Speaker 1: which I want to focus on the learned part of
Speaker 1: that title. What do you hope are the takeaways from
Speaker 1: this book? I tell stories about what happened, you know,
Speaker 1: the challenges we face and how we resolve things. And
Speaker 1: I entitled the last chapter about movie Pasts is how
Speaker 1: I forgot everything I ever learned. And one of the
Speaker 1: lessons is sometimes you get caught up in growth, and
Speaker 1: you can get caught up in kind of a momentum,
Speaker 1: and it's important to always step back and and and
Speaker 1: look at the bigger picture. Uh. You know, there's another
Speaker 1: chapter where I don't ask for enough advice. You know,
Speaker 1: that's something that I think is is super important. So
Speaker 1: there's a lot, you know, there's there's a lesson in
Speaker 1: every chapter. I try to focus on the things that
Speaker 1: I did wrong, the decisions I made wrong. And you know,
Speaker 1: I don't try to preach. I feel that by telling
Speaker 1: the story, in some cases people will go, oh, yeah,
Speaker 1: I've been in that situation, or if they get in
Speaker 1: that situation in the future, they'll it'll at least get
Speaker 1: them thinking, well, Mitch. In addition to the lessons, you
Speaker 1: also have insights predictions for the future of content. And
Speaker 1: these are the conversations I love to have. Uh, where
Speaker 1: do you see the media landscape, the way that we
Speaker 1: consume media shifting in the next five to ten years.
Speaker 1: Tim jokes about the metaverse earlier, but that's a conversation
Speaker 1: I'd love to have. Yeah, you know, the metaverse will
Speaker 1: really play a significant role in entertainment going forward. I
Speaker 1: think there's a few big macro trends going on, and
Speaker 1: I talked about this in the book. One of them
Speaker 1: is our shorter and shorter attention spans. Uh. It is
Speaker 1: hard to sit down for a two hour movie, and
Speaker 1: it's even hard to sit through a thirty minute series episode.
Speaker 1: So I think that the combination of that shorter attention
Speaker 1: span and all this user generated content, whether it's on
Speaker 1: TikTok or YouTube, will kind of you know, pushed you know, uh,
Speaker 1: studios and Netflix and everything to start to create shorter episodes.
Speaker 1: You know, still people want, you know, good stories that
Speaker 1: where they can fall in love and and and care
Speaker 1: about the characters, but they want to consume them in
Speaker 1: more bite sized chunks. So I see, you know, series
Speaker 1: still becoming major and and I see them in smaller segments.
Speaker 1: But I also see a world in where it almost
Speaker 1: brings in and I think this will be true for
Speaker 1: many retail and environments. Imagine Netflix in the metaverse, where
Speaker 1: you can go from wherever you live in the world
Speaker 1: and attend a red carpet screening of a new series
Speaker 1: or a new movie, and there's avatars of the scars
Speaker 1: and the creators. You can interact with them, you can
Speaker 1: shop with them, and even run into other consumers. And
Speaker 1: it's kind of like in the old video store days,
Speaker 1: where you could talk to people in the store suggest
Speaker 1: When you thought that we'd have an entire program without
Speaker 1: a mention of the metaverse in it, we somehow managed
Speaker 1: to squeeze it in. That was Mitch low, the former
Speaker 1: CEO of Movie Pass. His new book is out now.
Speaker 1: It's called Watch and Learn. How I turned Hollywood upside
Speaker 1: down with Netflix, Red Box and a Movie Pass. And
Speaker 1: that wraps up the weekend edition of Bloomberg Business Week
Speaker 1: from Bloomberg Radio. Thanks so much for joining us for
Speaker 1: Carol Masser, I'm Tim Stanevik, and also a big thank
Speaker 1: you to Katie Greifeld for helping us out this past
Speaker 1: week with Carol out. Be sure to tune into Bloomberg
Speaker 1: Business Week Monday through Friday. It starts at two pm
Speaker 1: Wall Street Time on Bloomberg Radio. You can also watch
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Speaker 1: This is Bloomberg