Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: That's pretty amazing how quickly and how dramatically sentiment shifted.
Speaker 1: Romaine.
Speaker 2: Yesterday we were talking about the buy everything rally, and now,
Speaker 2: as you say at the top of the show, everything
Speaker 2: that has a risk profile is being sold right now, a.
Speaker 1: Bit of a sell everything rally. In fact, we're hitting
Speaker 1: fresh session lows as we speak. And I just want
Speaker 1: to pin at Katie. I mean, we talk about the
Speaker 1: superlatives in this market for most of the major indices.
Speaker 1: We're talking about the biggest drop one day drop since
Speaker 1: well April, yeah, which of course is right around the
Speaker 1: Liberation Day.
Speaker 3: O juitah.
Speaker 1: That sort of bubbled up and then it just seemed
Speaker 1: like the last few months it just kind of people
Speaker 1: forgot about tariffs, or they say we're comfortable with where
Speaker 1: the tariffs were, until we got a truth social post
Speaker 1: earlier this morning.
Speaker 3: That's the thing.
Speaker 2: The noise had definitely been turned down when it came
Speaker 2: to the tariff conversation. Now, of course coming back in
Speaker 2: a big way. You have the truth social post from
Speaker 2: President Trump there right now basically saying that he's not
Speaker 2: even sure if you there's a reason to meet with
Speaker 2: President g in two weeks, and a lot of hopes
Speaker 2: had been pinned to that conversation.
Speaker 1: Yeah, and in fairness to the President, I mean, as
Speaker 1: you know, he does fire off these missives kind of
Speaker 1: on a whim. But we should point out that China
Speaker 1: has actually taken a lot of measures over the last
Speaker 1: few days. I mean, in fact the last few hours,
Speaker 1: including more restrictions on the export of rare earth, potential investigation,
Speaker 1: anti trust investigation into Qualcomm, and.
Speaker 3: A couple other things that I'm forgetting.
Speaker 1: So there's been some concern here. The China itself has
Speaker 1: kind of ratcheted up the pressure, and maybe that's why
Speaker 1: Trump felt the need to do it. You know, I
Speaker 1: had his chance to sit down with John Rogers.
Speaker 2: I heard about that.
Speaker 1: Yeah, he runs an era, co founded Aerial Investments, and
Speaker 1: I actually had a chance to talk to him about
Speaker 1: a wide range of things, including his thoughts here on
Speaker 1: the terror picture.
Speaker 3: Take a listen as to what he had to say.
Speaker 4: We're still finding ideas in small value space.
Speaker 3: You know, they really have been ignored.
Speaker 4: They're kind of the ugly ducklings when you compare it
Speaker 4: to Nvidia and Apple and all these jobs and exciting
Speaker 4: growth stories.
Speaker 3: You know, the little mundane.
Speaker 4: Businesses that we've invested in for forty two years just
Speaker 4: seem particularly orphaned these days. So we're seeing great ideas
Speaker 4: and excited to be doing the research and think there's
Speaker 4: real opportunity for small value.
Speaker 1: Do you see a broader future for investment in that
Speaker 1: sort of entertainment space? And I guess it's more given
Speaker 1: what the sphere in MSU do. It's just a little
Speaker 1: bit more of a hybrid entertainment space. But I am
Speaker 1: curious as to what additional value you find there.
Speaker 3: Well, everywhere we.
Speaker 4: Go, we talk to as many experts as we can
Speaker 4: as part of our regular research and due diligence, and
Speaker 4: everyone is saying, you know, post COVID, it's really is
Speaker 4: sticking that the next generation of citizens here, particularly in America,
Speaker 4: love experiences.
Speaker 3: They want to go.
Speaker 4: Out and be together to watch a ballgame, watch a movie,
Speaker 4: go to a concert, go to an outsdoor stadium to
Speaker 4: see music. It's something that is really I think here
Speaker 4: to stay. The moment mentum is continuing to hold, and
Speaker 4: so places like the sphere that has this you know,
Speaker 4: magical IP people want to come and experience it together.
Speaker 4: And I think it's really special. I think the Wizard
Speaker 4: of Oz is just scratching the surface. It's absolutely amazing
Speaker 4: and exciting to go to. But there will be other exciting,
Speaker 4: amazing things. Everyone speculates, well maybe one day, you know,
Speaker 4: it could be Star Wars, maybe it could be Harry Potter.
Speaker 3: You never know what could be next. But those are
Speaker 3: the kind of things.
Speaker 4: That people want to come and appreciate in a live audience.
Speaker 1: You're no stranger to investing in the entertainment space, and
Speaker 1: at least prior to the tie up with Paramount sky Dance,
Speaker 1: you were one of the largest shareholders in Paramount. Now
Speaker 1: that that deal is done, now that David Ellison has
Speaker 1: laid out his vision for what he wants to do
Speaker 1: with that company, I am curious as to whether you
Speaker 1: think that it can be not just profitable, but also
Speaker 1: a growth story.
Speaker 4: Again, well, that's still an open question. You know, it's
Speaker 4: been a torture experience. I still think for sure there's
Speaker 4: a lot of value there. You know, Paramount Studio is valuable,
Speaker 4: CBS is valuable, they're you know, still number one year
Speaker 4: after year with their content. You look at all the
Speaker 4: different things, and of course Paramount Plus and Pluto. They
Speaker 4: have these extraordinary assets, and so the stock I think
Speaker 4: is still you know, significantly undervalued. Now whether they can
Speaker 4: get the growth they hope To your question, that's a
Speaker 4: that's still an open question because you're, you know, you're
Speaker 4: competing with Netflix, You're competing with all the big guys,
Speaker 4: Apple and Amazon, et cetera. And whether you can grow
Speaker 4: in that environment is something that's really still an open question.
Speaker 4: I think mister Ellison has the right idea of you know,
Speaker 4: building scale, you know, building ip, making these acquisitions that
Speaker 4: can really add value and hopefully potentially add significant growth
Speaker 4: from revenue and profitability.
Speaker 1: To that point on scale, does a deal like one
Speaker 1: for Warner Brothers Discovery, should that actually come to fruition?
Speaker 1: Does that se smart to you in terms of the
Speaker 1: cost and what it would actually bring to paramount?
Speaker 4: Well, I've been reading a lawful a lot about it
Speaker 4: and talking again to as many experts as possible. I
Speaker 4: think that acquisition makes a lot of sense. It brings scale,
Speaker 4: as you suggest, it'll make them one of the major
Speaker 4: players that will be there forever. And at the same time,
Speaker 4: there's huge synergies, you know, huge cost cuts that are available.
Speaker 4: You have two major studios. Maybe you could sell one
Speaker 4: of the studios and the studio a lot and all
Speaker 4: the real estate value that's there. But also just again
Speaker 4: an extraordinary amount of synergies that are there, extraordinary amount
Speaker 4: of cost cutting that's there, and we put it all together,
Speaker 4: I think there's this real potential of immergier like that
Speaker 4: would happen.
Speaker 1: I do just have to ask you just about the
Speaker 1: political climate, because that's sort of driving some of those
Speaker 1: divisions these days. And I know in the past you've
Speaker 1: said that you're still hopeful for America, still hopeful for
Speaker 1: our economy and our markets. But when you look at
Speaker 1: what's going on, particularly in the city where you sit,
Speaker 1: where Aerial sits in Chicago, which has been the subject
Speaker 1: of some of the ire out of the White House,
Speaker 1: what do you make of it?
Speaker 4: I just think it doesn't make any sense at all.
Speaker 4: You know, the city has never been more beautiful, it's
Speaker 4: never been you know, the safety issues are drifting away.
Speaker 3: The violence is going down.
Speaker 4: You know, we've had extraordinary leaders here who've worked to
Speaker 4: build our city back from times where it was somewhat troubled.
Speaker 4: But we know Mayor Johnson's done a great job.
Speaker 3: JB. Pritzker has done a great job. You know.
Speaker 4: Former Secretary of Education Arnie Duncan with his CRED program,
Speaker 4: the Anti Violence Initiative have made a major difference in
Speaker 4: our business community. Our civic committee headed up by Derek Douglass.
Speaker 4: Everyone's come together and we're fully online together. We have
Speaker 4: the same perspective that our city is really on the
Speaker 4: way back.
Speaker 3: Things are great.
Speaker 1: We got additional headlines out of the White House with
Speaker 1: regards to tariffs, potentially more tariffs on China, largely because
Speaker 1: the President says that he doesn't think Jijiping is cooperating
Speaker 1: enough in the negotiations. Being a small and mid cap investor,
Speaker 1: particularly with some names that I would assume would have
Speaker 1: tariff exposure like Mattel, does it give you a little
Speaker 1: bit of concern that we still have not sort of,
Speaker 1: I guess, reached some sort of resolution on where we're
Speaker 1: actually going with these tariffs, what they will be, and
Speaker 1: what we can count on them to be.
Speaker 4: Well, none of us that are work in the Marcus
Speaker 4: day to day like to see We don't like to
Speaker 4: see the volatility. We don't like to see the surprises.
Speaker 4: You know, we're looking for stability, and this is kind
Speaker 4: of a fragile atmosphere with what ever's going on around
Speaker 4: the world all.
Speaker 3: The challenges that we face.
Speaker 4: Having these challenges domestically around the tariffs is something I
Speaker 4: think is really problematic.
Speaker 1: We've also seen a revival in deal making, John that
Speaker 1: we didn't necessarily see definitely coming out of last year,
Speaker 1: and at the start of this year. You are Ariel
Speaker 1: and your funds are investors in names like Carlisle, Lazard
Speaker 1: and a few others. I am curious as to whether
Speaker 1: you think the current uptick that we've seen in deal
Speaker 1: making is actually going to continue and even potentially expand.
Speaker 4: I think it will continue, and I think it will expand.
Speaker 4: As we've had a chance to talk to the management
Speaker 4: teams at both Carlisle and Wizard, do you feel like
Speaker 4: the momentum is building. This regulatory environment is so much
Speaker 4: more friendly or for acquisitions and mergers. I was talking
Speaker 4: to a great a leader yesterday, a big brokerage firm,
Speaker 4: and they were just saying how this is gonna be
Speaker 4: a great time for more and more deals to happen.
Speaker 4: I just can't overemphasize that. When you see the opportunities
Speaker 4: both for companies to make strategic acquisitions that it's not
Speaker 4: going to be questioned by the Justice Department or the
Speaker 4: SEC or the other regulators are out there, the FTC
Speaker 4: and the rest. I think you're gonna see one deal
Speaker 4: after another.
Speaker 1: John Rodgers, the founder and chairman of Aerial Investments, wide
Speaker 1: ranging conversation about his investments in the small and mid
Speaker 1: cap space, the state of the economy, the state of Chicago,
Speaker 1: and the state of those trade tariffs.