Speaker 1: This is Bloomberg Wall Street Week.
Speaker 2: The global push into infrastructure, breaking the IPO logjam in text.
Speaker 1: The financial stories that sheep.
Speaker 2: Are work cutting inflation without losing jobs. Do we need
Speaker 2: rate cuts and if so, how many? Investing in a
Speaker 2: time of geopolitical turmoil.
Speaker 1: Through the eyes of the most influential voices.
Speaker 2: Ten Rogueff economists at Harvard, former FDIC had Shila bet
Speaker 2: Ge CEO, Larry Kulp, San Francisco FED President Mary Daily Bloomberg.
Speaker 1: Wall Street Week with David Weston from Bloomberg Radio.
Speaker 2: Tesla moves forward after all Goldman finally gets out of
Speaker 2: retail and everyone's trying to figure out where inflation is headed.
Speaker 2: This is Bloomberg Wall Street Week. I'm David Weston. This
Speaker 2: week Wes Edens bright Line breaks ground on the nation's
Speaker 2: first truly high speed train line.
Speaker 3: This is now the beginning of the high speed rail
Speaker 3: industry in the US.
Speaker 2: Sir Clive Gillinson of Carnegie Hall on what it takes
Speaker 2: to make one of the world's great concert halls not
Speaker 2: only survive but thrive.
Speaker 4: You always go for the vision, go for something that
Speaker 4: is irresistible.
Speaker 2: And Tony James of Jefferson River capital on making sure
Speaker 2: New York's Metropolitan Museum of Art doesn't turn into your
Speaker 2: grandmother's attic.
Speaker 5: We're trying to be current. We don't want this to
Speaker 5: be your grandmother's attic.
Speaker 2: We start with the ever present question of inflation and
Speaker 2: where it's headed with Peter Boris, chairman and CEO of
Speaker 2: Computer Trading. So Peter, welcome back. Good to have here.
Speaker 2: Every week we get new data on inflation points one
Speaker 2: way or the other, but in a larger sense, you
Speaker 2: often look at what you call the Seven Seas and commodities,
Speaker 2: one of those telling you right now, first.
Speaker 6: Of all, thanks for having me. The seven Seas are
Speaker 6: relatively consistent, that inflation is going to be persistent for longer.
Speaker 6: You're starting to see some of the seasonal commodities potentially breakout.
Speaker 6: Cattle one see corn, the other sea that have been
Speaker 6: relatively weak, the stronger seas coffee, cocoa, and crude. They've
Speaker 6: been relatively stable after having fairly large moves.
Speaker 2: And what's driving that right now? I mean, what are
Speaker 2: the forces? Why do you look at the seven Seas?
Speaker 6: I look at them as the ac which is the
Speaker 6: consumer in terms of is the consumer going to have
Speaker 6: to substitute their spending for more on staples where demand
Speaker 6: is inelastic, and that then is going to lead to
Speaker 6: less discretionary spending across the board. And so then I
Speaker 6: look at bigger picture stocks like Visa, MasterCard, Costco, Target
Speaker 6: to see if the consumer strength is still there. Those
Speaker 6: stocks have demonstrated a little bit of weakness. So that
Speaker 6: is the conundrum, the ninth c of the pressure on
Speaker 6: commodities and potential weakness of these consumer stocks, which definitely
Speaker 6: puts the FED in a box.
Speaker 2: So if there's a breakout in some of the seas
Speaker 2: and the commodities, that puts pressure on Visa and MasterCard
Speaker 2: bigcause people don't have as much money to spend it Target,
Speaker 2: for example, they have to spend it on food.
Speaker 1: Yes.
Speaker 6: Yes, And so those stocks in particular are a good
Speaker 6: measure of consumer strength. And you see that in weekly
Speaker 6: data that you can get from JP or Bank of
Speaker 6: America compares to a week over week or year over
Speaker 6: year as the strength of consumer spending.
Speaker 2: Now, some stocks that have really felt a lot of
Speaker 2: pressure just recently have been the big tech. What is
Speaker 2: going on with them? Do you think?
Speaker 6: Well, first of all, there's the trading aspect to it,
Speaker 6: so you know, there's the old saying, right, what goes
Speaker 6: up must come down. So you've basically had a really
Speaker 6: big move, You've corrected. Technically, a number of these stocks
Speaker 6: have broken key levels, and if they don't reject those
Speaker 6: levels and start their uptrended again, that could mean that
Speaker 6: the leading aspect of the technology relative to other stocks
Speaker 6: is ending, which can hurt the large cap indices because
Speaker 6: there's such big weights.
Speaker 2: What does this all say the FED? I mean, I
Speaker 2: could speculate that actually a little bit of tightening financial
Speaker 2: conditions would not be a bad thing for the FED
Speaker 2: right now because they've been going the other way.
Speaker 6: I think the FED is sprinting in place, very very
Speaker 6: challenging because you have this tug of war. But it's
Speaker 6: hard to say that you should be easing when you've
Speaker 6: just had record highs in bitcoin, record highs inequities, and
Speaker 6: you've seen gasoline prices go up and potentially now these
Speaker 6: other commodities breaking out. So they're stuck in my mind
Speaker 6: of not doing anything probably the rest of the year.
Speaker 2: Gold doesn't begin with the sea. Last time I recalled,
Speaker 2: when you talk about record highs, we've had some record
Speaker 2: highs in gold. Is that a useful indicator in your
Speaker 2: experience over time where inflation might be heading, because often
Speaker 2: you think that's where you go if you think you
Speaker 2: got inflation.
Speaker 6: So I am not one that particularly favors gold as
Speaker 6: an indicator of what's going on with inflation. By the way,
Speaker 6: the correlation between gold and the S and P has
Speaker 6: been fairly high, so you would think, ooh, that's a
Speaker 6: cross current. People tend to look backwards. So in the seventies,
Speaker 6: when gold was really strong and inflation was high, there
Speaker 6: weren't really a lot of other instruments to use to
Speaker 6: hedge against inflation. But today there are many more instruments.
Speaker 6: You can short bonds in the futures markets, you can
Speaker 6: participate in individual commodity markets, or you can actually participate
Speaker 6: through options or futures in the equity market.
Speaker 2: So I don't think.
Speaker 6: Gold is as much of inflation indicator as perhaps a
Speaker 6: supply and demand question for uncertainty in the global geopolitical
Speaker 6: And then non US central banks may have added to
Speaker 6: gold demand recently. Of course, that too, in the last
Speaker 6: week or so, has had a pretty significant correction.
Speaker 2: Let me come back to your ninth see, I think
Speaker 2: it is conundrum what you said, yes, okay. As an investor,
Speaker 2: how do you invest into a conundrum? What do you do?
Speaker 6: So it depends on your time frame. If you're younger
Speaker 6: and you have a long time frame, then do you
Speaker 6: sit back? And that's the nature of markets on average, right,
Speaker 6: there's a double digital client in the SMP every year.
Speaker 6: Of course, I'm always mindful of the six foot tall
Speaker 6: man that drowns in water an average out of five feet.
Speaker 6: So you have to be careful of averages because there
Speaker 6: are bear markets. But in that case, you stay the course.
Speaker 6: If you're more like me and you're a trader and
Speaker 6: you've had a good run, I think the hardest thing
Speaker 6: in portfolio management and discipline is selling a winner or
Speaker 6: taking it down and rebalancing your portfolio. Is this a
Speaker 6: time to rebalance your portfolio where you have this conundrum
Speaker 6: combined with fed uncertainty, I think that makes a lot
Speaker 6: of sense.
Speaker 2: Peter is so helpful, Always good to have you on
Speaker 2: Wall Street week and it's Peter Borsh of Computer Trading,
Speaker 2: Treasury Secutary Yell and travel to China. The criticize the
Speaker 2: government for subsidizing parts of its industry. But this week
Speaker 2: the IMF leveled us similar criticism at the United States
Speaker 2: and urge Europe not to follow suit, to take us
Speaker 2: through where Europe stands in the apparent race to subsidize
Speaker 2: were welcome now, Stephanie Flanders Bloomberg, Senior Executive editor for
Speaker 2: Economics and Government. So Stephanie, welcome back. Great to have
Speaker 2: you with us. So tell us about this wonderful world
Speaker 2: of industrial policy. Sometimes we criticize it, and it looks
Speaker 2: like right now in the United States is embracing it.
Speaker 2: Where are we globally on industrial policy?
Speaker 7: You know, this is one of those things where it's
Speaker 7: a fast moving a bit of economics, certainly of economic
Speaker 7: policy making. You know, for decades, certainly when I was
Speaker 7: first learning about industrial policy and economic policy, it was
Speaker 7: kind of a dirty word, certainly capital I capital p
Speaker 7: industrial policy because it was the idea, maybe more popular
Speaker 7: in the fifties and sixties, that governments could spot strategic
Speaker 7: industries and invest in them. And the line I was
Speaker 7: always given that they were good at picking losers, they
Speaker 7: weren't good at picking winners, and that you could waste
Speaker 7: a lot of money doing that as a government, and
Speaker 7: if you were going to do it successfully, well, the
Speaker 7: only places that had done that were maybe places like
Speaker 7: Korea or Singapore where you had highly effective states and
Speaker 7: you had you know, these were emerging market economies that
Speaker 7: had a path to follow. They could see what other
Speaker 7: countries had done, so they had less chance of getting
Speaker 7: it wrong. And what's changed. I think, you know, like
Speaker 7: so many things, has been upended by the different geopolitical outlook.
Speaker 7: You know that what you think of as even you know,
Speaker 7: what a winner would be in a context where you
Speaker 7: could have in ten or twenty years time a decoupled
Speaker 7: global economy really changes.
Speaker 4: You know.
Speaker 7: It could be you may have wasted a lot of money,
Speaker 7: and an economist might have said that is a big
Speaker 7: You've inefficiently used those resources, you're not making profits, You've
Speaker 7: produced excess capacity of a good in the global market
Speaker 7: from doing this industrial policy. But if in twenty years
Speaker 7: time you find that you're the only place with say
Speaker 7: a solar panel industry on one side of a big
Speaker 7: economic in the global economy, well maybe all that quote
Speaker 7: unquote wasted money will turn out to have been well spent.
Speaker 7: So I think everyone's having to kind of rethink what
Speaker 7: success and failure looks like in an industrial policy context.
Speaker 7: But We certainly could be in for wasting a lot
Speaker 7: of money with these subsidies.
Speaker 2: Whether it's a good thing or a bad thing. How
Speaker 2: much of this do you think is triggered by China?
Speaker 2: Because China is now the second largest economy, some things
Speaker 2: that maybe beindest way of first. It certainly embraced subsidizing
Speaker 2: industry quite a bit. The Biden administration criticizes China greatea
Speaker 2: for that, but it's an enormous amount of money. How
Speaker 2: much of this is the rest of us being afraid
Speaker 2: that they will overwhelmed us?
Speaker 7: Well? And I think it's also it's not just the fear, right,
Speaker 7: it's actually the reality in some key sectors. I mean,
Speaker 7: the green technology is a classic example. We're now looking
Speaker 7: at how much you know Chinese evs electric vehicles are
Speaker 7: just sort of swamping the global market. A lot of
Speaker 7: subsidies have certainly gone into that. The European Union announced
Speaker 7: an investigation into ev They've already been burnt when it
Speaker 7: comes to solar panels because they European Union had invested
Speaker 7: a lot in developing, wanted to have a big domestic
Speaker 7: solar panel industry, was just wiped out of the water
Speaker 7: by China. There's the sheer scale of Chinese production. Now
Speaker 7: ninety percent of solar panels in Europe are made in China,
Speaker 7: and actually a very high proportion in the US as well.
Speaker 7: So you know, China is driving this, but of course
Speaker 7: if you're Europe, it's also the Biden administration's response to China,
Speaker 7: things like the Inflation Reduction Act. You know, the Europeans
Speaker 7: have felt like they had to have their own thing.
Speaker 7: They announced the Net Zero Industry Act last year, was
Speaker 7: very explicitly about building the European domestic green energy systems
Speaker 7: and products so that they weren't going to end up
Speaker 7: reliant on China.
Speaker 2: And how much pressure is there in Europe? Do they
Speaker 2: need to do some sort of large fiscal infusion to
Speaker 2: really get competitive?
Speaker 7: I mean, I suspect certainly. The International Monetary Fund would
Speaker 7: say it is as much about developing the single market
Speaker 7: and working as a cohesive block as it is about
Speaker 7: spending lots of money. Yes, there's going to need to
Speaker 7: be a lot of investment funds for green technologies, for
Speaker 7: decarbonizing the economy, potentially for taking advantage of digital technologies
Speaker 7: that Europe hasn't hasn't been able to do as well
Speaker 7: as the US.
Speaker 2: Stephanie has always so good to talk to you. Thank
Speaker 2: you so much. That is Bloomberg's Stephanie Flanders. Coming up.
Speaker 2: Is America finally going to get one of those high
Speaker 2: speed trains we've envied in France and Japan. We talked
Speaker 2: with Wes Edens about his bold new bright Line venture
Speaker 2: that broke round this.
Speaker 3: Week, so we think that the adoption rate for it
Speaker 3: is going to be rapid.
Speaker 2: That's next time, Wall Street Week on Bloomberg.
Speaker 1: This is Bloomberg worll Street Week with David Weston from
Speaker 1: Bloomberg Radio.
Speaker 2: This is Wall Street Week. I'm David Weston. The United
Speaker 2: States took a big step toward high speed trains this
Speaker 2: week when Brightline West broke ground on a twelve billion
Speaker 2: dollar project to build a rail link between Las Vegas
Speaker 2: and Los Angeles. And we welcome now the founder and
Speaker 2: chairman of Brightline. He is Wes Edens. Wes, great tip
Speaker 2: to have you with us. Thank you for joining us
Speaker 2: to tell us about this project bright Line West. It's
Speaker 2: the second bright Line project after Florida. Give us a
Speaker 2: sense of how big a business this is in success.
Speaker 3: Well, first of all, thanks for having me on David.
Speaker 3: You know, it's a great time for US. It's a
Speaker 3: great time for the rail business. And so, as you said,
Speaker 3: we broke around earlier today on Brightline West, which is
Speaker 3: the second train project for US, but it's the most. Notably,
Speaker 3: it's the first high speed train, true high speed rail
Speaker 3: that'll be built in America, and that's a big deal
Speaker 3: in a monumental location. And I think, actually even a
Speaker 3: bigger deal is I really do think that this is
Speaker 3: now the beginning of the high speed rail industry of
Speaker 3: the US, which I think is massive. You opportunities and
Speaker 3: growth in front of it. So it's a really exciting time.
Speaker 2: Given your investment tracker, you've checked how much demand there
Speaker 2: is out there potentially, and you've concluded it's big enough
Speaker 2: to support this and make it a good business. How
Speaker 2: much demand is there.
Speaker 3: There's about fifty million trips that happen between Los Angeles
Speaker 3: and Las Vegas every year, about eighty five percent of
Speaker 3: those happened by car. And I don't know if you've
Speaker 3: ever done the drive from Las Vegas to La but
Speaker 3: it's a notably difficult drive. It's probably four hours in
Speaker 3: the best case. It's very very unreliable in terms of
Speaker 3: what the time actually is, and so there's a tremendous
Speaker 3: amount of demand between these two cities. There's only one
Speaker 3: way to get there, which is on I fifteen, and
Speaker 3: so our train is going to go right down the
Speaker 3: middle of I fifteen, and we think it's going to
Speaker 3: have a massive amount of demand for people to make
Speaker 3: that trip.
Speaker 2: This is not your first fora You have bridline up
Speaker 2: and running i've in Florida right between Miami and Orlando.
Speaker 2: What have you learned from that that will change what
Speaker 2: you do with Briadline West.
Speaker 4: Well, i'd say.
Speaker 3: Most notably learned that people like trains, right, so we
Speaker 3: have millions of people that are our train down there.
Speaker 3: The adoption a bit in South Florida and no awfter
Speaker 3: Orlando has been terrific. We opened the route from Miami
Speaker 3: all the way to Orlando recently. It was actually last September.
Speaker 3: The numbers have been fantastic and we're very optimistic about
Speaker 3: the future of that train. The biggest lesson, i'd say
Speaker 3: is that when we built that train, we basically use
Speaker 3: the existing rail corridor for a portion of it. So
Speaker 3: basically from Miami up to Cocoa Beach. It's kind of
Speaker 3: a straight shot from south to north. At that point
Speaker 3: you turn left and then go across Throughte five twenty
Speaker 3: eight to the Orlando Airport. That's how the route has
Speaker 3: made what we did you know that because we had
Speaker 3: access to the train. It was version one point zero.
Speaker 3: As I said, it makes a lot of sense, but
Speaker 3: there's a lot of things about it that we think
Speaker 3: can be improved on. In particular, there's a lot of
Speaker 3: rail crossings there because that runs up really US Highway one.
Speaker 3: So this train from Vegas to La will cite it
Speaker 3: in the middle of I fifteen. It's a big two
Speaker 3: hundred foot wide corridor but right in the middle of it.
Speaker 1: And because of that, you.
Speaker 3: Can put a fence around it, you can electrify, no
Speaker 3: rail crossings, you can go true high speed, so you know,
Speaker 3: north of two hundred miles an hour is kind of
Speaker 3: the objective, and that version two point zero is what
Speaker 3: we think makes sense for this quarter, and I think
Speaker 3: it's a good blueprint for what we should find success
Speaker 3: with in other parts of the country as well.
Speaker 2: What's the time horizon you're looking at for these investments.
Speaker 2: I believe you're cash positive in Brightline out in Florida.
Speaker 2: Now you haven't recouped the investment yet, but your cash positive.
Speaker 2: How long until you actually recruit investment in Brightline or
Speaker 2: for that matter, bright Line West.
Speaker 3: You know, I think from this point forward in bright
Speaker 3: Line East, it's all systems go. You know, we're adding
Speaker 3: more capacity this summer in June with more train cars,
Speaker 3: the same in the end of the year in December,
Speaker 3: and then the same again next year. And so with
Speaker 3: that you'll then get to higher ridership levels, higher revenues,
Speaker 3: and we think that that's a time in which we'll
Speaker 3: start to look at, you know, different alternative in terms
Speaker 3: of financing, bringing in equity, you know, et cetera, et cetera.
Speaker 2: Do you have a sense of when you would bring
Speaker 2: in other investors.
Speaker 3: Yeah, we have brought in, you know, modest investors. I mean,
Speaker 3: I'm a large investor in a personally, so I'm a
Speaker 3: big believer and I kind of eat my own cooking,
Speaker 3: so to speak with it and have for a long time.
Speaker 3: I think that it's an investable project now, and so
Speaker 3: the the groundbreaking today I think signifies kind of the
Speaker 3: next layer of it, and I think that there will
Speaker 3: be some investment opportunities both on the debt and equity
Speaker 3: side in the upcoming kind of you know, months between
Speaker 3: now and the end of the year, and then I
Speaker 3: think as you get under construction, I think that there's
Speaker 3: lots and lots of different opportunities to grow the business
Speaker 3: because this is something clearly can be replicated. Their city
Speaker 3: prayers around the country tell.
Speaker 2: Us about the government role. We had Sexuary Boodagenche come
Speaker 2: out for the groundbreaking bright Lane West. How critical is
Speaker 2: the government? Can these happen without the government really supporting them?
Speaker 3: I think the long term and the answer is absolutely yes.
Speaker 3: But I think that there's lots of examples of government
Speaker 3: playing pivotal role to getting new industries off the ground.
Speaker 3: So if you look at the history of you know,
Speaker 3: Elon Musk with his SpaceX, or the electric vehicles, or
Speaker 3: you know, subsidies for the solar business, there's lots of
Speaker 3: examples of things that started out being subsidized and then
Speaker 3: turned into be you know, big robust businesses. And I
Speaker 3: think the train is going to follow those same footsteps.
Speaker 3: So you know, when you say government, really there's many
Speaker 3: governments involved. So it's really a coalition of local governments
Speaker 3: and state governments and federal governments, all of them playing
Speaker 3: in big role. Obviously, the federal government in the Department Transportation,
Speaker 3: you know, providing a three billion dollar grant, was a
Speaker 3: huge part of this, but frankly, so were you know,
Speaker 3: the delegations from Nevada and from California. Frankly, the governor
Speaker 3: in Nevada, you know, my governm. Lombardo, who has been
Speaker 3: an incredible supporter the DOT, the Department of Transportations, our
Speaker 3: partner in Nevada for this project. So, you know, I
Speaker 3: like to think that it takes everyone to say yes
Speaker 3: and only one person say no to derail these kinds
Speaker 3: of projects. And fortunately we have such a compelling project
Speaker 3: that we've actually had nothing but yes.
Speaker 4: So it's a really a good position to be in.
Speaker 2: Okay, Wes, thank you so very much. That's west Edens.
Speaker 2: He's chairing of Brideline and Brightline West. The arts, including music, museums, photography,
Speaker 2: and more, contributed over one trillion dollars to the US
Speaker 2: economy in twenty twenty two, according to the Bureau of
Speaker 2: Economic Analysis, and New York in particular is known for
Speaker 2: its performances and museums, but the very nature of the
Speaker 2: arts is going through fundamental changes in what is presented
Speaker 2: and in how it is paid for. Change is triggered
Speaker 2: in part by a pandemic that forced most of us
Speaker 2: to stay at home. Sir Clive Gillinson has been the
Speaker 2: executive and artistic director of Carnegie Hall for nearly two decades,
Speaker 2: and he remembers well the dramatic moment when his legendary
Speaker 2: concert hall was once again open for business.
Speaker 4: One of the most moving things is when we opened
Speaker 4: again after COVID. The emotion in the hall was astounding
Speaker 4: because Robert Smith, ou chairman, and I thought we should
Speaker 4: speak to the audience on the opening night and I
Speaker 4: literally said the first two words, which will welcome back.
Speaker 4: The place exploded, welcome back to Cardigi. And that emotion
Speaker 4: has carried through. So firstly, I think the whole thing
Speaker 4: of live music and the impact of live music that
Speaker 4: is in the greatest possible shape, and you know, people
Speaker 4: love it, care about it, and I think they even
Speaker 4: today that emotion is still there about how they now
Speaker 4: value it in a way where you only value something
Speaker 4: when it's taken away from you. Are you Carnegie Hall
Speaker 4: fully back from the pandemic? Yes, the first year we
Speaker 4: had a reduced number of concerts last season. This season
Speaker 4: it's the full number of concerts. We're back to the
Speaker 4: normal number of presentations and audiences are averaging ninety three percent.
Speaker 4: So we're I mean, you know, the fantastic response to
Speaker 4: what we're doing, and there's a real feeling of engagement
Speaker 4: with the music in a very powerful way.
Speaker 2: It wasn't just performing art centers like Carnie Hall that
Speaker 2: were hit hard by the pandemic. Tony James of Jefferson
Speaker 2: River Capital serves as co chair of the Metropolitan Museum
Speaker 2: of Art, a position he came to when the pandemic
Speaker 2: hit and hit the met particularly hard.
Speaker 5: The Met, for example, lost one hundred million dollars in
Speaker 5: revenues over the two years, so that's hard to recover from.
Speaker 5: A lot of the arts scenes in New York depend
Speaker 5: on tourism. Our attendants from locals are all the way back.
Speaker 5: Our tenants from tourists are only in the seventies, and
Speaker 5: particularly Asian tourists. That's where we're really short, and so
Speaker 5: it's a bit of a struggle. We've had to find
Speaker 5: new revenue sources. We've had to be careful about costs.
Speaker 5: But I think you know, as we've discussed in the past, David,
Speaker 5: I think arts are with New York, the gateway city,
Speaker 5: the wonderful city that it is.
Speaker 2: The success of a great art center like Carnegie Hall
Speaker 2: or the Metropolitan Museum requires a balance, a balance between
Speaker 2: high culture that appeals to changing audiences and running a
Speaker 2: very large business with all the challenges of managing costs
Speaker 2: and attracting revenues that any CEO of a big complex
Speaker 2: company would understand. One of the things that strikes me
Speaker 2: is your title, your executive and artistic director. It reminds
Speaker 2: me a little bit about that division between a publisher
Speaker 2: and an editor and newspaper.
Speaker 1: You have both.
Speaker 2: You're responsible for the business as it were Accrdentyhill as
Speaker 2: well as the artistry give us the sense of the balance.
Speaker 2: How do you get the right balance between the business
Speaker 2: side and the art side.
Speaker 4: I mean, it's a really interesting question because most organizations
Speaker 4: separate the two. The reason I would never ever do
Speaker 4: a job which was half of what I do is
Speaker 4: because I feel if you're involved in the artistic you
Speaker 4: want to be as expansive and imaginative and take risks,
Speaker 4: you know, and really travel extraordinary journeys with the music. Now,
Speaker 4: if you're the person responsible for the money, you're probably
Speaker 4: going to be cautious and keep saying I'm not sure
Speaker 4: we can do this, I'm not sure we can do that.
Speaker 4: The good thing about doing the two together is if
Speaker 4: I want to dream, I've then got to be part
Speaker 4: of making sure that can happen as a business. So
Speaker 4: in a way, I think it enables you to take
Speaker 4: far greater risks because you're responsible for both.
Speaker 2: You've been known throughout your career for taking some risks.
Speaker 2: I mean you were, of course a professional cello player
Speaker 2: back in the one Spring or extract.
Speaker 4: Well, that was somebody else's risk.
Speaker 2: But then you stepped up, not necessarily volunteering, but you
Speaker 2: stepped up to really take over a struggling organization, and
Speaker 2: you took risks from the very beginning. You've taken risks
Speaker 2: at card of your hall. How do you get the
Speaker 2: right balance, take your risk and we're not falling off
Speaker 2: the high wire?
Speaker 4: Well, I mean, of course, the key thing about all
Speaker 4: risk is how you manage risk. I mean, you can't
Speaker 4: live without risk. And so you know, there's a famous
Speaker 4: saying which is you know, if you're not living near
Speaker 4: the edge, you're taking up too much space. Money follows vision.
Speaker 4: You always go for the vision. Go for something that
Speaker 4: is irresistible, that has to happen, and then there's a
Speaker 4: chance you can sell it to somebody else if it's
Speaker 4: good and the world can live without it. I mean,
Speaker 4: it's very nice for it to happen. If it's only that,
Speaker 4: it's very hard to sell to somebody else. It's got
Speaker 4: to be irresistible.
Speaker 2: Over at the Metropolitan Museum, Tony James says that the
Speaker 2: mission is to show the world great art, but to
Speaker 2: do that it needs to generate a great deal of
Speaker 2: revenue each year to support the facilities, including the two
Speaker 2: million pieces of art the met owns, only fifteen percent
Speaker 2: of which are on display at any given time, and
Speaker 2: to mount more than twice as many exhibitions each year
Speaker 2: as any other museum in the world.
Speaker 5: About thirty percent of our revenues come from people paying
Speaker 5: to go in, buying food, buying stuff in so let's
Speaker 5: just call that revenues members as well, So that's about
Speaker 5: thirty percent. About thirty percent of our revenues comes from
Speaker 5: spin off from the endowment. We'd spend about four and
Speaker 5: a half percent of the endowment each year, but that's
Speaker 5: very restricted because people give you know, I'm giving this money,
Speaker 5: but the interest on it can only be used to
Speaker 5: buy renaissance art or something. There's fun fund digs in Egypt,
Speaker 5: or there's all kinds of strange things, and then about
Speaker 5: forty percent. The remaining forty percent comes from contributions with
Speaker 5: different sorts. The problem the MET has is more one
Speaker 5: of the great things about the MET depending on on
Speaker 5: you want to look at it.
Speaker 2: We sit on city land.
Speaker 5: It was given a hundred fIF years ago, but we
Speaker 5: sit on city land, and the deal was that city
Speaker 5: residents can pay what you wish as you come in.
Speaker 5: So the average city resident pays less than ten dollars
Speaker 5: to come in for one of the biggest museums in
Speaker 5: the world. They can spend days there or weeks there,
Speaker 5: and whereas a tourist pays twenty eight dollars. So when
Speaker 5: you lose your tourism, you lose a lot of the
Speaker 5: reft of paying people honestly, and so that's been a challenge.
Speaker 2: Coming up, we'll take a closer look at how centers
Speaker 2: of art and culture are changing what they present to
Speaker 2: adjust to changing audiences and what lies ahead in an
Speaker 2: increasingly digital world. That's next on Wall Street Week on Bloomberg.
Speaker 1: This is Bloomberg Wall Street Week with David Weston from
Speaker 1: Bloomberg Radio.
Speaker 2: This is Wall Street Week. I'm David Weston. There's more
Speaker 2: to sustain I mean, the cultural center of New York
Speaker 2: than presenting great art. Institutions like Carnegie Hall and the
Speaker 2: Metropolitan Museum must respond to the changing city and culture
Speaker 2: around them, reaching out to new communities and adapting to
Speaker 2: the new forms of expression that the digital world makes possible,
Speaker 2: and perhaps most of all, using the art to tell
Speaker 2: compelling stories for all of us.
Speaker 4: We have transformed the whole. So I mean, firstly, we
Speaker 4: do much more storytelling. We started big festivals when I began,
Speaker 4: and one of the earliest things was to ask Jesse
Speaker 4: Norman an extraordinary thing, to create and curate a series
Speaker 4: about African American culture. And we've looked at a number
Speaker 4: of big stories. I mean, We've looked at migrations and
Speaker 4: how migrations created American culture. We've looked at afric futurism.
Speaker 4: We've looked at the role of women in music, but
Speaker 4: more generally across the whole of culture. Now currently we're
Speaker 4: looking at the fall of Weimar Republican using that as
Speaker 4: a lens to look at the fragility of democracy all
Speaker 4: around the world, big big issue of our day. Next
Speaker 4: season we'll be looking at Latin music, So a huge
Speaker 4: amount of storytelling. And that's only one dimension.
Speaker 5: I suppose if you're a tourist and you've never seen
Speaker 5: Haystack Van Goes Haystacks, you want to go see them
Speaker 5: in person. But because so much of our audience is
Speaker 5: local and we want them not to go once a
Speaker 5: year or once every three years, we want them to
Speaker 5: go every month. We wanted to come back, so we
Speaker 5: have to have things that they want to go see.
Speaker 5: That's current. I just got back from Berlin last night,
Speaker 5: as you know, and they've got a wonderful contemporary art
Speaker 5: museum there and it's it's got beautiful paintings, one Picasso
Speaker 5: and one Magrie and it's a lovely collection of random,
Speaker 5: if you will, but very high quality contemporary art. But
Speaker 5: there's no theme to it. There's no story. We're trying
Speaker 5: to create things that have a story so that people
Speaker 5: want to come. Oh, this is you know, the rivalry
Speaker 5: between deg and money and how they fed off each
Speaker 5: other and they were both friends and at one point enemies,
Speaker 5: and how money cut Dega out of one of the
Speaker 5: paintings and get them interested in the narratives and the
Speaker 5: Harlan and Renaissance Show has been a huge success of
Speaker 5: celebrating that whole wave of culture that's centered in New York,
Speaker 5: about the strength of Africa and the wonderfulness of African
Speaker 5: American culture that's been spectacularly successful and was not very
Speaker 5: well known. That's where it gets people's interests. It's not
Speaker 5: just seeing an object.
Speaker 2: As important as it is to preserve the best of
Speaker 2: what is time honored in the arts, it's just that
Speaker 2: important to recognize great art that is being created to
Speaker 2: the present day and in places that go well beyond
Speaker 2: the traditions we've lived with for so long, especially as
Speaker 2: the profile of audiences continues to evolve. What is your
Speaker 2: sense of how the profile and i'll say demographic profile
Speaker 2: of your audiences has shifted over their nearly twenty years.
Speaker 4: It's hard to say we have so many audiences because
Speaker 4: we do so many different things. Were the best of
Speaker 4: every sort of music who we aspire to be? So
Speaker 4: in the some audiences which are very young, I mean,
Speaker 4: for instance, our a Futurism audience was very different, you know,
Speaker 4: and some up to seventy percent and never been in
Speaker 4: Carnegie Hall before. So you know, with each project, we
Speaker 4: develop new audiences and then we try and keep them
Speaker 4: as part of our audience going forward. So I mean,
Speaker 4: I think the audience has grown in terms of diversity,
Speaker 4: but diversity meaning you know, not only race, but age, men, women,
Speaker 4: I mean, you know, nationalities, everything, And we want to
Speaker 4: be and represent the best of every sort of music,
Speaker 4: which means that we're going to be relevant. I mean
Speaker 4: there's something like one hundred and eighty nationalities in New York.
Speaker 4: I mean insane, it's the most diverse city in the world.
Speaker 4: But we want to be relevant and meaningful to everybody.
Speaker 5: If you think about what's called the Western canon of
Speaker 5: ours of the traditional they're all white male artists. A
Speaker 5: lot of them are from Europe, all the way back
Speaker 5: to the Middle Ages, through Renaissance to the Impressionism Old Masters.
Speaker 2: Not a lot of diversity in that group.
Speaker 5: And then we had sections of the museum dedicated to
Speaker 5: the arts of the Pacific in Asia, for example, but
Speaker 5: they were very discreet parts of the museum. I think
Speaker 5: the greatness of the mat is that we can integrate
Speaker 5: all these things.
Speaker 2: If we went back twenty years ago and looked at
Speaker 2: the nature of the performers appearing on the stages here
Speaker 2: at Carnegie Hall and competitor today, how would it be different.
Speaker 2: How are you getting new young talent and where's it
Speaker 2: coming from? Well, we all the time.
Speaker 4: Part of our job is obviously to bring you the
Speaker 4: most extraordinary established performers here, but at the same time
Speaker 4: we are always looking out for the most brilliant young players.
Speaker 4: So a few days ago we had somebody called Jan
Speaker 4: chan Lim who won the Van Clibn competition. He was nineteen.
Speaker 4: He's just turned twenty, so now he's an old man,
Speaker 4: of course, but he came in it was sold out
Speaker 4: weeks in advance. He's a dazzling player. I mean, he
Speaker 4: is going to be out of our life for the
Speaker 4: next fifty sixty seventy years.
Speaker 2: Probably what we think of is the traditional patrons of
Speaker 2: the arts remain key to success of a place like
Speaker 2: the Metropolitan Museum, but they're now being joined by a new,
Speaker 2: younger and more diverse group of supporters.
Speaker 5: We're building a new, modern, contemporary wing. It's just going
Speaker 5: to get a really exciting project for the city six
Speaker 5: hundred million dollars. You could spend two hundred million on
Speaker 5: one Jockamenty sculpture if you had to buy.
Speaker 2: It, and we got to fill an entire wing on art.
Speaker 5: So we depend on collectors, usually at the end of
Speaker 5: their lives, giving us their collections or parts of their collections.
Speaker 5: So that set of givers is not that hasn't changed
Speaker 5: very much. That's still not very diverse. It's old, it's
Speaker 5: predominantly white, it's very wealthy, almost definitionally. But the people
Speaker 5: that come in and give cash or go to benefits,
Speaker 5: that's you young and we make every effort to make
Speaker 5: that younger and more exciting and hipper. We're trying to
Speaker 5: be current. We don't want this to be your grandmother's
Speaker 5: attic for true.
Speaker 2: Centers of art have to be great programmers to present
Speaker 2: works in compelling ways, to tell stories. Beyond featuring what
Speaker 2: people have already come to appreciate, they also play a
Speaker 2: key role in educating us all and what we haven't seen,
Speaker 2: what we have yet to appreciate, what is new, what
Speaker 2: is different, and what is coming around the corner for me.
Speaker 4: Education is not about audience development. Education is about giving
Speaker 4: every child the opportunity to have access to music. So
Speaker 4: we've got programs that are all around the country and
Speaker 4: serve kids everywhere. I mean, we now reach eight hundred
Speaker 4: thousand people a year with our education programs, probably the
Speaker 4: bulk of those outside New York City. But if those
Speaker 4: people never come to New York, I think we've succeeded
Speaker 4: as long as music can be part of their life,
Speaker 4: you know, Whereas if you were looking at as an
Speaker 4: audience development, we would have failed miserably.
Speaker 2: So you'll forgive me. This is Bloomberg. So we like
Speaker 2: to think about the business model too. When you talk
Speaker 2: about educating eight hundred thousand kids, how do you support that?
Speaker 2: Where's the renew for that?
Speaker 4: Well, I mean there's two things. Firstly, to create it,
Speaker 4: you have to have partnerships. So we have partnerships all
Speaker 4: around the country with people who share our values. And
Speaker 4: you can't have partnerships without shared values. So we do
Speaker 4: all of that, and then we have to raise a
Speaker 4: huge amount of money. I don't know the exact amount
Speaker 4: we spend on education every year, but out of a
Speaker 4: budget of about one hundred and twenty million a year,
Speaker 4: I would have thought we spend probably at least fifteen
Speaker 4: million on education, which is not much less than we
Speaker 4: spend on presenting concerts.
Speaker 2: Like every business and institution, art centers are embracing what
Speaker 2: digital technology makes possible, expanding their reach and exposure to
Speaker 2: people in New York and around the world, such as,
Speaker 2: for example, Carnegie Hall's new streaming service called Carnegie Hall Plus,
Speaker 2: providing us the opportunity to enjoy great music in the
Speaker 2: comfort of our homes.
Speaker 4: It's on Apple TV, it's on Amazon, Comcast, It's on
Speaker 4: ten different major platforms, so it's available to every home
Speaker 4: in America. Just about now. We're also going more and
Speaker 4: more international. And my view always is here we are.
Speaker 4: I mean, even though it's such an extraordinary city in
Speaker 4: New York, I don't know, I mean, what is it?
Speaker 4: Probably ninety five percent of the world's population will never
Speaker 4: come to New York, so what we do needs to
Speaker 4: be available everywhere to everybody. I never think that digital
Speaker 4: is a competitor with live. The live experience is the
Speaker 4: greatest possible experience. It's of the moment, it's being created
Speaker 4: for you at that moment you're sharing it with other people.
Speaker 4: There's something magical and special about a great live performance,
Speaker 4: which is inspirational, but if you can't have access to that,
Speaker 4: then to have access digitally is a fantastic opportunity which
Speaker 4: we should give people as well, but it is not
Speaker 4: a replacement. So I never worry about digital being something
Speaker 4: that's going to undermine people's wish to go to live performance.
Speaker 2: The Metropolitan Museum is also using digital technology to gain
Speaker 2: more ready access to audiences around the world, but it's
Speaker 2: also designing a new wing of the physical museum with
Speaker 2: the future evolution of technology very much in mind.
Speaker 5: We're trying to digitize every one of our significant pieces
Speaker 5: of work in high depth and make that free to
Speaker 5: the world. And our mission is to show the world
Speaker 5: great art, and it's not everyone's going to be able
Speaker 5: to afford to travel to New York, so we have
Speaker 5: to make that available to them digitally. The big question
Speaker 5: is when you build a new wing, is like, what's technology?
Speaker 5: This wing has to last one hundred years, so what
Speaker 5: what are we building for.
Speaker 2: Finally, one more thought from Sir Clive Gillinson, Executive and
Speaker 2: Creative Director of Carnegie Hall about the Hall itself, how
Speaker 2: it came to be and what makes it an icon
Speaker 2: for performers of all sorts the.
Speaker 4: World over and genuinely think that's the greatest concerts in
Speaker 4: the world, which is completely baffling in terms of acoustics. Yes,
Speaker 4: that's what I've always heard, and I mean what is
Speaker 4: as sotonishing is because of the sign. It's eight hundred seats.
Speaker 4: Most concertables are two thousand, and yet it feels completely
Speaker 4: intimate wherever you sit and people who sit right you know,
Speaker 4: because students will sit right at where you'll see it
Speaker 4: from the platform, right at the back, and you can
Speaker 4: hear it as if it's in your living room. If
Speaker 4: you look up there, they can hear as well as
Speaker 4: anybody else in the entire hall. And you can have
Speaker 4: a massive orchestra making a huge noise and it works perfectly.
Speaker 4: It can carry any sound, any amount of sound. And
Speaker 4: yet you could just have somebody playing a lute here
Speaker 4: and you can still hear every sound.
Speaker 2: So what goes into making a concert hall one of
Speaker 2: the greatest in the world. It turns out pretty much everything.
Speaker 4: The reality is you cannot replicate a great concert hall
Speaker 4: because I mean every single thing counts. The density of
Speaker 4: the plaster on the wall matters, the carpet, what the
Speaker 4: padding in the seats is and we send these seats
Speaker 4: back to Canada to the manufacturer who made them in
Speaker 4: eighteen ninety one, because nobody dares touch anything that could
Speaker 4: affect the sound, So they go back to the same
Speaker 4: place that they were made one hundred and thirty whatever
Speaker 4: it is years ago, and so on. You know, even
Speaker 4: when you have to put wires in the walls, the
Speaker 4: fact that you'll be changing the plaster, you've got to
Speaker 4: be careful that you try and get the right density
Speaker 4: of plaster.
Speaker 2: But the unique combination of qualities that have made Carnegie
Speaker 2: Hall a legend around the world came together, almost by accident,
Speaker 2: created by someone unknown as an architect who'd never done
Speaker 2: this before, to please the wife of one of the
Speaker 2: world's richest men.
Speaker 4: And this guy had never built a concert wor in
Speaker 4: his life. I read, you can tell me for the wrong.
Speaker 4: The fellow who was the architect was actually a cellist.
Speaker 4: He was you played cella, which of course is the
Speaker 4: reason why he was such a great act. He was
Speaker 4: the treasurer of Louise Carnegie's choral Society because she sang.
Speaker 4: Louise Carnegie sang it. The oratory of society there was
Speaker 4: no decent colstors. She said to her husband, as you do,
Speaker 4: would you be?
Speaker 2: That does it? For this episode of Wall Street Week,
Speaker 2: I'm David Weston. This is Bloomberg seenor next week