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Speaker 2: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 2: my co host Matt Miller.

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Speaker 1: Every business day we bring you interviews from CEOs, market pros,

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Speaker 1: and Bloomberg experts, along with essential market movin news.

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Speaker 2: I'm the Bloomberg Markets podcast called Apple Podcasts or wherever

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Speaker 2: you listen to podcasts, and at Bloomberg dot com Slash Podcast.

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Speaker 3: An exclusive with James Gorman, the executive chairman of More

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Speaker 3: and Stanley, recently stepped down from his post as CEO,

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Speaker 3: and this is the first interview in your new role

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Speaker 3: as executive chairman what's your most urgent priority.

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Speaker 4: Well, it was obviously to come and do this interview

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Speaker 4: with you. As my first priority. You know, it's just

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Speaker 4: support Teed and he's a terrific guy, will be a

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Speaker 4: great CEO, and my job really is to help him

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Speaker 4: as best as I can, but stay out of the road.

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Speaker 5: So that's really my priority.

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Speaker 3: It's interesting I've heard you used to write a handwrite

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Speaker 3: a checklist of priorities at the start of every year.

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Speaker 3: If you think about how you change gears into executive chairman,

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Speaker 3: what does that checklist this year look like.

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Speaker 5: I didn't write it this year.

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Speaker 4: I did that when I was CEO for fourteen years,

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Speaker 4: and it gave me a framework for focusing on a

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Speaker 4: few big things that matter, because in these jobs, there

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Speaker 4: are thousands, literally thousands of issues that come at you

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Speaker 4: and you can easily lose sight of the stuff that

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Speaker 4: actually matters, which is a few big things. So every

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Speaker 4: year I would tea up on the first day I

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Speaker 4: came into the office, which was yesterday, I came in

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Speaker 4: and write down the list of ten things, and you know,

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Speaker 4: one of them was always no new mistakes, which I

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Speaker 4: defined as things that cost us more than half a

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Speaker 4: billion of capital. Sometimes they were personal like stay fit

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Speaker 4: or get fit, or sometimes they are at development and

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Speaker 4: leadership with our top team. But no different jobs, so

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Speaker 4: different you've got you've got to switch. So that's what

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Speaker 4: I've done.

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Speaker 3: You know, I'm glad you brought up mistakes because to

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Speaker 3: the extent that we learned from life's challenges. I'm curious

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Speaker 3: about your single moment. What is the biggest mistake you

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Speaker 3: ever thought you've made at Morgan Stanley. You know, this

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Speaker 3: is an exit interview. It's the chance to look back

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Speaker 3: at the last decade or so.

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Speaker 4: You know it might sound im modest. I don't think

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Speaker 4: we made a lot of big mistakes. I mean the

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Speaker 4: if you look at the major things that we did,

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Speaker 4: whether they were the deals Smith Barney, each trade eat

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Speaker 4: advance succession, which is critical navigating through COVID. You know,

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Speaker 4: we got frankly most of the big I wish we

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Speaker 4: hadn't sold Van Camp and when we sold it to

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Speaker 4: Marty Flanagan and Invesco, So that was something I think.

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Speaker 4: It took a little too long to get the full

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Speaker 4: team that I wanted in place in the right jobs.

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Speaker 4: But you know, you can't do these jobs and not

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Speaker 4: make missas When I see a mistake, I embrace it.

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Speaker 4: You know, it's like Kipling, those travelers of success and fail.

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Speaker 4: You got to embrace them both because if you're not

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Speaker 4: making mistakes, the chances are you're not doing enough. So

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Speaker 4: I never see a mistake as a negative. I just

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Speaker 4: see it as something you learned from move forward.

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Speaker 3: You know, it's interesting, you're standing on top of a

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Speaker 3: mountain now. You've had a tremendous amount of success at

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Speaker 3: Morgan Stanley, but those first couple of years were rocky.

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Speaker 6: Were you ever worried.

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Speaker 3: In those first few years you'd be ousted before you

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Speaker 3: can act to turnaround.

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Speaker 4: No, you know, I just thought, listen what I felt

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Speaker 4: back then. We had to act, and we had to

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Speaker 4: act aggressively. And I knew that whatever we chose to

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Speaker 4: do there would be critics. That didn't bother me one

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Speaker 4: little bit because we're in trouble as it was, so

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Speaker 4: my job was to do something about it, not listen

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Speaker 4: to the critics of what we can't do, but figure

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Speaker 4: out what we can do. So I was highly confident

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Speaker 4: that we'd make choices and I thought they'd pay off.

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Speaker 4: I thought the rebalancing the business model was the right choice,

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Speaker 4: So I didn't. I just didn't listen to the critics.

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Speaker 3: It's funny you kind of got Morgan Stanley at rock bottom,

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Speaker 3: if you will. But a lot of investors think Ted

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Speaker 3: Pick's job is even harder because he is.

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Speaker 7: On a high note.

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Speaker 3: What do you think Ted's biggest challenge is going to be?

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Speaker 4: Oh, I don't think. I don't think it's hard or easier.

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Speaker 4: They're just different. You go through different cycles. I mean,

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Speaker 4: the Morgan Center I've had for the last five years

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Speaker 4: is very different from the first five or the middle four.

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Speaker 4: You know, for Ted, he's got one of the biggest

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Speaker 4: and most successful companies in the world, phenomenal brand, He's

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Speaker 4: a great culture carrier, so I'm sure the cultur will

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Speaker 4: stay in track. The real choices will be strategic. So

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Speaker 4: when opportunities come to move left or move right, how

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Speaker 4: do you do that?

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Speaker 5: How aggressively do you do it? And when do you

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Speaker 5: do it? So that's they're really the choices.

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Speaker 4: And in the first year while I'm here, I'll obviously

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Speaker 4: share with him whatever views I have on stuff if

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Speaker 4: he wants that, But in the lady years, he'll have

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Speaker 4: his team working with him on that.

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Speaker 5: So I'm confident about that.

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Speaker 3: We'll talk more about strategy in a second. But another thing,

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Speaker 3: as you transition to executive chairman, you have roles now

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Speaker 3: outside of the bank, and succession is arguably one of

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Speaker 3: the most important things you could do as a manager,

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Speaker 3: and a big new responsibility for you is serving on

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Speaker 3: the board of Disney, ironically, where succession has been one

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Speaker 3: of the biggest issues. How does Disney live past Bob Iger?

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Speaker 4: Well, firstly, I mean Bob Iger is a phenomenal executive.

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Speaker 4: I mean he is iconic for a reason. He's led

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Speaker 4: that company through so many cycles and really is a

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Speaker 4: gifted leader. So it's a great pleasure to work with him.

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Speaker 4: But it's not for me to judge Disney's future. I've

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Speaker 4: joined the board yet. I'm starting I think February fourth

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Speaker 4: or February second, I'm sure early February. I'm looking forward

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Speaker 4: to it. I like dealing with complexity situations. The changes

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Speaker 4: going on in that industry are profound and there are

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Speaker 4: choices to be made, so that to me is very

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Speaker 4: interesting and obviously given the experience I've had leading succession

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Speaker 4: with our board here with Dennisonlly, the head of our

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Speaker 4: comp committee, and Tom Glossa, they had lead director. You know,

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Speaker 4: hopefully I can add something to the succession committee that

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Speaker 4: I'll be joining.

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Speaker 3: What about pressing challenges outside of succession at Disney? Do

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Speaker 3: you think that there's anything that could be immediately addressed

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Speaker 3: as they contend with activists?

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Speaker 4: Well, you know, and they're always we had We've had

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Speaker 4: How many activists do we have here? We had at

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Speaker 4: least two, and I think they each had two bites

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Speaker 4: at the Apple. So no, that is not what the

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Speaker 4: focus should be on. The focus should be on strategic

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Speaker 4: choices companies make. But again, I haven't joined the board,

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Speaker 4: so I can't talk about a company on, not even

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Speaker 4: an insider on. That wouldn't be fair to the team.

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Speaker 3: More strategic decisions at Morgan Stanley, one massive question. You've

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Speaker 3: built this massive wealth management business mostly in the United States.

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Speaker 3: You have talked previously about the idea of Morgan Stanley

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Speaker 3: internationally expanding more. Do you think Morgan Stanley though, can

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Speaker 3: be a giant international wealth manager?

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Speaker 5: Oh?

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Speaker 4: Sure, there are a lot of wealthy people in this world.

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Speaker 4: I think population just tipped eight b and and you know,

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Speaker 4: I've just come back from a long trip through Asia,

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Speaker 4: through Thailand, Singapore, Hong Kong, and I was in Europe

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Speaker 4: last week. I've been all over there. There are plenty

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Speaker 4: of pockets of opportunities, so it's a question of where

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Speaker 4: where you pick your shots. I mean the whay you

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Speaker 4: pick your spots. There are endless opportunities, and I think

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Speaker 4: our Asia business, we have a wealth business in Asia.

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Speaker 4: It's small ish but growing very fast. Obviously that's a

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Speaker 4: focus Japan. I think with that partner Amuog is a

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Speaker 4: tremendous focus that I suspect Ted and the team will

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Speaker 4: do even more with which he's already started doing on

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Speaker 4: the trading side.

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Speaker 5: So there are endless opportunities. I'm not worried about.

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Speaker 3: What are the biggest challenges with China in particular are

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Speaker 3: given the rising geopolitical tensions and the state of the

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Speaker 3: economy there.

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Speaker 4: Well, China has you know, China has some fundamental challenges.

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Speaker 4: First and foremost is demographics. The one child policy guaranteed

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Speaker 4: the population is going to shrink, and right when you

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Speaker 4: need more productive working people coming through to support the

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Speaker 4: older generation, they've got few of them, and they don't

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Speaker 4: have good immigration. So I think China has some profound

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Speaker 4: challenges on demographics. It has profound challenges in terms of

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Speaker 4: building a consumption economy. You know that there's still an

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Speaker 4: export savings driven economy. So but on the other hand,

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Speaker 4: China's one point four bm people, second largest economy in

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Speaker 4: the world, and gross domestic product.

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Speaker 5: It's it's a key factor in global economic health.

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Speaker 3: So beyond Asia expansion, if you think about the wealth

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Speaker 3: management space, even in the US, there's another thing that's

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Speaker 3: happening that a lot of financial advisors are thinking about

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Speaker 3: in particular, and that is the approval actually or the

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Speaker 3: lack thereof, of a Bitcoin spot ETF in the United States.

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Speaker 3: When you think about what wealthy clients invest in, when

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Speaker 3: you think about the future of wealth management, do you

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Speaker 3: think bitcoin is a suitable investment.

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Speaker 5: I've never been.

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Speaker 4: You know, I've never really understood the value of bitcoin

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Speaker 4: as a form of stored value. Others have, and others

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Speaker 4: have made a lot of money on it. I joked once,

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Speaker 4: I wish I bought it at sixty dollars, and I'm

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Speaker 4: glad I didn't buy it at sixty thousand. It's clearly speculative.

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Speaker 4: I think it should play for wealthy people a very

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Speaker 4: small role in their financial fabric because it's so speculative,

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Speaker 4: it's so volatile, and again it's going through enormous regulatory

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Speaker 4: change and industry disruption. We're seen with some classic failures

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Speaker 4: of late, So some bitcoin's not going away. It's not

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Speaker 4: a fad. I just don't think it's a core investment.

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Speaker 5: I think it's a.

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Speaker 4: Speculative asset of which there are plenty of choices.

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Speaker 3: Speaking of regulation, you've been very vocal about the new

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Speaker 3: regulations being made in the United States about bank capital,

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Speaker 3: about operational risk. Do you believe the rules are likely

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Speaker 3: to change before implementation based on your recent discussions with

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Speaker 3: regulators and what do you think they will look.

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Speaker 5: Like at the end? Oh, that definitely change.

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Speaker 4: I mean they put out an extended comment period which

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Speaker 4: got extended further. There have been thousands of comments put

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Speaker 4: into the various regulatory bodies, led by the FED. It

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Speaker 4: was a proposal that I would say was extremely aggressive

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Speaker 4: and set a marker. It will not go through in

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Speaker 4: that form. If it did, I think it would have very,

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Speaker 4: very negative consequences for corporate lending across this country, which

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Speaker 4: is not what you want.

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Speaker 5: It's not going to help the economy growth. Well.

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Speaker 3: You've also spoken about the treasury market potential impacts from

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Speaker 3: these regulations. We've already seen stresses of late in the

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Speaker 3: treasury market. Do you have fears that those stresses will

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Speaker 3: be exacerbated?

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Speaker 4: I can't tell until I see the actual rules. But

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Speaker 4: all I know is what was put out is highly highly,

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Speaker 4: highly unlikely to be what's ultimately regulated.

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Speaker 5: Now.

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Speaker 4: Investors don't necessarily see that or agree with it. But

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Speaker 4: in my experience, I've been in this a long time.

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Speaker 4: I was on the FED board for six years in

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Speaker 4: New York. I chared the fac in Washington. I think

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Speaker 4: this is a highly aggressive proposal that will be materially

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Speaker 4: wound back when it finally becomes law.

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Speaker 3: Regulation now, there has been tighter capital rules proposed under

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Speaker 3: the Biden administration. There's also been a lot of regulatory

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Speaker 3: actions taken against banks. If the Republicans take the White

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Speaker 3: House in twenty twenty four, whether it's Donald Trump or

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Speaker 3: another contender, do you expect that this tighter regulatory environment

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Speaker 3: will just fully unwind too.

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Speaker 5: It's too hard to predict.

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Speaker 4: You know, I think we're in you know, you see

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Speaker 4: pendulum swing, and we swung to lighter regulation to I

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Speaker 4: think an excessive proposal. I think it'll swing back. So

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Speaker 4: it's heading back to more balance regulation, and that's where

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Speaker 4: it should be. I'm all about balance. The banking system

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Speaker 4: should not be deregulated. That would be a nightmare. On

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Speaker 4: the other hand, if you overregulate and you require capital

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Speaker 4: standards that are so high that the banks run investable,

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Speaker 4: they can't grow. That doesn't serve communities.

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Speaker 5: Well.

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Speaker 4: You need prosperous, thriving banks to provide lending products for

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Speaker 4: small businesses and consumers.

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Speaker 3: You know, to the extent we're less than a year

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Speaker 3: away from a spate of bank failures, to the extent

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Speaker 3: that there are still fragilities in the financial system, what

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Speaker 3: are they.

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Speaker 4: I don't think they are a speed of failures. Honestly,

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Speaker 4: I think there were three banks that got it wrong.

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Speaker 4: I've said that publicly. They made choices that were the

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Speaker 4: wrong choices. Wasn't complicated. They got washed up and cleaned

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Speaker 4: up and folded into other banks, and you move on.

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Speaker 4: This wasn't People kept telling me, we're having a banking crisis.

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Speaker 5: No, we're not. We had a crisis among three banks.

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Speaker 5: It was a crisis for their shareholders and their employees.

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Speaker 5: It's not a crisis for the market.

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Speaker 4: The core banking system is in rude good health to

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Speaker 4: use a British expression.

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Speaker 3: Well, you know, it's not just the banking system. If

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Speaker 3: you think about the hedge fund industry, regulators are also

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Speaker 3: very concerned about some fragil there. It wasn't too long

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Speaker 3: ago that Morgan Stanley lost almost a billion dollars in

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Speaker 3: the week of the collapse of Archagoes. Do you think

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Speaker 3: that there needs to be more safeguards on the non

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Speaker 3: bank system.

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Speaker 4: I mean, it's honestly, there's too many participants in the

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Speaker 4: non bank system to say yes.

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Speaker 5: So no, you'd have to go subset by subset.

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Speaker 4: We talked about payments, we talk about private creditor go

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Speaker 4: through each of the pieces of it. But there are

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Speaker 4: always risks when you're dealing with leverage in a financial system.

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Speaker 4: But if you don't have leverage, you don't have lending,

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Speaker 4: So it's a balance again. I'm always back to there

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Speaker 4: is a balanced solution to most of these debates, and

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Speaker 4: you can find it with full discussion with regulators.

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Speaker 3: Speaking of leverage, the cost of leverage is higher today

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Speaker 3: than it was a couple of years ago. Where do

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Speaker 3: you think interest rates go headed into the end of

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Speaker 3: the year, and what do you think the market starts

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Speaker 3: to look like through twenty twenty four? They go down,

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Speaker 3: as simple as that, Yeah, how far down?

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Speaker 5: I've got no idea.

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Speaker 4: I mean I thought that unlikely the FAD would cut

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Speaker 4: rates this year, but inflation has moved down pretty materially

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Speaker 4: quickly that it's now become more likely. So first half

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Speaker 4: of the year, I suspect nothing.

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Speaker 5: Back half of the year.

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Speaker 4: They could easily move a couple They could move a

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Speaker 4: couple of times. But the key point is we started

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Speaker 4: this journey with inflation at ten percent, rates at zero,

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Speaker 4: unemployment at three and a half percent, and my objective

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Speaker 4: was to get us to four four and four four

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Speaker 4: percent inflation, four percent rates, four percent unemployment. We're about

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Speaker 4: three percent inflation, we're five percent five and a half

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Speaker 4: in rates, and we're about three and a half in unemployment.

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Speaker 5: So rates will come down.

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Speaker 3: Do you think the economy is in at all clear

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Speaker 3: when it looks like a soft landing versus a hard landing,

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Speaker 3: do you think that the economy will survive this year

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Speaker 3: in good shape?

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Speaker 4: Economy is fine. I mean, there's this obsession with the

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Speaker 4: our word recession. I mean, you have recessions. They come

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Speaker 4: and go when you get imbalances between unemployment rates and

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Speaker 4: economic growth. So no, the economy is doing fine. I

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Speaker 4: personally think it is unlikely we'll have a recession, very

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Speaker 4: unlikely we'll have a hard landing.

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Speaker 5: But we'll see.

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Speaker 4: But the odds are clearly in favor of soft landing.

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Speaker 4: I think the Fed's done a great job.

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Speaker 3: Now for you, You've told me before that you would

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Speaker 3: look to teach in your post life at Morgan Stanley,

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Speaker 3: in your life after Morgan Stanley, I want to ask

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Speaker 3: you about that for a moment, because there is a

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Speaker 3: lot of turmoil on college campuses these days. Do you

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Speaker 3: think you'd ever take a bigger role at a university

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Speaker 3: given all the political pressures and donor activism that you're seeing.

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Speaker 5: Well, I'm joining.

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Speaker 4: I have been the chair of Columbia Business School for

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Speaker 4: many years, several with Henry Cravis's my co chair and

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Speaker 4: now chair of the school. I'm looking to get more

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Speaker 4: involved at Columbia University in the coming months, and I

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Speaker 4: think that'd be great to do. I think, you know

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Speaker 4: the importance of high quality education for a well functioning

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Speaker 4: society is profound, It's obvious. So yeah, I want to

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Speaker 4: be part of that, and obviously universities this is not

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Speaker 4: the first time universities have been hotbeds of dissent and

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Speaker 4: turmoil my whole life. They've been that from when I

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Speaker 4: went to university in Australia in the nineteen seventies.

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Speaker 5: So that doesn't that doesn't bother me.

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Speaker 4: But it's important that people are able to have dialogue

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Speaker 4: and discussion on campus without intimidation and expressing their rights

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Speaker 4: for free speech.

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Speaker 3: What is the next big ambition for James Gorman you.

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Speaker 5: Mean today or I.

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Speaker 4: Internally Morgan soon is to help ted and to help

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Speaker 4: with our clients around the world. I have a very

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Speaker 4: large client network that I built up over a long career,

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Speaker 4: and I think I can help our bankers and others

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Speaker 4: in that regard. For me personally, it's to live in

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Speaker 4: a little bit of a world of unknown for my

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Speaker 4: whole life. I've kind of known what the next steps

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Speaker 4: are as you mentioned, I've I've joined one public company.

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Speaker 4: We'll be joining one public company board Disney. I'll be

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Speaker 4: getting more involved at Columba University months ahead, and then

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Speaker 4: I'll take.

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Speaker 5: It from there.

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Speaker 4: So I don't you know, I want I want balance

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Speaker 4: in my life I've loved being CEO. It's a phenomenal company.

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Speaker 4: I'm so proud of my colleagues here the job that

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Speaker 4: they've done. This isn't a one person show. It's thousands

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Speaker 4: of people who are really talented doing the right thing,

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Speaker 4: and ultimately it's the values of the organization which is

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Speaker 4: what drives it. So that's what I'm most proud of

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Speaker 4: and for me personally, we'll find out.

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Speaker 3: James, thank you for your time, your first interview in

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Speaker 3: your new role. That's James Gorman, executive chairman now of

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Speaker 3: Morgan Stanley for Bloomberg Television and Radio.

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Speaker 8: You're listening to the team. Can's a live program Bloomberg

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Speaker 8: Markets weekdays at ten am Eastern on Bloomberg dot com,

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Speaker 8: the iHeartRadio app and the Bloomberg Business App, or listen

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Speaker 8: on demand wherever you get your podcasts.

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Speaker 2: One job I would not want is to be the

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Speaker 2: head of a college or university these days, or any

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Speaker 2: leadership position in an academic institution. It is I've seen

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Speaker 2: it firsthand serving on the board of Duke's Business School.

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Speaker 2: It is a tough job. And that's even before what's

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Speaker 2: happened over the last several weeks at Harvard and Penn

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Speaker 2: and some other places of higher education. So let's get

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Speaker 2: the latest there. Janet Lauren joined US higher education finance

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Speaker 2: reporter for Bloomberg New She's been on top of this

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Speaker 2: with some of the top reporting out there. So, Janet,

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Speaker 2: you know, we had the president of Penn step down.

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Speaker 2: Now Claudine Gay of Harvard has stepped down. The pressure

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Speaker 2: is just brutal here. The issues are visceral for a

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Speaker 2: lot of people. How is this going to play out?

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Speaker 7: Do you think, well, don't forget a couple of months

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Speaker 7: ago we had the president of Stanford Stone.

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Speaker 2: Oh that's right, yep.

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Speaker 7: So I guess the next focus is on the board

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Speaker 7: the Harvard Corporation.

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Speaker 6: It had been twelve members.

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Speaker 7: Now with Claudie Gay's resignation, it's eleven members.

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Speaker 6: There have been calls.

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Speaker 7: For them to step down, that they ran a very

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Speaker 7: flawed search, and why didn't they figure out what was

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Speaker 7: going on with her scholarship supposedly had been out there

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Speaker 7: for a while. And the question is will they continue

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Speaker 7: to serve Penny Pritzker, the former Commerce secretary, is the

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Speaker 7: chair of that board, and who's.

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Speaker 6: Going to want the job as president?

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Speaker 7: I mean, of course, it's the most prestigious in the

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Speaker 7: world academically, but as we were just talking about, it

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Speaker 7: comes with so many challenges, so many constituencies. And in

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Speaker 7: my story today, one of Vario esteemed professor Auvi Lobe,

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Speaker 7: talked about two extremely important things are raising money, which

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Speaker 7: we saw constrained, and dealing with Washington. You can't forget

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Speaker 7: that the federal government is one of Harvard and many

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Speaker 7: university's largest donors. Eleven percent of Harvard's revenue last year

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Speaker 7: came from the federal government. Yes, and that doesn't even

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Speaker 7: include federal student loans. Harvard is extremely generous with its

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Speaker 7: undergraduates for financial aid, but its graduate students, they borrowed

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Speaker 7: one hundred million dollars from the government last year. You know,

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Speaker 7: look at the price tag of Harvard Law School, Harvard

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Speaker 7: Business School, and you know, Harvard has to keep its

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Speaker 7: pristine reputation. If those students want jobs that are going

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Speaker 7: to pay to service that debt. It had never been

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Speaker 7: a consideration. No one would ever think of that before.

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Speaker 2: So is the underlying issue. I don't know how to

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Speaker 2: approach is the underlying issue for some observers of higher

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Speaker 2: education just the I guess the liberal bent of higher

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Speaker 2: education and administrations and leadership in higher education, which has

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Speaker 2: always been I guess an issue.

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Speaker 6: But is it just coming to the.

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Speaker 2: Ford now because of what we've seen at Penn and

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Speaker 2: Harvard and other places.

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Speaker 7: Well, I think in the last couple of years the

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Speaker 7: objective of DEI has been to be more inclusive, of course,

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Speaker 7: and critics of saying it's just gone way too far

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Speaker 7: looking at ideology, is.

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Speaker 6: That how decisions are made?

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Speaker 7: Are you?

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Speaker 6: Are you truly picking the best candidates?

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Speaker 7: And this really came to the forefront, especially after the

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Speaker 7: Hamas War on Israel, and you know Bill Lackman had

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Speaker 7: an extremely thoughtful post today. I'm looking at that. But

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Speaker 7: the question is where do you go from here? Especially

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Speaker 7: with these searches. As we were just talking about, there

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Speaker 7: the universities who are looking for new presidents. Harvard, Stanford, Penn, Yale,

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Speaker 7: They're longtime president has resigned, but don't forget Berkeley also

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Speaker 7: and u c l A. U CLA's president has been

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Speaker 7: the chancellor has been there for quite a long time,

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Speaker 7: so it's a it's a refresh and a lot of

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Speaker 7: these presidents are new in their job or had been.

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Speaker 7: Harvard and Penn because a whole host of presidents.

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Speaker 6: Retired after COVID.

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Speaker 7: You know, they just had this extremely difficult time and

442
00:21:22,800 --> 00:21:25,400
Speaker 7: and you know they had new leaders in and unfortunately

443
00:21:25,440 --> 00:21:27,000
Speaker 7: at not such a great time.

444
00:21:27,560 --> 00:21:31,280
Speaker 2: Bill Lackman today report Bloomberg's reporting. Bill Lackman says Harvard

445
00:21:31,400 --> 00:21:36,159
Speaker 2: board should go for protecting Claudeine Gay. I mean that

446
00:21:36,359 --> 00:21:38,360
Speaker 2: seems I don't know if it seems extreme, but it's

447
00:21:38,359 --> 00:21:41,840
Speaker 2: certainly a bold call for mister Ackman, which he was

448
00:21:42,000 --> 00:21:46,200
Speaker 2: very voice, very outspoken about that Claudeine Gay should step down.

449
00:21:46,280 --> 00:21:50,119
Speaker 7: Well, we saw right after Penn's president Liz McGill stepped

450
00:21:50,119 --> 00:21:54,360
Speaker 7: down the board chair, Scott Bach within within a few hours,

451
00:21:54,480 --> 00:21:55,680
Speaker 7: had stepped down himself.

452
00:21:56,240 --> 00:21:58,320
Speaker 2: All right, So I guess we could see something there. So,

453
00:21:58,680 --> 00:22:00,479
Speaker 2: I mean, and one of the things, you know, that

454
00:22:00,720 --> 00:22:03,960
Speaker 2: was surprising to me is Harvard announced that their I

455
00:22:03,960 --> 00:22:09,040
Speaker 2: guess applications were down, Yes, seventeen. That says something.

456
00:22:09,000 --> 00:22:12,680
Speaker 7: Yes, And you know it's not the anti semitism all

457
00:22:12,720 --> 00:22:15,720
Speaker 7: these videos that you'd seen. You know, we don't know

458
00:22:15,760 --> 00:22:18,400
Speaker 7: the full reason they didn't really tell us any anything.

459
00:22:18,840 --> 00:22:20,920
Speaker 7: It could have been for a lot of reasons. Remember,

460
00:22:21,000 --> 00:22:24,040
Speaker 7: this was the first application cycle since the Supreme Court

461
00:22:24,080 --> 00:22:28,920
Speaker 7: decision that eliminated race as a factor in applications. They had,

462
00:22:29,600 --> 00:22:32,600
Speaker 7: you know, more essays, but you know it's hard to tell,

463
00:22:32,640 --> 00:22:36,560
Speaker 7: but that for Harvard, which is always encouraging people to apply,

464
00:22:36,640 --> 00:22:38,360
Speaker 7: you know, we wrote about this many years ago. They're

465
00:22:38,400 --> 00:22:42,520
Speaker 7: always mailing letters to encourage kids to apply. You know,

466
00:22:42,600 --> 00:22:45,520
Speaker 7: it was quite shocking for them because everybody else seemed

467
00:22:45,560 --> 00:22:46,000
Speaker 7: to be up.

468
00:22:46,320 --> 00:22:48,399
Speaker 2: I tell you this what a time to be a

469
00:22:48,520 --> 00:22:52,639
Speaker 2: higher education reporter because it really feels like this is

470
00:22:52,680 --> 00:22:56,119
Speaker 2: a seminal moment in higher education in this country. It

471
00:22:56,760 --> 00:22:59,080
Speaker 2: is that the feeling from your sources, or is this

472
00:22:59,160 --> 00:23:01,760
Speaker 2: something that's just news cycle that will kind of blow over.

473
00:23:02,080 --> 00:23:04,720
Speaker 7: No, I don't think anybody would have ever expected this.

474
00:23:04,960 --> 00:23:08,119
Speaker 7: You know, you talk about Harvard's president, you know, the

475
00:23:08,200 --> 00:23:12,439
Speaker 7: shortest tenure in its four hundred plus year history, and

476
00:23:12,480 --> 00:23:13,840
Speaker 7: you know, you've got to think that there's been a

477
00:23:13,840 --> 00:23:19,359
Speaker 7: lot of tumultuous situations at that place for so many years.

478
00:23:19,720 --> 00:23:20,480
Speaker 6: But yeah, it is.

479
00:23:20,680 --> 00:23:22,840
Speaker 7: You know, we're not even talking about student loans too.

480
00:23:23,400 --> 00:23:26,160
Speaker 7: You know, we have an issue there. You know we've

481
00:23:26,160 --> 00:23:30,160
Speaker 7: talked about before. Graduate school loans are about to overtake

482
00:23:30,320 --> 00:23:34,720
Speaker 7: you know, the annual distributions more than more than undergraduate loans,

483
00:23:34,720 --> 00:23:37,160
Speaker 7: and people are having trouble paying those off. So there's

484
00:23:37,200 --> 00:23:40,640
Speaker 7: just a tremendous amount of distrust of higher education these days.

485
00:23:40,680 --> 00:23:44,320
Speaker 2: And it's expensive, yeah, and it really is. And you

486
00:23:44,359 --> 00:23:47,400
Speaker 2: think about the stories that come out from higher education,

487
00:23:49,000 --> 00:23:54,280
Speaker 2: it's either a story about the high cost and you know,

488
00:23:54,880 --> 00:23:57,720
Speaker 2: just it's too expensive, the affordability or lack of affordability

489
00:23:57,720 --> 00:23:59,960
Speaker 2: of higher education, or it's a story about how well,

490
00:24:00,040 --> 00:24:02,800
Speaker 2: how big their endowments are, are huge gifts being made

491
00:24:02,840 --> 00:24:06,080
Speaker 2: to these schools. It's really an odd economic model that

492
00:24:06,280 --> 00:24:08,360
Speaker 2: just doesn't if you just want to look at it,

493
00:24:08,359 --> 00:24:09,280
Speaker 2: it doesn't make sense.

494
00:24:09,359 --> 00:24:09,800
Speaker 6: It doesn't.

495
00:24:09,840 --> 00:24:11,919
Speaker 7: And you know, we saw the movie Boys in the

496
00:24:11,920 --> 00:24:14,680
Speaker 7: Boat the other day, and you look at the University

497
00:24:14,680 --> 00:24:18,200
Speaker 7: of Washington and during the depression and what higher education

498
00:24:18,359 --> 00:24:22,120
Speaker 7: did for people, and it didn't cost a huge amount,

499
00:24:22,200 --> 00:24:25,160
Speaker 7: and it hadn't cost a huge amount until much recently.

500
00:24:25,560 --> 00:24:29,119
Speaker 7: You know, your state schools should be affordable for people

501
00:24:29,160 --> 00:24:32,680
Speaker 7: to go to to better themselves, and you know, there's

502
00:24:32,680 --> 00:24:34,800
Speaker 7: some really tough questions that need to be asked, and

503
00:24:35,720 --> 00:24:38,800
Speaker 7: the price keeps continuing to rise. And of course, if

504
00:24:38,840 --> 00:24:43,080
Speaker 7: you're at Harvard Yale Princeton, and your family is below

505
00:24:43,119 --> 00:24:44,920
Speaker 7: a certain income, it's going to be free for you.

506
00:24:45,880 --> 00:24:48,000
Speaker 7: But there's the middle that you know, we'll have to

507
00:24:48,000 --> 00:24:49,479
Speaker 7: pay for it or take out loans.

508
00:24:49,520 --> 00:24:52,400
Speaker 2: I mean, what is the thinking. Is there a consensus

509
00:24:52,400 --> 00:24:56,080
Speaker 2: thinking as to what the problem is about the affordability

510
00:24:56,119 --> 00:24:59,960
Speaker 2: or lack thereof of higher education because it's just the price.

511
00:25:00,119 --> 00:25:03,760
Speaker 2: It is a well exceeded inflation for so long that

512
00:25:03,840 --> 00:25:06,280
Speaker 2: it just to a financial person looking at it says

513
00:25:06,520 --> 00:25:10,600
Speaker 2: this economic model is wrong or it's it's not efficient.

514
00:25:10,760 --> 00:25:13,120
Speaker 7: My goodness, they've been saying this for twenty five years

515
00:25:13,359 --> 00:25:14,479
Speaker 7: and it just keeps going up.

516
00:25:14,720 --> 00:25:16,720
Speaker 6: And you have people who will pay it, they'll borrow

517
00:25:16,760 --> 00:25:17,080
Speaker 6: for it.

518
00:25:17,119 --> 00:25:19,720
Speaker 7: But I don't know at some point, you know, we've

519
00:25:19,760 --> 00:25:22,000
Speaker 7: seen a few small colleges that are closing.

520
00:25:22,160 --> 00:25:22,320
Speaker 8: Yep.

521
00:25:22,600 --> 00:25:25,360
Speaker 7: The pandemic money has gone. You know, there's a lot

522
00:25:25,359 --> 00:25:29,560
Speaker 7: of constraints, and you know we'll see the government. You know,

523
00:25:29,680 --> 00:25:31,760
Speaker 7: student loans are in entitlement yep.

524
00:25:32,160 --> 00:25:33,840
Speaker 2: So I mean, so as it relates going back to

525
00:25:34,200 --> 00:25:36,800
Speaker 2: you know, Harvard and pen and all these other jobs,

526
00:25:38,000 --> 00:25:41,919
Speaker 2: is there a thought as to who might go for

527
00:25:41,960 --> 00:25:44,719
Speaker 2: these jobs. It seems to me I can't imagine if

528
00:25:45,000 --> 00:25:47,879
Speaker 2: you're not somebody, if you're someone outside of academia, you

529
00:25:47,920 --> 00:25:49,960
Speaker 2: would not aspire to this and go through that kind

530
00:25:49,960 --> 00:25:53,359
Speaker 2: of rigor it. I would guess it would be the

531
00:25:53,359 --> 00:25:56,080
Speaker 2: dean of your you know, arts and sciences school would

532
00:25:56,080 --> 00:25:58,120
Speaker 2: just kind of slide up into the next level because

533
00:25:58,119 --> 00:25:59,960
Speaker 2: presumably they've been vetted to some degree.

534
00:26:00,119 --> 00:26:02,880
Speaker 7: Well that's what we would have thought at Harvard. Well,

535
00:26:02,920 --> 00:26:05,520
Speaker 7: if you look at Rick Levin was the president of

536
00:26:05,600 --> 00:26:08,800
Speaker 7: Yale for twenty years, and he so many of his

537
00:26:08,920 --> 00:26:12,400
Speaker 7: provosts went on to lead great universities.

538
00:26:13,040 --> 00:26:13,480
Speaker 5: M I t.

539
00:26:15,160 --> 00:26:19,280
Speaker 6: Just a whole bunch, and he was sort of like

540
00:26:19,320 --> 00:26:20,680
Speaker 6: the great trainer.

541
00:26:20,560 --> 00:26:24,119
Speaker 7: For university presidents. I don't know how much that is

542
00:26:24,200 --> 00:26:29,720
Speaker 7: existing today. The provost at Harvard is stepping in, but

543
00:26:29,760 --> 00:26:31,800
Speaker 7: I don't think we've seen a provost take that job

544
00:26:31,880 --> 00:26:34,640
Speaker 7: in quite a long time. But you know, there's still

545
00:26:34,720 --> 00:26:38,640
Speaker 7: quite prestigious jobs. But Harvard has almost a six billion

546
00:26:38,680 --> 00:26:42,720
Speaker 7: dollar budget. That's like a company, sure, and it's very complicated,

547
00:26:42,880 --> 00:26:47,400
Speaker 7: very varied sources of revenue. So you know, we'll see, Yeah,

548
00:26:47,560 --> 00:26:49,800
Speaker 7: people are going to be clamoring for all of these jobs.

549
00:26:49,920 --> 00:26:51,560
Speaker 2: Yeah, but it's I guess it's just to be a

550
00:26:51,640 --> 00:26:53,800
Speaker 2: question as when we'll follow you your report and going

551
00:26:53,800 --> 00:26:56,399
Speaker 2: forward about you know what this means for higher education

552
00:26:56,480 --> 00:26:59,680
Speaker 2: in general. Well, this caused itself to kind of really

553
00:26:59,680 --> 00:27:02,480
Speaker 2: look at itself again and think about its ideologies, its

554
00:27:02,560 --> 00:27:04,240
Speaker 2: economic model, all those things.

555
00:27:04,359 --> 00:27:06,640
Speaker 7: Well, but keep in mind that very few people go

556
00:27:06,680 --> 00:27:09,359
Speaker 7: to schools like Harvard, Yale, Princeton. You know, the vast

557
00:27:09,359 --> 00:27:12,919
Speaker 7: majority of people in this country go to large state

558
00:27:13,080 --> 00:27:14,080
Speaker 7: public schools.

559
00:27:14,320 --> 00:27:17,040
Speaker 2: Yep, yep. Two of my offspring did that as well,

560
00:27:17,119 --> 00:27:20,159
Speaker 2: so and that's a good value, good opportunity too, but

561
00:27:20,200 --> 00:27:22,080
Speaker 2: they have their challenges as well. Janet Lauren, thank you

562
00:27:22,080 --> 00:27:24,639
Speaker 2: so much for joining us. Janet Lauren and her daughter

563
00:27:25,320 --> 00:27:26,640
Speaker 2: joining us today.

564
00:27:26,880 --> 00:27:30,000
Speaker 8: You're listening to the tape Can's our live program, Bloomberg

565
00:27:30,040 --> 00:27:33,639
Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the

566
00:27:33,720 --> 00:27:36,960
Speaker 8: tune in app, Bloomberg dot Com, and the Bloomberg Business App.

567
00:27:37,000 --> 00:27:39,800
Speaker 8: You can also listen live on Amazon Alexa from our

568
00:27:39,800 --> 00:27:44,880
Speaker 8: flagship New York station, Just say Alexa play Bloomberg eleven thirty.

569
00:27:45,840 --> 00:27:47,600
Speaker 2: You know, over the last twenty five thirty years of my

570
00:27:47,640 --> 00:27:50,320
Speaker 2: career on Wall Street, one of the explosive areas, it's

571
00:27:50,320 --> 00:27:53,240
Speaker 2: just been a growth of hedge funds, alternative investments, and

572
00:27:53,280 --> 00:27:54,879
Speaker 2: the way to play that on the sell side is

573
00:27:54,920 --> 00:27:58,880
Speaker 2: through the prime brokerage business. It's a good business. It's

574
00:27:58,920 --> 00:28:01,160
Speaker 2: a profitable business, but just a risky business. And we've

575
00:28:01,160 --> 00:28:03,520
Speaker 2: seen some firms kind of pull back a little bit,

576
00:28:04,280 --> 00:28:06,800
Speaker 2: you know, based upon their risk profile. But if you're

577
00:28:06,800 --> 00:28:09,240
Speaker 2: in it and you're good, it's a good profit business.

578
00:28:09,320 --> 00:28:11,960
Speaker 2: Our next guest is certainly in that camp, Mark Alderadi.

579
00:28:12,000 --> 00:28:14,480
Speaker 2: He's a global head of prime services at Jeffrey's, one

580
00:28:14,520 --> 00:28:17,560
Speaker 2: of those firms that's really committed to that business. Mark,

581
00:28:17,600 --> 00:28:20,159
Speaker 2: thanks for joining us here in studio. Talk to us

582
00:28:20,160 --> 00:28:22,480
Speaker 2: about the prime brokerage business. How's it been over the

583
00:28:22,560 --> 00:28:24,320
Speaker 2: last two to three years on the street?

584
00:28:24,440 --> 00:28:26,840
Speaker 9: Sure, thanks, Paul, thanks for having me. So. The prime

585
00:28:26,880 --> 00:28:31,160
Speaker 9: brokerage business has really been one that's been expanding. There's

586
00:28:31,200 --> 00:28:34,200
Speaker 9: a lot of growth. It's kind of a necessary part

587
00:28:34,240 --> 00:28:37,639
Speaker 9: of the hedge fund or alternative business in terms of

588
00:28:37,640 --> 00:28:41,120
Speaker 9: offering up leverage, helping folks cover shorts, and then all

589
00:28:41,120 --> 00:28:44,600
Speaker 9: these sort of operational infrastructure that goes with it. You

590
00:28:44,640 --> 00:28:47,800
Speaker 9: could argue that the operational infrastructures kind of table stakes

591
00:28:47,800 --> 00:28:51,160
Speaker 9: have been normalized, but as you've seen how firms have

592
00:28:51,240 --> 00:28:53,960
Speaker 9: come out of this business. Others have been scaling back

593
00:28:53,960 --> 00:28:55,400
Speaker 9: a little bit, but some are going into it a

594
00:28:55,400 --> 00:28:58,560
Speaker 9: little bit more forcefully. It is a capital intensive business.

595
00:28:58,640 --> 00:29:00,640
Speaker 9: As you mentioned, there is a risk to it's effectively

596
00:29:00,640 --> 00:29:03,720
Speaker 9: a lending risk. So it's it's been good and it's been.

597
00:29:03,640 --> 00:29:06,520
Speaker 2: Growing now and you know, back in my day, as

598
00:29:06,520 --> 00:29:08,320
Speaker 2: it were, I mean, if I had two or three

599
00:29:08,360 --> 00:29:12,120
Speaker 2: good years trading bonds or stocks or currencies, I could

600
00:29:12,280 --> 00:29:14,800
Speaker 2: literally walk out the door, knock on your door or

601
00:29:14,800 --> 00:29:17,000
Speaker 2: some other prime broker and say, hey, raise me five

602
00:29:17,120 --> 00:29:18,800
Speaker 2: hundred million or a billion or two billion dollars and

603
00:29:18,800 --> 00:29:21,040
Speaker 2: I'd go hang my shingle out and take all the

604
00:29:21,240 --> 00:29:23,600
Speaker 2: trading profits. Does that even happen anymore?

605
00:29:23,880 --> 00:29:23,960
Speaker 5: So?

606
00:29:24,160 --> 00:29:26,240
Speaker 9: I think that would be an exception to the rule.

607
00:29:26,320 --> 00:29:31,520
Speaker 9: If you come from a very well pedigreed manager and

608
00:29:31,560 --> 00:29:33,960
Speaker 9: you spin out and you get backing from that manager,

609
00:29:34,080 --> 00:29:37,120
Speaker 9: it's a much more plausible outcome. But I think one

610
00:29:37,160 --> 00:29:39,960
Speaker 9: of the differences today is that we see these multi

611
00:29:39,960 --> 00:29:42,640
Speaker 9: manager platforms that really have come into their own in

612
00:29:42,680 --> 00:29:45,280
Speaker 9: the last you know, a few years. So if you

613
00:29:45,320 --> 00:29:47,120
Speaker 9: were going to spin out rather than go out on

614
00:29:47,160 --> 00:29:48,880
Speaker 9: your own, and may want to join one of these

615
00:29:48,880 --> 00:29:50,200
Speaker 9: platforms instead.

616
00:29:49,920 --> 00:29:52,080
Speaker 2: So that kind of goes to the consolidation of this industry.

617
00:29:52,120 --> 00:29:56,280
Speaker 2: It seems like, you know, the mom and pop the

618
00:29:56,320 --> 00:29:58,840
Speaker 2: standalone hedge fun person with two or three billion, those

619
00:29:58,880 --> 00:30:02,280
Speaker 2: were kind of a dinosaur's SEMs, like it's all Citadel Millennium.

620
00:30:02,320 --> 00:30:04,800
Speaker 2: You got to go into these big platforms and that's

621
00:30:04,840 --> 00:30:06,040
Speaker 2: not as fun though, is it.

622
00:30:06,520 --> 00:30:06,760
Speaker 6: Well.

623
00:30:06,960 --> 00:30:08,920
Speaker 9: I can't speak to the how much fun it is

624
00:30:09,000 --> 00:30:11,440
Speaker 9: or not, but I will say that it's an easier

625
00:30:11,800 --> 00:30:14,840
Speaker 9: entry if you want to not manage your own business,

626
00:30:14,840 --> 00:30:18,240
Speaker 9: but get closer to managing your own business. In other words,

627
00:30:18,240 --> 00:30:20,280
Speaker 9: it takes care of all the infrastructure needs, it takes

628
00:30:20,280 --> 00:30:22,640
Speaker 9: care of the capital raise, and you can focus on

629
00:30:22,680 --> 00:30:25,360
Speaker 9: probably what you do best, which is manage people's money.

630
00:30:25,680 --> 00:30:27,360
Speaker 2: You know, when I left the cell side late two

631
00:30:27,400 --> 00:30:29,840
Speaker 2: thousand and four, I had looked long and hard, because

632
00:30:29,840 --> 00:30:32,400
Speaker 2: that's what sellside analysts. You leave, you go to a

633
00:30:32,400 --> 00:30:35,560
Speaker 2: hedge fund long short equity. I based upon my analysis,

634
00:30:35,640 --> 00:30:38,280
Speaker 2: and I said, this game's played out long short equity,

635
00:30:38,480 --> 00:30:41,480
Speaker 2: there's no alpha left. It's plus it's a young person's game.

636
00:30:42,520 --> 00:30:45,000
Speaker 2: I don't know, but it's money still flocking into hedge funds.

637
00:30:45,040 --> 00:30:46,840
Speaker 2: Isn't it talk to us about kind of funds flows

638
00:30:46,880 --> 00:30:47,760
Speaker 2: over the last several years.

639
00:30:47,880 --> 00:30:51,160
Speaker 9: Yeah, I mean they've had ups and downs. Twenty three

640
00:30:51,240 --> 00:30:53,160
Speaker 9: wasn't the best year ever, but it was a good year.

641
00:30:53,640 --> 00:30:56,080
Speaker 9: What we've seen from our seat in our client base.

642
00:30:56,560 --> 00:30:58,200
Speaker 9: Half of that money went to funds that are a

643
00:30:58,240 --> 00:31:01,760
Speaker 9: little bit more established, meeting have been around five years plus.

644
00:31:02,040 --> 00:31:04,000
Speaker 9: About twenty five percent of the money went to folks

645
00:31:04,000 --> 00:31:06,040
Speaker 9: between three and five years, and then the other twenty

646
00:31:06,080 --> 00:31:08,960
Speaker 9: five percent went to the what you called merging manager space.

647
00:31:10,000 --> 00:31:11,880
Speaker 9: But I think there's a lot more specialists today. So

648
00:31:11,920 --> 00:31:15,280
Speaker 9: you're like a healthcare specialist, you're a TMT specialist, And

649
00:31:15,360 --> 00:31:17,600
Speaker 9: when the allocators are looking where to put their money,

650
00:31:17,640 --> 00:31:19,960
Speaker 9: they're making those decisions as to what market or what

651
00:31:20,040 --> 00:31:21,920
Speaker 9: segment of the market would make most sense for them.

652
00:31:22,000 --> 00:31:24,800
Speaker 2: So what are some of the where are some of

653
00:31:24,840 --> 00:31:26,560
Speaker 2: the money going these days?

654
00:31:27,400 --> 00:31:31,080
Speaker 9: Well, without getting into specific names, but strategies, Well, so

655
00:31:31,320 --> 00:31:32,920
Speaker 9: a lot's going in most of it, as you mentioned,

656
00:31:32,920 --> 00:31:36,520
Speaker 9: is going into these multi manager platforms. Okay, away from that, again,

657
00:31:36,760 --> 00:31:38,520
Speaker 9: our perspective may be a little bit different because we

658
00:31:38,560 --> 00:31:42,000
Speaker 9: do have you know, jeffres obviously has a large healthcare,

659
00:31:42,480 --> 00:31:45,080
Speaker 9: banking business, trading business. So we do have a fair

660
00:31:45,120 --> 00:31:47,280
Speaker 9: amount of healthcare funds on the platform and they've done

661
00:31:47,400 --> 00:31:49,520
Speaker 9: pretty well in terms of the capital raised this past year.

662
00:31:49,640 --> 00:31:52,120
Speaker 2: So I mean, what are the big funds now, Like,

663
00:31:52,160 --> 00:31:54,520
Speaker 2: what's Stevie Cohen doing? What are the you know, I

664
00:31:54,520 --> 00:31:56,960
Speaker 2: don't know the acribus are they raising money these days?

665
00:31:57,440 --> 00:32:00,720
Speaker 9: I think, well, everybody's trying to raise money everybodysry, and

666
00:32:01,000 --> 00:32:03,880
Speaker 9: they're successful out of it varying degrees. And I think

667
00:32:03,960 --> 00:32:07,480
Speaker 9: for some of the larger folks that you've mentioned, it's

668
00:32:07,480 --> 00:32:09,720
Speaker 9: more about product expansion. And I'm not talking about the

669
00:32:09,840 --> 00:32:12,520
Speaker 9: fun structure per se, but it's what markets are they

670
00:32:12,560 --> 00:32:16,200
Speaker 9: trading in, whether in the US, Europe, Asia, emerging markets.

671
00:32:16,520 --> 00:32:21,400
Speaker 9: You see a very sort of wide spectrum or diversification

672
00:32:21,480 --> 00:32:23,760
Speaker 9: across a lot of those, and they sort of push

673
00:32:23,760 --> 00:32:26,400
Speaker 9: and pull on the levers as market opportunities arise.

674
00:32:26,760 --> 00:32:29,040
Speaker 2: So what are the I know, some of the challenges

675
00:32:29,160 --> 00:32:33,040
Speaker 2: having spoken some folks in an industry, the whole regulation

676
00:32:33,280 --> 00:32:35,960
Speaker 2: reporting aspect for this business, it just seems to get

677
00:32:35,960 --> 00:32:38,480
Speaker 2: more and more complex every time. How do you guys

678
00:32:38,480 --> 00:32:41,200
Speaker 2: at a prime brokers, how do you try to deal

679
00:32:41,240 --> 00:32:41,440
Speaker 2: with that.

680
00:32:41,520 --> 00:32:44,560
Speaker 9: Yeah, to be honest, we try to alleviate or move

681
00:32:44,600 --> 00:32:46,320
Speaker 9: some of that burden from our clients and put it

682
00:32:46,360 --> 00:32:48,920
Speaker 9: on ourselves in terms of what we report how we report.

683
00:32:49,120 --> 00:32:51,560
Speaker 9: That's not going to be possible with everything going forward.

684
00:32:51,600 --> 00:32:54,320
Speaker 9: So I'll just give two examples. One is the look

685
00:32:54,400 --> 00:32:57,360
Speaker 9: to have potentially more transparency within the swap or synthetic

686
00:32:57,440 --> 00:33:01,400
Speaker 9: or delta one businesses, and some folks obviously don't love

687
00:33:01,440 --> 00:33:04,160
Speaker 9: that idea because they may be you know, doing it

688
00:33:04,240 --> 00:33:07,400
Speaker 9: for trading anonymity. And then two sort of this bazzle

689
00:33:07,840 --> 00:33:11,880
Speaker 9: endgame which terms may require folks to just post more capital,

690
00:33:11,960 --> 00:33:14,480
Speaker 9: mean the broken dealers to post more capital. So the

691
00:33:14,600 --> 00:33:16,640
Speaker 9: rules and the regulations are going to change the playing

692
00:33:16,640 --> 00:33:18,040
Speaker 9: field sort of going forward.

693
00:33:18,800 --> 00:33:22,280
Speaker 2: Where's hedge fund money come from generally into the space?

694
00:33:22,600 --> 00:33:25,960
Speaker 9: Yeah, I mean it's coming from family offices, it's coming

695
00:33:25,960 --> 00:33:28,360
Speaker 9: from fund to funds, it's coming from pensions and endowments.

696
00:33:28,840 --> 00:33:31,880
Speaker 9: And you know, I think we've seen recently where we've

697
00:33:31,880 --> 00:33:33,960
Speaker 9: been focus a little bit more has been on the

698
00:33:34,440 --> 00:33:38,600
Speaker 9: family office space. Sometimes they are willing to take a

699
00:33:38,600 --> 00:33:40,880
Speaker 9: little bit more risk in terms of going with an

700
00:33:41,000 --> 00:33:45,240
Speaker 9: unknown individual or somebody they feel that maybe more affligating

701
00:33:45,360 --> 00:33:47,120
Speaker 9: with somebody as they start up, as opposed to going

702
00:33:47,160 --> 00:33:49,200
Speaker 9: with one of the more household names. But it's sometimes

703
00:33:49,200 --> 00:33:52,200
Speaker 9: safer to go with the household name because everybody's in there.

704
00:33:52,600 --> 00:33:54,400
Speaker 2: So when you submitted your budget to your bosses this

705
00:33:54,480 --> 00:33:55,960
Speaker 2: year for twenty twenty four, what are some of the

706
00:33:55,960 --> 00:33:58,560
Speaker 2: growth drivers that you kind of laid out for them?

707
00:33:58,720 --> 00:34:00,480
Speaker 9: I mean, for us, we are looking to do more

708
00:34:00,480 --> 00:34:02,800
Speaker 9: in the synthetic and swap space. We are looking to

709
00:34:04,320 --> 00:34:07,320
Speaker 9: offer a little bit more across We're pretty solid in

710
00:34:07,360 --> 00:34:10,160
Speaker 9: the straight sort of equity space, but looking at a

711
00:34:10,160 --> 00:34:13,000
Speaker 9: little bit more within convertible bonds, a little bit more

712
00:34:13,040 --> 00:34:14,920
Speaker 9: within the fixed income space. So I think for us,

713
00:34:14,960 --> 00:34:18,759
Speaker 9: we're looking to broaden our product offering and so and

714
00:34:18,800 --> 00:34:20,799
Speaker 9: we've had good traction so forth.

715
00:34:20,920 --> 00:34:24,160
Speaker 2: So I mean, who are they? What's the competitive landscape

716
00:34:24,200 --> 00:34:26,439
Speaker 2: here of this prime business these days?

717
00:34:26,719 --> 00:34:29,040
Speaker 9: Yeah, listen, there are you know, there are five very

718
00:34:29,239 --> 00:34:30,520
Speaker 9: large prime brokers.

719
00:34:30,520 --> 00:34:33,719
Speaker 2: That's gold Morgan, Stanley. Ay, maybe I don't know.

720
00:34:33,840 --> 00:34:35,759
Speaker 9: No, you're right, I just don't want to say competitive name.

721
00:34:35,800 --> 00:34:38,400
Speaker 2: But sure, so the big, the big, the bulls are

722
00:34:38,440 --> 00:34:39,600
Speaker 2: all in there for the most part.

723
00:34:39,719 --> 00:34:42,280
Speaker 9: Yes, But what could potentially change is if the capital

724
00:34:42,360 --> 00:34:45,719
Speaker 9: requirements changed, they may be more impacted than somebody like ourselves,

725
00:34:46,239 --> 00:34:49,319
Speaker 9: And so I could see the landscape changing slightly over

726
00:34:49,320 --> 00:34:51,799
Speaker 9: the next couple of years, and maybe the product mix

727
00:34:51,840 --> 00:34:53,640
Speaker 9: and use of balance sheet and use of capital kind

728
00:34:53,680 --> 00:34:54,600
Speaker 9: of changing along with it.

729
00:34:54,800 --> 00:34:57,120
Speaker 2: Yeah, because that's yeah. I mean, you guys have to

730
00:34:57,160 --> 00:35:00,319
Speaker 2: deal with those regulatory risks as many as much as

731
00:35:00,360 --> 00:35:03,279
Speaker 2: any other industry. Mark Alderati, thanks so much for joining us.

732
00:35:03,440 --> 00:35:07,120
Speaker 2: Mark is a global head of prime services. For Jeffrey's

733
00:35:07,120 --> 00:35:09,399
Speaker 2: talking about the hedge fund business, they still get two

734
00:35:09,400 --> 00:35:12,919
Speaker 2: and twenty. Not everybody, not everybody, Okay, very good, because

735
00:35:12,960 --> 00:35:14,840
Speaker 2: I'm just like two and twenty for what am I getting?

736
00:35:14,920 --> 00:35:16,480
Speaker 2: I mean, you know, I saw some of the hedge

737
00:35:16,480 --> 00:35:20,320
Speaker 2: fund results for twenty twenty three. Get results reported today.

738
00:35:20,560 --> 00:35:22,040
Speaker 2: Kind of a low double digit, big deal.

739
00:35:22,920 --> 00:35:26,040
Speaker 8: You're listening to the tape. Can's our live program Bloomberg

740
00:35:26,080 --> 00:35:29,680
Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the

741
00:35:29,760 --> 00:35:33,000
Speaker 8: tune in app, Bloomberg dot Com, and the Bloomberg Business App.

742
00:35:33,000 --> 00:35:35,839
Speaker 8: You can also listen live on Amazon Alexa from our

743
00:35:35,840 --> 00:35:40,960
Speaker 8: flagship New York station, Just Say Alexa Play Bloomberg eleven thirty.

744
00:35:42,120 --> 00:35:46,840
Speaker 2: The discussion of the day for me Media, Entertainment, fun stuff.

745
00:35:46,880 --> 00:35:50,160
Speaker 2: KEITHA ranganathen Joints As. She's a senior analyst covering media

746
00:35:50,200 --> 00:35:53,560
Speaker 2: for Bloomberg Intelligence. Joining us via Zoom from our Princeton,

747
00:35:53,960 --> 00:35:57,239
Speaker 2: New Jersey campus. Keith, Let's start with Disney here, the

748
00:35:57,280 --> 00:36:01,920
Speaker 2: activist investors and are kind of swirling around this company.

749
00:36:02,840 --> 00:36:05,600
Speaker 2: The pressure seems to be building on CEO Bob Iger

750
00:36:05,680 --> 00:36:08,560
Speaker 2: to write the ship to get the stock moving again.

751
00:36:09,000 --> 00:36:10,080
Speaker 2: What's going on at Disney?

752
00:36:11,360 --> 00:36:12,680
Speaker 6: Yeah, you're absolutely right, Paul.

753
00:36:12,719 --> 00:36:15,160
Speaker 10: I mean, the if you look at kind of Disney shares,

754
00:36:15,160 --> 00:36:17,680
Speaker 10: they're down about fifty five percent from their March twenty

755
00:36:17,719 --> 00:36:20,879
Speaker 10: twenty one highs. So obviously there's a lot that needs

756
00:36:20,880 --> 00:36:23,000
Speaker 10: to be done here. Having said that, though, I think

757
00:36:23,000 --> 00:36:27,080
Speaker 10: Bob Iger obviously recognizes what needs to be done. He

758
00:36:27,200 --> 00:36:29,279
Speaker 10: has kind of taken a lot of steps, whether it's

759
00:36:29,320 --> 00:36:32,200
Speaker 10: restoring the dividend, whether it's you know, kind of right

760
00:36:32,239 --> 00:36:36,440
Speaker 10: sizing content expenses, you know, coming up with, you know,

761
00:36:36,520 --> 00:36:40,760
Speaker 10: plans to reinvigorate streaming. They've had almost thirty percent streaming

762
00:36:40,960 --> 00:36:44,959
Speaker 10: pricing increases. They're looking to kind of get gained full

763
00:36:45,000 --> 00:36:48,120
Speaker 10: ownership of Hulu. So he's really juggling a lot of

764
00:36:48,120 --> 00:36:51,160
Speaker 10: different balls here, But you're absolutely right in terms of,

765
00:36:51,239 --> 00:36:55,440
Speaker 10: you know, the activist investors. They're obviously swirling around Disney.

766
00:36:55,440 --> 00:36:58,359
Speaker 10: But Eiger this morning at least, seems to be kind

767
00:36:58,360 --> 00:37:01,640
Speaker 10: of shoring up his defenses with news about you know,

768
00:37:01,719 --> 00:37:06,040
Speaker 10: this kind of strategic partnership with Value Act as well

769
00:37:06,040 --> 00:37:09,400
Speaker 10: as Blackwells, so they seem to be kind of getting some,

770
00:37:11,480 --> 00:37:14,760
Speaker 10: you know, support in their fight against Nelson Peals.

771
00:37:15,320 --> 00:37:17,160
Speaker 2: Is there anything? I mean, you look at the Walt

772
00:37:17,200 --> 00:37:21,319
Speaker 2: Disney Company and the cable networks led by ESPN, the

773
00:37:21,320 --> 00:37:25,759
Speaker 2: theme parks, the the film studios, all the studios they own,

774
00:37:25,800 --> 00:37:29,120
Speaker 2: all the brands they own. There's so many valuable assets

775
00:37:29,200 --> 00:37:31,319
Speaker 2: there that I guess if you do with some of

776
00:37:31,360 --> 00:37:33,759
Speaker 2: the parts, maybe you could say that the stock is undervalued.

777
00:37:34,040 --> 00:37:37,640
Speaker 2: And I'm sure the Disney's done that internally realistically. Do

778
00:37:37,680 --> 00:37:39,759
Speaker 2: you think there's any big deals that Bob can do

779
00:37:39,840 --> 00:37:43,880
Speaker 2: here to unlock value, whether it's sell ESPN or anything

780
00:37:43,920 --> 00:37:44,239
Speaker 2: like that.

781
00:37:45,320 --> 00:37:47,279
Speaker 10: So I think the one deal, and obviously this is

782
00:37:47,320 --> 00:37:51,040
Speaker 10: already ongoing, is they're looking to gain full ownership of Hulu,

783
00:37:51,239 --> 00:37:53,759
Speaker 10: and that's underway right now. So we were not really

784
00:37:53,760 --> 00:37:55,640
Speaker 10: sure what they're going to pay there. They obviously have

785
00:37:55,680 --> 00:37:57,759
Speaker 10: to pay a minimum of about nine billion dollars for

786
00:37:57,840 --> 00:38:00,959
Speaker 10: that thirty three percent stake of Comcast, but then whether

787
00:38:01,000 --> 00:38:03,680
Speaker 10: it'll go higher to about thirteen fourteen fifteen billion, nobody

788
00:38:03,760 --> 00:38:06,600
Speaker 10: really knows. In terms of other deals, I'm not really

789
00:38:06,640 --> 00:38:09,080
Speaker 10: sure they want to do anything very big. We do

790
00:38:09,200 --> 00:38:12,680
Speaker 10: know that they're looking to actually divest their India operations.

791
00:38:12,719 --> 00:38:14,719
Speaker 10: They're in the process of merging it with one of

792
00:38:14,760 --> 00:38:19,040
Speaker 10: the biggest Indian wireless operators, which is Reliance, to create

793
00:38:19,080 --> 00:38:22,480
Speaker 10: a huge media conglomerate there. So they're really looking to

794
00:38:22,560 --> 00:38:27,120
Speaker 10: kind of more trim and kind of streamline their operations.

795
00:38:27,360 --> 00:38:29,680
Speaker 10: So I'm not necessarily sure they're going to go out

796
00:38:29,719 --> 00:38:33,360
Speaker 10: and be more acquisitive in terms of ESPN. They have

797
00:38:33,440 --> 00:38:36,040
Speaker 10: clearly said that they're not looking to get rid of

798
00:38:36,080 --> 00:38:37,920
Speaker 10: the asset. They're looking more for some kind of a

799
00:38:37,960 --> 00:38:40,759
Speaker 10: strategic partnership. Not really sure whether that's going to be

800
00:38:40,800 --> 00:38:42,400
Speaker 10: a tech giant or whether that's going to be one

801
00:38:42,440 --> 00:38:44,120
Speaker 10: of the leagues. So that's a little bit of a

802
00:38:44,120 --> 00:38:46,279
Speaker 10: weight and watch. But I think the one thing that

803
00:38:46,600 --> 00:38:48,759
Speaker 10: the street is really looking for clarity on is what

804
00:38:48,800 --> 00:38:50,719
Speaker 10: they're going to do with their linear TV assets. We

805
00:38:50,760 --> 00:38:53,600
Speaker 10: know that last year Barb Biger had kind of floated

806
00:38:53,600 --> 00:38:56,000
Speaker 10: this whole idea that you know, he's not married to

807
00:38:56,440 --> 00:38:59,440
Speaker 10: the linear TV ecosystem. He doesn't mind getting rid of assets.

808
00:38:59,560 --> 00:39:01,440
Speaker 10: But the kind of walk that back a little bit.

809
00:39:01,480 --> 00:39:05,080
Speaker 10: So again there's a little bit of you know, uncertainty,

810
00:39:05,120 --> 00:39:08,200
Speaker 10: I guess with what happens with the linear TV assets, all.

811
00:39:08,160 --> 00:39:10,120
Speaker 2: Right, So that kind of goes to the next question,

812
00:39:10,160 --> 00:39:13,400
Speaker 2: which is kind of the streaming business, the pivot from

813
00:39:14,200 --> 00:39:17,440
Speaker 2: you know, broadcasting cable television channels over your cable system

814
00:39:17,480 --> 00:39:21,120
Speaker 2: to a streaming model. Netflix makes a lot of money

815
00:39:21,160 --> 00:39:24,000
Speaker 2: doing it, but nobody else really does. What are we

816
00:39:24,000 --> 00:39:26,520
Speaker 2: going to see in twenty twenty four with the streaming

817
00:39:26,560 --> 00:39:28,240
Speaker 2: business from the big media companies?

818
00:39:28,920 --> 00:39:29,839
Speaker 6: Yeah, absolutely right.

819
00:39:29,920 --> 00:39:32,120
Speaker 10: Nobody else other than Netflix right now is making money

820
00:39:32,200 --> 00:39:35,160
Speaker 10: in streaming. But the new mantra in streaming is is

821
00:39:35,239 --> 00:39:37,080
Speaker 10: less bad as good. So as long as all of

822
00:39:37,120 --> 00:39:41,000
Speaker 10: these companies have lower streaming losses, even that is being

823
00:39:41,080 --> 00:39:43,600
Speaker 10: viewed as a positive sign by investors. So in the

824
00:39:43,600 --> 00:39:46,680
Speaker 10: case of Disney, for instance, in twenty twenty two, they

825
00:39:46,719 --> 00:39:49,480
Speaker 10: had over four billion dollars that they lost in their

826
00:39:49,520 --> 00:39:52,480
Speaker 10: streaming business, they really kind of pared that down pretty

827
00:39:52,480 --> 00:39:54,480
Speaker 10: significantly in twenty twenty three to about two and a

828
00:39:54,520 --> 00:39:57,640
Speaker 10: half billion dollars. We think it could go down even further,

829
00:39:57,680 --> 00:39:59,840
Speaker 10: maybe just about seven to fifty million or eight hundred

830
00:39:59,840 --> 00:40:02,520
Speaker 10: mill and in twenty twenty four. So they are looking

831
00:40:02,600 --> 00:40:05,279
Speaker 10: to you know, all of these companies, Disney included, are

832
00:40:05,320 --> 00:40:08,040
Speaker 10: looking to break even on their streaming businesses. Of course,

833
00:40:08,080 --> 00:40:10,440
Speaker 10: it's going to be a very very long road for

834
00:40:10,520 --> 00:40:13,759
Speaker 10: them to kind of get to the profitability levels that

835
00:40:13,840 --> 00:40:15,960
Speaker 10: Netflix has achieved, because if you look at Netflix operating

836
00:40:15,960 --> 00:40:18,959
Speaker 10: margins right now in their streaming business, it's about twenty

837
00:40:19,040 --> 00:40:21,319
Speaker 10: two twenty three percent, and they're looking they're really on

838
00:40:21,360 --> 00:40:23,919
Speaker 10: a path to get to that thirty percent margin level.

839
00:40:24,320 --> 00:40:27,400
Speaker 2: Yeah, that's boy, that's kind of where the media companies

840
00:40:27,520 --> 00:40:30,200
Speaker 2: used to be back in the day. So another theme

841
00:40:30,239 --> 00:40:33,160
Speaker 2: for twenty twenty four, as I read your research and

842
00:40:33,200 --> 00:40:35,400
Speaker 2: see some others stuff out there on the street, is

843
00:40:35,760 --> 00:40:38,360
Speaker 2: maybe some M and A in this industry is his

844
00:40:38,440 --> 00:40:41,640
Speaker 2: industry maybe needs to consolidate because you know, the profitability

845
00:40:41,719 --> 00:40:43,640
Speaker 2: isn't what it used to be, and it's tough to

846
00:40:43,680 --> 00:40:46,880
Speaker 2: be a standalone company if you're not really big, like

847
00:40:46,920 --> 00:40:49,680
Speaker 2: a Disney like a Netflix. How do you think that

848
00:40:49,760 --> 00:40:50,399
Speaker 2: might play out.

849
00:40:51,280 --> 00:40:54,120
Speaker 10: Yeah, we've already seen a lot of rumblings, you know,

850
00:40:54,200 --> 00:40:56,319
Speaker 10: Paul to that effect. So we've had you know, just

851
00:40:56,360 --> 00:40:57,960
Speaker 10: like at the end of last year, we had this

852
00:40:58,040 --> 00:41:02,040
Speaker 10: whole news about maybe Warner Brothers, Discovery and Paramount kind

853
00:41:02,040 --> 00:41:05,240
Speaker 10: of coming together, and then that's sparking a huge discussion

854
00:41:05,280 --> 00:41:07,360
Speaker 10: about whether, you know, maybe comcasts should also be in

855
00:41:07,400 --> 00:41:09,520
Speaker 10: the fray for some of these assets. I think the

856
00:41:09,520 --> 00:41:11,719
Speaker 10: real problem, and I think that what the street is

857
00:41:11,760 --> 00:41:15,040
Speaker 10: having a real hard time kind of grappling with, is,

858
00:41:15,080 --> 00:41:17,120
Speaker 10: you know, the debt levels of some of these companies.

859
00:41:17,120 --> 00:41:19,160
Speaker 10: So if you kind of look at Warner Brothers and Paramount,

860
00:41:19,200 --> 00:41:21,440
Speaker 10: the reason that they probably will not like that deal

861
00:41:21,840 --> 00:41:23,680
Speaker 10: is one is, of course, you have very very heavy

862
00:41:23,760 --> 00:41:26,560
Speaker 10: linear TV exposure. And remember linear TV, of course isn't

863
00:41:26,560 --> 00:41:30,720
Speaker 10: secular decline because you're having about ten percent cord cutting

864
00:41:31,120 --> 00:41:34,080
Speaker 10: people canceling their PATV subscriptions. But again, if you look

865
00:41:34,080 --> 00:41:36,560
Speaker 10: at that Warner Brothers Discovery in Paramount combination, that's sixty

866
00:41:36,600 --> 00:41:41,799
Speaker 10: billion dollars in debt and nobody kind of really likes that. So,

867
00:41:42,080 --> 00:41:45,200
Speaker 10: you know, I don't really know how it's all kind

868
00:41:45,200 --> 00:41:47,200
Speaker 10: of going to shake out. Of course, I think M

869
00:41:47,239 --> 00:41:50,040
Speaker 10: and A is going to be the top hot topic

870
00:41:50,200 --> 00:41:52,920
Speaker 10: or the hottest topic for twenty twenty four, but not

871
00:41:52,960 --> 00:41:57,000
Speaker 10: really sure if any deal necessarily makes sense, just because

872
00:41:57,000 --> 00:41:59,920
Speaker 10: of that very very heavy linear TV exposure.

873
00:42:00,480 --> 00:42:03,440
Speaker 2: And for years, you know, media investors and analysts have

874
00:42:03,480 --> 00:42:07,400
Speaker 2: been wondering when and if a tech company, whether it's

875
00:42:07,400 --> 00:42:10,759
Speaker 2: an Amazon and Apple, somebody, a Google, somebody really big

876
00:42:10,800 --> 00:42:13,120
Speaker 2: with those limitless pockets, will come in and make a

877
00:42:13,120 --> 00:42:15,600
Speaker 2: big investment in the media and entertainment business. We really

878
00:42:15,600 --> 00:42:19,239
Speaker 2: haven't seen that too much here any reason I think

879
00:42:19,280 --> 00:42:20,120
Speaker 2: this year will be different.

880
00:42:20,800 --> 00:42:22,400
Speaker 10: I don't think so, Paul. I think, if at all,

881
00:42:22,440 --> 00:42:24,239
Speaker 10: it'll be even harder this year. I mean, this is

882
00:42:24,239 --> 00:42:26,480
Speaker 10: a presidential year. We're obviously going to see a lot

883
00:42:26,520 --> 00:42:29,359
Speaker 10: more of you know, the anti trust and a lot

884
00:42:29,400 --> 00:42:32,279
Speaker 10: more of you know, the regulatory concerns kind of resurfaced,

885
00:42:32,600 --> 00:42:34,520
Speaker 10: and I think any of these big tech giants are

886
00:42:34,560 --> 00:42:38,160
Speaker 10: going to be very very careful not to kind of

887
00:42:38,640 --> 00:42:41,200
Speaker 10: rub the regulators the wrong way, so it's very hard

888
00:42:41,200 --> 00:42:43,239
Speaker 10: for us to see them kind of make at least

889
00:42:43,280 --> 00:42:45,400
Speaker 10: any huge splashy acquisition.

890
00:42:46,560 --> 00:42:49,400
Speaker 2: The movie business. Are people going to the theaters Anymoregan

891
00:42:49,440 --> 00:42:52,280
Speaker 2: you said, how's that business kind of behaving now post pandemic.

892
00:42:52,840 --> 00:42:54,799
Speaker 10: Yeah, that's a great question. Actually we've seen you know,

893
00:42:54,800 --> 00:42:57,320
Speaker 10: obviously there was both this demand problem and the supply

894
00:42:57,400 --> 00:43:00,120
Speaker 10: problem that was kind of created by the pandemic. We've

895
00:43:00,160 --> 00:43:04,480
Speaker 10: actually seen the demand kind of come back pretty nicely,

896
00:43:04,520 --> 00:43:07,319
Speaker 10: I would say through twenty twenty three, just to kind

897
00:43:07,360 --> 00:43:09,520
Speaker 10: of put some numbers around it, we saw nine billion

898
00:43:09,560 --> 00:43:11,320
Speaker 10: dollars at the domestic box office.

899
00:43:11,640 --> 00:43:12,880
Speaker 6: That is still two.

900
00:43:12,640 --> 00:43:15,640
Speaker 10: Billion dollars shy of pre pandemic levels, but it's still

901
00:43:15,640 --> 00:43:18,480
Speaker 10: almost three hundred percent above you know, like twenty twenty

902
00:43:18,520 --> 00:43:20,759
Speaker 10: when kind of the movie business was completely shut down.

903
00:43:21,120 --> 00:43:25,360
Speaker 10: So we've kind of seen some resilience that said, you know,

904
00:43:25,400 --> 00:43:28,640
Speaker 10: we had another shock to the whole I think entertainment

905
00:43:28,640 --> 00:43:30,920
Speaker 10: world in twenty twenty three after the pandemic, which was

906
00:43:30,960 --> 00:43:33,400
Speaker 10: really the writer's strike as well as the actors strike,

907
00:43:33,719 --> 00:43:35,960
Speaker 10: and that is going to have some ramifications for the

908
00:43:36,000 --> 00:43:39,600
Speaker 10: box office in twenty twenty four because we've seen multiple movies,

909
00:43:39,719 --> 00:43:42,759
Speaker 10: multiple tent poles actually getting pushed out to twenty twenty five,

910
00:43:42,760 --> 00:43:45,160
Speaker 10: whether you know it's mission impossible, whether it's the new

911
00:43:45,200 --> 00:43:48,400
Speaker 10: Snow White movie, Captain America, the New you know, a

912
00:43:48,440 --> 00:43:51,000
Speaker 10: Spider Verse movie from Sony. All of these, you know,

913
00:43:51,600 --> 00:43:54,240
Speaker 10: will almost shave off about one to two billion dollars

914
00:43:54,239 --> 00:43:56,800
Speaker 10: of box office. So right now we're looking at a

915
00:43:56,920 --> 00:44:01,080
Speaker 10: much weaker kind of box office out for twenty twenty four.

916
00:44:01,520 --> 00:44:03,879
Speaker 2: All right, very good Keitha Ronganath, and thank you for

917
00:44:04,000 --> 00:44:06,680
Speaker 2: joining us as always with a breakdown what's happening in

918
00:44:06,719 --> 00:44:09,080
Speaker 2: the global media and entertainment space. Lots of big themes

919
00:44:09,120 --> 00:44:11,960
Speaker 2: here for that. So Githa rock anathen and senior Media

920
00:44:11,960 --> 00:44:16,600
Speaker 2: Anos Bloomberg Intelligence reporting from Princeton there with her research

921
00:44:16,640 --> 00:44:19,360
Speaker 2: and you can find that at Big for Bloomberg Intelligence

922
00:44:19,360 --> 00:44:21,080
Speaker 2: b I go in the terminal. We'll get you all

923
00:44:21,120 --> 00:44:25,320
Speaker 2: the Bloomberg Intelligence research. Some of the best equity credit

924
00:44:25,880 --> 00:44:29,320
Speaker 2: policy research for equities bond.

925
00:44:30,920 --> 00:44:34,040
Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can

926
00:44:34,040 --> 00:44:37,840
Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever

927
00:44:37,920 --> 00:44:41,640
Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter

928
00:44:41,840 --> 00:44:44,480
Speaker 1: at Matt Miller nineteen seventy three and on.

929
00:44:44,560 --> 00:44:47,640
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930
00:44:47,680 --> 00:44:50,400
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